Salcomp to buy Nokia's Chennai unit for Rs 215 crore: Ravi Shankar Prasad

Information Technology Minister Ravi Shankar Prasad on Monday said Finland-based Salcomp, one of Apple’s major suppliers, agreed to buy Nokia’s Chennai plant for around $30 million (Rs 215 crore).

The unit will be re-opened nearly six years after Nokia’s plant shut down due to a tax dispute.  The factory has been shut since 2014 after a dispute between the Finnish mobile handset maker and tax authorities. Salcomp is expected to begin operations at the plant by next year, and is likely to invest around $300 million over the next five years. 

Nearly 10,000 people are likely to get jobs once the factory goes full steam, Prasad said.

The factory was shut in 2014 and around 15,000 direct employees lost their jobs. Earlier, HTC, Foxconn, and Essar had evinced interest in the unit but did not pursue the matter.

The Nokia manufacturing facility, which employed over 30,000 employees directly and indirectly, was closed by the income tax department following a Rs 210-billion income tax dispute. 

Following this, the Finnish company, which sold the mobile handset business to Microsoft, suspended operations at the unit in November 2014. After the Nokia unit was shut, almost all the ancilliary companies, including Foxconn, stopped operations in the SEZ.

Microsoft had acquired Nokia’s global devices and services business, including assets in India, for $7.2 billion in April 2015; however, due to the tax dispute, it had to take the facility off its plans.

Last April, Nokia resolved the tax dispute with the central government by settling $241.4 million towards IT department tax claim.

Nokia’s deal with the tax authorities paved the way for clearing the sale of its factory to Finland-based Salcomp. 

Salcomp has, in fact, been present in India with a facility in Chennai for several years now. The company was supplying to Nokia phones when its manufacturing facility in Sriperumbudur was up and running. But when the Nokia facility shut down a few years ago, Salcomp maintained production at its own unit and also started manufacturing at two more plants in India.

During his last visit, Salcomp’s president and chief executive officer Markku Hangasjärvi told Business Standard that India accounts for 15-20 per cent of the company’s total sales, and he certainly expected to raise that to about 20-25 per cent by 2020. 

The company invested over Rs 200 crore in India during the past few years and plans are to at least double that amount by 2020.