Sanmina Corporation (Sanmina), an integrated manufacturing solutions company, and Reliance Strategic Business Ventures Limited (RSBVL), a wholly-owned subsidiary of Reliance Industries Limited (RIL), on Thursday announced 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”).
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 release stated.
According to the official statement, 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.
The joint venture 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 defence and aerospace.
It plans to create a world-class electronic manufacturing hub in India, in line with the Prime Minister's “Make in India” vision.
Speaking of the new development, Jure Sola, Chairman and Chief Executive Officer of Sanmina, stated,
“This joint venture will service both domestic and export markets and represents a major milestone in the Indian governments' “Make in India” initiative.”
RSBVL will hold 50.1 percent equity stake in the joint venture entity with Sanmina owning the remaining 49.9 percent. 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 its existing contract manufacturing business. As a result of the investment, the joint venture will be capitalised with over $200 million of cash to fund growth.
Revenues for SIPL were approximately Rs 12.3 billion (or approximately $165 million) for the fiscal year
ended March 31, 2021. 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.
Akash Ambani, Director, Reliance Jio, said,
“For both growth and security, it is essential for India to be more self-reliant in electronics manufacturing in Telecom, IT, Data Centers, Cloud, 5G, New Energy and other industries as we chart our path in the new digital economy. Through this partnership we plan to boost innovation and talent in India, meeting both Indian and global demand.”
The completion of the transaction is subject to customary closing conditions, including regulatory
approvals. The transaction is expected to close no later than September 2022.
Edited by Megha Reddy