ZTE, Foxconn lured by government tax breaks

Tuesday, June 28, 2011

China's ZTE and Taiwan's Foxconn will join other competitors - including Motorola and Samsung - in harnessing tax breaks granted by Brazil's government to companies that make computers and electronic tablets in the country.

ZTE reached a deal with Brazilian companies to start producing Android tablets in the country in August, local press reported.

The announcement comes after ZTE president Hou Weigui met with Brazilian President Dilma Rousseff in capital Brasília, following her official visit to China and ZTE's R&D facility in the city of Xian in April.

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ZTE plans to invest a total of US$250mn in its own manufacturing plant in Hortolândia, in São Paulo state, to start producing tablets and eventually 3G mobile phones. The company expects to employ some 2,500 people in Brazil by 2014. ZTE currently has about 600 employees in the country.

ZTE expects to see US$1bn in sales for Brazil in 2011, the company said earlier this year.


Foxconn, meanwhile, is expected to begin producing Apple's iPhone and iPad devices in Jundiaí, also in São Paulo state, in September after experiencing a few setbacks, science and technology minister Aloizio Mercadante was quoted as saying.

Production was initially scheduled for July. The company had trouble finding skilled labor, and the plant's construction was also delayed, but those problems have since been solved, he added.

The government's plan is to close a first agreement with Foxconn to manufacture 6.5-inch screens and then expand production to 8-inch displays for tablets and PCs.

In April, the company announced plans to invest US$12bn and create 100,000 jobs in Brazil.