Dixon seeks government nod for tie up with China's HKC to make display modules

Economic Times

2 days ago

India's leading contract manufacturer Dixon Technologies has sought the government approval for its proposed tie-up with China-based firm HKC to manufacture display modules for smartphones, laptops and tablets, said its Executive Chairman Sunil Vachani. The approval is required under the rules of Press Note 3 of 2020. In this, the government has made its prior approval mandatory for foreign investments from countries that share a land border with India. They need approval for investments in any sector. Countries that share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan. "HKC is one of the large companies as far as the display tab is concerned. So we plan to partner with them for putting up a display module factory (in Noida), catering to mobile phones, laptops and televisions. We are looking at a minority stake for them. We have already filed the application (before the government)," he told PTI here. He is part of the business delegation accompanying Commerce and Industry Minister Piyush Goyal.
He also said that the company is scouting for more partnerships and alliances to deepen the manufacturing ecosystem in the country for diodes and components, among others. Dixon, which has partnered with French group Dassault, is sensing a good opportunity coming from factory automation, where the companies are upgrading their production units into smart manufacturing. "The factories are going to be much more smarter. There is going to be a digital transformation. Dixon and a lot of MSMEs are also looking at Industry 4.0 initiatives, where the machines talk to each other. There is a lot of data coming out of the factory," he said. He added that this is the area where there is a huge potential for collaboration between Indian and French companies. According to Vachani, Dixon has partnered with Dassault to roll out initiatives on smart manufacturing. Industry 4.0, also known as the Fourth Industrial Revolution, refers to the rapid technological advancements and the integration of digital technologies into manufacturing and industrial processes. It involves a wide range of technologies like the Internet of Things (IoT), AI, robotics, and automation, enabling smart manufacturing and creating intelligent factories. "So we at Dixon ourselves have a very large budget on digital transformation, because we are in the process of making all our factories smart. We are in the process of rolling out the manufacturing excellence software in partnership with Dassault across all our factories," Vachani added. Dixon, he said, plans its unit to be recognised as a "lighthouse factory", which refers to a manufacturing plant that is a leader in adopting and integrating advanced technologies, primarily related to Industry 4.0. "So this is a very big initiative, and I think what it is going to result in is that we are looking at qualifying for the lighthouse factory, which is a global recognition. So that's the ultimate aim that we want a lot of our factories to be certified as lighthouse factories," he said. Over the requirement for a second round of the PLI (production-linked incentive) scheme for more components required by the domestic industry, he said, "I think the industry is satisfied with the list of components that are already there". Most of the high-end components, such as camera, display, etc, are already covered under it. "Dixon itself is in the process of rolling out production across each of these components that we talk about, some through partnerships, some on their own. We are looking at the battery. The list is exhaustive. We don't need anymore. And I think the government has done the job. As far as the component PLI is concerned, the ball is in the industry," he said. When asked about the total investment by Dixon, Vachani said, "In the components, PLI is going to be in excess of Rs 1,200 crore" and will invest further Rs 400 crore in the display module. Dixon will set up a plant at Noida, Uttar Pradesh, which will be a greenfield investment.
Dixon Technologies and Vivo India have formed a joint venture to establish an OEM (original equipment manufacturer) facility in India, focusing on manufacturing smartphones and other electronic devices. Dixon will hold a majority stake (51 per cent) in the venture, while Chinese smartphone maker Vivo's India business will own 49 per cent.
"We will have a capacity of almost 60-70 million mobile phones a year, plus, hopefully, the capacity that we plan to do jointly with Vivo should happen by next year. So overall, we'll have a capacity of 100 million mobile phones," he added.