Gemini to set up Rs 25 cr unit in Himachal Pradesh

Gemini Communications, a listed wireless networking equipment company, will invest around Rs 25 crore in a new facility in Himachal Pradesh to manufacture radio frequency identification (RFID) tags, the company said.

The company, which exports RFID antennae and other tracking equipment, will become the first Indian manufacturer of such equipment when the new facility is ready.

Considering that the new plant will be in place by September this year, revenues from the RFID division are expected to rise significantly.

In the next financial year, the company said that it expected the RFID division to account for 15 per cent of its sales against the current 5 per cent.

"In the light of increasing activity in the domestic retail sector and bigger export orders, we believe it makes sense for us to complete our portfolio by manufacturing RFID tags as well," said R Vijaykumar, chairman of the Chennai-based company.

Till now, the company, which posted profits close to Rs 9 crore for the last four quarters, has spent nearly Rs 10 crore in research at its RFID division, which was set up in 2003.

It currently imports the tags which it supplies to its customers and said that self-owned manufacturing would further improve its ability to compete in global markets.

"Currently, the tags cost around Rs 200 a piece, while on the shelves they cost around Rs 100-150 each," Vijakumar added, pointing out that the company would not be targeting just retailers.

"In India, besides organised retail, we will also be targeting industries such as IT and BPO which have a large number of small and moveable assets such as computers and monitors. The system not only improves security, but also makes it easier to trace objects quickly.

Vijaykumar said, "Besides this, we will also be approaching hotels, car parks, libraries, warehouses, hospitals and business' which need to keep a track of moving goods on a real time basis."

The global market size for such real time locating systems is estimated to be around $ 500 million (Rs 2,250 crore), with an expected growth of 20 to 30 per cent a year.

The sector, which includes location of goods and assets both on the shop-floor and in transit, is still in nascent in India. The reason: lower standards of retail and distribution followed in India.

"Worldwide, increasing consumer expectations has led to a spurt in demand for such products," said Sathya Durga, research analyst at the auto-ID and security division at Frost and Sullivan, India.

Real time locating systems play a key role when the assets are required to be located in transit.

"Customers are becoming less tolerant in accepting deficient products or services and want to be acquainted with information on the origin of certain products such as beef and other edible items," he added.