Nokia to Merge Chinese Operations

Nokia is merging its four Chinese joint ventures into one company - which will also comence the manufacture of CDMA handsets for the local market. The new company will be headquartered in Beijing with branch offices in Dongguan and Suzhou, and will continue operations in each of the previous joint venture locations. In addition, parties agree that pending government approval, the new company will begin production of CDMA handsets, using Nokia chipsets.

The merged joint venture will be converted into a foreign-invested company limited by shares (CLS) subject to approval from relevant government authorities. The shareholders of the CLS will be Nokia, Beijing Capitel, Dongguan Nan Xin Industrial Development, Shanghai Alliance Investment and Beijing Hangxing Machinery Manufacturing Corp.

At the signing ceremony today, Ouyang Zhongmou, CEO and President of Putian Corporation, Nokia's largest China joint venture partner, made a speech on behalf of all joint venture partners: "We are extremely excited about the merger. It is a logical next step for what has so far been a very fruitful partnership. We have full confidence in the future development of the new company. As partners, we will continue to provide our most valuable resources to enhance the new company's overall strength. For us, the merger will not only bring increased opportunities for us in China, but also allow us to improve our competitiveness outside of China."

Also present at the event, Nokia Mobile Phones President, Matti Alahuhta said: "This is indeed an important milestone for Nokia in China and highlights our continuous commitment to the China market. China already is and will continue to be one of Nokia's major manufacturing centers globally as well as a major center for Nokia's global research and development. The move to begin local manufacturing of CDMA handsets would not only allow us to broaden our product offering to Chinese consumers but also allow the new company to capture opportunities in China's growing CDMA market."

Nokia will retain over a 60% shareholding in the new joint venture and the new board of directors will be announced pending approval of authorities."

Posted to the site on 1st April 2003