Reliance Industries, through its subsidiary Reliance Strategic Business Ventures Limited (RSBVL), is set to invest Rs 1670 crore ($221 million) to create a joint venture with the US manufacturing company Sanmina Corp for making electronic products in Chennai.
The joint venture will create a world-class electronic manufacturing hub in India, in line with the Prime Minister's “Make in India” vision, Reliance and Sanmina said in a media statement.
The manufacturing hub, which to begin with will operate out of Sanmina's existing 100-acre campus in campus, will make, among others, hardware for 5G communications, cloud infrastructure, healthcare systems, and defence and aerospace, the statement added. If need be in the future, manufacturing will be expanded to other places in the country.
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The two companies to promote research, too
Reliance will hold 50.1% equity stake in the joint venture entity with Sanmina owning the remaining 49.9%. As a result of the investment, the joint venture will be capitalized with over $200 million of cash to fund growth. The day-to-day business will continue to be managed by Sanmina’s existing management team in Chennai.
"In addition to supporting Sanmina’s current customer base, the joint venture will create a state-of-the-art ‘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-edge technologies," the companies said.
Jure Sola, Chairman and Chief Executive Officer of Sanmina said: "this joint venture will service both domestic and export markets and represents a major milestone in the Indian governments “Make in India” initiative."
Akash Ambani, Director, Reliance Jio, said, "For both 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. Through this partnership we plan to boost innovation and talent in India, meeting both Indian and global demand."
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