Africa is getting some attention this week in manufacturing and plastics, with news that a South African startup is planning to start the first-ever production of smartphones and tablet computers on the continent.
This Bloomberg story says that Onyx Connect, in Johannesburg, plans to set up the first local smartphone factory in Africa.
The story says the company plans to take advantage of Africa's low cost.
South Africa's rand has dropped 40 percent against the U.S. dollar in the last five years, which has both made imported phones pricier and made it cheaper to manufacture in South Africa, which is Africa's most industrialized country, Bloomberg said.
The company also tells Bloomberg it will be sourcing plastic housings for the phones locally.
Onyx plans to make simple phones — it says it can make a phone with camera and one gigabyte of memory for about $30, licensing Google's Android system.
The company says it has a long background in sourcing and manufacturing in China and still plans to get components like circuit boards from China, but will be doing most of the manufacturing in Africa.
While there clearly are challenges for Onyx to be going up against the very competitive Asian phone manufacturing industry, the company feels there's now enough demand in Africa to support a local factory.
And it notes that it plans to use its own phone designs, with local research and development staff.
South Africa's plastics industry makes a similar point about the value of pursuing locally based innovation.
The chairman of the country's Plastics|SA trade association, Bernard Mahl, said in recent comments wrapping up the group's 2016 activities that innovation driven by African markets is a good path forward for local plastics companies, as they try to carve out a competitive niche against global rivals.
“If we look at the past 5 – 10 years, the South African plastics industry has not recorded any real growth,” he said. “Whilst we managed to have stayed on par with the country's GDP growth, this is still far below the average plastics growth of three percent worldwide. We need to put on our innovators' caps.”
He said that South Africa's plastics processing industry must resist being stuck — “unlikely to be able to compete with the first world [and its] technological advancement,” and at the same time “not able to compete with companies from the Far East on price.”
Like Onyx, he advocates a locally focused path.
“We are in the unique position of understanding the challenges we face on the African continent, and as such we must push ourselves to find innovative solutions for the African environment,” Mahl said.
One global plastics supplier is also keying on the potential to upgrade Africa's industry.
U.S. blender, dryer and auxiliary equipment maker Maguire Products made that argument this week at AMI's “Plastics in Africa” conference, saying that raw materials automation is a crucial need for industry there.
That's a sales pitch, of course, but Maguire argues that African firms' over-reliance on labor and not using enough automation in their material handling ultimately costs them money, since materials can account for 80 percent of production costs.
Maguire said it's worked with companies throughout the continent to demonstrate the economic case for those upgrades.
African-made smartphones. Local plastics companies keyed on African-themed innovation as a competitive path. And global firms arguing that the time is right for more automation among local processors.
It was interesting to see these three pieces come across my desk in the same week. I'm not going to pretend to be enough of an expert in conditions in Africa to say it definitely means something big, but it does seem these three items could be telling us something.
