BackCelkon to invest Rs250 crore in Tirupati and Hyderabad projects
Celkon will make branded phones and tablets locally from June 2016
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Hyderabad: India’s fifth-largest handset maker Celkon Impex Pvt. Ltd on Tuesday said it will build two factories at a cost of ₹ 250 crore in Andhra Pradesh and Telangana to make Celkon-branded phones and tablets locally from June 2016.
Celkon will split its investments equally between the planned facilities in Hyderabad and Tirupati, Y. Guru, chairman and managing director, said.
The Telangana government on Monday allocated Celkon 11.4 acres at E-City Hardware Park outside Hyderabad. The 1,250 acre hardware park has a dedicated 602 acres for electronics hardware manufacturing, where the biggest home grown phone brand Micromax Informatics Ltd is also setting up an assembly unit.
Celkon broke ground for its Tirupati facility last month alongside bigger rivals Micromax, Lava International Ltd and Karbonn Mobile India Pvt. Ltd that are coming together to set up the country’s first mobile phone manufacturing cluster.
Guru said India is today in a position similar to that of China’s in the early 1990s. “We think we can cross China (in mobile device manufacturing) by 2018."
Celkon’s Hyderabad unit will have 10 production lines. Together, the Hyderabad and Tirupati units will have an eventual production capacity of 1 million units a month.
Phones made at these plants will also be exported to developing countries in Africa and Asia. The company is planning to export its devices to 30-40 countries, Guru said. The company currently exports phones to Sri Lanka, Nepal, Singapore and some countries in southern and eastern parts of Africa.
The Telangana government has offered Celkon 5% value added tax (VAT) exemption and 14.5% customs duty exemption for products made at its Hyderabad facility, matching an offer from neighbouring Andhra Pradesh.
To be sure, Celkon has been operating a unit with four assembly lines out of a leased property in Medchal suburb of Hyderabad since June. Operations at the leased facility will continue if phone demand grows significantly, Guru said. The Medchal facility produced 290,000 units last month.
Producing phones domestically offers cost benefits, which, in turn, can be passed on to customers, Guru explained, pointing out that local manufacturing enabled Celkon to make a 7-inch, Intel Atom X3-powered tablet for as low as ₹ 4,999.
“The cost savings of making in India are significant," said Guru. “We can naturally pass on these benefits to our customers."
Apart from phones and tablets, the company will also begin making liquid crystal display (LCD) televisions following in the footsteps of its bigger rivals Micromax and Intex Technologies (India) Ltd. Celkon will soon ink agreements with Chinese companies for making television sets, Guru said, without disclosing their names.
A separate production line will be set up for LCD televisions because its technology is different from mobile and tablet devices, Guru explained. Celkon is also talking to local manufacturers to source black plastic required for television casings.
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