SinoHub Inc., an electronics company based in the People’s Republic of China, today announced that it has entered into a joint-venture agreement with Ciao Telecom Inc., a global provider of telecommunications products and services with headquarters in the U.S., to manufacture and market mobile communications devices in Brazil.
Brazil is currently one of the largest mobile communication device markets in the world, and continues to increase at an annual growth rate of 14 percent. SinoHub’s main growth driver is its mobile phone manufacturing and distribution division; by tapping into this market, both SinoHub and Ciao Telecom hope to capitalize on Brazil’s growth trends through the formation of a Brazil-based corporation, CiaoHub, S.A.
Ciao Telecom is responsible for the plans to construct a factory in Vila Velha, Espirito Santo, Brazil, for the production of various mobile communication devices. Plans as of now are that the factory will be modeled on SinoHub’s manufacturing facility in Shenzhen. SinoHub will manage the factory, and will be responsible for production of CiaoHub products; Ciao Telecom will be responsible for the distribution.
Construction of the factory is expected to be complete by October 2012 with factory startup in 2013. If the timeline is achieved, the joint venture expects CiaoHub to manufacture and sell approximately 1.3 million mobile phones and tablets in Brazil and employ 380 people by 2013.
SinoHub and Ciao Telecom will each hold a 47 percent stake in the new company; the remaining 6 percent will be equally divided among the six directors of CiaoHub. CiaoHub will seek to raise USD$15 million in estimated needed capital to build the initial factory, purchase equipment, hire and train the required staff, purchase initial inventory, and market its products.
“I am excited to announce this joint venture agreement, which marks an important step toward implementation of SinoHub’s strategy to make SinoHub into a multinational company. Since the launch of our integrated contract manufacturing (ICM) business segment in 2010, we have gained a wealth of experience in the design and production of a wide range of mobile communication devices,” Harry Cochran, chairman and CEO of SinoHub stated in the press release. “We believe our experience, our innovative joint-design model and our proven ability to deliver high quality devices in flexible order quantities and with limited lead times positions us to succeed in the rapidly expanding Brazilian and international markets. We are pleased to be joined in this venture by Ciao Telecom, a multinational telecommunication services provider with operations in the United States, Brazil, Europe and the Middle East. Ciao Telecom has especially deep knowledge of the Brazilian market and close connections with many organizations in Brazil.”
For more information visit www.sinohub.com
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