Nokia, the phone handset manufacturer, on Wednesday announced an investment of up to $150 million over next four years to set up a manufacturing facility in India, which would also give employment to about 2,000 people.
"India's position at the heart of a rapidly growing mobile communication region makes it an attractive option for establishing our new manufacturing facility here," Pekka Ala, President of Nokia, said in New Delhi on Wednesday.
The company is likely to finalise the site for the manufacturing plant and other pre-requisites like logistics by the first quarter of 2005 and hopes to roll out the first handset from Indian facility by the end of 2005 or early 2006, he said.
Ala said India would be among top five markets in terms of sale of handsets and among top three in terms of subscribers.
"Volumes have changed in India and this is the key reason behind setting up manufacturing facility here. This will be Nokia's 10th facility all over the world," he said, adding that it makes sense to make a plan to set up a manufacturing operation to take care of local demand in a cost competitive manner.
Nokia is negotiating with its key component suppliers across the world who are already working with them at other manufacturing facilities to come and join hands with Nokia in setting up the facility in India.
Asked what portion of up to $150 million investment will be of Nokia, Ala said: "The biggest portion will be ours."
Nokia is planning to manufacture all types of handsets, right from the entry level to high end and in both the technologies -- GSM and CDMA.
Anticipating a subscriber base of 2 billion (200 crore) by the end of 2006, Nokia hopes that a major chunk of nearly 12 per cent will be contributed by India.
Asked about the size of the plant, Ala said no final decision has been taken in this regard but assured that the size of the plant will be in keeping with the size of the market.
On the issue of whether India's facility would be exclusively for this country or will be used as a hub for exporting to the neighbouring countries, Ala said: "We are never rigid about such things. As and when the situation arises we take a decision but primarily the reason for setting up the facility here is to cater to the Indian market."
Recently other manufacturers like LG has also announced its plans to set up handset manufacturing facility in India.
Asked whether the company was talking to the key operators to promote the marketing of the handsets, Sanjeev Sharma, Nokia's India head said: "We are in negotiations with all the key operators for marketing and distribution for handsets. This is extremely important to have a close cooperation with them for our products."
