UPDATE 1-Motorola to spend $100 mln on India handset plant http://today.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?view=CN&storyID=2006-06-07T143828Z_01_DEL16851_RTRIDST_0_TECH-INDIA-MOTOROLA-UPDATE-1.XML&rpc=6
Wed Jun 7, 2006
By Shailendra Bhatnagar
CHENNAI, India, June 7 (Reuters) - Motorola Inc. (MOT.N: Quote, Profile, Research), the world's second-largest handset maker, said on Wednesday it will spend $100 million in India in stages to boost sales in one of the world's hottest mobile markets.
The company will initially invest $30 million to develop a unit making handsets and base stations in a 300-acre (120 hectare) special economic zone on the outskirts of the southern city of Chennai, a company statement said. The remaining $70 million will be invested in two stages.
The zone in which the U.S. firm will build its unit is near the Telecom Industry Park in the town of Sriperumbudur where Finnish rival Nokia (NOK1V.HE: Quote, Profile, Research) has a factory.
"India is a vitally important market for Motorola and as a strategic manufacturing hub offers compelling value proposition and strong cost efficiencies," Ron Garriques, executive vice president at Motorola Inc., said in a statement.
"Our decision to make an investment of this scale is a reflection of our continued global commitment to connect the next billion consumers," he said.
The planned investment in an India plant, expected to become operational in 2007, came a day after another American tech giant, the world's largest computer services company IBM (IBM.N: Quote, Profile, Research) said it would invest nearly $6 billion in India over three years.
Following IBM's announcement, India's Telecoms Minister Dayanidhi Maran told Reuters in an exclusive interview that the government would raise its estimate for 2006/07 foreign investment in the country's information technology and telecoms sectors.
Last year, Maran estimated that India would attract $22 billion in 2006/07 from foreign firms in the two key sectors, behind much of the country's recent economic growth.
About $9 billion in planned investment was announced last year, including $3 billion by SemIndia and chip maker AMD (AMD.N: Quote, Profile, Research), $1.7 billion by Microsoft Corp. (MSFT.O: Quote, Profile, Research) and more than $1 billion each by Intel Corp. (INTC.O: Quote, Profile, Research) and Cisco Systems Inc. (CSCO.O: Quote, Profile, Research).
Almost all global telecoms equipment majors such as Ericsson (ERICb.ST: Quote, Profile, Research), Nortel Networks Corp. (NT.TO: Quote, Profile, Research) and Nokia (NOK1V.HE: Quote, Profile, Research) have made a beeline to Asia's third-largest economy, also the world's fastest-growing major mobile phone market.
The Indian economy is estimated to have grown 8.4 percent in the fiscal year ending in March 2006, and has expanded at an average of 8.0 percent for the past three years grabbing the attention of investors worldwide.
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