Electronics Production | April 06, 2007

Jabil sticks to Ukraine for low label cost

Western Ukraine is trying to become Europe's answer to the challenge of cheap Chinese factories despite bureaucratic red tape and political turmoil.
The area in Western Ukraine is known for its poverty and high unemployment. The region wants to attract foreign companies to invest in the region by escaping rising wages, taxes and real estate costs in neighbouring countries.

Jabil came to Uzhhorod, Ukraine in 2004 where it operated out of tiny quarters. Todaythe EMS provider employees 1200 people in the area and lease half of a modern factory.

Philippe Costemale, general director of Jabil Circuit Ukraine to local media, "We scrutinized all the places in Europe. We needed low-cost labour, and Ukraine could be the future of Europe."

Jabil is building a 280,000-square-foot factory that will employ 2,400. The company expects to invest $90 million in the region and produce 300,000 cell phones per week.

The Ukrainian government is considering legislation that would make it easier for companies to import and export products. This law will allow Jabil to import cell phone parts and export the completed phones without paying customs duties, local media reports.


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