Taiwan-based mobile phone contract manufacturer Arima Communications recently closed its Taiwan plant and plans to transfer production operations overseas, according to reports by Taiwan's Economic Daily News and China Times. Arima's Taiwan plant was located in Yingge, Taipei County, and mainly engaged in the manufacturing of Smartphones. The entire production operations at this plant will be transferred to the company's China plant in Wujiang, Jiangsu Province. At the same time, Arima has set up a production line in Brazil and expects to begin production in April 2009. Initially the Brazil plant's production capacity is estimated at 100,000 units per month and will be expanded to 500,000 units eventually. Although the production costs in Brazil are considerably higher than China, the 50% preferential rate of duty for local production prompted Arima to set up manufacturing operations in the country, mainly catering to the demand of branded vendors seeking to tap the Brazilian market.