Salcomp to double Indian capacity; Mulls plants in Vietnam and Mexico

Chennai: With the Indian mobile phone market growing at a scorching pace, mobile phone charger manufacturer Salcomp Manufacturing India Pvt Ltd plans to double its capacity.

The Indian company, a supplier to Nokia India, is a wholly owned subsidiary of the €259 million Finnish Salcomp plc, part of the Stockholm-based investment firm Nordstjernan.

Salcomp''s €9-million plant at Sriperumbudur has eight production lines to roll out 33 million chargers per year. The company will soon add four more lines, taking the total capacity to 50 million.

"There is sufficient space to add 12 more lines and double the production. We hope to triple our investment in India," said Markku Hangasjarvi, president and CEO, Salcomp plc.

The doubling up of the capacity in India will happen when other major cell phone companies like Motorola commission their Indian plants. Salcomp has submitted its chargers for approval to mobile phone companies in India.

The top brass of Salcomp group were in Chennnai to inaugurate the Indian plant located inside the Nokia Telecom Park, a special economic zone.

Initially Salcomp will supply to Nokia and later to others mobile phone manufacturers based in India. "Exports will happen sometime in 2008-09. The target is to ship out 10 per cent of the total production," added Arto Makela, director, Indian operations.

Salcomp will ship its chargers on its own to other markets like South East Asia, Middle East, Africa and even to Brazil where it has a plant. Its 250-million unit Chinese plant currently services most of Salcomp''s overseas markets.

The company also plans to increase the local component content in its chargers to 100 per cent. Presently the figure stands at 5 per cent. Salcomp will localise its component needs like printed circuit boards, plug pins and others soon.

"The pace of localisation would depend on our vendors depends on the speed at which our vendors set up their plants in India," Makela added.

The Indian plant employs around 800 people of which nearly 75 per cent are women. The number of workers will be increased to 1,000 shortly and to 2,500 in a year''s time.

Meanwhile Salcomp also plans increasing capacities at its Brazilian and Chinese plants by 5 million and 30 million units.

Post expansion, the company''s Brazil plant will make 35 million mobile chargers. The Chinese and Indian plants will make 280 million units and 200 million units per annum said Hangasjarv.

However he declined to comment on the expansion outlay planned for Brazil and China.

According to him Salcomp is also looking at Vietnam and Mexico for setting up production base there. "We would like to look at other low cost production centres," he added.

About the location risk that Salcomp is exposed to with two of its major plants housed in China and India, Hangasjarvi said, "The governing systems in India and China are different. We are not at risk having our production operations in these two countries."

According to Mats Heiman, chairman, Nordstjernan, the group has no plans to start any other production facilities in India.

Apart from Salcomp, Nordstjernan has one more business in India viz servicing of precision grinding machines through group outfit KMT Production Machinery India Pvt Ltd. Another group company Sirius Machinery gets good business servicing the tube filling machines like toothpaste and cosmetics cream fillers.

"We invest in variety of industries. We also own Scandinavia''s largest construction company NCC," added Heiman.