Infinx, a leading California-based global provider of business processes and technology solutions owned by the Tandon Group, today expanded its India footprint by opening a new delivery center- its fourth at Mahape, in the township of Navi Mumbai in Maharashtra, India.
The new facility, spread across an area of 15,000 sq. ft., kicks off with 350 seats. Over the next three years, Infinx would be investing $30-40 million in the state-of-the-art center to create over 3,000 job opportunities in the Navi Mumbai region as the company expands its business to the UK market, and scale its business in US. Currently, the company deals primarily with U.S based pharma/ healthcare giants.
The new facility was inaugurated by Mr. ML Tandon, Chairman, Tandon Group of Companies, along with Mr. Sandeep Tandon, Managing Director of Tandon Group and Mr. Hiren Kulkarni, CEO, Infinx.
The Navi Mumbai center, which is in addition to the existing three delivery centers of Infinx in India, has been established as a Centre of Excellence for its document management services (DMS) business. It will help Infinx scale up business processes for the global healthcare industry, especially the revenue cycle management space. The center will also enable the company to expand its DMS business across diverse industries to meet the growing demand of customers worldwide, particularly in the US market.
Said Hiren Kulkarni, CEO, Infinx: The Navi Mumbai delivery center showcases our commitment to meet the needs of our global customers by tapping India’s demographic dividend. About 70% of the 350 seats immediately available at the facility would be filled with fresh commerce, science and pharmacy graduates and the rest 30% seats will be filled with technology professionals. This would offer them a promising head-start in career along with an opportunity to hone their skills. In the second phase of the expansion, the company will be creating job opportunities in our IT and software business, propelling Navi Mumbai and surrounding areas into the forefront of healthcare BPO and IT space. We plan to spend upwards of 30 million investment in the area which includes more real estate to set up our delivery systems. We see the employment potential at our centre for up to 3000 people from the region, helping the growth of the local economy.
Infinx has developed a robust recruitment engine and training plan to make the Navi Mumbai facility operational by investing in human capital and various training and development programs that meet the global industry standards. Located in the heart of the IT area, the location of centre has been chosen to attract talent from not only Navi Mumbai but also Thane and Mumbai areas.
Over the years, Infinx has grown its document management services business exponentially with more than 750 highly skilled employees working globally on this vertical alone, serving the international market by adding several new projects.
Adds CEO, Mr. Hiren Kulkarni: This investment is a milestone in the commitment of Infinx to expand its capabilities and footprint globally and provide high business value to its customers servicing out of the India market. With the rapid growth of our business in U.S, we are growing our delivery centres fast all over the country and strategically expanding our facilities to provide our more than 100 clients with right-skilled resources and greater choice of facilities and talent. We already employ more than 1,500 people in India and have an aggressive hiring and expansion plan for the future, helping create jobs and benefitting the Indian economy.
Infinx, the leading US-based global provider of business process and technology solutions belonging to the Tandon Group, today announced the launch of its new delivery centre in Hyderabad, India. The state-of-the-art facility spread across 20,000 sq.ft. of production area was inaugurated by the Chairman of the Tandon Group of Companies, Mr. ML Tandon, the Managing Director of the Tandon Group of Companies, Mr. Sandeep Tandon, and the CEO of Infinx, Mr. Hiren Kulkarni.
The delivery centre, located at Rahejas South Zone SEZ in the Shamsabad area in the heart of the Hyderabad technology hub, would offer world-class infrastructure to meet the needs of the global corporate world. It would serve as a Centre of Excellence for business processes in medical coding, accounts receivables, accounts payable, document management and SAP Business One, an integrated ERP solution for small and medium-sized businesses.
Says Hiren Kulkarni, CEO, Infinx: “We are delighted to launch our new ultra-modern delivery center in Hyderabad. It will not only enable us to continue to meet the needs of our customers by leveraging the skilled, diversified and talented workforce available in the region, but also help us further strengthen our business continuity strategy. This initiative has been a part of our long-term strategy to expand our footprint in other parts of India to provide our clients with greater choices of facilities and talent.”
