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December 11, 2005 5:11 pm

Samsung to make phones in India

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Samsung Electronics said on Sunday it would begin manufacturing mobile phone handsets in India next year.

The South Korean company said it would invest US$15m in an industrial plant in Gurgaon, a suburb of New Delhi in which many overseas companies have located local operations.

HC Ryu, director of telecoms, Samsung India, said the factory would help the company respond faster to the rapidly-growing Indian market.

The country has some 67m mobile phone subscribers, and this number is seen expanding to more than 300m in three years.

Until March this year when South Korea’s LG Electronics began making mobile phone handsets in the Indian city of Pune, international handset makers imported units into India. Motorola this month begins assembling phones in India, while Nokia plans to open a facility in Tamil Nadu early next year.

Samsung’s decision dovetails with India’s strategy to attract more investment in the manufacturing sector, complementing a robust software services industry.

Manufacturers have long preferred China for low-cost operations, shunning India because of its poor infrastructure and failure to evolve industrial facilities to a global standard. India’s exports account for just 0.8 per cent of world trade, compared with 6.4 per cent for China’s exports.

Samsung’s plant, which will be operational in the first quarter of next year, will have an initial capacity of 1m units and ramp up to 20m handsets in 2010. It is the electronics group’s fourth overseas handset manufacturing facility after China, Brazil, and Mexico.

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