Xenitis to launch mobiles, plans third unit

The Rs 620 crore Xenitis Group, which started by selling low cost PCs under the 'Aamar PC' brand name, has ambitious plans to emerge as a voume manufacturing giant supplying brands for products ranging from PCs, mobikes, mobile handsets, to passenger cars and trucks by 2009.

Xenitis Group is also targeting a turnover of Rs 1,550 by March 2008, from its infotech, telecom and two-wheeler businesses, on the back of contract manufacturing businesses that it has taken up as well as from sale of its own branded products in the same categories.

Speaking to Business Standard, Santanu Ghosh, chairman and managing director of Xenitis Group said that it is targeting Rs 1,000 crore turnover from its infotech business alone by March 2008.

It is also planning an initial public offering (IPO) to fund the second phase of expansion of its infotech division.

Although Ghosh declined to comment on the amount it plans to raise, the money would be used to fund expansion of its infotech business which includes foraying into TFT manufacturing, memory assembling and also mother board manufacturing.

Xenitis had identified high growth sectors of the economy, like infotech, mobiles and transporation, and then decided to convert the import-dependence of these sectors into a volume manufacturing opportunity.

It aimed to become a domestic supplier of these goods to brands and wean them away from imported goods, principally from China.

At present Xenitis imports components from China and manufactures PCs at its plant in West Bengal.

Xenitis Group is also going to launch sub-Rs 1,000 mobile handsets by October this year. It has already tied-up with service providers like Airtel and Vodafone Essar for bundled offers with its handsets.

It is also investing Rs 100 crore in its third factory in West Bengal. This would be up and running by March 2008 and would manufacture close to 2 lakh mobile handsets per month.

"We are looking at a turnover of Rs 200 crore by March 2008 from our telecom business alone," said Ghosh.

It would initially roll out 28 models, some of which would offer dual GSM sim card option which means one can keep two connections at the same time.

These handsets would range between Rs 750 and Rs 6,000.

"Xenitis was the first to roll out sub-Rs 10,000 PCs in 2002 and in the second phase, we plan to roll out sub-Rs 1,000 mobile phones by October this year. We also plan to launch sub-Rs 1 lakh passenger cars by 2009," Ghosh said.

One of Xenitis Group's most ambitious projects was the establishment of West Bengal's first two-wheeler manufacturing plant, with an investment of Rs 300 crore and an installed capacity of 3,60,000 units per year.

Global Automobiles, the Group's automobile manufacturing subsidiary, launched its first two-wheeler brand - Xpression - in April 2007 and rolled out a second brand Xpression Plus in the three months that followed.

"A range of bicycles, a product of another Group subsidiary, is also on the anvil," Ghosh informed.

By 2009, Global plans to foray into the manufacturing of cars, buses and trucks. Although Ghosh said it was too early to comment on sales target for cars, it would handle contract manufacturing for cars too to push overall profits of the company.

"We are sitting on cash and order surplus for the next three years. We already have orders for 1 lakh mobile handsets per month and 10,000 orders for mobikes from Iran," claimed Ghosh. So far, the company has sold 8000 pieces of 125 cc mobikes in West Bengal alone and expects a turnover of Rs 350 crore from its automobile business by March 2008.

"We would score over the other established two-wheeler companies because we offer quality products at very low costs, keeping our profit margins low," Ghosh pointed out.

According to industry estimates, Hero Honda Motors Limited is currently the market leader in the two-wheeler category with a market share of 40 per cent and posted a turnover of close to Rs 10,000 crore as on March 2007.