The newly inaugurated center will open with a 200-seat pilot project for Healthcare Revenue Cycle Management, particularly in areas of medical coding and account receivables, with an additional 150 seats dedicated for accounts payable and document management projects. It has a capacity to quickly scale up to 500 seats. Infinx has already developed a robust recruitment and training plan to make the facility fully operational by investing in human capital training-and-development programs that meet global industry standards.
Infinx also plans to capture a pie of the SAP business by setting up a sales touch point office operating out of the new delivery center. Over the years, the company has been successfully serving over 100+ SAP customers across various industries and plans to further drive profitable growth with SAP Business One. Infinx’s partnership with SAP and exclusive focus on project management solutions strengthen its ability to help customers and partners find new, innovative ways of getting the most out of their investments in SAP Business One.
The new delivery centre would enable Infinx to achieve its mission of further expanding the Healthcare RCM and Accounts Payable business by introducing highly innovative, top-quality services. While doing so, Infinx also plans to create equal employment opportunities for fresh graduates and experienced professionals in the surrounding areas. The facility is fully compliant with the best-in-class IT infrastructure, security and compliance standards that all Infinx facilities worldwide meet.
Over the last two years, Infinx has made major investments to expand its outsourcing operations to deliver high-quality services, customer support, and software development solutions to its clients. It has been building strong relationships with its clients by focusing on generating business value through delivery excellence and innovative offerings. It continues to grow and acquire a decent market share in today’s outsourcing industry. Infinx aims to enter newer geographies to provide best-in-class integrated business process and IT solutions to its global customers.
Infinx is a global business process management and technology solutions company providing integrated portfolio of outsourcing solutions in areas such as healthcare RCM, pharmacy, document management, IT and SAP.
Headquartered in San Jose, California, Infinx focuses on delivering high-quality healthcare and technology solutions to its clients across the globe. With over 3000 employees globally and 5 world-class delivery centers in Mumbai, Navi Mumbai, Chennai , Bargur and Hyderabad in India, the company combines service delivery excellence, subject matter expertise and analytics, and business intelligence tools to deliver business value to clients through its entire spectrum of services.
Infinx has a strong focus on business intelligence tools and has been successfully developing various decision-making IT tools and applications over the years for its healthcare clients across the world. With a strong leadership, subject-matter experts and unified service delivery model, the company has a strong record of serving over 100+ clients in the healthcare and IT space worldwide.
Infinx stands as a trusted partner to US healthcare providers, hospitals, pharmacies, and medical billing companies delivering mission critical solutions with 24 x 7 x 365 operational reliability.
The Mumbai-based Tandon Group has a rich legacy of providing entrepreneurial and innovative solutions for many premier high-technology companies. The Group took shape in 1978 as Tandon Magnetics, when the first magnetic recording heads were manufactured for floppy disk drives. The products made their way into the first generation of the IBM PC. Since then there has been no looking back.
The Group today counts many premier global brands as key customers. Some of the products manufactured over the years by the Tandon Group include disk drives, memory modules, power supplies / adapters, DC motors, fiber optic assemblies and a variety of electronic components.
The Tandon Group of companies include Syrma Technology, Memory Electronics, 3G Wireless Communications, Tandon Information Solutions (TIS), Infinx Healthcare, Tandon Advance Devices Pvt. Ltd. (TADPL) and Tovya Automation.
Ajai Chowdhry, Founder, HCL, Talked About the Electronics Clusters Coming up Across the Country, While Addressing a Conference Organised at EFY Expo 2013
“The National Electronics Policy is taking the Indian electronics industry on the right path. It has addressed the loopholes that acted as a roadblock in the growth of electronics industry in the past several years,” said Ajai Chowdhry, founder, HCL.
Chowdhry was speaking at the conference on “National Electronics Policy – Resurrecting the Electronics Manufacturing Eco-System” organised at EFY Expo 2013. The conference was attended by prominent dignitaries, including T Vasu, president ELCINA & director, Tandon Group, J Satyanarayana, secretary, department of electronics & IT, Government of India, Kapil Sibal, Minister for Communications & IT, and Ramesh Chopra, founder and vice chairman, EFY Group.
