Finnish electronics manufacturer Salcomp, which earlier acquired Nokia’s defunct factory (closed for nearly five years due to a tax dispute) near Chennai, has acquired the facility of Lite-On Mobile on the same premises. These acquisitions are expected to make Salcomp the largest tenant in the area, which was once a special economic zone (SEZ).
Salcomp will be occupying nearly 55 per cent of the 1 million sq ft SEZ area, which housed one of the world’s largest mobile manufacturing units.
The Tamil Nadu government is talking to Chinese electronics manufacturer Luxshare, a supplier to Apple, for filling up the remaining space. Foxconn has already taken up a slice of the one million sq.ft area.
The state government said that revival of the facility will put Tamil Nadu back in the global electronics manufacturing map. The state has lost its glory after Nokia’s factory shut in 2014.
Salcomp will be investing around Rs 1,300 crore in the facility. The company is planning to start production by March 2020. Salcomp has three facilities (two in Chennai and one in Noida) in India and produces around 150 million chargers. It is now eyeing manufacturing various components of smartphones for the domestic and export markets. With these acquisitions, Salcomp will have five facilities in India.
The state is also planning to set up ready built facilities for electronics manufacturers or even other manufacturers. These facilities, expected to come up in two 50 acre plots in Sriperumbudur, may be ready in a year's time.
“We are seeing impact of the call given by the prime minister for Make in India and the follow through actions that have been led by the Ministry of Electronics and Information Technology (MeitY) in terms of engagement with the industry. We are seeing that global manufacturers are looking at India seriously. The development of Salcomp investing in the Nokia plant is definitely a result of that,” said George Paul, chief executive officer, MAIT.
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 Rs 21,000 crore tax dispute, it had to take the facility off its plans. Following this, the Nokia factory was shut in 2014 and around 30,000 people, employed directly and indirectly, lost their jobs.
In 2018, Nokia said it had accepted the resolution agreed between the Indian and Finnish tax authorities under the mutual agreement process for double taxation avoidance.
Nokia paid Euro 102 million in taxes in addition to the Euro 100 million that was already paid during 2013-2015.
Nokia’s deal with the tax authorities paved the way for clearing the sale of its factory to Salcomp. Sources said even though the tax dispute with the entity (Nokia) may take more time, the land where the factory was situated, has been released and can be put to use.
As far as VAT claims of Rs 2,400 crore by Tamil Nadu are concerned, M C Sampath, minister for industries, Tamil Nadu, said the aim is to settle the problems at the earliest and bring the property to use.
“We will go step by step, let the company get the concurrence from the Centre and start operations in the factory. Then, we will look at the tax claim by the commercial tax department,” he said.