Singapore-based Flextronics, a leading contract electronics manufacturer, has planned to invest $200 million in the first phase to set up its manufacturing facility in Sriperumbudur (45 km from Chennai), where the company would be consolidating its Indian manufacturing operations.
In the first phase, the company will set up two units with a total space of 5,00,000 sq ft at the 250 acre Flextronics Industrial Park.
The first unit, which was inaugurated on Saturday by Prime Minister Manmohan Singh in the presence of Congress President Sonia Gandhi, Chief Minister M Karunanidhi and Union Minister for Communications and Information Technology Dayanidhi Maran, will have a production capacity of a million handsets a month. The second unit will be ready by the next year.
The Sriperumbudur facility will manufacture GSM mobile handsets and telecom infrastructure equipment, such as mechanicals for base stations, and cater mainly to domestic customers.
After a year or so, it will look at export markets, such as Europe, Africa and the Middle-East. The unit will initially employ about 1,000 people. However, going by the company's global experience, the 5,00,000 sq ft facility may employ about 4,000 people.
The company has planned 10 million sq ft facilities to be developed in phases and the park will have four different units for manufacturing cell phones, consumer digital products and computing and telecom infrastructure products, such as base stations.
Addressing a press conference before the inauguration of the facility, Michael McNamara, CEO, Flextronics, said the Sriperumbudur facility complemented its industrial parks in Brazil, Europe and China.
Asked about the development of local suppliers, he said the facility will initially have smaller percentage of local suppliers compared with other industrial parks. However, 20 to 25 per cent is reasonable to start with, he added.
Peter Tan, president and managing director, Asia, Flextronics, said the Sriperumbudur facility will significantly minimise logistics cost throughout the supply chain and improve manufacturing efficiency. The park will be a one-stop shop with design-build-ship activities under one roof.
Tan also said the company will move its manufacturing activities from Bangalore and Pondicherry to Sriperumbudur and consolidate its operations.
Hardware policy soon: PM
Prime Minister Manmohan Singh announced that the Centre will soon come out with an electronics and IT hardware policy to give major fillip to electronics and IT hardware industry and make it more competitive.
After inaugurating the manufacturing facility of Flextronics in Sriperumbudur, he said the Centre would follow a forward-looking policy regime that would continue to encourage the electronics and IT hardware sector and promote new investment, create new employment and generate new business opportunities.
The Centre will also reduce tariff on 217 IT items to zero per cent as part of the commitments to WTO. This will promote greater competition, which, in turn, will help the development of the domestic electronics industry, he added.
While the IT and electronics sectors are growing rapidly, the government is also committed to address the issue of shortage of skilled manpower by setting up a Mission on Vocational Education to improve the skill base, he said.
Lauding Flextronics for setting up its facility in Sriperumbudur, Singh stressed that the UPA government is determined to provide a conducive environment that will create exciting opportunities for both domestic and foreign entrepreneurs.
Earlier, Singh had laid the foundation stone for the Rs 470 crore (Rs 4.70 billion) Global Automotive Research Centre in Orgadam, about 70 km from Chennai, and said the heavy industries ministry is preparing an automotive mission plan for 2006-2016 to quadruple the turnover of the automotive sector in the next 10 years.