UPDATE 1-Motorola invests $60 mln to expand in Singapore http://today.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?view=CN&storyID=2006-06-05T081549Z_01_SIN6512_RTRIDST_0_TELECOMS-MOTOROLA-UPDATE-1.XML&rpc=66
Mon Jun 5, 2006
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By Jennifer Tan
SINGAPORE, June 5 (Reuters) - Motorola Inc. (MOT.N: Quote, Profile, Research), the world's second-largest cellphone maker, said on Monday it would invest $60 million to expand its global supply chain operations in Singapore over the next two years. Motorola sees improving the efficiency of its supply chain -- which handles about $10 billion of business a year -- as a key driver of profitability.
The supply chain control centre in Singapore, where Motorola plans to recruit about 200 professionals by the end of 2007, will be fully operational by 2008.
It will handle global purchasing, procurement, sourcing and logistics across all of Motorola's businesses, ranging from mobile devices to networks and connected home solutions.
Motorola is centralising its global supply chain efforts for the first time with its new control centre, a move which should lead to improved profitability, time-to-market, and cost structure, Chief Executive Officer Edward Zander told a news briefing.
"The way you compete over the next decade is through your supply chain," Zander said. "This will help us to respond to changes in markets worldwide, more quickly, more efficiently, and more seamlessly."
Zander said Motorola would invest the $60 million in recruiting staff, research and development, information technology systems as well as manufacturing process technologies.
Motorola has more than 20,000 employees, four manufacturing sites and 37 research and development facilities spreading across eight countries in Asia Pacific.
In the January-March quarter, Motorola ranked second with a global handset market share of 20.1 percent, behind industry leader Nokia Oyj's (NOK1V.HE: Quote, Profile, Research) 32.8 percent, according to data from research outfit Strategy Analytics.
As for its plans in the rest of Asia, Motorola said it would announce a manufacturing presence in India soon.
"We are on track for a manufacturing presence in India. An announcement is imminent," Stu Reed, executive vice president for Motorola's supply chain operations, told reporters.
He added the manufacturing capability in India would involve both mobile devices as well as network infrastructure.
Industry leader Nokia (NOK1V.HE: Quote, Profile, Research) of Finland opened its first Indian handset factory in March in a bid to increase its stranglehold on the world's fastest growing mobile market.
South Korea's LG ELectronics Inc. (066570.KS: Quote, Profile, Research) and its larger rival Samsung Electronics Co. Ltd. (005930.KS: Quote, Profile, Research) also have manufacturing units in India.
Ultra low-cost phones -- below $50 -- are fuelling demand in cost-sensitive India where each month, 4-5 million new users enter a market with the world's cheapest local mobile call rates of as low as 2 U.S. cents a minute. Meanwhile, the demand for mobile handsets remains strong, driven by other emerging markets like China, Southeast Asia, Latin America and eastern Europe, Zander said.
"There's good growth in the industry, more than what we anticipated. We started off this year better than many of us had forecast," he said.
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