Christmas is a happy time for most, but the last days of December 2019 were sad, as we bid farewell to over 250 of our young men and woman who have been with us for almost three years building set-top boxes (STB).
In 2016 a group of enthusiastic black entrepreneurs from BUA Africa, approached Microtronix to assemble set-top boxes – they were confident that together we could get a large slice of the government contract to produce boxes for the subsidised STB roll-out as well as becoming a second-source supplier to Multichoice for the basic entry-level decoders. They brought to the table the prospect of 3,6 million boxes over three years and Microtronix brought the expertise and equipment to meet this demand, and so the company BUA Microtronix was formed.
Later that year, a 5000 m&178; custom-built factory was built and commissioned and production began. Most of our staff were young matriculants taken off the street and meticulously trained in the skills of electronics and electronic assembly. These young people in the end were the heroes at BUA Microtronix, they worked tirelessly day and night producing around 100 000 set-top boxes per month, which equates to one set-top box every 15 seconds, across three lines daily, for almost three years.
The dream became reality and the partnership was healthy. The numbers grew, eventually peaking in October 2019 at 184 000 boxes produced in one month. Together we produced a total of 3,9 million set-top boxes. Chinese giant Skyworth provided the funding and the technology, our partners BUA closed the deals and were awarded one third of the government STB USAASA (Universal Service and Access Agency of South Africa) contract, Multichoice supported our BBBEE start-up and BUA Microtronix manufactured and assembled the set top boxes. Together we created over 350 jobs for young black South Africans and produced 3,4 million set-top boxes for Multichoice and 500 000 boxes for USAASA, an achievement that we are all so very proud of.
Saying goodbye to 250 of our loyal hard-working staff at the end of 2019 was difficult and sad, however they left with their pride and dignity enhanced, but so ended another great chapter in the history of Microtronix. I truly extend a huge thank you to all our partners at BUA, SkyBlu, Skyworth, Multichoice and USAASA for giving us this opportunity to collaborate on this initiative and last but not least of all to our great Microtronix staff, both past and present.
It was recently announced that the government would no longer be procuring set-top boxes for the low-income market and the supply of decoders for the digital migration must come from the open market and OEMs and retailers must supply and distribute the boxes for sale. What a reversal from the original vision to create and stimulate a thriving electronics manufacturing sector through the empowerment of many black industrialists off the digital migration project? So to those budding black industrialists who were planning to set up factories to produce STBs – always remember that in business and in life sometimes losing can in fact be winning.
The 500 000 government set top boxes sustained our factory for less than six months and borrowing money and setting up an operation for this project could have been financially damaging. The intention of growing black entrepreneurs and industrialists in this economy seems futile.
For those who continue to trade in this sector, with well-established factories, remaining viable and relevant alone remains a permanent challenge.
Contract manufacturing is not for the fainthearted and my respected colleagues and competitors will attest to this. Fortunately, Microtronix has always managed to remain diversified and has serviced a very wide spectrum of sectors of the marketplace, and so with the closing of one door there is always an opening of another.
Although Microtronix has a diversified customer portfolio, the struggling economy, the rand continuing to weaken and being extremely volatile, places immense pressure on our margins. We believe that we will have to look north for more business and I think the South African electronics industry can play a significant role in supporting industry in Africa and internationally. Solar and renewable energy is also showing signs of providing worthwhile business for local manufacture.
Microtronix remains confident in our ability to react to market conditions and we have some very exciting plans for 2020 that will leverage off our ability to offer a full turnkey solution from prototypes to over 100 000 units a month, whilst consistently improving our efficiencies and reducing costs whilst combining the knowledge we acquired in executing on the STB project.
We believe the exciting changes we will be making in 2020 will further enhance our ability to fulfil our vision to be recognised as the trusted leader in the provision of turnkey electronic contract manufacturing solutions in Africa. Please contact us for your every need.
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