Siemens plans to start producing IP phones in Curitiba in Jan

Thursday, October 4, 2007

The enterprise networks division of German equipment supplier Siemens (NYSE: SI) plans to start manufacturing IP telephones in the Brazilian city of Curitiba, Paraná state, in January, the company said in a statement.

Siemens expects to invest US$5mn in new equipment and staff. The project is expected to generate 160 direct and indirect jobs.

The company's factory in Curitiba will become the first Siemens facility outside Germany to produce IP devices and will manufacture five new models of IP telephones.

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The units produced in Brazil are intended for the local market as well as export to the rest of Latin America. Siemens expects to treble its sales of IP phones in Brazil.

Sales of IP telephones in Brazil are being held back by the high cost of the devices, according to Armando Alvarenga de Souza, CEO of Siemens Enterprise Communications Brasil. With the new production line Siemens therefore aims to help promote an increase in the adoption curve of these terminals and believes it can lead to a 30% cut in the price of IP terminals, the executive added.

"The Latin American market has enormous importance for generating volume for the Curitiba factory. This will allow a reduction in costs that will impact the telephone's final price," according to Humberto Cagno, CEO of Siemens Enterprise Communications in Latin America.

Siemens expects the Brazil operation to produce 150,000 IP telephones a year, with exports accounting for approximately 40% of production, Cagno added.