The Hindu : Business : Nokia to set up handset plant near Chennai

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Thursday, Apr 07, 2005

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Business

Nokia to set up handset plant near Chennai

By Our Staff Reporter

(From right): The Director, India Operations, Nokia Global, Jukka Lehtela; the Senior Vice President, Raimo Puntala; the Managing Director of Nokia India, Sanjeev Sharma; and the Senior Vice President, Nokia Asia Pacific, Lauri Versalainen; at a press briefing in Chennai on Wednesday. — Photo: Vino John

CHENNAI, APRIL 6. The mobile handset major, Nokia, today announced that Sriperumbedur, about 40 km west of Chennai, would host its first manufacturing facility for phones in the country and the tenth across continents.

The plant, on which the company expects to invest between $100 and $150 million, will be its fourth such facility in the Asia Pacific region.

After participating in the signing of a memorandum of understanding with Nokia, the Tamil Nadu Chief Minister, Jayalalithaa, told the State Assembly today that the plant would come up at the industrial estate of the State Industries Promotion Corporation of Tamil Nadu (SIPCOT).

Nokia, she added, planned to initially invest Rs. 675 crores ($150 million), while its component suppliers would make a similar investment. About 1,200 direct jobs and 6,000 indirect employment opportunities would be generated thanks to the investment.

The area housing the plant, to initially produce 24 million handsets, and the allied units would be declared as a Special Economic Zone, Ms. Jayalalithaa said.

Later, addressing a press meet, senior executives of the company said apart from making the Nokia models more competitive in the local market, it would enable the company respond faster to the customer needs. They, however, declined to comment on the announcements by the State Government, including on the SEZ status.

"It is a very significant moment ..." said Sanjeev Sharma, Managing Director of Nokia India. The Nokia Industrial Park, as the 210 acre facility was likely to be christened, would locate the manufacturing units of the company's suppliers.

State's support

Construction work on the plant, whose site was influenced by the "very good support from the State Government, cost benefits and availability of skilled labour," would begin as soon as possible. The plant would go on stream in the first half of 2006 and employ 2,000 people on attaining full scale production.

Apart from meeting the growing demand for mobile phones in the country — both the GSM (Global System for Mobiles) and CDMA (Code Division Multiple Access) varieties — the handsets manufactured at the plant were also likely to be exported

According to Raimo Puntala, Senior Vice-President (Operations and Logistics, Customer and Market Operations) of Nokia Corporation, the Sriperumbedur plant promised "clear logistics advantage," to the company.

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