BackPanasonic offers manufacturing facilities to other brands
The company has partnered with two domestic electronics and home appliances firms to make washing machines, refrigerators, and air conditioners for them
PremiumNew Delhi: Local arm of Japanese electronics major Panasonic on Thursday announced plans to open up its existing smart factory in Jhajjar (Haryana) for local Indian brands to manufacture their products and help with them with its design and IoT capabilities with a view to expand the scope of its business in India.
The company has partnered with two domestic electronics and home appliances firms to make washing machines, refrigerators, and air conditioners for them though Manish Sharma, president & CEO, Panasonic India, and South Asia, said it was not contract manufacturing. “The products will be available to consumers very soon. They are large companies," he said, declining to share their names.
The company will use 10% of the factory’s current capacity to manufacture electronics for other brands. Sharma doesn’t admit that the company is renting out its excess capacity to generate revenue. “No, because we are not dealing with that situation. This is a seven-year-old facility and capacity utilization is quite adequate. For example, my refrigerator capacity is 100% utilized, so in order to support this strategy we are expanding these capacities. Similarly, for air conditioners and washing machines, we have 75-80% capacity already utilized and these are seasonal products," he said.
In peak summer months, the capacity utilization is 100% and the company goes into extended shifts. “With this strategy, in the next 2-3 years we will have to expand and make investments to extend the capacities," he said.
The biggest trigger why company is putting resources behind this effort is to expand manufacturing, and build scale for electronics manufacturing in India in line with the prime minister’s Atmanirbhar Bharat or self-reliant India initiative. “In the last 5-6 months, since the PM announced this, the industry and government chambers have been deliberating the right strategy to execute it," he said. “It is the industry’s responsibility to scale up the manufacturing capacity and till the time we don’t share it, exponential growth won’t happen."
The company will work out a cost with its partners for its manufacturing and other services. “We are not aiming at becoming a contract manufacturing—because it is not about anyone walking into our manufacturing unit and asking if we can manufacture for them. The idea is how we can provide our platform technology to people, and let them customize their product for the Indian market. The propriety technology used by Panasonic is going to stay with the company and won’t be shared," he said.
The manufacturing capacity will commence in a phased manner, starting with building of capacity for brands across refrigerator and air conditioner manufacturing along with smart and connected capabilities through its Miraie platform, the company said. This will be extended to other product line across appliances. The move will also bring in capabilities for smaller brands to come use Panasonic India’s IoT platform, Miraie, meant for connected devices.
Over the next one year, Panasonic India expects 10% of extra revenues of its consumer business to come from this initiative. “This 10% will help us, in addition to our own brands’ growth, expand capacity with more investments in the subsequent years," Sharma said.
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