Nokia to invest $150 m in Chennai unit

SRIPERUMBUDUR/CHENNAI: Mobile giant Nokia inaugurated its manufacturing facility in Sriperumbudur, Chennai, on March 11. The unit will manufacture only low and mid-range GSM handsets during its initial phase, which includes the Nokia 1100 model. Apart from catering to the burgeoning Indian market, Nokia is also looking at this country as a sourcing base for low-cost phones. The big picture, however, is that the new facility will add to Nokia’s network infrastructure in the Asia Pacific region and flag off India-manufactured mobile pieces in diverse markets of South-Asia like Pakistan, Nepal etc.

At a press meet in Chennai, which was attended by Tamil governor SS Barnala, Jorma Ollila, chairman and CEO, Nokia, JS Sharma, secretary to the government of India and chairman of Telecom Commission, Matti Vanhanen, Prime Minister of Finland, and Robert Andersson, Nokia’s executive vice-president, customer and market operations.

Jorma Ollila, chairman and CEO, Nokia said, “We are pegging India as an export hub for Nokia phones, catering to South-Asia. We will be investing $150 million over the next three years. We selected Chennai for the factory because we’ll get skilled labour, friendly business environment, support from the government, good logistics connections and overall cost-efficiency. Currently ranked at number five, India is set to become the second-largest mobile phone market by 2010.”

He added, “The India manufacturing facility will support demand for mobile handsets and add to the network infrastructure in the Asia-Pacific region. First-time subscribers in India are very much on our map and we are working closely with operators in order to lower the total cost of ownership of a mobile phone. In the near future, India could see affordable handsets and quicker and more efficient network solutions,” Officials from Nokia tag the mobile handset market growth at a whopping 60%.

The plant began with the commercial production of handsets on January 2, 2006 and already has over one million finished pieces to its credit. The facility employs around 1100 people.

Meanwhile, JS, Sharma, chairman of Telecom Commission said, “Indian mobile subscribers are willing to pay for upgrades, value-based services and advanced models that offer better services. The growth has caught the imagination of big players like Nokia. Currently, the mobile subscriber base in India is 85 million. In the last three months, five million new lines are being added every month. The target is to take the base to 500 million by 2010, which indicates the market potential of India.”

Also significant is the fact that two of Nokia’s global component suppliers, Aspocomp Group and Perlos Corporation, are commencing operations in Nokia India Telecom’s industry park. Aspocomp is expanding its HDI (high density inter-connections) business operations by building a new printed circuit board plant in the park with an investment of over $70 million. Perlos Corporation will build a manufacturing plant with an investment of approximately $12 million.

Nokia said the park will have around 8-10 suppliers setting up shop and will generate 10,000 job opportunities once it is fully operational. Ollila said the park will add to Nokia’s infrastructural support in the region and provide support to the Chennai plant in the form of a broad mix of material and services from global and local suppliers.