Nokia will build a new plant in Vietnam, increasing its production in emerging markets and underlining Vietnam’s growing role as a manufacturing hub for global electronics firms. Skip related content
The cost of the new site near Hanoi, due to open in 2012, is around 200 million euros (169.6 million pounds), and further investments will follow, said the world’s largest cellphone maker by volume.
“I think it’s a great signal from European investors. Two hundred million euros is quite a significant investment for Vietnam,” Matthias Duhn, Executive director, European Chamber of Commerce in Vietnam, told Reuters.
“We have some short term issues, especially in manufacturing where we have power cuts. We have the usual education, infrastructure and bureaucracy issues, but that should not distract investors from the medium and long term prospects, which are still good,” Duhn said.
Vietnam and Southeast Asia are increasingly emerging as one of the alternative manufacturing hubs to mainland China.
The world’s top semiconductor firm Intel completed late last year a $1 billion (614 million pounds) assembly test facility. According to Intel, it is the largest computer equipment and manufacturing plant in Vietnam.
Hon Hai’s Foxconn is slated to build a $200 million mobile phone plant in Vietnam this year, state media have reported.
NOKIA PRODUCTION CHAIN
Differing from its smaller rivals Nokia has strongly focussed on developing its own manufacturing plants, and assembles almost all Nokia-branded phones itself.
Nokia has ten manufacturing sites in China, India, Korea, Finland, Hungary, Romania, Brazil, Mexico, and a smaller plant in Britain for its luxury Vertu brand.
Emerging markets and the sales of non-smartphones are traditional strongholds for Nokia, which last month said it would shift to use Microsoft software as it has struggled to catch up with Google and Apple.
Problems with its smartphone offering have hit Nokia’s profit and shares over last year, and led to replacement of its chief executive in September 2010.
Nokia shares were 2.1 percent lower at 6.20 euros by 9:25 a.m. British time, underperforming 1.3 weaker STOXX 600 European technology index.