ERICSSON'S INDELEC TO PRODUCE UP TO 700,000 PHONES A YEAR
Published:03-October-1996
By Computergram
In line with plans announced at the end of last year (CI No 2,823),
L M Ericsson Telefon AB continues to show a strong commitment to
telecommunications equipment production in Spain, where it now owns
100% of Zamudio, Basque Country-based Indelec SA. The Zamudio plant
will become the third of Ericsson's world production centers for
cellular telephones, only produced to date at the firm's plants in
Sweden and the UK. Ericsson president Lars Ramqvist announced on a
recent visit to Spain that Indelec will manufacture 700,000 fixed
and cellular telephones a year, absorbing part of the production of
the other two world centers, where demand is exceeding output
capacity. Five work shifts have been set up at the Zamudio plant,
operating seven days a week and due to take on another 120 staff in
the course of this year. Ericsson is one of the primary suppliers
of telecommunications equipment to the two cellular operators in
Spain, Telefonica Moviles SA and Airtel SA, although Ericsson
Espana managing director Raimo Lindgren confirmed that 90% of
Indelec's production will be exported to other European countries
and Latin America. Since 1993 Ericsson has invested $44m in
Indelec, in which it has gradually raised its holding over the
years, taking Telefonica de Espana SA's 20.7% stake in April 1995
and the Basque government's 40% stake in October 1995. In June 1996
the Swedish firm took full ownership of Indelec, merging it with
Ericsson Radio. Ericsson has earmarked investment of a further
$26.4m in Indelec up to the year 1998. Lindgren foresees that the
plant's sales volume will double to $80m in fiscal 1996. The
factory will be the only production center worldwide to produce NMT
cellular telephones and analog mobile telephones conforming to the
TACS standard, while it will also manufacture surface-mount modules
for digital telephones. There had originally been plans for Indelec
to produce Groupe Special Mobile telephones and the base stations
required by Telefonica a nd Airtel; however for the moment this
will not occur, "although the necessary adjustments can easily be
made if the market so dictates," Lindgren declared. At all events
the Zamudio plant is already producing some components for the
stations being manufactured at Gavle, Sweden; Melbourne, Australia;
and Carlton, UK. Lindgren said that plans could well be changed in
the future in the light of the rapid development of cellular
telephony in Spain, where there is now a subscriber base of 2.5
million, and talk of the possibility of a third operator joining
the fray. In the 1995 financial year Ericsson Espana announced
sales up 40% at $735m, with exports also up 40%, although profits
were down 34% at $33.6m. Ericsson confidently predicts that this
pattern of growth will continue, albeit a little more slowly, this
year.
