Plan to rescue South Africa’s first smartphone factory

By Hanno Labuschagne for MyBroadband

The Mara Phones management buyout team has claimed it has secured an investor that can help save the company’s South African factory and the jobs of its employees.

Two of the factory’s main funders — Standard Bank and the Industrial Development Corporation — initially put the factory up for auction in early February.

That came after the R1.5-billion facility fell short of expectations, with a lack of uptake of Mara smartphones and Covid-19 lockdown regulations putting a damper on operations.

The auction was put on hold pending the outcome of a business rescue process that started on 25 February 2022.

The business rescue practitioner has promised their plan will be published by no later than 6 May 2022, by which time it will be clear whether the factory will revive operations or be sold off.

Sylvester Taku, who previously served as Mara Phones managing director in South Africa, has explained a buyout management team that he now heads has secured an investor that will ensure the business is adequately capitalised.

Taku asserts that there is “affinity” in the market for affordable smart devices in South Africa that can also be exported to other African countries.

“The fact that we have secured the partnership of a tier-one raw material supplier will significantly improve margins and provide us with the capability of always having a broad range of devices with the latest specifications,” Taku explained.

“We have the support of our channel partners and the support from the government in creating an enabling environment for locally manufactured smart devices.”

Taku said there were changes in the pipeline for the company, but he would only divulge these if the relaunch under the buyout team gets the go-ahead under the BRP plan and from the lenders.

“There will be an exciting marketing campaign amongst other activities planned to get the brand out there,” he stated, without providing further details.

The team will have to confront allegations from factory workers regarding serious labour violations.

These include women not being allowed to wear bras, staff only permitted to have lunch in designated areas if the food was vegetarian, failure to pay full salaries, and income tax deductions not being paid to Sars.

“We believe that compliance with all laws and regulations are bare necessities. We intend to go further and ensure that all employees are content and proud to be part of the organisation,” Taku stated.

He told MyBroadband he had been struggling with his own finances due to Mara’s decline because he was not paid his salary for more than a year.

“It has been a stressful time, with most employees looking at me to save the company and their jobs,” Taku said.

He feels a sense of responsibility for the company’s fate, with many families of the roughly 200 factory workers depending on its continued existence.

“The support of stakeholders, advisors, friends and family, and having the end goal of ensuring that the original vision of South Africa taking its place as a manufacturer of smart devices in the 4IR era, keeps one committed and motivated,” he added.

Taku wants to ensure that the legacy of Mara Phones in South Africa is not another failure in the attempt to participate in advanced electronics manufacturing in South Africa.

 

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