Samsung to Open $375M Manufacturing Plant in Durban, South Africa
Good news for the global economy: Samsung will soon open a new manufacturing plant in South Africa. The plant - set to launch in the coming weeks - will be at the Dube TradePort, 30 kilometers north of the coastal city of Durban in the KwaZulu-Natal province.
Samsung is the plant’s first major investor, with $280-375 million designated for the site. The company aims to recoup $940 million in annual sales from the local and African export markets by 2015. Projections show that the number of mobile phone users is expected to rise 43 percent to 346 million by 2017 in sub-Saharan Africa, the fastest-growing region for mobile phone use. South African president Jacob Zuma will be launching the TradePort site within the next month.
The Dube TradePort is a new economic zone on the east coast of South Africa that was designed to encourage new investment by offering duty-free tax rates, manufacturing incentives, world-class logistics and office space, all in hopes of enticing companies to invest in the area. Similar zones are being designated within South Africa to help drive foreign investment and aid companies looking to export their products.
Initially, the plant will strictly manufacture domestic appliances such as refrigerators and stoves, with aims to manufacture televisions and other electronic devices at a later date.
Director-General of Trade and Industry Lionel October commented on the plant by saying “They (Samsung) are looking at producing a whole suite of goods for the local and African export market, but will start with a small product range. We want to encourage them to expand production to electronics and higher value technology products over time. We hope that this will become Samsung’s manufacturing hub for Africa.”
Samsung is currently the world’s largest smartphone manufacturer, and its Electronics division serves as the world's largest information technology company. The announcement comes just weeks after Samsung revealed its plans to open a billion dollar state of the art display factory in Vietnam. The factory - to be launched in Vietnam’s Bac Ninh province - is projected to generate an annual revenue of $6 billion and employ about 8,000 people. Both plants bring the potential for economic prosperity to their respective locales.
Gartner: Leaders Lack Skilled Smart Manufacturing Workers
With organisations rapidly adopting industry 4.0 capabilities to increase productivity, efficiency, transparency, and quality as well as reduce cost, manufacturers “are under pressure to bring their workforce into the 21st century,” says Gartner.
While more connected factory workers are leveraging digital tools and data management techniques to improve decision accuracy, increase knowledge and lessen variability, 57% of manufacturing leaders feel that their organisations lack the skilled workers needed to support their smart manufacturing digitalisation plans.
“Our survey revealed that manufacturers are currently going through a difficult phase in their digitisation journey toward smart manufacturing,” said Simon Jacobson, Vice President analyst, Gartner Supply Chain practice.
“They accept that changing from a break-fix mentality and culture to a data-driven workforce is a must. However, intuition, efficiency and engagement cannot be sacrificed. New workers might be tech-savvy but lack access to best practices and know-how — and tenured workers might have the knowledge, but not the digital skills. A truly connected factory worker in a smart manufacturing environment needs both.”
Surveying 439 respondents from North America, Western Europe and APAC, Gartner found that “organisational complexity, integration and process reengineering are the most prevalent challenges for executing smart manufacturing initiatives.” Combined they represent “the largest change management obstacle [for manufacturers],” adds Gartner.
“It’s interesting to see that leadership commitment is frequently cited as not being a challenge. Across all respondents, 83% agree that their leadership understands and accepts the need to invest in smart manufacturing. However, it does not reflect whether or not the majority of leaders understand the magnitude of change in front of them – regarding technology, as well as talent,” added Jacobson.
Technology and People
While the value and opportunities smart manufacturing can provide an organisation is being recognised, introducing technology alone isn’t enough. Gartner emphasises the importance of evolving factory workers alongside the technology, ensuring that they are on board in order for the change to be successful.
“The most immediate action is for organisations to realize that this is more than digitisation. It requires synchronising activities for capability building, capability enablement and empowering people. Taking a ‘how to improve a day in the life’ approach will increase engagement, continuous learning and ultimately foster a pull-based approach that will attract tenured workers. They are the best points of contact to identify the best starting points for automation and the required data and digital tools for better decision-making,” said Jacobson.
Long term, “it is important to establish a data-driven culture in manufacturing operations that is rooted in governance and training - without stifling employee creativity and ingenuity,” concluded Gartner.