CHENNAI: Foxconn shutting down and exiting its Sriperumbudur handset component plant is counted as one of the greatest industrial blows Tamil Nadu has faced in recent times, alongside the Nokia exit. But the State has not lost its grip on the international electronics contract manufacturer yet.
A top government source said on Tuesday that talks have been going on for over a month between Foxconn and the government regarding the company setting up a manufacturing unit in the State.
According to the highly placed source, the Taiwanese manufacturer has been involved in discussions with the State government on the possibilities of setting up a manufacturing unit in Sriperumbudur area, one of which could be through the 300-acre land holding the company has in the Sriperumbudur-Irungattukottai region.
“They have explored options with us on how to convert the land into a Domestic Tariff Area,” said the official.
Turning the land bank into a domestic tariff area would open up the possibility for the company to use the production for the domestic market, which is one of the fastest growing in the world for electronics and mobile handsets. This holding is distinct from its recently shut facility that was an ancillary supplier for the Nokia plant.
However, all is not well with the discussions as one of the most crucial reservations Foxconn has is on the labour front.
According to the official, the company had expressed reservations about the possibilities of labour problems cropping up at their sites.
“They went through such a problem in 2010 in their recently shutdown plant in Sriperumbudur. They are leery about such a thing happening again, but we have assured them that the labour situation in Tamil Nadu is peaceful and there are more than 4,000 foreign companies here that function without any such problem,” he said.
The talks, if they pan out, could come just in time for the Global Investors Meet, which is already seeing immense traction in terms of investments locked in. Foxconn, through a company that is part of its group, also recently announced that it would manufacture LED TVs for Sony in a facility near Chennai.
That plant is to have a production capacity of 5 lakh units per annum. Foxconn had recently made a huge commitment to make investments worth $5 billion in Maharashtra.