Prime Minister Narendra Modi’s ambitious ‘Make in India’ campaign, intended to lower barriers to doing business and promote foreign investment in the country, has started to yield results.
By Sudhir Chowdhary
Prime Minister Narendra Modi’s ambitious ‘Make in India’ campaign, intended to lower barriers to doing business and promote foreign investment in the country, has started to yield results. After the entry of Foxconn, Taiwan’s Wistron has stepped into India’s manufacturing sector. It has joined hands with homegrown Optiemus Infracom to invest $200 million in a joint venture including the establishment of an assembly plant in India in the next five years. The two companies plan to set up a manufacturing plant in Noida and it will initially manufacture smart devices, such as smartphones and tablets, says Ravinder Zutshi, managing director, Optiemus Infracom. “The handsets market is expected to continue to grow in double-digits over the next few years. There is a lot to happen in the next four to five years from now,” he tells Sudhir Chowdhary in an interaction.
Excerpts:
How do you look at the present Indian mobile handset market?
Today, the handsets market is growing by 35% and it is clearly the fastest growing business in telecom. It’s a growing business and in the times to come handsets are definitely going to be much better in terms of design and features. We see internet users in India growing up significantly from 300-400 million. With more people accessing the Internet through their mobile phones, Internet penetration in India has also increased which has paved its way to major migration from feature phone users to smartphone users.
By 2017, India is expected to overtake USA to be the second largest smartphone market globally, as per research firm IDC. The market is expected to continue to grow in double-digits over the next few years as more and more people switch to smartphones and gradually upgrade to 4G-enabled phones. So, it clearly indicates there is a lot to happen in the next four to five years from now.
Tell us something about the partnership between the two players?
In line with the government’s ‘Make in India’ initiative, we (Optiemus Infracom) and Wistron, Taiwan’s leading original design manufacturer (ODM), have entered into a joint venture (JV) agreement to establish manufacturing facilities for telecom products in India. Over the next five years, the partners will invest approximately $200 million in infrastructure, technologies and processes, to cater to growing Indian and global demands of telecom products—smartphones, tablets and smart devices. The JV targets to create over 15,000 employment opportunities in India, over the next five years.
The partnership aims to provide a complete end-to-end solution to global and Indian brands encompassing world class manufacturing infrastructure, distribution, retail and after sales.
And, it is a matter of great pride for us to actively contribute to the growing manufacturing ecosystem in the country. We are committed to make available world class technology products at affordable prices for global and local brands.
Will the factory manufacture only smartphones?
Wistron brings with them a lot of expertise in different verticals, like mobile phones, tablets and all ICT manufacturing. Also, they have innovations as well as design centres. So we see a strong relationship building up in terms of manufacturing. We will begin with smartphones, we can then move to tablets. To begin with it could be tablets and smartphones, but if tomorrow the government has some policy change for PCs; then you never know. Wistron designs and manufactures for companies like Acer and Lenovo. So that can be extended to India through the JV.
You are going to manufacture MNC phone brands here, is that correct?
No, the message is that we’ll make global brands; we’ll also look at Indian brands who are willing to get phones manufactured. Some of the brands are creating their own facility and some are not, as of date. So they will probably come and join our manufacturing process.
So it will be both global and Indian brands. It is a facility which is open to any brand who wants to make a smartphone. The facility will be operational by March-end.
How does it align with the government’s ‘Make in India’ campaign?
It aligns in terms of the ecosystem creation. Also in terms of incentivising in the country where government has a lot in terms of extending dual duty differential project where people have started realising that if they make it in India, they have a clear benefit of 11%. It’s a huge benefit in the mobile business. So that itself drives the whole ‘Make in India’ initiative and that’s where it comes from what everybody wants today—to get their phones made in India. And we have the first move advantage; hence lots of brands are coming to us for support in local manufacturing.
What’s the advantage that this JV will offer to each partner and its clients?
Two big advantages: One, Wistron brings with them high technology aspect and innovative factor along with the relationship that they created in the last 30-40 years with the global brands. So that can be extended to this JV as well because as I said, duty structure itself will allow people to come and ‘Make in India’. So that gets extended to us and we will get the benefit of it.
Second, Wistron being a big design centre company in the world, a customer can expect better designs and if any manufacturer wants to get his phone designed by our JV, we are ready to do it. So that means a good design, more India suited, affordable price, and more feature since we are doing all local.
Will your venture play a role in the government’s Digital India plan?
It is going to play a big role. Currently Digital India is a very large subject. A lot of things are happening in Digital India plan; e-commerce, e-benefit, e-licensing etc. So I think we can play a role in improving the lives of people and make it comfortable through mobile devices. People are moving to data accessed through a mobile phone. We can deliver more services through the mobile which will definitely be a prominent part in supporting the Digital India campaign.
What kind of employment are you looking at, in terms of numbers, type of employment etc?
We are currently going to have only one facility in Noida and as we said, our partnership extends to three to five year roadmap, which is covering $200 million of investment in the JV in which we’ll employ about 15,000 people overall. As far as the manufacturing capacity goes, finally it will be a 100 million capacity plant where we’ll have SMPs and the mobile devices together.
What will be the type of employment?
Skilled, semi-skilled, and unskilled, all three. We are already talking to a few institutions where we can get skilled labour because now under the government of India’s Skill Development Programme, we are part of Telecom Sector Skill Council. For our business, we can look at Telecom Sector Skill Council where we are generating a lot of technicians for factory. So it’s a big support which will come from Skill Development Programme.