New Delhi, Mar 3: Reliance Industries’ subsidiary RSBVL and Sanmina Corporation on Thursday announced setting up of an electronic manufacturing joint venture in India that will focus on hi-tech infrastructure hardware across diverse sectors, including communications networking, defense and aerospace.
Reliance Strategic Business Ventures Limited (RSBVL) will hold 50.1 per cent equity stake in the joint venture while Sanmina will have 49.9 per cent shareholding.
RSBVL will achieve this ownership primarily through an investment of up to Rs 1,670 crore in new shares in Sanmina’s existing Indian entity, according to a statement.
With the investment, the joint venture will be capitalised with over USD 200 million of cash to fund growth.
The transaction, which is subject to regulatory approvals, is expected to close by September 2022.
“Sanmina Corporation, a leading integrated manufacturing solutions company and Reliance Strategic Business Ventures Limited (RSBVL)… Today announced that they have entered into an agreement to create a joint venture through an investment in Sanmina’s existing Indian entity (Sanmina SCI India Private Ltd, SIPL),” the statement said.
The day-to-day business will continue to be managed by Sanmina’s existing management team in Chennai.
“The joint venture will prioritise high technology infrastructure hardware, for growth markets, and across industries such as communications networking (5G, cloud infrastructure, hyperscale datacenters), medical and healthcare systems, industrial and cleantech, and defense and aerospace,” it added.
Akash Ambani, Director at Reliance Jio, said, “we are delighted to work with Sanmina to access the significant market opportunity for high-tech manufacturing in India”.
“For growth and security, it is essential for India to be more self-reliant in electronics manufacturing in Telecom, IT, Data Centers, Cloud, 5G, New Energy and other industries as we chart our path in the new digital economy,” he added.
He also said the partnership will boost innovation and talent, meeting both Indian and global demand.
The joint venture will cater to the growing demand for high technology infrastructure hardware in India as well as address export opportunities.
According to the statement, the partnership would leverage Sanmina’s 40 years of advanced manufacturing experience and Reliance’s expertise and leadership in the Indian business ecosystem.
The joint venture aims to create a “world-class electronic manufacturing hub in India” in line with ‘Make in India’ vision.
Besides supporting Sanmina’s current customer base, the joint venture will create a ‘Manufacturing Technology Center of Excellence’ that will serve as an incubation center to support the product development and hardware start-up ecosystem in India, as well as promote research and innovation of leading technologies.
Revenues for Sanmina SCI India Private Ltd, the existing Indian entity, was nearly Rs 1,230 crore (or USD 165 million) for the fiscal year ended March 31, 2021.
With this joint venture, Sanmina expects to significantly grow the scale of this business over time and expand its Indian manufacturing footprint to serve the local and global demand for hi-tech equipment across industries.
The entire manufacturing will initially take place at Sanmina’s 100-acre campus in Chennai, with the ability for site expansion to support future growth opportunities as well as to potentially expand to new manufacturing sites in India over time, based on business needs, according to the statement.
“We are excited to partner with Reliance to build the premier integrated manufacturing solutions company in India,” Jure Sola, Chairman and Chief Executive Officer of Sanmina, said.
This joint venture will service both domestic and export markets, and marks a major milestone in `Make in India’ initiative, Sola added. (PTI)
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