Padget Electronics, a subsidiary of Dixon Technologies on Thursday said it has set up a new facility with an investment of Rs 256 crore in Noida to manufacture Xiaomi smartphones. The new plant is built across 270,000 sq feet, and has an annual capacity to manufacture 25 million phones. The company is also working to come up with another facility in the next one year to manufacture smartphones and IT hardwares, which will be spread over an area of 1 million sq ft.
Dixon has already commenced the production of Xiaomi smartphones in the October-December quarter. The development comes after Xiaomi in May had announced its partnership with Dixon for manufacturing and export of its mobile phones.
Speaking at the launch event, communications and IT minister Ashwini Vaishnaw said, “5,000 workers will work in the factory and produce smartphones and feature phones. It is highly encouraging to see design input and component manufacturing ecosystem being developed in India”.
Talking about the domestic value addition, the minister said, it is as high as 60% in some product categories. “We should not interfere with the natural process of industry (by fixing targets) in terms of value addition. We should let the industry flourish,” Vaishnaw added.
The minister also said the PLI scheme has created an incremental employment for 500,000 people in the mobile phone industry.
Dixon, which is also part of the smartphone PLI scheme, tends to benefit from the new partnership with Xiaomi to manufacture smartphones. “This is the largest plant for mobile phones for Dixon. We are delighted about the new state of the art manufacturing facility, quality processes and efficient production lines,” said Sunil Vachani, executive chairman at Dixon Technologies.
Company officials said that Dixon is currently manufacturing about 500,000 units of Xiaomi phones a month in the new facility. It will soon ramp up the production phase wise to 1 million units a month.
For Xiaomi, the development is crucial in the sense that the government has firmed up its stance that the smartphone makers, especially Chinese ones, should involve domestic contract manufacturers and other partners in their supply chains.
“We have a 5-year long association with Xiaomi India and are excited to start this new chapter that exemplifies synergies between our two organisations,” said Atul Lall, vice chairman and managing director at Dixon Technologies.
Vachani also said the upcoming plant will be the largest for any Indian company and will have a capacity of about 50 million units covering smartphones as well as IT hardwares.
Dixon is a major contract manufacturer for feature phones and smartphones and counts companies like Motorola, Samsung, Nokia, Xiaomi, itel, etc, as its clients. The company is also a beneficiary of production-linked schemes for lighting, mobile devices, telecom products, IT hardware, and air conditioners.
Besides Dixon, Xiaomi has partnered with other local contract manufacturer Optiemus Electronics, for making its bluetooth audio products out of its factory in Noida.
According to Counterpoint, Xiaomi has a 16.6% market share in smartphones in India in terms of volume. Further, it is looking to source 50% of the smartphone components locally over the next few years.
