The Hindu Business Line : Nokia investing $75 m more in Sriperumbudur

Chennai, Dec. 5 Nokia today announced fresh investments of $75 million (Rs 300 crore) on expansion of its mobile handset plant at Sriperumbudur, near Chennai. This takes the Finnish mobile major’s investment —made and committed — in Sriperumbudur to $210 million.

At a press conference here today, Nokia India Pvt Ltd’s Director-Operations, Mr Sachin Saxena, said that the investments were needed to ramp up capacity to meet the growing market demand, but could not give capacity figures. Capacity reckoning would vary depending upon the models produced and the extent of outsourcing, he said.

10th handset unit

Nokia started production of handsets from its $150-million plant in Sriperumbudur in January 2006. It is the company’s tenth handset plant in the world.

At the vendor park around the plant, seven of Nokia’s suppliers were to set up shop. Of them, two — Salcomp and Perlos — have begun operations. The other five (Jabil and Foxconn for mechanics, Wintek for LCD panels, Aspocomp for printed wired boards and Laird for antenna) are to begin operations in about a year. Mr Saxena could not say whether or not the prices of Nokia handsets would drop when all the vendors were in production. The ‘Nokia Operations’ in Sriperumbudur plant produces the devices and transfers them to ‘Nokia Sales’ in Gurgaon. Though both are the divisions of Nokia India, the transfer prices would be the call of Nokia Operations, while Nokia Sales would decide on market prices.

Nokia Sales is free to buy handsets from any Nokia plant in the world, just as Nokia Operations is free to export. Because of this arrangement, any cost saving arising out of localisation of components purchase may not result in an enhanced ability on the part of the seller to drop prices.