9 February 2017

East Africa: Affordable 'Made in East Africa' Computer Software to Hit Market

interview

South American technology firm Positivo BGH made its entry into the region two years ago with the building of 'made in Rwanda' laptops. Allan Olingo spoke with the firm's president for Africa Juan Ignacio Ponelli on its plan to increase access to technology in schools.

It has been easy, mostly because we had both governments' support.

We started discussions with the Kigali government over the education project in early 2014 and by the year end, we had concluded them, signed an agreement and formed the Positivo BGH, which is a joint venture between technology companies Positivo Informática from Brazil and BGH from Argentina.

Our agreement was to sell them 150,000 devices each year. We have already assembled more than 150,000 units for that market, most of which have been distributed across schools.

In Kenya, we have partnered with a university to deliver laptops under the primary education Digital Literacy Programme (DLP). We will be delivering second half of the "Taifa" laptop project of 600,000 units mid this year. To us, this will be an achievement as we are planning to actualise this within the eight months of operations in the country, having completed the factory in October last year.

Have there been any challenges with regards to the assembly plant in Nairobi?

We have had several challenges with the project -- key among them being the currency fluctuations. We are doing an import-oriented operation from the components to the basic factory set up. The currency movements affects us as we have to take hits on this, while we are not able to vary the contract price terms. Outside that we have used economies of scale to try to limit the hits we are taking.

So what will happen with the Kenyan plant once you have delivered the governments' tender requirements?

We plan to commercialise the remaining element and push for delivery of laptops mostly for private schools. When you look at the standard one laptop projects it remains silent on the private schools yet the contents will have a significant impact on learners.

For all of them to remain on the same level, the private schools will have no choice but to adopt the same curriculum and to us, this is the next market. After that we will do the secondary schools before rolling out to the public the "Made in Kenya" laptops, which will retail at affordable prices.

How is the arrangement with Jomo Kenyatta University of Agriculture and Technology (JKUAT) working? How do they benefit from the collaboration?

We are carrying the business element of the deal, while JKUAT does the academic bit. Basically, the students at the electrical and software engineering department of JKUAT are the biggest beneficiary.

We are one of the biggest five global technology firms in the education sector, hence this project has seen them participate in technical training through internships and do the daily operations in assembly of these units.

This gives a perfect base for knowledge transfer, while the content development, especially on the merging of the content with the software development, is also being handled by our professionals working in partnership with these students. This is the future of manufacturing collaborations on the continent.

JKUAT is also engaged in the support and training of teachers and students all over selected Kenyan public schools.

So where will you source the parts that will then be assembled at the JKUAT premises in Kenya?

We have been able to build the laptops factory in collaboration with JKUAT as promised. It is true that we aren't manufacturing but doing assembly of the laptop parts here in Nairobi.

That's why we will call them "Made in Nairobi" laptops. We are, however, sourcing the parts from all over the world with China being a key supplier. Other markets that will be supplying the components include Japan, Europe and parts of South America. However, we are also trying to see whether we can get some components locally.

You are working in a market that is price sensitive; how do you plan to address this as you branch out from government-sponsored initiative into your own commercial venture?

We are operating in a market that has good regional policies on shipped knocked-down kits. With that in mind, we plan to take advantage of this to put up brands that will be cheaper compared with imported finished devices.

We are also banking on volumes and economies of scale effect to push down the prices. We are in a region that is proud of its achievements and products and we believe that having a "Made in East Africa" electronic product will resonate with the market.

What has been the impact of your activities, especially the technology products, education in Rwanda, where you have been doing business since 2015?

We have managed to do three laptops customised for that market. We have the mini notebook; 2in1 and the Nestbook.

Are there any investments outside of education within the region?

We are currently at the concept stages to introduce assembly plants for other electronics and software development. It will be our goal to have a lot of "made in Africa" software so that the huge import bill for these items that is currently benefiting Asian nations can be reduced.

We are renowned for producing security software systems for militaries and this is an area we are looking at especially in the region. We already have partnerships in software development with IBM and Motorola in the region and we hope these will yield in products designed for this market.

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