A brave New World
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.