India’s Reliance to invest $220 million in Sanmina JV
US EMS provider Sanmina is forming a manufacturing joint venture with a subsidiary Indian conglomerate Reliance Industries. The Indian group will make an investment in Sanmina’s existing Indian entity Sanmina SCI India Private Ltd, otherwise know as SIPL.
Through the investment in SPIL, the companies will create a joint venture looking to cater to the growing demand for high technology infrastructure hardware in India as well as addresses export opportunities
The partnership will leverage Sanmina’s advanced manufacturing experience and Reliance’s expertise in the Indian business ecosystem. The day-to-day business will continue to be managed by Sanmina’s existing management team in Chennai.
The aim of the joint venture is to create an electronic manufacturing hub in India, in line with the country’s “Make in India” vision. According to a press release the JV will prioritise high technology infrastructure hardware, for growth markets, and across industries such as communications networking (5G, cloud infrastructure, hyperscale datacenters), medical and healthcare systems, industrial and cleantech, and defense and aerospace.
At the same time, the companies are planning to create a ‘Manufacturing Technology Center of Excellence’ with the joint venture – aiming to serve as an incubation center to support the product development and hardware start-up ecosystem in India.
Reliance will hold 50.1% equity stake in the joint venture entity with Sanmina owning the remaining 49.9%. To achieve this ownership Reliance will – via its subsidiary – invest INR 16.7 billion (about USD 220 million) in Sanmina’s existing Indian entity, while Sanmina on its end will contribute its existing contract manufacturing business..
Initially, all the manufacturing will take place at Sanmina’s campus in Chennai. However, the companies stresses in the press release that campus holds the ability for site expansion and that it also, if needed, might expand to new manufacturing sites in India.