A brave New World

Finweek English Edition - - Companies & markets - FROM THE AN­NUAL RE­PORT ANA MON­TEIRO

HAV­ING ES­TAB­LISHED a suc­cess­ful track record in bring­ing well-known ap­pli­ance brands to the South African mar­ket, Nu-World Hold­ings is now di­ver­si­fy­ing from its SA base.

The com­pany, re­spon­si­ble for im­port­ing and man­u­fac­tur­ing ap­pli­ance brands such as Mor­phy Richards, Sun­beam, JVC, Tele­funken and Sun­beam, has over the past six years built up busi­nesses in Bri­tain, the United States and Aus­tralia.

And Nu-World’s most re­cent an­nual re­port showed that off­shore sub­sidiaries al­ready con­trib­ute a third of its R1,6bn in rev­enue (with Aus­tralia be­ing the big­gest for­eign op­er­a­tion, ac­count­ing for R452,4m).

Nu-World chair­man Michael Gold­berg is up­beat about On Cor­po­ra­tion, the com­pany’s US joint ven­ture with a South Korean com­pany to sup­ply the US mar­ket with a lim­ited range of con­sumer elec­tronic prod­ucts un­der the Pros­can and Pro­tel brands.

Says Gold­berg: “The com­pany was es­tab­lished in May last year and the start-up phase is be­hind us. Rev­enues are ex­pected to in­crease sub­stan­tially over the com­ing years.”

In­ter­na­tional ex­pan­sion plans be­gan in 2000, when it bought a third of Prima Aus­trala­sia (a year later, Prima ob­tained the Tele­funken agency). That was fol­lowed in 2002 by the for­ma­tion of a strate­gic al­liance with Prima In­ter­na­tional UK, a 60% in­vest­ment in Nu­World UK in 2003 and a 65% in­vest­ment in Aus­tralia’s Yale Ap­pli­ance Group.

Against a back­drop of dif­fi­cult trad­ing con­di­tions down un­der (with in­creased com­pe­ti­tion and a de­fla­tion­ary mar­ket), Prima Aus­trala­sia had a dif­fi­cult year. How­ever, with the merg­ing of Nu-World’s Aus­tralian op­er­a­tions in Au­gust 2006 (with Prima’s busi­ness model com­ing in line with Yale’s), the merged en­tity – known as Prima Yale (in which Nu­World has a 54,8% stake) – has since been trad­ing prof­itably.

Nu-World’s 60%-held sub­sidiary Nu­World UK has had mixed for­tunes. With weak con­sumer sen­ti­ment in Bri­tain (due to lower dis­pos­able in­come be­cause of in­creased en­ergy costs and higher in­ter­ests rates), Nu­World UK posted a loss for fi­nan­cial 2005. How­ever, it bounced back in 2006, with a new line-up of prod­ucts and an in­creased cus­tomer base re­turn­ing the com­pany to prof­itabil­ity.

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