Motorola to invest $100m in India manufacturing plant

The global communication company - Motorola has announced plans to build a $ 100m (£53.8m) factory in India.

The cell phone manufacturer Motorola Inc. said on Wednesday it would spend $ 100 million in India in stages to boost sales in one of the world's hottest mobile markets. Cell phone use is growing speedily in India, where around 100 million people currently own a phone handset.

Ron Garriques, executive vice president at Motorola Inc., said in a statement, “India is a vitally important market for Motorola, and as a strategic manufacturing hub offers compelling value proposition and strong cost efficiencies."

The move, by Schaumburg, Illinois in Chicago based company, follows plans by larger rival Nokia to build a $ 150m manufacturing site in the country. Nokia has a nearby handset facility in India, which includes over 4 million GSM and CDMA users every month.

After telecom majors such as Nokia and telecom auxiliary manufacturing companies Flextronics and Foxcon, the American firm, Motorola, has also decided to set up shop in Chennai. World's second-largest telecom manufacturing company said work would shortly begin on the plant, based in the special economic zone (SEZ) at Sriperumbudur, near Chennai.

Motorola stated it would invest $ 30 million in the beginning, which will be increased to $ 100 million in phases, to develop a unit making handsets and base stations in a special economic zone and remaining $ 70 million will be invested in two stages.
"Our decision to make an investment of this scale is a reflection of our continued global commitment to connect the next billion consumers," Ron Garriques said.

The company anticipated to have the Indian factory operational by next year.

Stu Reed, executive vice-president, integrate supply chain, Motorola Inc, said, “We intend to move fast. The intent will be to have a fully fledged manufacturing entity by early 2007," further adding that “This facility will provide employment to 3,000 people initially, which will be scaled up to 7,500 persons, mostly technicians."

Reed also mentioned that the plant would initially manufacture a million handsets a month and then export to the Middle East and Africa.

India's cell phone user base hiked to 98.6 million in May, about the combined population of Spain and Italy. The Indian economy is also calculated to have soared 8.4 % in the fiscal year ended in March 2006, and has multiplied at an average of 8 % for the past three years, gripping the attention of investors globally.
Indian cell phone users are anticipated to snap up about 55 million handsets this year, up 71 % from 2005, and the market is forecast to rise to $ 5.8 billion by 2010.