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Reliance Industries Limited has signed a pact with United States-based Sanmina Corporation for setting up a joint venture to manufacture electronics hardware 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), today (3 March) 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)," RIL said in a statement on Thursday (3 March).

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.

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, it said.

The joint venture will create a world-class electronic 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 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 defense and aerospace.

In addition to supporting Sanmina’s current customer base, the joint venture will create a state-of-the-art ‘Manufacturing Technology Centre 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.

"RSBVL will hold 50.1 per cent equity stake in the joint venture entity with Sanmina owning the remaining 49.9 per cent," the statement said.

RSBVL will achieve this ownership primarily through an investment of upto Rs 1,670 crore in new shares in Sanmina’s existing Indian entity, while Sanmina will contribute its existing contract manufacturing business, it added.

As a result of the investment, the joint venture will be capitalised with over $200 million of cash to fund growth.

"All the manufacturing will initially take place at Sanmina’s 100-acre campus in Chennai, with the ability for site expansion to support future growth opportunities as well as to potentially expand to new manufacturing sites in India over time based on business needs," the statement said.

“We are excited to partner with Reliance to build the premier integrated manufacturing solutions company in India,” said Jure Sola, Chairman and Chief Executive Officer of Sanmina.

“This joint venture will service both domestic and export markets and represents a major milestone in the Indian governments “Make in India” initiative," Sola added.

Akash Ambani, Director, Reliance Jio, said, “We are delighted to work with Sanmina to access the significant market opportunity for high-tech manufacturing in India. 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," 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, the statement said.