Memeburn was recently invited on a physical tour of the Hisense factory, situated in Atlantis, Cape Town. It is the only Hisense factory in South Africa and produces almost all of the company’s fridges and television sets for Sub-Saharan Africa.
The factory itself is an hour’s drive from the Mother City while the Hisense offices are located in the Century City area of Cape Town.
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THE COMPANY
Hisense was founded in 1969 in Qingdao, China, and first entered the South African market 30 years later in 1996. The company’s management decided to manufacture more of its products within South Africa to secure a stronger footing in the local market. These products would consist of home refrigeration units and television sets, while cellphones, tablets, microwaves, and washing machines would still be imported.
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Since opening the plant, TV market share has grown from 9% in 2012 to 18% in 2014, while refrigeration market share has increased from 10% to 20% during the same period.
A large portion of all manufactured units are exported outside of South Africa.
In 2013, Hisense purchased the old Tedelex factory in Atlantis, which had closed in 2010. Hisense reopened it and invested R350-million into phase one of its programme. This included employing 300 workers from the Atlantis area, which, according to Hisense, revitalized the community after Tedelex closed down its factory. Tedelex had only employed 150 factory workers.
Hisense initially brought in many foreign trainers and specialists from China to train local workers, but has slowly been replacing them with the trained employees to keep the company as ‘local’ as possible.
The company now employs 500 staff, of which 98% are ‘local’, at the production facility. The members of staff form part of a 75 000 strong global family.
The Cape Town production plant joins China, Algeria, Egypt, and Mexico as other countries of manufacturing. According to stats provided by Hisense, the Cape Town factory manufactures 1200 fridges and 1700 TVs per day, with available capacity to manufacture more units if needed.
Due to South Africa’s load shedding woes, Hisense is unable to power the entire factory off the grid with generators during blackout sessions. In order to counter this, the factory keeps additional product stock on hand to ship out if needed.
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THE REFRIGERATION UNITS
Almost all of Hisense’s fridges, from entry-level units to more advanced and robust models, are manufactured in their Atlantis plant. Only a few are still imported due to materials needed for specific parts and colours, such as the Hisense H200RRE red bar fridge.
Hisense manufacturers almost all of the refrigeration components from raw materials. Each fridge starts off as a motor, some chemicals, a bag of plastic pellets, and a stack of plastic sheets. From here the materials are melted down, molded, and left to cool. The newly minted pieces and unit casings and stuck together with a special filler compound. Afterward, the entire refrigeration unit is assembled and heads off to its next destination.
The fridges are then put through rigorous testing phases and quality control checks. All of the manufactured units are hooked up to sensors and left on for 90 minutes to make sure they reached the recommended temperatures for usage.
From there, the complete fridge is boxed up and shipped off to where it needs to go. A small number of select fridges are unboxed in the factory by inspection managers for random spot checks. This final check is to verify all previous quality control measures have been thorough enough.
THE TELEVISION SETS
Unlike the refrigeration units, TVs are not manufactured at the Atlantis plant, though they are assembled from various imported and local components.
Every television set in the plant starts off as one of four PCB boards on a sheet. These sheets are run through large machines which attach components too small for human hands to handle. After the components are attached, the final machine checks each and every board for faults. It verifies the boards against a schematic of what the semi-completed board should look like and if anything is different — even the smallest of letterings — the machine will alert production staff to the inconsistency.
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Once the first stage is completed, the boards are passed to a line of women who start fitting the larger components, such as processors and connection ports. These women are affectionately known as “The Golden Girls”. According to Hisense, women are far more diligent when it comes to fitting the components and keeping concentration;men rarely form part of the line. Everyone on this line is able to assemble a board without even checking the schematics.
In order to ensure the PCB boards are not damaged by static shock, The Golden Girls are grounded by a copper wire attached to their wrists.
These complete component boards are run through a large machine which solders all of the components to the PCB.
In the next section, workers on the line plug the completed boards into a variety of systems to test all of their connections, video and sound output, and any playback defects.
Screens now reach their final assembly phase where the PCB boards are attached to the screens and enclosed in the casing. The workers here need to be incredibly fast as one slow individual could slow down production for the day and create a backlog.
After the assembly, all screens pass through a final testing phase which conducts burn-in tests, functionality, and tests compatibility with remotes.
Once tested, the products are packaged along with all of their relevant materials. Remote controllers are also assembled at the plant, but we didn’t get a chance to view that area.
Large-scale screens, such as the 75 inch, aren’t part of the standard production line. These larger models are specially constructed by two workers in a locked room and can take two weeks per screen. Due to the sensitivity of this process it was not part of the tour.
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FUTURE PLANS
Both the local television and fridge divisions form phase one of Hisense’s plan for South African. In 2016, the company will be launching phase two, for which ground has already been purchased next to the current plant. The company will then start to manufacture washing machines and assemble cellphones locally. Consideration had been given around manufacturing the cellphones from scratch, but the cost would have been too high and the process too complex.
By the end of 2016, Hisense aims to be one of the top three electronics companies in terms of market share in the TV and refrigeration categories they export to.
Due to the sensitive nature of Hisense’s operations all images have been pre-approved and supplied by Hisense.