He said that electronics cluster being set-up across the country is a good move to boost domestic manufacturing. He further added, “One of the most important element of the electronics policy is Preferential Market Access. Despite much opposition from the international players, the Indian government stood by it, which is a major step to encourage domestic manufacturing.”
“The National Electronics Policy is comprehensive, which includes three pillars of infrastructure, incentives and innovation. Three large proposals are there with DeitY. They are for companies of all sizes. We are hoping that by the end of March, we will have three clusters which will be a huge step towards our main goal of promoting domestic manufacture and domestic electronics players. We can see a lot of action happening in the states of Punjab and Andhra Pradesh. Jabalpur will soon have an electronics cluster too,” he further added. Chowdhry emphasised on boosting in-depth design and technologies, which will further give a boost to domestic manufacturing in India.
Addressing the audience at the conference, T Vasu, president ELCINA & director, Tandon Group, said, “The industry has to be vigilant and receptive about the initiatives from the government. Then only can we make the best use of the policies and decisions made by the government. With the National Electronics Policy, it is quite evident that the government is keen to support industry for growth in the right direction.” The conference concluded on a positive note aiming to gather the industry support for the road ahead.
About EFY Expo:
The Electronics For You Expo is a unique electronics event that focuses not only on “components” and “manufacturing equipment”, but on the entire ecosystem for electronics in India. To build a comprehensive platform for the electronics industry, the EFY Expo puts together everything that an electronics event should provide-from innovation (new technology) and product design, to manufacturing and product sales. Visitors at this expo range from innovators and design engineers, to manufacturers and B2B buyers. Over the past 43 years, the EFY Group has become synonymous with cutting-edge technology. Today, this renowned media group is spread across 8 locations catering to the intellectual needs of a diverse readership across India and abroad.
About EFY Group:
Over the last four decades, the EFY Group has become synonymous with information on cutting-edge technology. Today, this renowned media group is spread across eight cities of India, and caters to over two million techies spread across the globe.
Its print publications not only reach every nook and corner of India–our mailing list has over 6,000 zip-codes–but are also read by techies in South Asian countries, like Nepal, Pakistan, Bangladesh, Sri Lanka, Bhutan, and Afghanistan. The Group is also amongst the few Indian publishers to have its publications distributed in Singapore and Malaysia.
Recently, the Group launched digital editions of its publications to make them easily accessible to readers all across the globe. The Group’s digital publications are now available in all popular platforms including iOS (Apple), Android, Kindle and e-zine (web browser). The Group has also tied up with leading online distributors including Amazon, Scoop, PocketMags, Zinio, Magzter, etc.
The events division of the Group was strengthened with the launch of Electronics For You Expo in 2011. Now, the group boasts of a strong portfolio of events including EFY Readers’ Choice Awards, ELCINA-EFY Awards, Electronics Rocks, EFY Design Engineers’ Conference, and Open Source India.
The Group’s passion for technology and its expertise in knowledge-sharing is now being channeled into building a strong hands-on training programme through the EFY Tech Center. The Tech Center is working with the industry and academia to create industry-ready engineers.
The Group has set itself the target of empowering and helping 10 million techies, across the globe, by 2015, and it’s investing heavily on growing the online communities and increasing the number of readers of its digital publications to achieve the goal.
Ranked as one of the ‘Top 100 Influential People in Electronics Manufacturing’ by Venture Outsource, a global electronics manufacturing operations community, and with 45 years of committed service, T Vasu’s professional career has been dedicated to promoting the electronics industry. Along with being a director of the Tandon Group and the managing director of 3G Wireless Communications, T Vasu is the current elected president of ELCINA (Electronics Industries Association of India). He is also past chairman of the Export Promotion Council for Export Oriented Units (EOU) and Special Economic Zones (SEZ). Speaking to Richa Chakravarty of Electronics Bazaar, T Vasu reminisces about his journey within the industry.
