Chinese kit maker to spend $200 million on Sao Paulo industrial park.
ZTE Corp. is setting its sights on Brazil, targeting $1 billion in sales from the country this year, company executives said Friday, as the company continues to look for growth outside its home market.
The Chinese telecommunications equipment maker is seeking to take advantage of rapidly growing global demand for next-generation high-speed wireless networks and devices such as tablets.
Shenzhen-based ZTE plans to spend $200 million over the next four to five years to build an industrial park in Hortolandia, Sao Paulo, which will house a research and development facility for ZTE in Latin America, Eliandro Ávila, chief executive of ZTE's Brazil operations, said in an interview. ZTE first set up operations in Brazil in 2001 and sales currently amount to about $600 million, the executive said.
"Sales from Brazil represents about 50% of Latin America sales. It's a very stable market and the potential of the market is very huge," Yuan Lie, head of ZTE's South American operations, said in the same interview.
ZTE has grown rapidly over the past decade by selling low-cost telecommunications equipment, mostly to operators in China and other emerging markets. But last year, the firm also made progress in North America by selling more than a dozen models of handsets there, and became the world's No. 4 phone supplier by units. While ZTE is a major global supplier of telecom hardware, it has faced difficulties with governments in the U.S and Europe over concerns about ties to the Chinese government and in India over official security inspections for network equipment from China.
Having a production base in Brazil has many advantages, the executives said, including lower taxes and costs, as well as better time-to-market for its products.
The industrial park will also house a manufacturing facility for tablets, mobile phones and telecom infrastructure as ZTE continues to push into the devices market to compete with big phone and tablet manufacturers such as Apple Inc., Nokia Corp. and Samsung Electronics Co. Traditionally, ZTE made devices designed to carry telecom operators' names but the company is also pushing its own-brand devices in markets such as Europe and the U.S. Having a base