Hisense keeps expanding in South Africa(2)

Boris Guo (right), a technical manager gives instruction to a TV assembly line staff member at the Atlantic Hisense factory. [Photo/Francisco Little]

Big investment

General Manager of TVs, Albert Li, said there are currently 84 local staff members working at the TV operation, and 150 to 200 at the refrigerator factory. Once fully functional, the $39 million invested in phase one is expected to directly create 600 local jobs, and indirectly provide an additional 2,000 or so job opportunities, while producing 400,000 refrigerators and TVs every year.

At the factory, Li is pleased with progress and interacts easily with staff, giving words of encouragement and advice. He's been with Hisense since 2008 and, while he misses the port city of Qingdao, in China, where Hisense is headquartered, he's at home in the Atlantis world of motherboards, capacitors and microchips. In the packing room he proudly shows off an exhibition monster TV. "This 110-inch screen is the biggest TV in the world, and will one day be made here in Atlantis," he said, smiling in his hair net and white coat.

These big ambitions are reflected in the Hisense complete knock-down (CKD) kits operation, which is significant in the South African context, as the company pushes to contribute to the re-industrialization of the South African economy.

Khan is not perturbed by the perception held by many that Chinese goods are often of low quality.

"What makes our business different from other Chinese companies is that we already have a consumer market. We have a 30-percent market share of TVs, and our popularity with our customers proves that we sell quality products." He also said that the brand is growing in large retailers, and discussions with marketing agencies are underway as the company looks to build up its brand even further in the local market.

"Consumers are not too concerned with the origins of the brand, but rather look at price, quality, technology and service. We focus on these aspects," said Khan, who added that the company has set up a unique repair-while-you-wait system for TV owners.

Hisense South Africa will focus on Sub-Sahara Africa as a region, but only after the brand is dominant in the South African market, said Khan, which he expects to be the case in 18 to 36 months. The brand already has a strong presence in Egypt and Nigeria, and sells products in 15 African countries.

Corporate responsibility

Khan believes it is important to first build up an import market where consumers buy the Hisense brand based on price, quality, technology and service and then invest in domestic manufacturing.

This global business model applies to the company's TV, refrigerator and future tablet and phone operations.

"We want to change perceptions of how Chinese companies are viewed. Staff at the factory feel they are part of a global company, with heritage in China. We have to find the balance between local, Chinese and global," he said.

Khan is also well aware of the need for corporate social responsibility, and the sometimes-difficult labor environment in South Africa. Hisense has built sporting facilities for staff, and provides performance incentives coupled with staff recognition in an effort to develop a positive culture within the company.