Mustek plans aggressive move into Africa

By Staff Reporter for Mustek
Johannesburg, 14 Aug 2001

Mustek has adopted a strategy in terms of which it is planning to place the Mecer brand in each major African territory.

Mustek CEO David Kan says the first step was the recent acquisition of a 50% stake in a new PC manufacturing plant in Nigeria, which he says will make the company the number one PC manufacturer in west Africa in the next year. The company plans to follow this with a move into east Africa.

"One of the main reasons we chose to move into Nigeria specifically was the government`s attitude towards its telecoms and information technology policies, which are advanced considering the rest of the region," he says.

In the past year, 10 GSM licences have been appointed to both international and local telecoms players.

"The growth of GSM and the imminent success of this technology will in turn stimulate the demand for personal computing devices," says Kan. "Essentially we are aiming to make Nigeria a hub for IT activity for the West African region."

Kan admits that the company will face challenges. "Perception is by far the biggest hurdle we face," he says. "For too long investors have believed that the African market isn`t a viable option because of political instability, fluctuating exchange rates and the resistance by governments to take their countries into the information age.

"But that is not the reality. According to BMI-TechKnowledge Africa research, millions of US dollars are being poured into the continent specifically in the IT and telecoms arenas.

"Good, solid partnerships greatly reduce the risk of business in a country because the business partner will have the right understanding of the market as well as understand the government`s intentions and future plans."

Kan says the Nigerian plant aims to sell at least 2 500 PCs a month for the first six months.

Since there is a total of only 100 000 PCs in Nigeria, the target is seen by many as optimistic, he adds.

"No risk, no reward. The higher the risk, the greater the reward." Many companies believe that the Zimbabwean market is not viable due to political instability, but Mustek is generating revenue of more than $1 million a month there, he adds.

"While other international brands are using Africa to get rid of old stock, Mustek is bringing in the latest technologies available. In some cases we have been almost a year ahead of our competitors in terms of the technology offering we have.

"There is business in Africa, and we will do it," Kan says.