To tap Brazil telecom market, SinoHub and Ciao Telecom to set up phone production facility

By Telecom Lead Team: SinoHub, a provider of
private-label mobile phones, has entered into a joint venture with Ciao
Telecom, a provider of telecommunications products and services, to manufacture
and market mobile communications devices in Brazil. The JV company will set up
a mobile production unit.


Brazil is one of the largest, fastest growing mobile
communication device markets in the world, with 276 million active mobile
phones expected by year end 2012, representing an annual growth rate of 14


SinoHub and Ciao Telecom
will each own 47 percent of the new company, with the remaining 6 percent to be
equally divided among the six directors of CiaoHub.


CiaoHub will develop plans to construct a 9,000 square
meter factory in Vila Velha, Espirito Santo, Brazil for the production of
mobile communication devices including mobile phones, smart phones, tablets and
mobile device components.


The factory is expected to be modeled on SinoHub’s
manufacturing facility located in Shenzhen, PR China, and will be managed by


Construction of the factory is expected to be completed
by October 2012, assuming the timely completion of site acquisition and initial
funding for the factory and operations. SinoHub will be responsible for the
production of CiaoHub’s products, and Ciao Telecom will be responsible for the
distribution of the mobile communications devices CiaoHub manufactures.


CiaoHub will seek to raise capital to build the initial
factory, purchase equipment, hire and train the required staff, purchase
initial inventory and market its products. Current plans call for total capital
of approximately US$15 million.


CiaoHub expects to manufacture and sell approximately 1.3
million mobile phones and tablets in Brazil and to end 2013 with approximately
380 employees.


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. 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,” said Harry Cochran, chairman and chief
executive officer of SinoHub.

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