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Nokia's global EVP visits factory near Chennai

Trip 1st high profile visit after Nokia sold its phone unit to Microsoft

T E Narasimhan  |  Chennai 

Nokia Global Executive Vice President, Devices and Services, Stephen Elop today visited Nokia factory, near Chennai. It may be noted, this will be the first high profile visit from Nokia after the handset maker inked a deal with Microsoft on September 3 to sell Devices & Services business to Microsoft in EUR 5.44 billion on all-cash transaction.

Nokia's spokesperson confirmed Elop's visit to Nokia's Special Economic Zone (SEZ) at Sriperembudur near Chennai, adding that it was a routine trip, he met the employees and "reassured" them during his interaction. The company, which kept the whole trip secret, declined to comment further.

Meanwhile, M Shanmugam, general secretary, Labour Progressive Front, one of the Union representing the workers said that Elop arrived at the factory at and spent about three hours in the factory. During the visit he met only the management and Nokia employees, but not the workers.

It may be noted, hours after the deal was announced last week, Microsoft's Chief Executive Officer Steve Ballmer wrote a letter to the employees saying that “there are no significant plans to shift where work is done in the world as we integrate, so we expect the Nokia teams to stay largely in place, geographically”.

This communication has brought some relief to the over 15,000 people whose livelihood depends on Nokia's Special Economic Zone (SEZ).

The SEZ is one of the key source for Nokia to address its global markets.

Nokia Special Economic Zone (Telecom equipments SEZ) at Sriperembudur, near Chennai, according to Ministry of Commerce data, reported physical Exports of Rs 12,136.54 crore from 2006-2007 to 2011-2012. The SEZ provides direct employment to 15,264 persons. Investment of Rs 2,539.28 crore has already been made in this SEZ, out of which FDI is Rs 548.80 crore.

Earlier company sources, said that till now the Nokia Telecom SEZ attracted investment of around $500 million, of which $310 million was from Nokia while the remaining was from the four major suppliers including Foxconn, Wintek, LOM and Salcomp.

In 2005, the company was allocated 210 acres of land by the Government to set up the SEZ. Nokia was the first to bring electronics to India by setting up country's first telecom SEZ in the country, thanks to labour, port and culture Chennai managed to get the investment.

Nokia not only saw opportunities in India, but also said this facility will be one of the major source for export markets.

Earlier a company official, compared Chennai plant with China, while cost of labour is cheap here, however due to high import and other costs, manufacturing of a product is costly than in China. But the good part in this facility was the rejection level which was low compared to China's.

Earlier the company officials said in terms of efficiency and practice compared to China, the Chennai plant was good. Technology and equipments are the same. Both the plants are cost competitive now, however with the increase in cost of transportation and power, the Chennai plant was loosing its edge.

Till July 2012, since its inception in Sriperumbudur, number of phones manufactured at this facility was 700 million, which is the fastest ramp up for Nokia globally. The company produces 23 products, both mobile and smart phones.

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First Published: Tue, September 10 2013. 20:51 IST