Flextronics may expand manufacturing base outside Bangalore

Flextronics to expand manufacturing base

The Hindu Business Line

``We are carrying out due diligence to find out whether to expand in Bangalore or set up a new facility.''



ELECTRONICS manufacturing services company Flextronics, on Thursday, announced that it is exploring options to expand its manufacturing base in India, in addition to the existing facility in Bangalore.

Senior company executives held a meeting with the Communications and IT Minister, Mr Dayanidhi Maran, to discuss the possibility of setting up a greenfield investment either in Bangalore, Pondicherry or Chennai. Other investment details of the project will be released after negotiating with channel partners.The $15.9-billion Flextronics employs nearly 3,000 people in India and is one of the world's largest contract makers of handsets and an OEM supplier to all telecom and base station manufacturers such as Ericsson, Nokia and Nortel. ``We are carrying out due diligence to find out whether to expand in Bangalore or set up a new facility,'' Mr Vijayan Chennasamy, Vice-President, Flextronics Technologies, said after the meeting with Mr Maran. Today's announcement comes close on the heels of Mr Maran's recent trip to the US where he met Mr Michael McNamara, Flextronics' Chief Operating Officer.

"We are keen to collaborate with the Government of India on a mutually beneficial long-term partnership. We are looking to make incremental strategic investments in the country by leveraging on its human capital and competitive cost structure," said Mr Peter Tan, President & Managing Director of Flextronics, Asia.

Flextronics had recently acquired 55 per cent stake held by Rupert Murdoch-owned DirectTV in Hughes Software Systems. It changed the name of Hughes Software Systems to Flextronics Software Systems and now proposes to buy all the shares of the company held by the public to make it a wholly-owned subsidiary of Flextronics International.

"With India's emergence as a growing telecom market, we've been witnessing strong interests from our customers to increase our manufacturing presence to support their imminent entry into this market. The business outlook remains upbeat and we are fully committed to participating in the India's economic development," said Mr Chennasamy.

Over a billion dollar worth of investments is expected to be pumped into India in the coming months by various IT and telecom companies. A number of companies, including Intel, Nokia, Ericsson and LG have already announced their plans to invest in manufacturing in India.