Sterlite wants land to set up LCD panel factory

Promoter Anil Agarwal had indicated a month before that they were keen to invest Rs 40,000 crore in an LCD plant

Anil Agarwal’s Sterlite Technologies is looking for land, possibly in Madhya Pradesh, for a factory to make LCD panels, say sources.

The panels would go for television sets, mobile phones and other consumer electronic devices, top industry sources said.

 

Sterlite executives were not available for comment. Agarwal had indicated a month before that they were keen to invest Rs 40,000 crore in the LCD plant. Sterlite currently makes optical fibres for telecom and internet services. The LCD unit will see it foray into supplying components for consumer electronic companies. The latter market is expected to grow with the government’s Make in India and Digital India programmes.

The lack of domestic manufacturing in consumer electronics and appliances has been blamed for the lack of scale, incentives and component supplier base. Consumer electronics and durables are the second largest item on the country's import bill after oil. A recent E&Y report says India's consumer electronics and appliances market will touch $20.6 billion (or Rs 1.23 lakh crore) by 2020, growing at a compounded annual rate of 9.7 per cent. The current market size is estimated at $10 bn (or Rs 60,000 crore).

To encourage manufacturing, the central government  had recently announced it was extending the Modified Special Incentive Package Scheme (M-SIPS) for five years, streamlining the process and covering more product categories. First introduced in 2012 as part of a National Policy on Electronics, it provides for 20-25 per cent subsidy on capital expenditure for manufacturers of electronics and consumer durables.

The move will trigger a wave of investment, experts say, much more than the Rs 15,000 crore of proposals the scheme got in the first leg between 2012 and 2014. Of these proposals, 16 projects totaling Rs 2,230 crore were approved by the government, industry sources said.

It is unclear if Sterlite would route its investment in the LCD panel unit through M-SIPS but industry sources say this is likely.

Some other firms such as Panasonic, Videocon and Haier are also expected to tap M-SIPS as they look at increasing their manufacturing from India. So, too, for mobile phone makers such as Lava, Karbonn, Micromax and Intex that are increasingly turning to India as China becomes more economically unviable for them to produce there.

Shifting of manufacturing to India is also tied to the larger objective of these companies in converting India into a regional hub for exports, experts said.
WANTED: LAND PARCEL

• Anil Agarwal’s Sterlite scouting for land to set up its LCD panel manufacturing plant
• Madhya Pradesh could be possible base for this plant
• Investment for this plant pegged at Rs 40,000 crore, easily among the biggest in consumer electronics
• Will help Sterlite foray into supplying components for consumer electronics — a market that is expected to grow