Nokia: Vietnam plant to create 10,000 jobs

Nokia has said its planned manufacturing site near Hanoi, the 11th plant of the world’s biggest maker of mobile phones, would generate up to 10,000 jobs for Vietnam by 2014.

Representatives of the Finland-based giant and Vietnamese Ministry of Planning and Investment signed Mar. 2 in Hanoi a memorandum of understanding marking the beginning of a phase of preparations ahead of the targeted opening of the new plant in 2012. 

(Front line) Representatives of Nokia and the Vietnamese Ministry of Planning and Investment sign a memorandum of understanding marking the beginning of preparations for the planned factory in Hanoi on Mar. 2, 2011 (Photo: Vietnam Investment Review)

Nokia plans an initial investment of approximately EUR 200 million or some US$300 million, with further sizeable investments, for the plant in Bac Ninh Province neighboring Hanoi. The province also houses a Samsung handset factory.

The Nokia plant would cover about 70 hectares in the Vietnam-Singapore Industrial Park.

Nokia expects to receive an investment license from the Ministry of Planning and Investment in the second quarter of the year, according to the ministry. The company expects to start construction in the second half of the year.

The world leading cellphone maker has started recruitment for the facility. It plans to employ 275 workers by October this year and up to 10,000 by the end of 2014, when the factory  operates fully. Of the jobs, 9,500 will be direct and the rest indirect.

Nokia aims to have the plant open in 2012, expecting the first handsets to come out in March or April. By the end of 2014, the expected output per quarter would be 45 million handsets.

The manufacturer said it would export most of the products, as Samsung is currently doing. The export ratio would increase from 80% in 2012 to 92% the next year, and then 95% when the plant operates fully, according to Nokia. It adds R&D would also be done in Vietnam though the plant would manufacture low-end phones.

The new plan would help Nokia deliver a contemporary mobile experience to the next billion consumers all over the world, Nokia said in a statement issued Mar. 2, the day they signed the memorandum of understanding.

“Only about 30 percent of the world's population is currently online, and we believe we can play a major role in connecting the next billion not just to their first phone but to their first internet and application experience,” Esko Aho, Executive Vice President of Nokia, said in the statement.

Juha Putkiranta, Senior Vice President of Nokia said in the announcement, “This new manufacturing site will play a key role in our effort to connect the next billion to the web.”

In October last year, the world’s largest chip maker, Intel, opened a US$1 billion assembly and test facility in Ho Chi Minh City which Chief Executive Paul Otellini said helped put Vietnam “on the map for high-tech investment.”

Japan’s Canon Inc. also operates a plant in Vietnam, located near Hanoi.

Citigroup, in a report published late this Feb, put Vietnam on top of its Global Growth Generators list. The 3G list is based on the weighted average of six growth drivers namely investment, demographic prospects, health, education, quality of institutions and policies, and trade openness.

Citi identified the list’s 11 countries which have the most promising growth prospects as, in alphabetical order, Bangladesh, China, Egypt, India, Indonesia, Iraq, Mongolia, Nigeria, the Philippines, Sri Lanka and Vietnam. Citi said the nations have highest growth potential in the 21st century.

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