Reliance and the American company Sanmina will create a joint venture for the manufacture of advanced electronic equipment in India
Reliance Industries Limited has signed a pact with the American company Sanmina Corporation for the creation of a joint venture for the manufacture of electronic equipment in India.
“Sanmina Corporation, a leading integrated manufacturing solutions company, and Reliance Strategic Business Ventures Limited (RSBVL), a wholly owned subsidiary of Reliance Industries Limited (RIL), announced today (3 March) that they have entered into an agreement to create a joint venture through an investment in Sanmina’s existing Indian entity, Sanmina SCI India Private Ltd (SIPL),” RIL said in a statement Thursday, March 3.
According to the statement, the partnership will leverage Sanmina’s 40 years of advanced manufacturing experience and Reliance’s expertise and leadership in the Indian business ecosystem.
Day-to-day operations will continue to be managed by Sanmina’s existing management team in Chennai, which will be transparent from the perspective of employees and customers, he said.
The joint venture will create a world-class electronics manufacturing hub in India in line with Prime Minister Narendra Modi’s “Make in India” vision, according to the statement.
The joint venture will prioritize high-tech infrastructure hardware, for growing markets and in sectors such as communication networks (5G, cloud infrastructure, large-scale data centers), medical and healthcare systems, industrial and clean technologies, defense and aerospace.
In addition to supporting Sanmina’s current customer base, the joint venture will create a state-of-the-art “Manufacturing Technology Center of Excellence” that will serve as an incubation center to support product development and the startup ecosystem. of equipment in India, as well as to promote research and innovation of advanced technologies.
“RSBVL will hold a 50.1% stake in the joint venture, with Sanmina holding the remaining 49.9%,” the statement said.
RSBVL will achieve this ownership mainly through an investment of up to Rs 1,670 crore in new shares in the existing Indian entity of Sanmina, while Sanmina will bring in its existing contract manufacturing business, it added.
Following the investment, the joint venture will be capitalized with over $200 million in cash to fund growth.
“All manufacturing will initially take place at Sanmina’s 100-acre campus in Chennai, with the option to expand the site to support future growth opportunities as well as potentially expanding to new manufacturing sites in India over time. time based on business needs,” the statement said. noted.
“We are delighted to partner with Reliance to create India’s first integrated manufacturing solutions company,” said Jure Sola, Chief Executive Officer of Sanmina.
“This joint venture will serve both domestic and export markets and represents a major milestone in the Indian government’s ‘Make in India’ initiative,” Sola added.
Akash Ambani, Director of Reliance Jio, said, “We are delighted to be working with Sanmina to tap into the significant high-tech manufacturing market opportunity in India. For growth and security, it is essential for India to be more self-sufficient in the manufacture of electronic products in the sectors of telecommunications, computing, data centers, cloud, 5G, new energy and others, as we chart our course in the new digital economy.
“Through this partnership, we expect to drive innovation and talent in India, meeting both Indian and global demand,” he added.
Completion of the transaction is subject to customary closing conditions, including regulatory approvals. The transaction is expected to close no later than September 2022, according to the statement.