Date:25/08/2007 URL: http://www.thehindubusinessline.com/2007/08/25/stories/2007082551560400.htm

Back Salcomp to boost capacity addition, local content

The company expects its headcount to go up to 1,000 by the year-end and to double next year.

Our Bureau

Chennai, Aug 24 Salcomp, the Finnish mobile charger manufacturer, which began production from its Sriperumbudur plant in June, plans to reach a capacity of 100 million chargers at the latest by the end of 2008 – a year earlier than originally planned.

In India, Salcomp has started off as a supplier to Nokia but will also make chargers for other mobile phone manufacturers – Motorola and Sony Ericsson.

At least on some of the products, the company intends to raise local content from under 10 per cent in value terms now to 80 per cent by the year-end, Mr Arto Makela, Director, India Operations, Salcomp, told Business Line today.

Mr Makela did not want to disclose the value of local purchases, either currently or at the stage when the company would be producing 100 million chargers a year, but he did say that buying components locally made it some 6 per cent cheaper than importing (from China).

Salcomp today employs around 750 people, mostly women, and expects its headcount to go up to 1,000 by the year-end and to double next year.

‘Better than expected’

Mr Makela said that business in India was better than expected, as demonstrated by the fact that Salcomp needs to ramp up capacity faster, and would break even in four years.

However, when the company set up its plant in the SIPCOT Sriperumbudur Hitech SEZ, it was given to understand that what it supplied to Nokia for eventual exports would be tax-free.

But now, Salcomp learns that such “deemed exports” are not entitled to corporate tax exemption, which is a “disappointment”.