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Trial production under way at Nokia's Chennai plant

N. Ramakrishnan

Chennai , Jan. 15

ASK Mr Jukka Lehtela, Director - India Operations, Nokia India Pvt Ltd, when the company's plant at Sriperumbudur will begin production. He smiles. Pauses. Then swivels around in his chair, opens a drawer and takes out a gift-wrapped Nokia handset box. It is that of a Nokia 1100.

"This," he says, pointing to the handset, "was shipped out of the plant." And, then, he adds for good measure that the official opening of Nokia India's plant is slated for March 11.

According to him, the company is now testing, verifying the production line, recruiting people and training them. "We are in the phase of having some trial production and learning," says Mr Lehtela. Only small numbers are being produced, he says.

By March, he says, the company should have everything ready so that it is able to handle the higher volumes that it anticipates. The idea was to manufacture a basic handset — the 1100 is Nokia's entry-level handset — to overcome all initial glitches. "You can practise only with small quantity," says Mr Lehtela.

The 1100 handset is one of the models that Nokia has designed and introduced with Indian customers in mind. Its features include a built-in flashlight.

Mr Lehtela told Business Line that Nokia was working hard on the test runs and line qualification. It has recruited about 600 employees so far, in batches, so that they can be trained. By the end of this year, he reckons that the company should have about 2,000 employees.

Space for suppliers

Nokia, the Finnish telecom handset and equipment manufacturer, signed an agreement with the Tamil Nadu Government in April 2005 to set up a manufacturing plant at Sriperumbudur, about 50 km west of Chennai on a 210-acre plot. The facility has been designated a product-specific special economic zone. At that time, the State Government had said that the company would invest $150 million (about Rs 650 crore) in the plant, its 10th such facility across the world. The plant will manufacture GSM (Global System for Mobile Communication) handsets.

Mr Lehtela said Nokia was well on course to investing its committed $150 million over a three-year period. It was also working hard to bring in its suppliers to the country so that logistics did not pose a problem. The Nokia plant would have some space for suppliers.

He reckons at least 10 of its suppliers would have units within the plant. These suppliers would be mainly companies that supply "variable parts" - like covers, keypad or plastic or metal parts.

Mr Lehtela would not put a figure on what the total investment in the facility would be, including that of its suppliers. However, he said that in China, the total investment in a similar facility had exceeded $ 1 billion, in a 5-7 year period. The total investment, he added, depended on whether the suppliers were going to confine themselves only to Nokia or provide parts to other handset manufacturers.

Completion by Feb

Nokia India's plant is being built by Leighton Contractors (India), a subsidiary of Leighton Holdings Ltd of Australia, a large project development and contracting group.

According to information available on Leighton Holdings' Web site, it was awarded the $35-million (about Rs 150 crore) contract to construct Nokia's plant. The work is scheduled for completion by February 2006.

Leighton's contract includes the entire complex that would have a 23,000 sq m steel frame building to house two major production halls, offices, warehouses and locker areas. Leighton is responsible for electrical, air-conditioning, water treatment and sewerage, and all external works including roads and car parks.

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