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Samsung Plans New Assembly Plant in Kenya

Korean electronics giant Samsung is set to open a television, laptop and printer assembly plant in Kenya by end of this year, positioning Nairobi to be the nerve center of its operations in East Africa.

The plant is initially expected to employ 900 people directly and more than 1,000 in its supply and marketing chains, in addition to enhancing the transfer of knowledge, Samsung officials said.

Robert Ngeru, Samsung’s chief operating officer in East Africa, said the Nairobi assembly will be the latest addition to the chain of African plants in South Africa, Sudan and Senegal.

Samsung has recently announced plans to build a similar plant in Addis Ababa to serve the expansive Ethiopian market.

A new plant with 900 workers will push the number of Samsung’s employees in Kenya to 1,000 and place Kenya on a firm path to acquiring the skills it needs to become a regional hub for the high-value technological products.

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 means Samsung will ship in knocked-down kits for assembling – increasing the efficiency of its supply chain and possibly cutting the cost of its products.

Ngeru said Samsung is currently negotiating for tax incentives with the Ministry of Trade and Kenya Revenue Authority (KRA). He added that the amount of money the Korean firm will invest in the venture is pegged on the incentives offered.

Samsung’s bold moves are part of the plan to firm its stranglehold on the East and Central African market of 142 million people and push up its sales to $2 billion by 2015 from $250 million in 2011.

“Samsung will initially ship in equipment parts or panels and assemble then here, but will later move to the next stage of molding the body covers locally,” Ngeru said.

Ngeru said Samsung’s future growth plan for Africa is hinged on market segmentation and localization of products according to the rising needs.

In Ethiopia, Samsung is targeting the emerging middle-class in an economy of 80 million people that has been growing at an average of 8 percent annually in the past five years.

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