I was born into the family of an idealist in Coimbatore, in 1946. My father, Tirumalai, was an electrical engineer who worked with the British government on power generation systems. He subsequently joined the freedom movement and even went to jail. Having struggled for freedom, my father did not want to work for the British government, and hence took to farming. He was an idealist and his beliefs were part of the upbringing that my two sisters and I received. My mother, Jayalakhsmi, was a home maker. I was closer to my uncle Sundarajan, who was head of the administration department at Madras Atomic Power Project. Though he was 27 years older to me, we were like close buddies.
Engineering was my passion
Though academics had been a core part of my educational background, as a student, I was equally interested in extra-curricular activities and games.
I did my primary schooling from Suburban School in Coimbatore, while secondary schooling was done from Hindu High School in Chennai. During this period, I would identify myself as just an ‘above average’ student; however, in college I was very serious with my academics and scored very well.
I graduated in mechanical engineering, specialising in managerial economics and entrepreneurship from the College of Engineering, Guindy, Chennai. I was also awarded a technical diploma in manufacturing and repairing techniques of electronic teleprinters at M/s Olivetti, Ivrea, Italy in 1977. While my education was shaping up, I had a chance to train in ship engineering at the Chennai port, which was an experience in itself. Currently, I have been conferred with the Fellowship from the Institution of Engineers, Kolkata early 2000’s.
Apart from academics, I was very keen on football, representing my school and college in various inter-school and inter-college tournaments. Music also held my interest for a long time. Irrespective of whether it was classical or movie songs—I just loved it.
My first job—an enriching experience
After finishing my college, and after a short spell in heavy engineering, I landed in my first job in 1966 with Hindustan Teleprinters (under the Ministry of Communications), a telecommunications equipment manufacturing company in Chennai. This experience has been the most rewarding because of the exposure it gave me in various fields of engineering, manufacturing and management. I experienced various aspects of professional life, right from manufacturing, then shifting to regional sales, before heading quality and taking charge of systems and industrial engineering. Thus, working in a public sector company was an experience in itself. Experiencing various levels of responsibility in the public sector gave me lot of exposure and abundant opportunity to equip myself in managerial skills.
An incident that I vividly remember and that left a lasting impression on me was when the entire plant was shut down for about three months due to labour unrest and no one was allowed to enter the premises. During this crisis, I was able to establish successfully a supply chain and meet our orders within a short span of time (of less than three months). More than the appreciation from the top management for this seemingly impossible and unachievable task, the satisfaction and self-belief I gained were invaluable. Even today, nearly after 35 years, it makes me feel proud that I contributed in some way to the telecom needs of the country at a crucial time. It was not a cakewalk, yet working in the public sector gave me enough knowledge and skills to walk through life.
From a short stint in heavy engineering, I have then spent more than 45 years in the electronics industry. Having worked in public sector telecom manufacturing for over 23 years in the areas spanning production, quality, industrial engineering, systems, etc, I moved to the private sector in 1989 to the Tandon Group to head their Chennai facilities which manufactured and exported HDD parts of which I had no manufacturing knowledge. With mere managerial skills, I not only managed to learn the production cycle but also succeeded in growing the business many times over, in all parameters. Professionally, this move has been one of the turning phases of my life. I remember, the day in June 1996, when I had come down to Mumbai for a day to meet Manoharlal Tandon, head of the Tandon Group to discuss a project near Chennai. It was a brief meeting and I was given the responsibility to turn around a business that was about to get extinguished. He made the decision in a few minutes and I accepted the challenge. Though this was an uphill task coupled with huge risk, I took up the challenge. Continuous support from Manoharlal Tandon and my team made this risk worth undertaking and task accomplished. I was now heading a business that manufactured high precision hard disc drive components and assemblies, of which I had no manufacturing knowledge. With mere managerial skills, I not only managed to learn the production cycle but also succeeded in growing the business many times over, in all parameters.
A career dedicated to the industry
While I was heading the business unit of the Chennai Export Processing Zone, I became the secretary of Madras Export Promotion Zone (MEPZ). This gave me the opportunity to raise various issues faced by manufacturers and the industry, with the government, particularly the Commerce Ministry. This exposure to working with government organisations improved my ability to sort out issues and sharpened my leadership skills. I have made my own humble contributions towards creating a favourable environment for the growth of the electronics industry in India. I was first elected as the vice chairman, and then chairman of the Export Promotion Council from 2004-2008.
