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At a time when the Union Government is debating a policy to encourage local production of telecom equipment, Nokia Siemens has seen a 25 per cent growth in volumes at its plant in Sriperumbudur, Tamil Nadu.
The company manufactured 12.18 lakh units in 2012 compared with 9.78 lakh in 2011. This has gone up to 12.86 lakh units as of March 2013.
“The manufacturing unit in Tamil Nadu is key to our global operations,” Sandeep Girotra, Head of Nokia Siemens operations in India, told Business line . The company recently bagged the Rajiv Gandhi national quality award from the Government in the large-scale manufacturing segment.
Nokia Siemens said that it achieved a sales turnover of Rs 2, 580 crore from the factory, of which Rs 1,198 crore came from exports.
Satendra Singh, Head of Manufacturing, India, Nokia Siemens Networks, said, “We are manufacturing the entire range of equipment for 2G, 3G and Long Term Evolution (4G technology). We are exporting equipment to all over the world from this plant.”
The company employs 742 workers at the plant, mostly ITI diploma holders. Nokia Siemens had started the plant in 2008 and has so far invested close to $75 million.
While the company has been bullish about its manufacturing capabilities, it is also facing some serious challenges. The biggest challenges are the lack of availability of components and semiconductor fabrication in the country.
“The absence of a local ecosystem forces us to import components. Ideally we would want to procure it locally but these are cutting-edge technology owned by foreign players,” said Satendra. The company is currently procuring things such as plastic and packaging material from India but the key electronics component is being imported.
Telecom equipment vendors, including Nokia Siemens and Ericsson, have been telling the Government to encourage component makers and chip companies to set up units in India before enforcing the manufacturing policy.
Under this policy, equipment vendors have to add value to their products locally by as much as 80 per cent, which may not be possible without the component makers.
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