South Korea's LG Electronics is to close a handset factory in Mexico and shift production to an existing facility in Brazil, affecting around 200 employees. The plant is being closed after the Mexican government recently scraped a 15% import duty on mobile phones, which also eliminated the cost benefit of having a local facility within the country.
The Mexican factory produces around 200,000 units per month.
"Tariffs in Mexico were removed so there is no merit for local production," company spokeswoman Judy Pae told the Financial Times. "Our Brazilian plant has enough capacity so we will make the most of it for the Mexican shipments."
The latest figures from Gartner places LG as the world's third largest handset vendor behind Nokia and Samsung. The firm shipped just over 26.5 million handsets in Q1 '09, giving it a market share of 9.9%.
On the web: Financial Times - Gartner Report
Posted to the site on 21st May 2009
Posted to: www.cellular-news.com/story/37593.php