Korean electronics firm Samsung is seeking tax concessions and safeguards against counterfeit imports as a prerequisite for opening a Kenyan assembly plant.
Samsung Electronics Africa President Sung Yoon on Monday said state incentives in form of tax benefits and blockage against the influx of fake phones and electronics would enable the company to set up a local production factory cost-effectively.
“Building a local assembly depends on how the government protects those factories. The Kenya market is okay capacity wise but the issue is there are other products coming from other countries. At the end of the day, how can we keep our price competitive?” said Mr Yoon when the company briefed journalists in Nairobi on the electronic giant’s 2018 market strategy for Kenya.
“So it (setting up a local plant) depends on how much benefits (the government provides) for those factories.”
The electronics company in 2013 announced plans to open a television, laptop and printers’ assembly plant, a move that would position Nairobi as the nerve centre of its operations in East Africa.
The plant was initially expected, according to local Samsung officials who spoke at the time, to employ 900 people directly and more than 1,000 in its supply and marketing chains besides enhancing the transfer of knowledge.
Samsung currently serves Kenya and the larger East African market through shipment of finished electronic products, including laptops, refrigerators, television sets and printers.
Establishing the assembly plant would mean Samsung shipping in knocked down kits for assembly – increasing the efficiency of its supply chain and possibly cutting the cost of its products.
Mr Yoon said the firm plans to beef up its local talent base and increase partnerships with local distributors as it seeks to drives sales.
“We need more talent to drive profitable growth,” he said.
The company’s Nairobi office has in recent years been hit by a wave of top-level resignations in unclear circumstances.
The Seoul-based firm opened the Nairobi regional hub in November 2003 targeting to grow market share in the East African market with its range of products such as TVs, cell phones, computers, and home appliances.
Mr Yooon said the company would beef up its service centres across Kenya to provide after-sales services to customers and ward off stiff competition from Asian rivals who include LG, Huawei, Tecno, Asus, Sony, Lenovo, ZTE, Panasonic and Toshiba.