T Vasu with Sam Pitroda (L), advisor to the Indian Prime Minister, and Muthu Sivam (R), MD, Sanmina-SCI at ELCINA-EFY Awards 2012 ceremony
In ELCINA, I was first just a committee member, later became the vice president in 2010, and president the following year 2011. Leading an association is a huge responsibility and this can only be possible if the members of the association contribute equally. ELCINA, in association with DeitY, has been able to put up the white paper for the formation of electronics clusters, which is now a part of the National Manufacturing Policy. This has been a major step in promoting the electronics industry. The power of an association is far greater than that of an individual. The contributions that I have made are always through the association. I believe that opportunities to an individual come through such responsibilities.
Life, I believe, is a learning process and our achievements are linked to the opportunities that are thrown to us. I had the opportunity to work with some of the best people in the industry, both as team mates and as leaders. Three people who have influenced my life immensely are the late RP Subramanian of Hindustan Teleprinters, Manoharlal Tandon and GK Pillai, former commerce home secretary of India from whom I learnt to be more dynamic as well as systematic. Working with GK Pillai inspired me to reach for my goals untiringly, within the bureaucratic set up. With strict discipline and a trusted team, these people have been able to build large operations. This is what we can imbibe from them.
Working with these eminent people, I have realised that one needs to believe that employees or teams should be given enough freedom to operate in their domain, and their work and talent should be appreciated in public. One also needs to point out their limitations or mistakes at the appropriate time. I believe that we should create a corporate environment geared towards improvement, rather than a ‘penalty culture’. For budding entrepreneurs, I have just one message to convey—to be sincere, passionate and dedicated in all your professional endeavours. Patience is the name of the game and winning is certain.
A family with high moral and cultural standards
My wife Vijayalakshmi is an economics graduate but decided to be a home maker to take care of our children. My contribution is not much in raising my kids; it’s my wife who has brought them up with a high degree of morals and culture. I am extremely grateful and proud to have a partner like her who has been so supportive and dedicated in life. She is also the one who has contributed immensely to my life. My daughters Priya and Vidhya are both married. While my elder daughter is a medical professional living in the US, the younger one is a management graduate in human resources and training, in Bengaluru.
Today I feel I should have given more time to my family. While moving ahead in life, I feel there is a compromise that we make and this generally happens with our closed ones. I wish I could spend more time with my near and dear ones.
Instrumental in bringing changes
Success cannot be counted in numbers. Having spent decades contributing to building a better electronics industry, I would love to be remembered as a person instrumental in bringing about positive changes in the system governing trade, exports and electronics manufacturing in this country.
Success is something I don’t know how to define, but yes, to an extent I have been able to reach a level in professional life. I am fairly satisfied but I wish to continue to contribute to the industry I started with. I look more at the positive aspects in people while trying to correct the negative ones. So far, I have no regrets in life. Entering the field of manufacturing opened a new path in my professional life and gave it meaning.
Though I have no future plans nor do I maintain a wish list, but of course, I would be glad to dedicate my life to some social activity—for instance, to train rural women for electronics manufacturing. Also, through my association with ELCINA, I would like to involve myself in the development of clusters by DeitY and ELCINA. And of course, try to gain more free time to spend with my family, which I have failed to do in the past.
These are a few of my favourite things
Singer: Dr Balamurali Krishna
Food: Manage with any type of food, Indian/continental, etc.
Film: Singham, Abhiyum Naanum
Book: I am not a heavy reader
Dress: Informal clothes, except for ceremonial occasions
Within a week government clearing a scheme to promote domestic production of electronics items, about 20 companies have expressed interest in setting up manufacturing units in two clusters to be set up in Rajasthan and Andhra Pradesh.
Electronics components makers’ association ELCINA, which is promoting the two clusters at Bhiwadi (Rajasthan) and Ananthpur (Andhra Pradesh), said that 15 to 20 companies have confirmed their interest in setting up units.
