IDC Statement on Mara Phones Feb 2022

IDC Statement on Mara Phones Feb 2022

Mara Phones South Africa (Pty) Ltd, which is part of the global Mara Corporation and domiciled in Dubai, United Arab Emirates (UAE), launched its operations in South Africa in 2019 after which it established a state-of-the-art manufacturing plant in the Dube Trade Port, Kwa-Zulu Natal.

Mara Phones set out to position Africa as a world-class manufacturing hub of hi-tech products to locally manufacture low-cost, high-quality mobile smartphones. In addition to the South Africa operation, Mara Corporation has a similar smartphone production facility in Rwanda.

At implementation, the total funding for this project which was intended to create 450 jobs over five years stood at R492 million. As a senior lender, the IDC approved total facilities amounting to R238 million. Mara Phones shareholders were not able to raise their full contribution. As such, the shortfall was provided by another local financial lender.

Production at the Kwa-Zulu-Natal facility commenced during October 2019 but was disrupted in early 2020 owing to the worldwide COVID-19 pandemic and the hard lockdown. Consequently, the production volumes were impacted and were below target.

Despite the quality of its products, Mara Phones struggled to penetrate the South African market in which other global brands and other lower-cost smartphone competitors are firmly entrenched. In addition to battling to meet its production targets, the business was adversely affected by business disruptions in the wake of the pandemic after which the company ceased its operations in July 2021.

Regrettably, the IDC has established that in the absence of further capitalisation of Mara Phones, there is no case to be made to inject further debt funding into the company. Notwithstanding this, the IDC is exploring other options given its developmental mandate and other options that interested parties may offer.

Ends

Issued by Tshepo Ramodibe
Head: Corporate Affairs

For more information, please contact:
Chimwemwe Mwanza (Media Relations)
Cell : 073 535 03 00
Tel : 011 269 3922
Email: Chimwemwem@idc.co.za