Tellumat and gaming company GPI form joint venture in electronic manufacturing

August 22nd, 2014, Published in Articles: EE Publishers, Articles: EngineerIT


The JSE-listed investment and empowerment group Grand Parade Investments (GPI) has entered into a manufacturing joint venture with electronics contract manufacturer Tellumat, in terms of which GPI will acquire 51% of the new  company, Grand Tellumat Manufacturing, with Tellumat owning the balance of 49%.

The transaction is a merger of the engineering skills and manufacturing capabilities of Tellumat with the investment know-how of GPI. The newly created company aims to position itself as the manufacturer of choice for electronic and related technology products designated to require minimum levels of local content to be eligible for procurement by government departments and local infrastructure projects.

Tellumat was a privately owned South African company founded in 1998 from businesses that originally were part of the UK based Plessey group that established operations in South Africa in the 1960s. Tellumat currently manufactures and assembles a wide range of electronic products including some that are ultimately delivered to companies such as Boeing, Airbus and Eskom.

Murison Kotzé - "the electronic manufaturing market is not dead, despite the tough times we’ve experienced as an industry we have seen an improvement over the last 18 months

Murison Kotzé: “The electronic manufacturing market is not dead. Despite the tough times we’ve experienced as an industry, we have seen an improvement over the last 18 months.”

In answer to the question “Is the electronic manufacturing industry in South Africa dead?”  (lead editorial  EngineerIT, January 2014), Murison Kotzé, managing executive, Tellumat Electronic Manufacturing said that despite the tough times experienced as an industry, there has been an improvement over the last 18 months.  “The fact is that the market is very competitive as many companies compete for a limited number of customers.

“The majority of the electronic manufacturing that happens in South Africa is either for local companies (of which many export their products) or for international companies, but mostly for local consumption. Even though we have a good base of local companies placing manufacturing work in South Africa, as an industry it is imperative that our customer pool expands, and that we look beyond our borders and become an acknowledged electronics manufacturing centre.”

He also said that as electronic manufacturing service providers we can’t rest on our laurels and expect business to remain local without doing our bit to help our customers remain internationally competitive. “There are certain things like the relatively high cost of labour and electricity as well as our exchange rate that we can do very little about; but there are areas within our scope of influence where we need to focus. Driving efficiencies, investing in better equipment and employing ‘lean’ manufacturing practices are crucial to keeping our industry alive – to keep our local customers local and to attract foreign companies to produce locally.”

By Tellumat adding its proven manufacturing capability, high level of quality systems and a wealth of manufacturing expertise in the aerospace, defence, energy, telecommunications, transport and consumer electronics industries to the joint venture, Grand Tellumat Manufacturing is well positioned as a localisation partner for foreign and local vendors bidding for government procurement and infrastructure projects.

At the end of 2012, GPI entered into a deal with German slot machine manufacturer Merkur Gaming to manufacture these gaming machines in South Africa for the first time. They formed an arrangement whereby they would manufacture, assemble and distribute slot machines, sports betting and lottery terminals through a joint venture with Tellumat as the contract manufacturer.

Grand Parade Investments is a Western Cape based black-owned and -controlled (as defined in the Codes of Good Practice) holding company listed on the Johannesburg Stock Excahnge, with investments and operations in the South African gaming and leisure industry. Since its establishment in 1997, the company has positioned itself as a formidable player in this industry.   Its field of expertise up to now is in gaming and its present investment and operations portfolio was therefore biased towards the gaming, leisure and entertainment sectors.

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