First Nokia exports dial in a new manufacturing era

Ivan Herd, general director of Nokia (Vietnam) LLC, told VIR that the handset maker has started production at its $302 million factory in Vietnam-Singapore Industrial Park in Bac Ninh province, about 20 kilometres from Hanoi, after one year of construction.

Although some of the factory’s facilities remain at construction process and the factory is expected to be launched sometimes in August or September, Herd said “we hope Nokia Vietnam would become one of the largest factories of Nokia in the world”, implying a possibility to further expand investment in Vietnam. He declined to give further details.

Near the factory, Nokia’s rival - Samsung Electronics - has been aggressively expanding its mobile phone manufacturing, raising total investment from $670 million to $1.5 billion. The South Korean firm is also turning Vietnam into one of its biggest manufacturing hubs in the world, starting construction on another $2 billion manufacturing complex in Thai Nguyen province in March.

The first shipment from Nokia factory marks a milestone as for the first time a Nokia handset made in Vietnam has been exported globally.

 “We will start with our Nokia 105, and as our capabilities improve, we will move on to other more difficult products,” said Herd.

“Our factory in Vietnam will be part of the global supply network so the expectation is that a maximum 5 per cent of our products will be exported to domestic market,” he said.

Nokia received investment certificate for this factory in late 2011 and the new factory is expected to attract more electronic component suppliers to Vietnam.

 So far, Nokia has recruited over 300 employees for this factory. “By the end this year, our employee number will be thousands,” said Herd.

 “Nokia does not focus on one cost element but total supply chain costs, infrastructure, our extended supply chain and customer locations. These are the main reasons we moved to Vietnam,” he said.