Mobile phone maker Tecno to set up handset assembly plant in Kenya

Mobile phone maker Tecno has announced plans to establish a handset assembly plant in Kenya in an effort to minimise costs and reinforce its position in the local market.

Speaking to Smart Company last week, the firm’s vice-president, Mr Arif Chowdhury, said Tecno was in talks with the government, adding that the plant could be set up by 2014.

Currently, all Tecno phones sold in Kenya are assembled in Hong Kong and shipped in, a process that adds about 10 per cent to the retail price.

“We are planning on setting up a plant in Kenya. The country is one of our key markets and we are seeking increased localisation of our products,” said Mr Chowdhury.

Discussions with the government, Mr Chowdhury said, would revolve around possible tax incentives and training of an adequate labour to work at the plant.

A local assembly has the potential to reduce the costs of phones for the millions of subscribers in the market.

However, this positive impact may be bogged down by the fact that Kenya does not have the capacity to manufacture mobile phone components.

“We will have to import phone parts until we can manufacture them locally. This means that the new plant will not be able to completely shave off the 10 per cent manufacturing and importation costs,” said Mr Chowdhury.

He spoke following the company’s launch of a new low-cost smartphone in the Kenyan market.

Tecno is not the first mobile phone manufacturer with plans to establish a plant in Kenya. In 2008, South Korean electronics goods manufacturer LG said it would set up a Sh100 million ($1.4 million) mobile phone handset assembly in Kenya by 2009. The plans are yet to materialise.

Meanwhile, Kenya’s neighbours seem to be faring well. Last year, Tecno set up an assembly plant in Ethiopia, the first of its kind on the continent and the second plant that Tecno has established within a period of one year.

The factory has a production capacity of 200,000 handsets a month. The firm is hoping to establish one of a larger scale in Kenya to serve the East and Central African market.

In July this year, the company launched its first Ethiopian assembled phone, the Tecno T3, which only supports the Amharic language. In Rwanda, China’s A-Link technology has set up a phone assembling plant with the capacity to produce 600 mobile phones a day.

The establishment of an assembly plant in Kenya would be part of Tecno’s long-term strategy to dominate the smartphone market in Africa.

The Hong Kong-based company made its entry into the continent in 2006 following successes in India and Pakistan. In 2008, it closed down these operations to concentrate on the African market.




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