Samsung to Build New Handset Facility in Vietnam

Samsung Electronics, currently the second largest mobile phone manufacturer in the world (after Nokia), will build a new handset plant in Vietnam, in the Bac Ninh province, somewhere at 30 kilometers North-East of the country's capital, Hanoi. The total cost of the investment is estimated at more than $670 million (about 434 million Euro).

The new factory should be ready until the beginning of 2009 the latest and it will be the fifth Samsung plant, besides the one from South Korea, the company's homeland, and the ones from Brazil, China and India. For the beginning, the Bac Ninh facility will produce around 30 million mobile phones per year, but Samsung intends to expand its production, in time, to more than 100 million handsets. This will help the company in keeping its second place in the mobile industry and it could even allow it to attempt for Nokia's leading position.

While most of the people believe China has the lowest production costs, Vietnamese people are actually willing to work for less money, and this is obviously one of the main reasons why the South Korean company decided to build its new plant here. Another reason is the fact that, from the new factory, it's easier and cheaper to ship handsets in the emerging mobile markets found in the area, including Malaysia, Thailand, Myanmar, Cambodia and Laos. Of course, the local Vietnamese market will also benefit from the new Samsung facility and the country's mobile penetration rate will surely grow after the handset production starts.

Following Samsung's example, other major mobile phone producers could also build handset plants in Vietnam. This can only be a good thing for the South Asian country, which is not really among the most evolved ones in terms of economic development.