VVDN to expand ops globally by next year
VVDN Technologies aims to build the component supply chain ecosystem in India and expand its manufacturing facilities.
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New Delhi: Manesar-based original design manufacturer, VVDN Technologies, is gearing up to diversify into smartphone assembly in India. With seven existing manufacturing and assembly facilities in the country, it has ambitious plans to extend its footprint to global markets, including Europe, the US and the Middle East, Vivek Bansal, founder and president, VVDN Technologies, said in an interview.
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“We are getting into smartphone manufacturing, plans of which are in the pipeline right now. It’s not a five-year plan—it’s for the near term. We are already speaking with companies and original equipment manufacturers for it. This is a part of our strategic relationship with our clients for whom we are already building many other products," Bansal said.
While India is increasingly a preferred destination for smartphone assembly, it still depends on China to source key components. “A key part of the company’s push to expand its market share would be in building the component supply chain ecosystem in India, which is still premature," said a senior consultant familiar with VVDN’s expansion plans, seeking anonymity. The firm will be expanding its international presence within “next two fiscal years", he added.
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“We will have to expand our manufacturing facilities outside India at some point. Right now, we’re expanding in India. As part of our roadmap, we plan to be in Europe as well—could be Poland, and Mexico. We have a very small manufacturing presence in Fremont, California, to take care of our US clients’ requirements, but we’ll eventually need a larger facility in North America," said Bansal.
VVDN is “actively considering one international manufacturing facility right now", he said, and added, “We can’t disclose the location right away, but we will announce in 12 months." Bansal was speaking on the sidelines of India Mobile Congress which concluded on Sunday.
The company’s expansion strategy follows ₹250 crore fund-raising led by the investment arm of brokerage firm Motilal Oswal on 7 September for the third time after infusing ₹350 crore in April, and ₹250 crore in January 2020.
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While Bansal did not divulge the names of firms it is in talks with for smartphone manufacturing, he said its phone assembly business may begin with existing clients from other product categories. Its global expansion is driven by the need to meet regulations across geographies, and to reduce shipping times to global markets.
“We need to have a manufacturing facility within US soil if we cater to products for the US Defense sector. But, while ‘make in India’ is our focus, there is a ‘local for local’ trend globally—Europe wants products to be made within Europe itself. The middle-East wants something similar, so this is another market that we’re looking out for," Bansal said.
VVDN’s largest revenue share comes from its original design offerings to brands, which the Centre is also pushing for. On Friday, union communications and IT minister, Ashwini Vaishnaw, said at a roundtable that local design “creates the real value addition of nearly 40-50% on local manufacturing."
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Bansal, too, agreed, adding, “In China, for any product category, the entire BOM can be procured locally. If I have to do that in India, we need to build all of this capacity here. In many cases, companies are still taking CKD and SKD-driven approaches, which seems very short-term. Such manufacturing won’t survive in the long term, unless someone holds design IPs. The next step has to be to build an ecosystem of components here—that’s where we need entrepreneurs to come in."
As a contract manufacturer, VVDN competes with the likes of Dixon Technologies. On 15 September, Mint reported that Dixon Technologies is further expanding its manufacturing facilities to a dedicated plant in Noida for China-headquartered OEM, Xiaomi. The latter will have capacity to produce 1 million devices per month, once completed.
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