Austria's AT&S, Europe's largest producer of printed circuit boards, plans to invest about 100 million euros (US$121 million) in the city to build its second plant.

"The positive decision is a continuation of AT&S' expansion strategy," said AT&S Group spokesman Reinhold Oblak, China Daily reported Tuesday.

The Austrian company has already set up a first plant in the city's Xinzhuang Industrial Park to produce printed circuit boards which are used in mobile phones for an investment of 120 million euros (US$145 million).

The company focuses its business in four areas - telecommunications, automobile, industrial electronics and medical technology. At present in China its emphasis is on telecommunications.

Last year its revenue from the Chinese market reached 40 million euros (US$48 million) and the figure is expected to double in the company's next fiscal year.

Oblak said in an initial step, construction work on the new plant would begin immediately adjacent to the existing plant.

Of the investment, 10 million euros (US$12 million) has been earmarked solely for constructing the new plant. The plant will be in production in autumn, 2006.

"The two plants in Shanghai will boost sales to the world's major cellphone manufacturers," said Oblak.

AT&S' key clients include Nokia, Siemens, Motorola and SonyEricsson and it also supplies products to Chinese telecommunications companies such as Putian, Yuhua and TCL.

These cellphone manufacturers currently cover around 70 per cent of the world's mobile phone market.

When the new plant is operational in 2006, AT&S will able to offer services to the Japanese market and other Asian countries, said Patrick Ma, chief executive officer of AT&S China.

"We will continue devoting our energy to producing printed circuit boards for the telecommunications industry," he said.

He said China is the company's most important market. The market is growing fast and it is necessary for AT&S to expand its production capacity.

Last year, the company occupied 15 per cent of Chinese market share and the figure is expected to reach 25 per cent in three to five years, he said.

The plants in China and India contributed about 25 per cent of AT&S' total turnover in 2003. Oblak said the percentage was expected to rise to 50 per cent.

"The second plant in Shanghai underlines the company's commitment to the strong growth in the Chinese market," he said.

Source:China Daily'