Nokia announced on Monday that it would set up a mobile device manufacturing facility in the province of Cluj in Romania. Already on Friday of last week a Romanian government official disclosed the intention to news agency Reuters.
Production at the new plant is expected to commence during the first half of 2008. The new factory will be Nokia's tenth mobile device mass production facility around the globe. In addition, the company produces its high-end Vertu phones at a small facility near London.
Nokia affirms that the Romanian plant will not threaten the position of the company's Finnish production facility in the southwestern town of Salo. On the contrary, the Salo plant has hired additional workforce this year.
The new facility will produce mobile handsets for the European, Middle East, and African markets. The difference between the Salo facility and the Romanian production unit is that whereas the Finnish factory focuses on new models and smartphones, the Romanian plant will produce more affordable handsets.
The region of Cluj is situated some 400 kilometres north-west from the Romanian capital Bucharest. A small airport in the town of Cluj-Napoca itself is being expanded to accommodate even jumbo jets.
Nokia justifies the setting up of a new plant by the steady volume growth in the mobile handset market. Last year the company sold 347 million mobile phones, which is nearly a third more than in 2005. Also for this year the company anticipates a 10 per cent increase in sales volume.
In Nokia's view, increasing capacities in the existing plants would not have been enough to satisfy the growing demand.
The Cluj facility will be an average-sized Nokia plant with around 3,000 to 4,000 workers.
Nokia will also set up an industrial village in the vicinity of the plant to accommodate the company's key suppliers and partners.