Reliance arm, Sanmina enter JV for manufacturing EVs in India
Mumbai: Reliance Strategic Business Ventures Limited (RSBVL), a wholly-owned subsidiary of Reliance Industries Limited (RIL), has entered into an agreement with Sanmina Corporation (Sanmina) to create a joint venture to manufacture Electronic Vehicles in India.
The joint venture is created through an investment by RSBVL in Sanmina’s existing Indian entity (Sanmina SCI India Private Ltd, “SIPL”).
“The joint venture will create a world-class electronic manufacturing hub in India, in line with the Prime Minister's `Make in India’ vision,” the companies said in a joint statement Thursday.
RSBVL will hold a 50.1 percent equity stake in the joint venture entity with Sanmina owning the remaining 49.9 percent.
"RSBVL will achieve this ownership primarily through an investment of upto Rs 1,670 crore in new shares in Sanmina’s existing Indian entity, while Sanmina will contribute its existing contract manufacturing business," the statement said.
As a result of the investment, the joint venture will be capitalized with over $200 million of cash to fund growth.
“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,” director Akash Ambani, Reliance Jio, said in a media statement.
The joint venture 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, and defense and aerospace.
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.
Revenues for SIPL were approximately Rs 12.3 billion (or approximately US$165 million) for the fiscal year ended March 31, 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, the companies said.