There are no gambling machine manufacturing facilities in South Africa, notwithstanding the fact that the industry currently contributes about R50-billion to GDP annually.

In terms of the agreement, GPI and Merkur have formed a new company called Grand Merkur (Pty) Ltd (“Grand Merkur”). Grand Merkur will be registered in South Africa to manufacture, assemble and distribute slot machines, sports betting terminals and lottery terminals. The new company will also investigate opportunities for the possible operation of gaming facilities, and look to develop a training centre, as well as a research and development centre, where locally designed software, games and alternate hardware will be developed.

The deal brings together GPI’s local expertise and the intellectual property of the biggest manufacturer in Europe with significant game design and operational skills. Grand Merkur will be able to supply the existing local market with a world-class product which has enjoyed significant success and market share in Europe.

Casino, LPM and Sports betting operators will be able to access high quality German produced hardware that can now be manufactured locally at a lower cost, while gamblers will benefit from a varied selection of games and cabinets, and a game design team that is able to introduce brand new games in a relatively short turnaround time.

Thomas Niehenke, Chief Operating Officer of the Gauselmann Group said: “Grand Merkur was established because both Merkur and GPI saw significant growth prospects in South Africa and throughout the continent. For Merkur, Africa offers an ideal expansion opportunity for our ever expanding manufacturing arm, Gauselmann adp.” Niehenke added: “Currently, South Africa has no local slot or gaming machine manufacturing plant, which we believe presents us with an ideal gap in the market. GPI’s gaming experience and established industry relationships make it an ideal partner in Africa.”

The two companies intend to leverage one another’s intellectual capital, existing relationships and experience in the gaming manufacturing industry in Europe and Africa as a whole, but particularly in South Africa, where foreign investment, job creation and locally manufacturing and assembly of goods would benefit the country significantly.

Hassen Adams, Executive Chairman of GPI said: “The opportunity offered by the joint venture to export our manufactured products to the rest of the continent, Europe and elsewhere is a significant benefit. We also expect it to create a significant number of new jobs and careers in the local manufacturing industry, which will naturally provide significant economic multipliers for the country”.

Adams continued: “for GPI the venture forms part of our vision and commitment to invest in South Africa and its communities and to advance transformation and economic empowerment. Both GPI and Merkur have similar histories, philosophies and visions and as such form a perfect fit. We each share a commitment to investing in people and communities, ensuring innovation as well as growth and sustainability.”

GPI has also signed further agreements with South African electronics contract manufacturer Tellumat, formerly Plessey, to assist with the project and to secure their services at its Atlantis and Retreat plants. Tellumat has been in existence as an electronics manufacturer in South Africa since the 1960s, and is currently manufacturing and assembling for the likes of Boeing, Air Bus, Telkom, Eskom and Sony.

Tellumat was given the thumbs-up as manufacturer following a site visit to its factory in Retreat by the Gauselmann Group’s Chief Technical Officer, Dr Werner Schroer, in June this year.

Grand Merkur will be based in Cape Town, South Africa, the home of GPI.

About Grand Parade Investments (GPI)

Grand Parade Investments Ltd. (GPI) was formed in 1997 to conduct business as an investment holding company with interests in the gaming and leisure industry. In June 2010 it acquired 100% ownership of its Limited Payout Slot Machine (LPM) operations and in so doing became an investor and operator. The company comprises a substantial shareholder base representing a broad spectrum of the population of the Western Cape and is an extremely proud, and truly Broad-based, Black Economic Empowerment enterprise. The company has been trading effectively on the JSE since 2008 and has consistently grown its portfolio to the benefit of all of its shareholders on an annual basis. In addition to its 25.1% shareholding in the Table Bay Hotel, as well as both the GrandWest and Golden Valley Casinos, it also presently operates over 1,800 LPMs at over 400 different locations across Gauteng, KwaZulu-Natal and the Western Cape.

About Merkur Gaming GmbH (Merkur Gaming)

Merkur Gaming GmbH is a wholly-owned subsidiary of the family owned Gauselmann Group a specialist gaming enterprise focussing on the development and sales of innovative Amusement With Prizes („AWP“), Limited Payout Machines „LPM“), casino slot machines as well as Video Lottery Terminals („VLT“) with a key focus on Multi-Games, made in Germany.

Merkur Gaming’s core role within the Gauslemann Group is to serve and service international markets, with a strategic decision to only enter markets that have already been exposed to gaming and who have already been successfully infiltrated by other manufacturers and operators.

A key differentiating factor of Merkur Gaming is its direct association with sister manufacturing and game development company Gauselmann adp. The fact that the supplier and developer is so closley associated with the operator and distributor has been a key driver of both entities‘ success. Gauselmann adp is Europe‘s leading game development (software) and gaming machine (hardware) producer. The Gauslemann adp factory in Lűbbecke produced in excess of 85,000 gaming machines and cash management systems in 2011, and continues to successfully develop new gaming cabinets and games to meet the demand of not only it’s gaming customers, but also the organic growth created through the continued expansion of its associates.

About Tellumat (Pty) Ltd (Tellumat)

In the early 1960’s, Plessey plc UK Group established a South Africa based, African subsidiary company. In 1988 Plessey plc UK was dissolved and the South African operation became an autonomous company, listing on the JSE in 1995 as Plessey South Africa. Fragmented through acquisition in1998, Tellumat, as it is known today, became a privately owned company.

Tellumat Electronic Manufacturing is an electronics assembly and manufacturing facility uniquely structured and equipped to provide from “labour only” to a true full turnkey solution. Tellumat’s significant expertise is focused on complete system solutions for all levels of complexity, including prototyping, quick turn-around and volume production. They cater for a diverse range of markets including telecommunications, military, aerospace, metering, security, industrial and medical. The manufacturing solutions offered can improve time-to-market, lower total costs and asset utilization, and ultimately, increase their partner’s market share and margins.

All the expected areas of competence are included in their manufacturing process, these, combined with stringent quality assurance measures, ensure that reliability and quality is built into their customers’ products. Tellumat Electronic Manufacturing adheres to the international IPC workmanship standards, and is an ISO 9001:2000 accredited facility.

For further information contact:
Grand Parade Investments

Alan Keet
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Tel: +27 21 421 7771