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Foxconn moves factories further inland in Henan

08-04-2010 08:38 BJT

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Taiwan-based, IT giant Foxconn, has opened a new assembly plant in central China's Henan province. The troubled firm began to move its operations further inland, to limit soaring labor costs. Foxconn's move away from its long time manufacturing hub in the south, came after a series of suicide by factory workers.

After a spate of suicides earlier this year, the world's biggest IT contractor Foxconn is seeking to transform itself.

It plans to mainly produce Apple iPhones at a new 100 million US dollars plant in Henan province.

The plant's construction, owned by Futaihua Precision Electronics, a wholly owned subsidiary, will begin on August 20 and is expected to take one year.

Once completed, the permanent plant is expected to make about 200,000 iPhones everyday.

For the time being, about 500 workers - many of whom have worked at the main Foxconn production hub in southern Shenzhen - are manning an assembly line in a temporary workshop.

The workers are housed in several seven-story buildings nearby. They have access to a sports ground, fitness facilities and reading rooms.

Foxconn also plans to invest a total of 740 million US dollars in two factories in Henan's capital Zhengzhou. The facilities will not be bigger than the company's plants in Shenzhen, where more than 400,000 workers are employed.

Foxconn is not only expanding its production bases inland to take advantage of cheaper labor costs, but it is also looking to capitalize on the huge and growing consumer market further inland.

It is talking with provincial authorities in Henan about opening some 2,000 chain stores - an attempt to diversify its business operations.

The chain stores are expected to enjoy preferential policies. Foxconn plans to finish registration of some of the shops before October.

Between January and May, at least 10 Foxconn factory workers jumped to deaths - creating a firestorm about the plant's poor working condition, low pay and harsh management.

Foxconn raised salaries by about 70 per cent after the deaths.

The company said it will cut costs by replacing human labor with automated production management, and the company will negotiate the possibility of raising production prices with its clients.

Editor:Zhang Jingya |Source:

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