“We have taken the lead in developing the first two clusters … Member groups of 15 to 20 companies which have confirmed their interest have been formed for these model clusters,” ELCINA President T Vasu told reporters.
Vasu, who is also director of Tandon Group, did not disclose details of proposed investment, but said that the companies which have expressed interest in setting up units are all Indian firms.
“The response has come even before the promotion of these clusters. Around nine companies have registered to invest in Bhiwadi cluster which is yet to inaugurated,” ELCINA Secretary General Rajoo Goel said.
The government on July 3 approved the Electronics Manufacturing Cluster scheme which aims to reduce the country’s dependence on imports for various electronics items.
The government will provide financial support of up to Rs 50 crore for setting up a cluster which will house eco-system required for manufacturing specific kinds of devices.
The country imports electronics items worth about USD 40 billion, at present, according to ELCINA. The National Electronics Policy draft forecasts such imports to touch a humongous USD 300 billion by 2020.
Under the proposed National Electronics Policy, government will provide incentives for setting up 200 clusters across the country.
Sarish Verma wants to build PC monitors in India. No, the 38-year-old who has worked with HCL and American Express in India and the US isn’t a crank, although there are enough of the we-have-invented-the-perpetual-motion-engine types around. Verma is earnest and is now busy persuading venture capitalists that there is a future for monitor manufacturing in India.
The man hasn’t lost his head. The Indian hardware industry is on a roll, and hardware manufacturing, once written off as unviable, is making a comeback. Numbers provided by Manufacturer’s Association of Information Technology show that some 3 million PCs will be sold in 2003-04. And Delhi-based information technology research firm Skoch Consulting expects the market to grow by 50 per cent in 2004. Sanguine execs are already looking at numbers of a far higher magnitude. “There are 170 million PCs sold every year and 20 million of these sell in China,” says Ravi Pradhan, an IIT Madras alum who spent over two decades in IBM’s PC division in the US, and who now heads the Indian operations of chipmaker Via Technology. “That is the kind of market we are looking at.”
It isn’t just PCs. Last year, India’s mobile telephony companies added 17.5 million subscribers to an existing base of 11.1 million. Even assuming 10 per cent of existing customers change their handsets (read: phones), that’s a whopping 18.6 million new phones sold. This year, the corresponding number is likely to be 36 million, volumes at which local manufacturing begins to look conspicuously attractive to phone-makers.
Personal computers and cellular handsets are at the bottom of the hardware hierarchy. Like most other class structures, however, this one is a pyramid, implying that the base contributes the most volume. The emergence of a large domestic market for TVs and mobile phones, then, fosters conditions conducive to domestic manufacture. Once that happens, products higher up in the hierarchy (they sell relatively lower volumes) can be easily manufactured.
Flextronics thinks it can replicate its China experience in India Ash Bharadwaj, Chief Operating Officer Flextronics
Circa, early 2004, India seems to be at this point of inflection. The icing on the cake is the imminent opportunity in set top boxes once the Conditional Access Service (CAS) regime in cable television kicks in-and kick in it will despite roadblocks. That’s some 50 million set-top units that will be sold over the next five years. Then here are UPSEs, printers, telecom and networking equipment, digital cameras, medical equipment, even niche products like ATMs, leave alone hardware opportunities in white goods, consumer electronics, and automobiles. Gopal Srinivasan, the CEO of TVS Electronics, is understandably buoyant. “It isn’t a question of opportunity here,” he says. “It is a question of being able to execute; companies in this space should grow at least two to three times.” The number he puts to the “hardware manufacturing opportunity” in India over the next three years: Rs 55,000 crore. That’s manufacturing cost. Market researcher IDC, known for its conservative numbers, estimates that the corresponding market-value estimate (for PCs, servers, hand-held devices, traditional workstations, storage, peripherals, and data communication equipment) is Rs 75,000 crore. We’ll say that again: Rs 75,000 crore or over $15 billion at today’s exchange rate. For the record, India’s software exports in 2003-04 are expected to be $12.2 billion.
