Flextronics to shift mfg activities to Chennai

Flextronics, an electronics manufacturing services (EMS) provider based out of Singapore, plans to move its manufacturing activities from Bangalore to its industrial park coming up near Chennai.

However, the company has no plans to completely pull out of Bangalore, a top executive of the $16-billion company informed.

"We plan to shift the manufacturing divisions from our Bangalore facility to Chennai where the first unit of our industrial park for manufacturing cellphones is going to be operational by October this year," Valerie Kurniawan "� Surjadi, director, marketing communication, told Business Standard.

She, however, said that the company was not completely pulling out of Bangalore, which might remain its base for prototype designing for the company. "We will decide on this as soon as our Chennai Industrial Park becomes operational," she added.

Flextronics' association with Bangalore dates back to 2001 when the company came to India by acquiring a manufacturing facility of Motorola in Bangalore.

The company operates from Bangalore from a 42,000-square feet facility which focuses on manufacturing mobile communications, consumer digital and infrastructure products.

Of its some 3,000 employees in India, 700 are based in Bangalore, where Flextronics also has its software and hardware divisions. The rest are based at its software and hardware designing centres in Chennai, Gurgaon and Pondicherry where the company has a manufacturing facility of about 40,000 square feet.

The Flextronics industrial park in Chennai is coming up on a sprawling 250 acres of land with a built-up area of 2 lakh square feet at Sriperumbudur with an investment of $100 million over a period of five years.

The park will have four different units for manufacturing cellphones, consumer digital products, and computing and infrastructure products like base stations for telecom services providers.

A Gururaj, general manager and director, India operations, Flextronics India, said that the first unit for manufacturing cell phones would be operational by September this year, while the rest of the units would be operational by 2008.

"Initially, we plan to manufacture about one million cell phones per month and 15,000 base stations per year," Gururaj said.

The company, which caters to the needs of OEMs here, plans to reach out to global OEMs in the long run. "We see a lot of opportunities in the domestic market and are accordingly planning to ramp up our headcount by adding at least 2,000 people in India by the end of the year," he added.

According to a study by research firm Frost & Sullivan, the EMS market in India stood in the range of $900-950 million in 2005 and is expected to reach $2.3-2.5 billion by 2010.

"Going forward, we expect that India's potential EMS capabilities can capture 1 per cent of the North American market, 2 per cent of Europe, 4 per cent of Asia and 5 per cent of the rest of the world," he added.

Flextronics at present operates in 30 countries across the globe. In Asia, the company has manufacturing facilities in 30 locations in seven countries including Japan, India and China. Some of the OEMs that Flextronics currently provides its services to include Nokia, Dell, Apple, Fuji, Sony Ericsson and Panasonic.