Spice Mobiles to increase local handset production

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By Sandhya Malhotra

Encouraged with the initial experience of local mobile manufacturing, Spice Mobiles, the first Indian handset manufacturer to begin local production at Baddi, Himachal Pradesh in March 2010, is all set to increase its local production. The manufacturer has shown its peers that India has the capability in mobile manufacturing, despite handicaps like lack of manufacturing ecosystem and government support; and unavailability of components. And its bold step has been an inspiration for other Indian mobile companies such as Micromax, Lava and Zen, who are also considering setting up manufacturing facilities in India next year.

While sharing the initial experience of manufacturing at Baddi, HK Shah, vice president commercial Spice Mobiles, says, “The experience of manufacturing handsets locally at Baddi, has been quite positive. Our local production is comparable in every way—in terms of quality, reliability and performance—with its imported counterparts. We import our high end mobiles from China and other countries.”

Currently, the Baddi facility is producing 100,000 basic handsets per month on a two shift basis. The plant is built over a 3 acre plot and the factory building is around 2136.7 sq m. “Starting with one assembly line, we are gearing up to add three more lines within this quarter to raise the production capacity to 400,000 handsets per month by 2010 ends,” informs Shah.

Besides tax and excise benefits in Baddi, our manufacturing strength has given us the ability to build and offer customised solutions as per customers’ specific requirements by incorporating value-added services applicable for specific markets—domestic as well as for exports,” says Shah.

Planning to migrate to CKD

Mobile handset manufacturing is split into two sections—automatic and manual. Electronic printed circuit board (PCB) assembly needs to be automated and the final assembly and testing is a combination of manual and automatic processes.  Says Shah, “As of now, we do the final assembly and testing (which is partly manual and partly automatic). Also, we are evaluating the merits of changing over to CKD and PCB assembly. We need to decide whether to do this activity inhouse or subcontract it locally.”

Commenting on the profitability aspect, Shah laments, “Since the mobile handset components manufacturing industry is practically non-existent in the country, it will be beneficial and profitable to start manufacturing these inhouse.”

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