Samsung to Open Assembly Plant in Kenya

Samsung will open a television, laptop and printer assembly plant in Kenya by the end of the year. Nairobi will be the center of its operations there. The aim of the move is to allow Samsung to gain business in the East and Central African markets and to increase its sales eightfold in the region to Sh 170 billion ($2 billion/€1.5 billion) from 2011’s sales figure of $250 million (€192 million).

As was reported in the Africa Review, the new plant will employ around 900 people directly. Another 1,000 employees will be in its supply and marketing chains to expand business in the East African region. In addition, a further plant is to be built in Addis Ababa to serve the market in Ethiopia.

The Kenya plant will be used to assemble Samsung televisions, laptops and printers and is the newest Samsung plant established in Africa. Recently Samsung has established operation sites in South Africa, Sudan and Senegal. It will mean that Samsung will export assembly kits to the new facility instead of shipping finished products to Kenya.

According to Robert Ngeru, Samsung’s COO in East Africa, Samsung’s future growth plan in Africa “is hinged on market segmentation and localization of products according to the rising needs”. Ethiopia’s emerging middle class will be particularly targeted by Samsung as it has been growing at an annual 8% rate in the past five years.

Ngeru added that locating the plant in Kenya implies that Samsung can take advantage of a higher skilled worker base to build structures for knowledge transfer and get easy access to the regional market.

Samsung supplies 16 African countries from its Nairobi headquarters established in 2011.The assembly plant to be opened is expected to strengthen the company’s position in Africa’s rapidly growing market.

According to the article, the electronics market in the region is predicted to grow at an average annual rate of 11% over the next 10 years.