23 January 2018

Nigeria: 'Why Samsung May Not Site a Plant in Nigeria Now'

Photo: Răzvan Băltărețu/Flickr
Samsung Galaxy S7 Edge smartphone.

Although, it has not outrightly ruled out the possibility of establishing a manufacturing plant in Nigeria, South Korea's electronic giant, Samsung is hoping that the country's infrastructure would improve and market size enlarged soonest to be able to accommodate its plans for the country.

Speaking in Lagos at the 2018 Dealers Forum, the President and Chief Executive Officer of Samsung Electronics Africa, Sung Yoon, who disclosed that SEWA is refocusing its vision and strategy for Nigeria, noted that one of the reasons for not establishing a manufacturing plant in Nigeria, yet was because its market size.

Yoon said that though Samsung was the leading consumer electronic company in Nigeria, but its market size was not large, compared with that of South Africa, where the firm has a plant.

According to him, the company's smartphones market size in South Africa was 80 per cent, but lower in Nigeria.

He listed other issues affecting siting of manufacturing plant in the country to include low infrastructure, low Return on Investment (ROI) and gray market activities.

"We are trying to be a local company here. Building factory depends on return on investment and efficiency of the economy.

"There are lots of gray products coming into the country and this will affect the return on investment," he said.

The Samsung CEO said that manufacturing a mobile phone required about 400 different components, of which were not sourced in Nigeria. He said that the company had manufacturing plants in Vietnam, China, South Africa and South Korea, hence, having one in Nigeria was a thing of the future.

Yoon, who said on a yearly basis, the firm spent over $16 billion globally on Research and Development (R&D), noted that despite the challenges in the Nigerian market, the company is geared towards stimulating a higher level of operational efficiency, with the overarching objective of providing customers with the highest quality products, sales and services.

Yoon said as a dynamic and innovative organisation, SEWA is constantly exploring ground-breaking ways of providing its customers with best-in-class products, sales, support and marketing functions.

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