(AP) - BUCHAREST, Romania-Nokia signed a deal Monday with the Romanian government to open a cell phone production facility in Transylvania, the company said.
Nokia plans to invest Euros 60 million (US$80 million) in the plant near Cluj, a major city in Transylvania. The plant will be the company's 11th cell phone production facility globally.
The company said its decision to build a factory in Romania reflected Nokia's strong growth globally, as well as increased demand for mobile devices in Europe, the Middle East and Africa.
Nokia said it selected Cluj County for the plant because of its pool of skilled labor, its good logistics connections and its industrial tradition.
Romanian authorities have agreed to spend Euros 33 million, or about US$44 million, on improving roads and on utilities for the plant, which will be built in the village of Jucu on the outskirts of Cluj, about 400 kilometers, or 250 miles, northwest of Bucharest.
Construction will start in this spring and production is expected to begin in the first half of 2008. Nokia will recruit 500 workers by the end of the year. Eventually, the project is estimated to create 15,000 jobs, the government said.
As part of the plans, Nokia is looking to establish an industrial park in the area, enabling a number of key suppliers and partners to locate their operations there.
Prime Minister Calin Popescu Tariceanu said the Cluj airport could also need to be expanded to cope with increased traffic.
The projects will add to Romania's developing technology sector. Ericsson, Microsoft and Renault have also announced plans to open research, support or design facilities in the new European Union member country.