Snapshot
Sanmina Corporation and Reliance Industries Limited (RIL) have agreed to create a joint venture. According to RIL, the joint venture will create a world-class electronic manufacturing hub in India.
This joint venture will prioritize high technology infrastructure hardware such as communications networking, medical and healthcare systems, industrial and cleantech, and defense and aerospace.
Sanmina Corporation, a leading integrated manufacturing solutions company, and Reliance Strategic Business Ventures Limited (RSBVL), a wholly-owned subsidiary of Reliance Industries Limited (RIL), on Thursday (3 March) announced that they have agreed to create a joint venture through investment in Sanmina’s existing Indian entity (Sanmina SCI India Private Ltd, ‘SIPL’).
According to RIL, the joint venture will create a world-class electronic manufacturing hub in India, in line with the ‘Make in India’ vision.
This joint venture will prioritize high technology infrastructure hardware such as communications networking (5G, cloud infrastructure, hyper-scale data centers), medical and healthcare systems, industrial and cleantech, and defense and aerospace.
“This partnership will leverage Sanmina’s 40 years of advanced manufacturing experience and Reliance’s expertise and leadership in the Indian business ecosystem. The day-to-day business will continue to be managed by Sanmina’s existing management team in Chennai, which will be seamless from an employee and customer perspective,” the company noted.
“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 the product development and hardware start-up ecosystem in India, as well as promote research and innovation of leading-edge technologies,” it added.
RSBVL will hold a 50.1 per cent equity stake in the joint venture entity with Sanmina owning the remaining 49.9 per cent. RSBVL will achieve this ownership primarily through an investment of up to Rs 1,670 crore in new shares in Sanmina’s existing Indian entity, while Sanmina will contribute to its existing contract manufacturing business.
As a result of the investment, the joint venture will be capitalized with over $200 million of cash to fund growth. Through this joint venture, Sanmina expects to significantly grow the scale of this business over time and expand its Indian manufacturing footprint to serve the local and global demand for Hi-Tech equipment across industries.
All the manufacturing will initially be done at Sanmina’s 100-acre campus in Chennai, with the ability for site expansion to support future growth opportunities and potentially expand to new manufacturing sites in India over time based on business needs.