Dale Carnegie once famously said, “Remember, today is the tomorrow you worried about yesterday.” At Microtronix we can hardly believe that seven months have passed since the company celebrated its 30th anniversary at a glittering function, probably attended by many of you reading this article now. It was recalled at the time that Microtronix was satisfied, but not overjoyed by 2023, and anxious about the coming year. 2024 was daunting as one of its major customers – LG Electronics – had given notice that they would be moving their production back to Durban following their factory being vandalised in the Durban riots two years ago. Microtronix produced over 200 000 PCBs for LG for TV sets, monitors and video screens over the past two years and enjoyed a most fruitful and enjoyable engagement with a global blue chip customer. Despite the setback, Microtronix was happy for this new milestone.
2024 started as most do, with holiday hangovers and fresh resolutions, but with newfound ideas on what the year might bring and how the challenges that lay ahead would be tackled. By the end of January, it was apparent that 2024 was going to be a very tough year indeed and this has proven to be a very accurate prediction.
With the supply chain issues that have troubled the industry since the pandemic having appeared to ease, and with the loadshedding that plagued us in the latter part of 2023 resulting in unplanned costs and downtime temporarily on hold, it appeared as if there was a new fresh set of challenges – a general downturn in demand for products and manufacturing services leading up to the general election. In the company’s favour was some consistent business in the vehicle tracking space, with an increase in sales due to export orders only.
In a nutshell, the year so far for Microtronix has been difficult. Whether it’s because of the general election uncertainty that was evident across the markets, the longer-than-expected customer product development lifecycles being experienced, a general downturn in global demand for certain products, or a combination of all of them, 2024 so far was proving to be challenging.
Despite the constant government talk of growing the local manufacturing industries, certain foreign countries remain at our doorstep. More than ever, local manufacturers finds themselves competing directly with these foreign manufacturing concerns. A major customer who supplies electricity meters to state-owned entities has moved the bulk of their production overseas, without any local procurement or manufacturing. This decision by our customer was taken even though we provided suitable equivalent measures to compete with foreign supply. Despite government legislation regarding local manufacturing and local content, it does not seem fitting that state-owned entities would allow their production to be moved offshore given the massive unemployment currently faced in South Africa. Unfortunately, this curtailment left Microtronix in a predicament with the company ultimately having to sadly terminate 80 jobs.
On a hugely positive note, however: where one door closes another usually opens, and Microtronix has been fortunate to have been approached by several small solar businesses who tendered for and won contracts from the Department of Minerals, Resource & Energy to supply and install solar products which provide lighting to various unelectrified homes in townships across South Africa. These include Burgersfort and Thulamela in Limpopo, villages of Corona, Mfabantu, Tshisabantu, Masameni, Butterworth and Dr AB Xuma local municipality, Engcobo and Winnie Madikizela Mandela local municipality in the Eastern Cape, and finally Doornkop township and Steve Tshwete municipality in Mpumalanga. What is most rewarding about this project is to see the new GNU uplifting poor communities and giving them basic lighting and power for cell phones, tablets, and small devices not normally available in poor communities. It has been most pleasing to be able to manufacture and distribute a few thousand solar home systems to families previously using gas or kerosene to light their homes. Microtronix’s experience completing these projects has demonstrated that besides providing energy-efficient lighting, its solutions increase the safety of residents given the all-night lighting that is provided outside their homesteads.
On another positive front, Microtronix has started to produce around 100 000 set-top boxes in conjunction with Space TV and Harambe, that will finally, after more than ten years of waiting, be distributed to poorer households, allowing them to receive digital television. This forms part of a Sentech tender, and it has been said that this will continue in the months to come, with up to one million set-top boxes being produced within the next two years to cope with the final ‘digital migration’.
Since the elections, the rand seems to have stabilised, with the GNU seeming to have been well received both locally and internationally. An anticipation of an interest rate cut is likely to buoy the depressed property market, and there appears to be renewed commitments by the government to increase its focus on manufacturing to stimulate job creation; these initiatives offer hope that Microtronix will experience a second half of the year that manages to eclipse the first half.
The focus at Microtronix will always remain on ensuring total customer satisfaction and the company looks forward to achieving that goal for the rest of 2024 and beyond.
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