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Mobile device maker Nokia has announced that it will pump USD 75 million into its manufacturing plant at Sriperumbudur, near Chennai, over the next year.

Nokia started manufacturing handsets in India at the Sriperumbudur plant in January 2006 and had initially committed itself to invest USD 150 million over four years. However, in the face of a buoyant demand in the country, the company has already invested USD 210 million in its Chennai operations.

"The company has already invested USD 210 million in the country against a commitment of USD 150 million and USD 75 million more is being invested in its Sriperumbudur plant," said Sachin Saxena, Nokia India Director (Operations).

The announcement of fresh investment comes in the wake of a booming demand in the domestic market and rising shipments to overseas markets. The fresh fund infusion is intended to beef up the capacity of the plant at Sriperumbudur so as to cater to the burgeoning needs of the local as well the emerging markets. It is also meant to improve the product portfolio of Nokia.

Raimo Puntala, senior vice-president (operations and logistics), Nokia, said, “The decision to make additional investment in the plant is a reflection of Nokia's commitment to the Indian mobile communications industry and of the increasing demand for mobile devices from Asia, Middle East and Africa. Nokia will continuously strengthen its manufacturing network to drive greater agility within the business and increase its competitiveness.”

The Sriperumbudur plant has already manufactured 60 million handsets in a record 20 months since it commenced production in January 2006. Half of the production from the plant is consumed domestically and the rest is exported to countries across the Middle East and Africa, Asia, Australia and New Zealand.

The Sriperumbudur plant mainly concentrates on low-cost sets for which there is a growing market in India, said Saxena. He also pointed out that seven Nokia vendors had committed to set up production facilities at the Nokia Telecom Park of which three of them had already begun operations. The remaining would become fully operational by early 2009. Once it was fully operational, the park could provide jobs to around 30,000 people, explained Saxena.

More than the cost element, Mr. Saxena felt that the nearness of vendors (at the telecom park) would help Nokia substantially in terms of quickly responding to the demands of customers.
The Chennai plant employs 6,000 people and is Nokia’s 10th manufacturing facility in the world.