By Kim Yoo-chul
Staff Reporter
Samsung Electronics said Friday that it will invest 50.5 billion won for the construction of handset plant in northern Vietnam with mass-production scheduled for early 2009.
The world’s No. 2 handset manufacturer after Finland-based Nokia added that it will also form a mini ``IT-Cluster’’ near the site with more cash to produce key components used in mobile phones.
``We will invest to Samsung Electronics Asia Holding in Singapore to set up Samsung Electronics Vietnam for the plant in Bac Ninh Province with an annual production capacity of 100 million sets,’’ a Samsung spokesperson said, adding that his company will start operating the first-phase of the plant producing 30 million phones in the first quarter of next year.
Bac Ninh is 30 kilometers northeast of Hanoi.
``We will expand our production to 100 million in a few years in response to growing demand for handheld devices in Southeast Asia,’’ the official said.
Samsung officials said low-end phones costing under $100 will be produced at the plant.
On a question over further details about the ``IT-Cluster’’ plan, the official simply said that Samsung has engaged in talks with Vietnamese parts makers and that the roadmap will come quite soon.
Samsung has been pushing for the plan over the past year under a strategy to better compete with Nokia in the global market by eating more stakes in Asian emerging markets including Malaysia, Indonesia and Vietnam, as well.
The Vietnamese handset market is expected to grow by 50 percent this year, thanks to the growing consumer appetite for mobile phones riding on economic recovery and the massive influx of foreign capital.
Foreign investment commitments in Vietnam surged nearly 70% to a record $20.3 billion last year, thanks to the country's acceptance into the World Trade Organization.
Since Vietnam is a member of the Association of Southeast Asian Nations (ASEAN), cell phones produced in Samsung’s Vietnam plant will be subject to a 5 percent tariff cut in other ASEAN members.
``In order to achieve the yearly target of 200 million and increase our global market share, we should not lose Southeast Asia, where Nokia is relatively weak,’’ another Samsung official said.
Samsung sold 161 million handsets last year. Eighty million were produced in its overseas plants.
In addition to a handset plant in Gumi, 260 kilometers southeast of Seoul, Samsung also operates handset facilities in China, India and Brazil.