 "Dixon Technologies to open new Chennai facility for top notebook brands")
Dixon Technologies, a leading electronics contract manufacturer, will open a new facility in Chennai for producing laptops for four leading notebook brands in India.
An Economic Times report quoted a senior executive from the company as saying that the factory is expected to become operational within the next 8-10 months.
During the company’s recent earnings calls, Atul B Lall, chairman and MD at Dixon Technologies, said, “We have the top four customers out of the top five local brands operating in the country. For this, a new campus is being planned in Chennai. The site has been identified and the resources have been acquired.”
“We target to start this Chennai facility in the next 8-10 months, so this is also going to be a very significant engine of our growth... What the team has been able to do in the mobile front, we aspire to do the same for IT products,” he was quoted in the news report.
The contract manufacturer, one of the nation’s largest, announced that it is currently producing notebooks for Acer. Additionally, it has initiated the new product introduction (NPI) process for Lenovo laptops, with full-scale production slated to begin in the third financial quarter of FY25, the report said.
“The Chennai plant should be operational by Q4 of the current financial year or Q1 of next financial year,” Lall said, adding that the potential market for IT products in India is nearly $10 billion.
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Dixon reported quarterly revenues of Rs 6,588 crore, marking a 101 per cent increase year-on-year for the June quarter. The company’s net profit surged by 109 per cent year-on-year, reaching Rs 140 crore, with the majority of this profit stemming from its mobile and EMS (electronics manufacturing services) division.
This growth was mainly driven by a significant increase in volumes for Motorola and Xiaomi. The company plans to make further investments as necessary to manage its robust order book, the report quoted Lall as saying.
“There is strong growth in volume for Motorola smartphones with a monthly order book of almost 900,000 to 1 million per month, including a decent order book for exports. Xiaomi business is also ramped up and now we are clocking around 700,000 per month from July, and higher volumes are expected in coming months of the festive season,” Lall said, as cited by the report.
Around 35 per cent of Motorola phones manufactured by Dixon are exported to the US and other countries, according to the company. Additionally, their collaboration with the Chinese Original Design Manufacturer (ODM) Longcheer is achieving production volumes of 400,000 to 450,000 units, with potential to increase to 700,000 units per month.
Lall mentioned that the company will soon onboard two more global Android handset brands as customers.
The company is also on the verge of completing its acquisition of Ismartu, the manufacturing arm of Transsion Holdings, pending approval from the Competition Commission of India. Once finalised, the company will control 55-60 per cent of the smartphone production capacity in India, the report said.
Lall stated that after scaling up smartphone assembly, the company's next focus will be to enhance manufacturing capabilities by incorporating display modules, precision components, mechanics, and other modules, as mentioned in the report.