Nokia has kept construction of its $302 million manufacturing facility
in Vietnam on schedule to start production next year, despite the company’s
well-documented financial setbacks.
William Hamilton-Whyte, managing
director of Nokia’s representative office in Vietnam, said even though the
mobile phone maker faced financial difficulties, the company’s investment plan
in Vietnam remained on schedule and capable of creating 10,000 jobs at its
facility under construction in northern Bac Ninh province.
“It is still being built here. It
is not behind the schedule. We are building foundations, walls and roofs of the
facility. But you will see that it goes fast because Nokia wants to build it
like facilities we did in Finland, India or China,” he said.
Nokia began the construction of
this $302 million facility in April and planned to complete the construction in
2013. The factory has a production capacity of 45 million units per quarter.
Most of the products will be exported to overseas markets.
Nokia is building the facility in
Vietnam amid the financial trouble that forced the firm to announce closure of
its facilities in Germany, Canada and Finland. As a result of the planned
changes announced, Nokia plans to reduce up to 10,000 positions globally by the
end of 2013.
By building manufacturing
facility in Vietnam, Nokia could reduce production costs through taking the
advantages of affordable labour cost and preferred tax incentives in this
country.
In Vietnam, Nokia is recognised
as a high-tech enterprise, meaning that Nokia will have an equal competitive
advantage with its rival Samsung Electronics in term of tax incentives, which
include 10 per cent of corporate income tax for the whole life of its project.
A high-tech enterprise also enjoys tax exemption for its first four years of
operation with profits and pays half of this 10 per cent rate in the following
nine years.
“I am very eager to get the first
product from the facility in Vietnam,” he said, adding that it would have a
huge impact on Nokia’s business in Vietnamese market as it “enables us to be
closer to customers.”
In a bid to expand its market
share of smartphones in Vietnam, where Whyte said it was growing
month-on-month, Nokia last week officially announced plans to sell its best
smartphones Nokia Lumia 920 and Nokia Lumia 820 in the market, and introduce a
new device running Windows Phone 8 called Nokia Lumia 620.
Ngoc Linh | vir.com.vn
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