Lava to Invest Rs. 500 Crores to Set Up Plant in Andhra Pradesh

Earlier this week, Prime Minister Narendra Modi had laid the foundation stone for a dedicated mobile handset and electronics manufacturing facility at Tirupati, Andhra Pradesh.

According to officials, apart from Lava, the facility will house brands like Micromax, Celkon and Karbonn. "The manufacturing plant, which will be operational in 2017, will target production capacity of five million phones a month once fully functional. Lava will invest Rs. 500 crores for this facility that will be set up over 20 acres of land allotted by the government," company's International Chief Manufacturing Officer Sanjeev Agarwal told PTI.

He added that the facility will aim to generate employment for 12,000 people. "Over the next few years, we plan to develop the entire manufacturing ecosystem in India and promote localisation of components," Agarwal said.

Lava's existing manufacturing unit in Noida, which has a monthly capacity of one million units, was commenced six months back.

"We have already achieved manufacturing cost as competitive as that in China (from Noida unit). Moreover, with our robust infrastructure, we are delivering products with 50 percent better quality as compared to products made in China," he said.

This development is an important milestone in Lava's journey and will help deliver on the promise to empower people to do more and be more by generating employment and imparting skills, he added.

In July, Lava had said it will invest Rs. 2,615 crores over the next 7 years to set up two manufacturing units in India. Once operational, the units will have a combined capacity of 18 million handsets per month.

Global handset makers like Samsung and domestic players like Micromax and Spice have assembly units in India. Recently, international players like Xiaomi, Gionee and Asus have announced assembly units in India in partnership with electronics major Foxconn in Andhra Pradesh.

Handset makers are looking to tap the multi-billion dollar opportunity in India, which is one of the fastest growing smartphone markets in the world.

The Indian handset industry is poised to overtake the US as the second-largest market in next few years. According to research firm IDC, shipments in India grew 44 percent year-on-year to 26.5 million units in April-June 2015 quarter.

Lava ranked fourth in the tally with seven percent market share, after Samsung (23 percent), Micromax (17 percent) and Intex (11 percent).