Will Africa Become the Next China?

It won't be long before OEMs start asking their suppliers for the "Africa price."

A worker assembles engines at Volkswagen's factory in Uitenhage, South Africa. Photo courtesy Volkswagen

Chinese telecommunications manufacturer ZTE Corp. announced today that it will build a cell phone factory in Bahir Day City, Ethiopia. The plant, which will cost some $5.2 million (US), will have the capacity to produce 3,000 to 4,500 mobile phones per day. ZTE figures there’s a lot of pent-up demand for cell phones throughout Africa, and it wants to capitalize on it. Read about it

here.

(In fact, China has become Africa’s third-largest trade partner, after the US and France. According to areportby China’s General Administration of Customs, bilateral trade between China and Africa will exceed $100 billion (US) in 2008.)

If we get any news from Africa these days, it’s usually bad: poverty, drought, rampant AIDS, conflicts in Sudan and Nigeria, Islamic extremism, political oppression in Zimbabwe.

Under the radar, however, Africa is quietly flexing some manufacturing muscle, and I wonder just how long it will be before we start talking about outsourcing to Africa the same way we outsource to China today.

It’s not so far-fetched. Due to the strength of the euro, Airbus is considering setting up shop inTunisia.BMW operates manufacturing facilities in Cairo, Egypt, and Rosslyn,South Africa.Mazda has facilities in Kenya, Zimbabwe and South Africa. Toyota operates assembly plants in Mombasa, Kenya, and Sandton, South Africa. The latter employs more than 9,500 people. Ford, GM, Honda and Volkswagen also have plants in South Africa. Chinese electronics manufacturer Hisense Group runs a television assembly plant in Johannesburg, South Africa.

Overall, South Africa has an established, diversifiedmanufacturing basethat has shown its resilience and potential to compete in the global economy. In fact, manufacturing contributed 20 percent of South Africa’s annual GDP in 2006.

It won’t be long before OEMs start asking their suppliers for the “Africa price.”

John has been with ASSEMBLY magazine since February 1997. John was formerly with a national medical news magazine, and has written for Pathology Today and the Green Bay Press-Gazette. John holds a B.A. in journalism from Northwestern University, Medill School of Journalism.

Error-Proofing Assembly Starts With a Connected Shop Floor

On Demand Connecting shop floor tools to a manufacturing execution system is critical to error-proofing assembly processes, improving quality control, and lowering defect and scrap rates. Join Torrence Williams, Partnerships Manager for Pico MES, and Dan Smith, VP of Sales for Kolver Tools, as they discuss an easier path for manufacturers to start connecting their factory floor.

Sponsored by:

This topic is something that challenges each of us every day that we go to work. This talk is about change and why it works and why it fails. It is focused on manufacturing facilities, because that is where the author has spent most of his working life.

Sponsored by: