EMS-China seems to be more competitive
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EMS-China seems to be morecompetitive
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Jabil Circuit to move lock, stock and barrel to China fromChennai
CHENNAI: The first crack in the edifice of the Sriperumbadurindustrial corridor, near
Chennai, is now visible. The US-based $12.8 billionelectronics manufacturing services (EMS) giantJabil Circuit has gone kaput.
Housed in the Nokia telecom special economic zone (SEZ), it iswrapping up its operations and shifting base to China, top industrial and official sources confirmedto ET on Friday.
Jabil Circuit would be pulling down the shutters by March 31,2009, according to a source. All attempts to reach Jabil did notmaterialise.
As a key component vendor to Nokia, Jabil moved into the NokiaSEZ, where it has a large unit spread over 10 acres. Supplyingmoulded products such as ‘A’ cover (outside cover of a cell), ‘B’cover (internal), ‘C’ and ‘D’ covers (those fitted with cameras),Jabil had invested over $100 million at the new facility, where 600plus workers were employed. But with the telecom boom not takingthe desired trajectory, Jabil’s plans hit a roadblock.
In 2007, Jabil acquired Celetronix housed in the Madras ExportProcessing Zone, adding over 5,000 plus employees and 2.70 lakh sqft of manufacturing space in three locations namely Mumbai, Chennaiand Puducherry.
Legally, section 25(O) of the Industrial Disputes Act stipulates,an employer should intimate the labour authorities about such aneventuality giving 90 days notice prior to closure. Thereafter, itis for the authorities to consider or reject such a representation.However, when ET contacted the State labour department officials,they said, "we have not received any application so far fromJabil."
The global economic turbulence has impacted Jabil Circuit, leavingit in dire straits in recent times. Though it has been trying allmeans to keep itself afloat and looking at revival measures, manyemployees have been advised to shift to Pune or leave their job."It is in deep trouble. Not only in India, it is also shutting down its plants globallyas part of its plans to relocate to the Dragon Nation," another topofficial, on condition of anonymity, said.
Industry forecasts pegged the EMS sector to touch $40 billion by2012. The fast paced economic growth of India coupled with thebusiness opportunities
Capital investments committed by companies in the Sriperumbadurcorridor have touched Rs 3,300 crore, which is half of thecountry’s EMS business. Many big EMS and original designmanufacturers such as Flextronics, Jabil,Sanmina-SCI, Solectron and Wintek entered the country. But, all ofthem have been hit by the worst ever global meltdown.
According to a website, Nokia had shut down its plant in Finlandwhile Europe had lost 6,000 jobs in the EMS space. Sourcesindicate that Foxconn, which is also located at the Nokia SEZ,could follow Jabil. Salcomp — which saw 1% dip in sales to Euro283.3 million in 2008 — and Perlos are the other two notablevendors for the telecom major.