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‘Why telephone manufacturers shun local production in Nigeria’

Major phone manufacturers like Samsung, Nokia, BlackBerry, Tecno, LG and Huawei have no plans to establish manufacturing plants in Nigeria at the moment, in spite of the huge size of the Nigerian market.

The local Punch newspaper reported Monday that even though Nigerian mobile phone subscribers will spend an average of 900 billion naira (US$5.7 billion) on buying smart phones between now and 2015, the major manufacturers are shunning local production.

They said between Nigeria and some of their components’ manufacturers in Europe, as well as poor infrastructural development, are some of the reasons for their reluctance to set of manufacturing plants in the country.

Nigeria currently has an expanding mobile subscriber base of over 105 million, making it the highest in Africa.

But the Chief Executive Officer of Nokia West and Central Africa, Mr. James Rutherfoord, said it would not be economically viable for the mobile phone maker to establish a factory in Nigeria.

“Most of our component suppliers, all the people that make chips, that make batteries and all the other components of the devices are not around here. They are all in the Far East. So, it is very difficult to create a factory very far away from them,” Mr. Rutherfoord explained.

”It goes beyond Nokia just waking up and deciding to open a factory in Nigeria. We need the whole ecosystem of people producing the components to be very close, otherwise we will have products which cost will be much higher if they are not close to the other manufacturers,” he said.

For his part, the Chief Executive Officer of Samsung Electronics, West Africa, Mr. Brovo Kim, said though the size of the Nigerian market was enough incentive for any foreign mobile device maker to set up a factory, there were critical drawbacks that would hinder the establishment.

“We have well established plants where we assemble electronics such as air-conditioners, television and refrigerators. We are seriously considering setting up a plant for mobile phones. But the problem is that there are a number of micro components involved in the assembly of mobile phones.

”The process of making phones, especially smart phones, is very complex. We will never rule out the possibility of a plant in Nigeria,” he said.

Apart from the stated reasons, most Information and Communications Technology companies, operating in the country have always cited inadequate infrastructure and poor power supply as major hindrances.

Despite the drawbacks, the Vice President, Tecno Mobile, Mr. Arif Chowdury, has said his company will set up a manufacturing plant in Nigeria by 2014.

“We have actually set up a plant in Addis Ababa, Ethiopia, and we have almost completed plans to set up another one in Lagos or anywhere else in Nigeria.

“That will be done as soon as we conclude the process with the government of Nigeria. I must say that it is very important for us to set up a plant in the Nigerian market because of the huge potential inherent in the market,” he said.


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