Vivo to invest Rs 40 billion in new smartphone plant in Greater Noida

Company to acquire 170 acres of land, which has already been identified

Chinese smartphone maker Vivo will invest more than Rs 40 billion in a new smartphone unit spanning almost 170 acres in Greater Noida.

The company has already identified land and the process for acquisition and other formalities were underway, Vivo director (brand strategy) Nipun Marya told Business Standard here adding the proposed investment does not include land cost.

In phase I of the mega project, Vivo plans to invest nearly Rs 8 billion, which would ramp up its current smartphone production capacity in India from 25 million units to 50 million per annum. The company already operates a captive plant in Greater Noida spead over 50 acres and employing about 5,000 people.

“We have so far invested Rs 3 billion in our existing facility in Greater Noida. The new plant would also employ about 5,000 people in phase I,” he informed and said Vivo was looking to make the new facility operational “as soon as possible.”

At present, Vivo has 4 plants worldwide, including two in China and one each in India and Indonesia, although it has footprint in 16 countries. “India is the only country apart from China, where Vivo has planned its second production unit,” Marya noted and asserted India was a major market for the smartphone company.

Besides, Vivo has a consumer research unit based out of Gurugram to conduct studies in the domestic market for value addition in its product portfolio, which currently has about a dozen different smartphones.

Marya was in town to launch Vivo’s latest model Y95 as part of its aggressive growth strategy in Uttar Pradesh. It is priced at Rs 16,990 and available at all offline channels and leading online platforms.

In the last quarter, Vivo commanded domestic smartphone share of over 18% and stood second in India. Last year, Vivo reported revenues of Rs 110 billion in India, up from Rs 60 billion during the previous financial year.

Over the years, the Greater Noida region has emerged as India’s top smartphone manufacturing hub with big names, including Samsung, Vivo, Intex etc setting up their units with several other projects in the pipeline.

Currently, the Noida region is estimated to have a combined capacity of more than 150 million devices annually, roughly corresponding to about 50% of India’s annual demand. However, most components are still being imported from China and these units primarily assemble mobile phones from completely knocked-down (CKD) kits for hawking.

The central government had earlier expressed its intention to provide more initiatives to boost electronics manufacturing under ‘Make in India’. This is deemed imperative for generating millions of jobs for both skilled and semi skilled workforce given the exponential growth of the sector and projected growth. The Centre has estimated mobile phone production to touch 500 million devices by 2019-20.