Mobile phone powerhouse Nokia will manufacture one in five of its handsets in China this year, making the mainland not only the company's fastest-growing market but one of its fastest-growing production bases as well.
David Hartley, vice-president for business development in China, said Nokia's mainland operation had seen rapid growth since the first small factory opened near Beijing in 1995.
'Our exports grew by 50 per cent last year. A significant and growing portion of our global production now comes from China. It is our intention, as the global market continues to expand, to continue to increase our production in China as well,' he said.
Mr Hartley would not say how many handsets were made in China but research group Gartner Dataquest said the company had a global market share of 35 per cent in the first quarter, which would amount to annual production of between 140 million and 147 million handsets, based on sales projections. That would put potential production in China at close to 29 million handsets this year. About 60 per cent of the units are exported, primarily to Europe and Asia.
Two of Nokia's 10 handset plants are in China; one in Beijing and another in Dongguan. The Beijing plant, the larger of the two, is one of the largest exporters in the Beijing area. According to Nokia, the plant shipped US$1.2 billion worth of handsets and base stations last year, accounting for one-quarter of the export total from all companies located in Beijing.
When the Dongguan plant is added in, Nokia exported US$2.1 billion in products from China last year.
The most common advantage cited by companies manufacturing in the mainland is the relatively low cost of skilled labour. But Mr Hartley said this was not a significant issue for Nokia.