San Jose-Mumbai partnership to boost innovation and talent in India
A newly formed export-oriented joint venture of San Jose’s Sanmina Corp and Reliance Strategic Business Ventures Ltd will prioritize 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, as well as defense and aerospace.
“We are excited to partner with Reliance to build the premier integrated manufacturing solutions company in India,” stated Jure Sola, Chairman and Chief Executive Officer of Sanmina. “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, “We are delighted to work with Sanmina to access the significant market opportunity for high-tech manufacturing in India. 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 as we chart our path in the new digital economy.
“Through this partnership we plan to boost innovation and talent in India, meeting both Indian and global demand.”
Rated as a world-class electronic manufacturing hub in India, the joint venture will support Sanmina’s current Indian customer base in the country, and 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 the country, as well as promote research and innovation of leading-edge technologies.
The partnership will leverage Sanmina’s 40 years of advanced manufacturing experience and Reliance’s expertise and leadership in the Indian business ecosystem. The day-to-day business will continue to be managed by Sanmina’s existing management team in Chennai, which will be seamless from an employee and customer perspective.
Samina and Reliance 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).
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, while Sanmina will contribute its existing contract manufacturing business.
As a result of the investment, the joint venture will be capitalized with over US$200 million of cash to fund growth.
RSBVL will hold 50.1% equity stake in the joint venture entity with Sanmina owning the remaining 49.9%.
Revenues for SIPL were approximately Rs.12.3 billion (or approximately US$165 million) for the fiscal year ended 31 March 2021.
Through 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.
All the 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.
Completion of the transaction is subject to customary closing conditions, including regulatory approvals. The transaction is expected to close no later than September 2022.
Sanmina Corporation is a leading integrated manufacturing solutions provider serving the fastest growing segments of the global Electronics Manufacturing Services (EMS) market. Recognized as a technology leader, Sanmina provides end-to-end manufacturing solutions, delivering superior quality and support to Original Equipment Manufacturers (OEMs) primarily in the communications networks, cloud solutions, industrial, defense, medical and automotive markets. Sanmina has facilities strategically located in key regions throughout the world.
Reliance is India’s largest private sector company, with a consolidated turnover of Rs.539,238 crore (US$73.8 billion), cash profit of Rs.79,828 crore (US$10.9 billion), and net profit of Rs.53,739 crore (US$7.4 billion) for the year ended 31 March 2021. fiinews.com
