Why Nokia India’s Chennai Plant Has Become The Orphan Factory

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By Vidhya Sivaramakrishnan & Gulveen Aulakh/ET

Once a celebration of Indian manufacturing, Nokia’s Chennai factory, beset by legal troubles, has become nobody’s child. Old owner Nokia does not want it, new one Microsoft is reluctant to take it. And the solution they have come up with only provides temporary relief to the 7,500 workers there, reports ET.

Arivazhagan, 26, reminisces about the time he travelled over 600 km to Chennai from Tirunelveli, a district in Tamil Nadu, around eight years ago to search for a job. Along with his three friends, they were walking down a road in Sriperumbudur (40 km south-west of Chennai) which was turning into a booming industrial hub, thanks to the Hyundai car factory set up in 1999.

A local told them about Nokia’s mobile handset factory, the first in India, coming up in the same region.

Enamoured by the ‘multinational’ tag, they all applied for jobs. The entry criterion was modest—60% marks in 12th class. “Whenever we used to go home, our friends would say, ‘what a cool job you have. Now, your life is settled’,” says Arivazhagan. “Now they don’t even come to meet us.”

The factory, which changed their lives, has changed. Like its owner, Nokia, its best days — revenues of Rs 1,50,000 crore between 2006-07 and 2012-13 by exporting handsets to about 75 countries — are behind it. Output is down from 13 million handsets a month at its peak to 2-4 million handsets, production lines from 20 to 10. A liability in a global corporate merger, it lies in the cracks, an orphan factory.

Since January 2013, two sets of tax authorities have raised a demand of about Rs 23,400 crore from Nokia India. One of them attached the Sriperumbudur factory, its prime asset in India. In September 2013, Microsoft purchased Nokia’s handset business at the global level for $7.2 billion, a deal it will close tomorrow — without this factory. Original post at the Economic Times

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Wahengbam Rorrkychand

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