Foxconn reopens Indian manufacturing unit

CHENNAI: Foxconn has again started manufacturing activity at its Chennai factory inside the Nokia Telecom SEZ, two people aware of developments at the Taiwan-based phone maker said.The unit was closed as part of a collective shuttering of phone and component factories after Nokia’s exit from the cell phone manufacturing business in late 2014.Trial production has begun at the factory, said a top government official in Tamil Nadu, adding that the production was “part of the 2019 Global Investors Meet (GIM) MoU they [Foxconn] signed with us promising Rs 2,500 crore of investment in TN.”FIH Developers, part of the Foxconn Group, signed the MoU earlier this year to expand manufacturing of components that is projected to create 20,000 jobs, according to a state government press release. Foxconn did not respond to an email seeking comment.The development comes at a time when the Nokia Telecom Special Economic Zone is seeing strong revival. Salcomp, recently acquired by Chinese firm Lingyi iTech, has bought the Nokia factory inside the 212-acre SEZ.The Nokia plant was excluded from the sale of the Finnish company’s mobile devices business to Microsoft in 2014. Foxconn shut down its unit soon after due to a lack of business orders, leading to massive protests by its employees.Later, as Chinese firms such as Oppo and Xiaomi increased smartphone sales in India, they contracted Foxconn with making phones locally at its newly opened facilities in the Sri City industrial cluster across the border in Andhra Pradesh.The central government’s phased manufacturing programme, which provided tax incentives for domestic manufacture of mobile handsets, strengthened Foxconn’s business case for more factories in India.Over the last one year, Foxconn has executed a phased return to Tamil Nadu, slowly building capacities at its own SEZ along the electronics industrial corridor, where high-end iPhone models are made currently.Foxconn, now a contract manufacturer for Apple and other brands such as China’s Xiaomi and the Nokia-branded smartphones from HMD Global, is expanding into Tamil Nadu even as it runs operations in Andhra Pradesh.The rush to produce more smartphones comes in the backdrop of emerging economies such as Vietnam proving to be a destination for phone brands looking for a cost-effective de-risking of their China strategy.In its 2019 annual report, Foxconn identified India as a “rapidly growing region, due to the low adoption rates of smartphones, and with the local carriers increasing internet coverage outside of tier 1 and tier 2 cities.”“India is expected to be a catalyst in the future growth of smartphone shipments,” it said in the report.

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