Huawei plans to invest $500 mn on new plant

Huawei Technologies, a telecom equipment maker from China, is planning to start operations at its manufacturing facility in Sriperumbudur, near Chennai in the next two years to cater to the domestic needs of the telecommunications market. The plant is expected to attract an investment of around $500 million.

The company has already started contract manufacture of optical infrastructure in the facility and would scale up the facility to manufacture more products in the next one or two years, said P Sanjeev, sales director, Huawei Devices, a division of Huawei Technologies.

The investment for the facility would be part of its announced $2 billion investment for capacity building in India. Last November, we announced an investment of $2 billion in India to be made over the next five years. We are yet to finalise the plans and earmark investment for each of our project, he said. Decision on the nature of capacity expansion and investment would be taken in the fourth quarter of this fiscal.

The company is also exploring options to set up a semi-knock down for fixed wireless phone (FWP) in the facility. It has around 16 offices across the country including a research and development (R&D) centre in Bangalore.

The investment of $2 billion would be infused into expansion in R&D centre, setting up of manufacturing facility, capacity building and India operations investments, setting up regional hubs for training and development of human resources and corporate social responsibility (CSR) activities. The investments in some of the activities has already commenced, he added.

According to a few earlier reports, Huawei had earlier promised the Tamil Nadu State government officials, led by the then deputy chief minister for the state M K Stalin, that it would invest around $500 million (around Rs 2,300 crore), on a plant in Chennai. However, company officials refused to confirm the numbers, stating it is yet to decide on the investment and related matters.

The company, which announced launch of three smart phones with the Android platform this week, also has over 50 per cent share in data download business in the country. It caters to around 3 million units of data cards used for data downloads in the country through various telecom operators, of the 5.5 million units sold in the country, said Sanjeev.

The company is planning to bring in brand visibility by co-branding the data cards with its logo in collaboration with the telecom operators, he added.