Mobile makers learn to make the right calls

While local investors report poor progress with mobile phone production plans, foreign investors are pumping capital into building handset manufacturing plants in Vietnam.

The project on building a plant manufacturing mobile phones and motherboards over five hectares at Hanoi’s Hoa Lac Hi-Tech Park of Thuan Phat Imoso Joint Stock Company was kicked-off in 2007 with $70 million in total investment capital.

Accordingly, the firm will build four factories to be commissioned in 2009. However, until late 2010 Thuan Phat Imoso’s first products came onto the market and only one factory was brought online.

The park’s Investment Department head Tran Dac Trung said that Thuan Phat Imoso’s project was more than a year later than schedule and the park’s authority asked the developer to quicken the pace of construction. The authority also considered scaling down the project size to make it fit the reality, Trung said.

Before Thuan Phat, in 2004 Vina-Mobi Vietnam Joint Stock Company intended to construct a handset manufacturing plant at a cost of $25 million in central Danang province. The project, however, got its licence revoked in 2007 due to delay in implementation.

While local investors struggle with their projects, foreign players poured money into building handset manufacturing plants in Vietnam.

South Korea-backed Samsung announced in late March 2011 that its handset plant in northern Bac Giang province reaped $2 billion in total export revenue since getting online in 2009. The figure was expected to hit $3 billion in 2011.

For its part, Nokia attempts to bring online its $1.5 billion handset manufacturing plant in northern Bac Ninh province in 2012. Foxconn reportedly restarts its project on building a mobile phone plant based in northern Vinh Phuc province after a period of delay due to economic recession.

Industry experts have ascribed lack of output market as a key reason behind local investors’ failure in localising handset production.

Executives at FPT Mobile, an arm of technology giant FPT Group, also admitted that a bunch of factors must be counted on when building a factor assembling locally made handsets with actual sales volume being of great importance. – VIR

Tags: Vietnam Mobile makers