Home-grown mobile phone manufacturer Lava International plans to invest Rs 1,100 crore over the next five years to expand its electronics components business, a move expected to generate 8,500 jobs and deepen local value addition in smartphone manufacturing.
The company will manufacture key smartphone components such as display modules, camera modules, multilayer printed circuit boards (PCBs) and enclosures in India as part of its localisation strategy, senior executives said on Thursday.
“We have decided to make critical components ourselves for more value addition,” Sanjeev Agarwal, ED & CEO, Lava International, said, adding that the company currently has the capacity to manufacture about 40 million mobile phones annually.
Speaking of technology, Agarwal said Lava is leveraging both internal capabilities and external partnerships. “We are exploring some partnerships for components, and we also have our own in-house strengths because we design our phones ourself,” he said. The company, he said, had started to diversify into components about a year ago with a focus on improving quality and increasing localisation.
“Lava started mobile manufacturing in India in 2015. We were also the first company to set up a design centre in India, and today all our mobile phones are designed in India,” he said. The company’s Noida plant currently employs over 3,000 workers.
Component Ecosystems
Meanwhile, as part of the diversification push, Lava has also inaugurated a new mobile charger manufacturing facility. The chargers are being designed in India and largely use locally-sourced parts, according to the company.
Agarwal said the locally manufactured chargers are around 20% cheaper than the units the company was previously sourcing, while also offering improved quality and productivity.
Sovereign Policy Backing
Lava International Managing Director Sunil Raina said the company has submitted a proposal under the Centre’s Electronics Components Manufacturing Scheme (ECMS) scheme for component manufacturing. Approvals under the ECMS scheme are currently under process for multiple categories. The company also hopes to avail itself of benefits under the Uttar Pradesh government’s component manufacturing initiatives.
Executives said localisation of components such as displays, camera modules and PCBs shall help reduce import dependence, improve cost competitiveness and increase margins for domestic manufacturers over the long term.
The Indian smartphone industry saw a major disruption around 2017-18 amid intense competition from Chinese smartphone makers, forcing several domestic brands out of the market. Lava too had temporarily scaled down its smartphone business during that phase before re-entering the market over the past few years with a revised strategy. Domestic phone companies owned about 50% of the market about 12-13 years back, but that share has now fallen to less than 6-7%, including the feature phone market share.