Finland's Salcomp to buy factory inside Nokia SEZ near Chennai.

CHENNAI: Salcomp, a Finnish power supply equipment maker, has in its latest acquisition plan sparked off talks of a possible revival of Tamil Nadu's electronics manufacturing sector at Sriperumbudur near Chennai. It was here that Nokia started making feature phones a decade back becoming the largest phone factory in Asia before a tax dispute brought it down, killing jobs in thousands. 

Headquartered in Salo, Finland, Salcomp is in the process of taking over a shuttered antenna plant of Laird Technologies, a British firm that had followed Nokia into India and set shop inside the 212acre Nokia Telecom SEZ. Salcomp, which runs a factory inside the Nokia Telecom SEZ, is purchasing the building and superstructures owned by Laird and taking over the sub-lease that Laird had obtained from Nokia when it set up in India in 2008. 

Markku Hangasjarvi, Chief Executive Officer of Salcomp, confirmed the development."The consideration of the sale would not be disclosed. We expect to significantly increase our operations in India, especially in Tamil Nadu," he said. 

Sasikumar Gendham, Managing Director for Salcomp India, said the investments across the three Indian plants, including the new factory , which will be 1.5 times that of the current factory in the SEZ, will touch Rs 150-200 crore over a three-year period. 

A query sent to Laird India went unanswered. 

Since Nokia got embroiled in a tax dispute, Salcomp and Laird had applied with the Delhi High Court for transfer of the sublease that Nokia had with Laird. With the revenue department, having "no objection to this substitution" --according to court documents accessed by ET -- the Finnish company is all set to take over the plant. Salcomp had sealed a sub-lease deal with Nokia and an agreement with Laird for purchase of the building on December 2 last year. 

Laird made the first shipment of handset antennas in February 2008 and quickly ramped it up to 50 million sets by September 2009. The company also touched the 100 million mark in metal products used for board-level shielding in handsets. The Laird facility would be Salcomp's third after it recently opened a 150-million-a-year plant near Noida. 

For Salcomp to begin catering to the Indian market from this new facility, it needs to get the factory as a Domestic Tariff Area as the alternative to manufacture from the export-oriented unit makes manufacturing costlier by 12.5%. The company is now waiting for a noobjection certificate from the tax department.