SA’s R1bn Yekani smart factory faces liquidation
Yekani Manufacturing, a R1 billion smart factory in the Eastern Cape that many believed will give international giants such as Apple, Huawei and Samsung a run for their money, is reportedly facing liquidation.
Yekani – an information and communications technology company – officially launched the R1 billion electronics factory in the East London Industrial Development Zone in June 2018.
Its portfolio of product categories ranges from education 2-in-1 tablets and laptops, to consumer products, such as mobile handsets.
According to a Daily Dispatch report, Yekani Manufacturing has closed its doors, potentially putting 500 skilled workers out on the street.
The news comes hot on the heels of telecommunications giant Telkom’s plan to shed over 3 000 jobs, while retail giant Massmart also announced this week that it will retrench about 1 400 employees from its DionWired and Masscash stores.
SA’s official unemployment rate continued to increase last year, reaching 29.1% in the third quarter – its highest rate in over 16 years.
Yekani Manufacturing, part of the Yekani Group, was once the mainstay hope of East London becoming a job-creating fourth industrial revolution capital, says the report.
It notes the East London Industrial Development Zone factory did not reopen on Monday after the festive season break.
ITWeb tried to contact Yekani’s switchboard as well as its public relations company earlier this morning but the calls went unanswered.
According to the report, Standard Bank is calling in a loan of R200 million and after Yekani’s failure to make repayments, liquidation processes are under way.
Employees who spoke to the paper on condition of anonymity, fearing they might be victimised should Yekani and Standard Bank come to an arrangement, said staff had not been paid since August.
It notes Yekani Group legal adviser and company secretary Akhona Mafani said while Standard Bank had brought an application for Yekani's liquidation, the matter was sub judice and he could not comment.
The funding for this project was a concerted effort from various stakeholders, which included the Department of Trade and Industry and private financial institutions, with a significant portion coming from Yekani’s coffers.
It was expected the launch of this smart factory would allow Yekani to lead the way in technology innovation and help Africa secure its rightful place among global technology leaders.
When it opened, Yekani said the world-class, technologically advanced facility was aimed at pushing the limits of technology innovation and was an investment estimated to create approximately 1 000 jobs, not only for the East London community, but also for the much-needed employment boost in the province.
“If government’s intention is to create jobs, it’s important to support local businesses like Yekani instead of importing things that we can manufacture locally,” said the company’s group chief executive, Dr Siphiwe Cele, at the time of the opening.
He pointed out Yekani could produce 40 0000 tablets a month, which could potentially create 50 additional jobs.
“We could potentially create 1 800 more jobs. The factory exists and it has state-of-the-art equipment,” he said.
The opening of the 100% black-owned electronics contract manufacture and ICT giant was in response to the call made by president Cyril Ramaphosa in his maiden State of the Nation Address to re-industrialise intermediate cities and stimulate manufacturing in the country.
The 28 000 square metre state-of-the-art smart factory resides within a customs-controlled area at the East London Industrial Development Zone.
The facility is equipped with eight surface mount technology lines capable of placing 1.5 million components per hour.