India Shining. Hardware Shining
Actually, it’s more like hardware basking in the reflected glory of India Shining. With the economy on an upswing, a resurgent India Inc-454 of the 797 companies whose financial results are in at the time this article goes to press show net profits for the first nine months of this year that are higher than their 2002-03 net profits-is certain to invest more in it, both software and hardware. Better still, much of these gains have come on the back of productivity gains that involve the extensive use of it and as more companies, especially small and medium enterprises, travel down this path, the domestic hardware market will grow, and grow, and grow.
That’s evident in the financial results of HCL Infosystems, one of India’s largest hardware companies. In the three months ending December 31, 2003, the company’s hardware business grew 56 per cent as compared to the same period in 2002. “We can now invest in educating and developing the market,” says a visibly upbeat Ajay Choudhury, CEO, HCL Infosystems. Wipro. Suresh Vaswani, the President of Wipro Infotech, a company focussed on the corporate segment, is just a shade less bullish: he expects a growth of 30 per cent.
Once the market hit a certain volume, it made sense to manufacture in India Sunil Sharma, Head, Kobian India
The second reason for the boom-in-making is price. Hardware manufacturers are close to hitting the sweet spot of the desktop segment-under Rs 15,000 according to some estimates, although Narendra Pani, the Vice President (Business Development) of TVS Electronics, insists that the market will really grow once the Rs 10,000 barrier is breached-and the laptop one (Rs 30,000). In part, these arise from increasing manufacturing efficiencies and a quest by companies to cut costs, and consequently, prices, to increase penetration. In part, they arise from the government’s decision, in early 2004, to cut excise duty on hardware from 16 per cent to 8 per cent and remove the 4 per cent special additional duty. This reduction has rendered unorganised sector players-they do not pay duties-redundant. Today, HCL’s entry-level desktop, Ezeebee, retails for 17,990; price warrior Zenith has an offering for 16,000.
The third reason for the hardware boom is activity in the retail and government segments of the market. A third of the 3 million PCs sold this year will find their way to homes. And e-government initiatives launched by several Indian states as well as the central government could further the cause of growth. The Boom Riders
As demand grows, everyone is speaking about increasing output, even capacities. Acer, for instance, is expanding the capacity of its PC assembly line at Pondicherry and LG is threatening to do to the PC business what it did to the consumer electronics one with its more-for-less products. IBM has a manufacturing facility in Pondicherry with an estimated capacity of 50,000 units. The company didn’t respond to BT’s questions but it is evident that it is considering large-scale manufacturing in India. In 2003, while media-attention was focussed on the visits of the company’s Chairman Sam Palmisano and President Steven Mills, another senior executive made a low-profile trip to India. This was IBM’s head of manufacturing Nicholas M. Donofrio, who reportedly visited the Pondicherry plant as part of an exercise to evaluate the possibility of large-scale manufacturing in India.
The two have come together to produce low-cost ATMs for the Indian market Sarath Naru, Founder, Ventureeast (Left) and Kannan Founder, Vortex
However, according to Skoch Consulting’s Sameer Kochar-he headed marketing at now-dead-but-once-glorious PC manufacturer PCL-organised sector players do not have the capacity to meet demand. The gap, he reasons, will be met by a clutch of aggressive price-players, local, and from countries like Taiwan and Singapore.
That phenomenon has already begun. Singapore-based Kobian (See A Laptop For Rs 30,000) has a manufacturing facility up and running at Silvassa. Other such companies like eSys, again from Singapore, UK’s ACI, and local-laptop vendor Micro-D have some sort of presence. And most hardware execs believe it is only a matter of time before Chinese biggie Legend (2003 revenues: $2.6 billion) enters the market.
The hardware industry is as component-dependant at the automotive one. Sure enough, there’s a boom on there too. Acer’s component manufacturing company Wisitron has had a presence in India through Bangalore-based Xserve Technologies for over a year. “One of our charters is to look at the viability of manufacturing here,” says Rahul Gupta, Country Head, Xserve, who has already outsourced the manufacturing of some components to Indian companies. And Celetron India (See The Billion-Dollar Hardware Company), an electronics manufacturing services company is expanding its capacity to cater to the domestic market.
