Nokia and Foxconn to revive Chennai plant

Plant shut since 2014, to be revived as global mobile manufacturing hub

Published Date
04 - Oct - 2016
| Last Updated
04 - Oct - 2016
 
Nokia and Foxconn to revive Chennai plant

Nokia and Foxconn have reached an understanding regarding their long standing tax dispute over the factory in Sriperumbudur, Tamil Nadu, making way for the Finnish company’s factory to be operational. Although, the manufacturing company has set out tough conditions to be met for Nokia, including a full waiver of Foxconn’s tax liabilities in India and state level issue resolution. Foxconn’s proposal outlines the conversion of the Nokia plant into a global manufacturing hub for mobile phones with the latter being involved in some way.

Foxconn also wants the SEZ in which the plant is located to be converted into a domestic tariff area at no additional cost to itself. This will allow the products made their to be sold locally and also bring the production capacity back to the original 100 million a year. According to Foxconn, the request for the revival was made by the Tamil Nadu government. Foxconn also plans to invest $5billion in India and has requested the Tamil Nadu government to resolve labour and other related issues that were creating obstacles to the smooth revival of the plant.

Work at the particular plant had stopped when Nokia stopped giving orders owing its financial crisis. Foxconn was a major supplier to Nikia’s requirements. Nokia, in 2014, had shut its plant in Chennai causing more than 15,000 employees to directly lose their jobs. As for the reason, Nokia had then stated that its parent firm, Microsoft, had terminated the mobile purchase agreement and ceased any future orders.

Foxconn is already in the manufacturing industry in India at four plants in Sri City, Andhra Pradesh and one near Chennai, supplying phones and televisions for other brands. Along with the requirements stated earlier, Foxconn has also requested the government to waive any liability to rehire previous Nokia and Foxconn workers from the same plant.