Compal Electronics Co (仁寶電腦), the world’s No. 2 contract laptop computer maker, yesterday confirmed that it is to invest a total of US$500 million in its manufacturing plant in Vietnam.
“In a bid to meet the client’s growing demand, the company decided to reopen the plant in Vietnam,” Compal spokesman Gary Lu (呂清雄) said by telephone.
Compal president Ray Chen (陳瑞聰) in June told shareholders that the company expects its non-notebook business, which accounted for 23 percent of the firm’s total revenues last year, to grow by at least 30 percent this year, as the company successfully entered the supply chains of two new smartphone maker clients.
“One of the new smartphone clients is a Chinese handset maker,” Chen said.
Lu said Compal has started to manufacture a small number of smartphones in Vinh Phuc Province, Vietnam, and is to gradually expand the production capacity of the plant.
Compal plans to inject US$500 million into the plant in several installments and is to increase its labor force from 200 people to 2,000 people.
The Taiwanese contract manufacturer announced in November 2007 that it would build a manufacturing plant in Vietnam in an attempt to expand its production capacity for the growing notebook business.
The Vietnamese government granted Compal an investment permit in the same year, with the investment expected to generate 35,000 jobs, according to Vietnamese newspaper Vietnamnet Bridge.
Compal in March 2013 suspended operations at the Vinh Phuc plant, citing incomplete supply chains for notebook products, infrastructure deficiencies and low operation efficiency.
Compal plans to focus on manufacturing smartphones in the reinvested plant, as they require less components and have an easier manufacturing processes compared with Compal’s other products, Lu said.
“Supply chain issues in the manufacturing of smartphones are easier to solve,” Lu said, adding that the company does not plan to produce other devices at the plant at this time.
Vietnam’s vice chairman of the provincial People’s Committee Nguyen Van Chuc was quoted by the Vietnamnet Bridge as saying that the local government is willing to support Compal in implementing its investment project.
Compal’s stock price dropped 0.52 percent to close at NT$18.95 in Taipei trading yesterday, underperforming the TAIEX, which gained 0.11 percent.
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