The Hardware Ecosystem
Electronics Manufacturing Services (EMS) is probably one reason for the continued profitability of most global hardware companies. These companies are contract manufacturers of sorts: they provide design, engineering, manufacturing, and logistics solutions to hardware companies. The rate of obsolescence in the hardware industry is close to supersonic and few companies have the resources to change their manufacturing lines and supply chain requirements at the same rate. Enter EMS companies such as Flextronics (See The 13.4-Billion Endorsement) that take care of everything.
Flextronics is in India, in Bangalore, where it assembles set-top boxes, mobile phones, TV tuner cards, and the innards for some equipment on offer from city-based optical networking company Tejas Networks. Solectron (Solectron Centum in India), another EMS major, has a factory, also in Bangalore, and has invested Rs 10 crore in contract manufacturing. Jabil Circuit manufactures printed circuit boards for Whirlpool and Philips. All three companies are busy acquiring customers and getting a taste of the Indian market. Indian companies have jumped into the fray too.
Via is convinced that low-cost high-performance machines will explode the Indian PC market Ravi Pradhan, Head, Via’s Indian operations
TVS Electronics’ Srinivasan wants to transform his company’s manufacturing facility in Chennai into a contract manufacturing hub (he also wants to focus on catering to the hardware requirements of India’s booming organised retail sector, but that’s another story).
EMS companies are a critical part of the hardware manufacturing ecosystem. Apart from driving down costs and increasing speed to market, they provide local hardware hotshops (such as Tejas) with an opportunity to develop products and outsource manufacturing.
Noida-based iPolicy Networks, for instance, plans to start manufacturing its internet security boxes soon. “In four-to-five years, there will be more (such) products,” says Ashok Jhunjhunwala, a professor at IIT Madras, who is the moving force behind an incubation engine called Tenet Group. “We ourselves will make a few announcements in the next two months.”
Nor is venture capital an issue (See The Venture Capitalist And The Innovator). Midas is in the process of closing a new round of funding of $10 million. And two batches of Silicon Valley venture capitalists have visited India thus far in 2004; they are sure to have experienced the telecom boom and the optimism among local hardware makers. Ergo, they are likely to be more open to investments in Indian hardware start-ups.
Infrastructure, especially power, could play the spoilsport, but hardware executives are taking heart from a recent government decision to allow Indal to buy power from its vendor of choice for its Kochi-facility, with the state electricity board piping power from generator to customer. And Vinay Deshpande, the Vice Chairman of the Karnataka government’s hardware committee and CEO of Encore Technologies, points to the hardware park coming up in Bangalore and others planned in Andhra Pradesh, Kerala, and Tamil Nadu as evidence that the government is doing its bit. There’s empirical and anecdotal evidence to suggest that it is all coming together.
THE BILLION-DOLLAR HARDWARE COMPANY Mumbai-based Celetron could be it.
The EMS company is expanding capacity to meet local demand M.L. Tandon, Head, Celetron India
There must be something about hardware manufacturing in India if hard-nosed investors, including New Enterprise Associates, ING Barings Asia and Westbridge Capital have invested $51 million in a California-based electronics manufacturing services (EMS) company whose business model revolves around manufacturing in South Asia, primarily India. The company is Celetron Inc, its Indian subsidiary is Celetron India, and its promoters are the Tandon family (remember Tandon computer?). The Indian arm already exports PC components like power supply, head stacks for disk drives, and memory cards, and boasts profit margins in the 12 per cent region (the company claims this is higher than that for any other EMS company). Encouraged by trends in the domestic market, Celetron plans to expand capacities to cater to demand in India and has acquired land in Pondicherry for a factory. In three years, the company hopes to touch revenues of $1 billion from the domestic market, and from exports. That’s something.
Mr. M.L. Tandon, Chairman of Tandon Group of Companies, Mumbai, was selected in recognition of his commitment to hardware manufacturing and thereby achieving a turnover exceeding Rs.1000 crore in the year.