Amid worsening Sino-US relations, Apple is gradually shifting its production base away from China. Against such a backdrop, India has emerged as a major manufacturing hub, with various component manufacturers setting up their production facilities in India. One such instance is the recent acquisition of a defunct handset factory unit by Apple supplier Salcomp.
Salcomp is one of Apple’s main components supplier has bought Nokia’s handset factory near Chennai for close to USD30 million (Rs 215 crore). The company is gearing up to commence production at the plant by March 2020 and intends to invest around USD 300 million over the next five years, revealed a source close to the matter.
The company conveyed through an email statement that they are happy to confirm the purchase of Nokia’s facility in Sriperumbudur. Salcomp currently operates in two other units in Sriperumbudur, where it employs around 7,000 people.
Salcomp officials further disclosed that the company is endeavoring to secure necessary clearances to seal the deal at the earliest, post which, manufacturing would be restarted. Once functional, the plant is expected to employ close to 10,000 people, added another company official.
The handset manufacturing plant was set up in 2006 and used to be the world’s largest. It had a production capacity of 100 million handsets per year, which employed around 12,000 people and was a testament of India’s manufacturing competence. However, owing to a tax dispute between foreign investors and local authorities, the plant was shut down in late 2014.
Apple is eyeing on expanding production capacity in India for the local and global markets and the acquisition aligns with its strategy. The majority of the plant’s production would comprise Apple’s components, precisely almost 60% (of production). The remaining capacity of the 1.1 million sq ft plant would be utilized by others including Oppo, Foxconn, Vivo, and Xiaomi, reported a company insider.
Apparently, other major contract manufacturers of Apple have also been exhibiting great interest in setting up units in India. Suppliers, such as Shenzhen Yuto Packaging Technology, Flex, Sunwoda Electronic Co, and CCL Design (Suzhou) are already manufacturing components and accessories in India, while others including Wistron and Foxconn are ramping up expansion efforts in India.