Nokia selects Chennai for its manufacturing in India

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Espoo, Finland - Nokia today announced that it will set up a manufacturing facility for mobile devices at Chennai. The manufacturing unit in Chennai will be Nokia's tenth mobile device production facility globally. Nokia anticipates investing an estimated USD 100-150 million in the India production plant. “Establishing a new factory in India is an important step in the continuous development of our global manufacturing network. We selected Chennai to be the location for the factory thanks to the availability of skilled labor, friendly business environment, support from the state government, good logistics connections and overall cost-efficiency," said Pekka Ala-Pietilä, President, Nokia. According to a Nokia release, the construction work at the site of the manufacturing unit will start in April and production is expected to begin in the first half of 2006. Nokia foresees ramping up the factory gradually and the work force reaching approximately 2,000 employees when production is full scale.

Like many others Nokia also believes that mobile penetration in Asia Pacific is expected to be a major contributor to the global mobile subscriber base surpassing the two billion mark by the end of 2005. “Therefore, India which is set at the heart of the region where mobile communications is growing rapidly was a natural location of choice for the new production facility,” a press release posted on its website said.

Announcing the decision to manufacture in India in December 2004 on a visit to India Pekka Ala-Pietilä had acknowledged India's growing significance in the growing mobile communications market. "The factory would be an integral part of our global manufacturing network and help fulfill growing demand as mobile communications become increasingly affordable and available to more people in this diverse region," Ala-Pietilä announced. The vendor had also said that it would be investing in the manufacturing in India to “better meet the burgeoning demand for mobile devices in the country”. Nokia is the leader in the Indian GSM handset market and the country is its 5th biggest market in the world. Nokia did business worth 1.364 Euros in India in CY 2004.