Samsung & LG Severely Damaged in S. Africa, Toyota Backing Off Investments
July 19, 2021
JOHANNESBURG, South Africa—South Korea’s Samsung Electronics and LG Electronics saw the greatest amount of damage among Korean firms in South Africa.
LG’s TV manufacturing plant in the port city of Durban was burned down and its surrounding warehouses were looted, according to The Korea Times.
“The company will have to figure out where it will source TV shipments as its factory burned down,” an industry official said. “But given the factory produces LG TVs sold in South Africa, the damage will not be great.”
Samsung’s warehouses in KwaZulu-Natal were also pillaged, however, its Durban plant has remained intact—after Samsung initiated “enhanced” security measures.
The recent imprisonment of former President Jacob Zuma last week prompted massive riots, looting, and violence not seen since apartheid. The current death toll is reaching 100 as of Sunday afternoon.
Although the riots started with Zuma’s imprisonment, the chaos itself has grown into grievances from the government’s poor handling of the COVID-19 pandemic, high unemployment rate, and economic downturn.
South Africa is the continent’s most successful country, however, the country itself is unable to compete against technological powerhouses in Europe, Asia, and the United States. The country has a wide variety of natural resources from diamonds to gold but relies on Asia to supply its entire tech sector from computers, microchips, TVs, smartphones to cars, ships, and building construction expertise.
Japan’s Toyota Motors has expressed “extreme concern” over the wide-scale vandalism, destruction of property, and looting in the country.
Toyota’s regional officer for Africa, Toshimitsu Imai, wrote a letter to eThekwini Mayor Mxolisi Kaunda, stating they’re rethinking all future investments in the country, reports IOL.
“A key priority for Toyota is the safety and welfare of our employees, their families and the communities within which we operate. The safety and harmony within this ecosystem is a fundamental value we strive for because it enables us to be a successful business and thereby contribute to the communities and economies within which we can operate,” said Imai.
“Unfortunately, the incidents in the city have left us feeling very uncertain about the future of our business in KZN. Our manufacturing operations in the south of Durban were forced to close and have remained closed since Monday, 12 July 2021. We are uncertain as to when it will be safe enough for us to resume operations.”
Many tech corporations appreciate the African market because of a lack of competition. Asian, European, and American companies enjoy a competition-free environment with no domestic competitors to challenge their brands in every field. However, social unrest around the continent has made these corporations think twice about future investments because of the risk involved.