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UPDATE 1-Foxconn considers investing $12 bln in Brazil

Published 04/12/2011, 12:00 PM
Updated 04/12/2011, 12:16 PM
SONY
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* Brazil says studying Foxconn's plan, talks ongoing

* Foxconn to start assembling iPad in Brazil by end-Nov

(Writes through, adds background and details)

By Ray Colitt

BEIJING, April 12 (Reuters) - iPhone maker Foxconn Technology Group is considering investing $12 billion in Brazil to assemble monitors, Brazil's president said on Tuesday, in a sign the company may be ready to accelerate its move away from its main China manufacturing base.

The Brazilian government is studying Foxconn's investment plan, President Dilma Rousseff told reporters during a visit to Beijing, where she is meeting with Chinese President Hu Jintao.

"You've got an ample range of investments that go from $300 to $400 million to $12 billion over 5 to 6 years in the case of Foxconn," Rousseff said, speaking of discussions Brazil's government is having with various technology companies.

"They're proposing a partnership. They came to us and said we want to invest in Brazil."

A $12 billion investment would be the latest in a string of moves by Foxconn to establish operations away from its main manufacturing hub in the southern Chinese city of Shenzhen, where rising labour costs have forced many companies to set up operations in cheaper parts of China.

The company has traditionally manufactured most of Apple's products at its Shenzhen factories.

"We've been talking to them for three months," said Aloizio Mercadente, Brazil's science and technology minister.

The Brazilian government and Foxconn are negotiating a range of details, including the location of any new facilities, financing, taxes, broadband infrastructure and logistics, including roads.

"The negotiations are far from complete but I'm confident," said Mercadente.

Calls to Foxconn's spokesman went unanswered.

Separately, Mercadente also told reporters that Foxconn is planning to begin assembling Apple's iPad tablet PC at its plants in the South American country by end-November.

Foxconn Chairman Terry Gou has been ramping up the company's capabilities in the LCD sector in recent years, setting up its own flat panel display unit and buying Sony's LCD TV manufacturing plant in Slovakia. The company's LCD unit is Chimei Innolux.

Foxconn, which counts Hon Hai and Foxconn International Holdings as its subsidiaries, is a key supplier to top technology brands such as Apple and Hewlett-Packard. These brands typically do their own research and design work in-house and outsource manufacturing to Foxconn and rivals such as Flextronics.

Besides Foxconn, other Taiwanese companies that operate factories in Brazil include Compal, the world's No. 2 contract laptop PC maker.

Foxconn's last major investment outside of Shenzhen was in October, when it announced a $2 billion plant in Chengdu, in China's Sichuan province. The company has roughly 1 million workers in China, and is the country's largest private sector employer. (Writing by Kelvin Soh, Editing by Alex Richardson, Don Durfee and Mark Potter)

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