Hon Hai Chairman: Mulling Building New Plants In Africa

Hon Hai Precision Industry Co. (2317.TW), a contract producer of electronics for Apple Inc. and other brands, is mulling building new factories in Africa to tap the abundant labor supply and natural resources in that region, Hon Hai Chairman Terry Guo told reporters Wednesday after the company's annual shareholders' meeting.

Rising wages in China, where most of Hon Hai's plants are based, have forced the Taiwanese company to relocate some of its plants to lower costs. In the second half of last year, the company started relocating some of its plants from the more affluent coastal China to the inner part of the country. Guo said the relocation will need a total of 12 to 18 months to complete.

Hon Hai has been criticized by labor activists that working conditions in its plants in China aren't satisfactory. Three workers at Hon Hai's plant in Chengdu in southwestern China were killed last month in a combustible-dust explosion, following a spate of suicides at Hon Hai's plants across China last year.

Guo also said Hon Hai is planning to use its facilities in Brazil to produce tablet computers, but he didn't elaborate.

-By Lorraine Luk, Dow Jones Newswires; 8862-25022557; [e-mail]