Date:20/02/2006 URL: http://www.thehindubusinessline.com/2006/02/20/stories/2006022001180300.htm

Back Flextronics Chennai park to be ready by Aug — In talks with about 25 suppliers for setting up units

Bharat Kumar

Mr Gururaj A, General Manager and Director of Indian operations

Recently in Doumen , China

FLEXTRONICS has said that the industrial park in Chennai, for which it had announced plans last year, will begin operations by August 2006.

Speaking to an Indian media contingent after a tour of its manufacturing facilities in Doumen, China, Mr Gururaj A, General Manager and Director of Indian operations, said: "We plan to begin printed circuit board assembly operations by August 2006."

By October, the plant would see end-product rollout. This would follow the setting up of mechanical processes including metal stamping, plastic injection moulds, and the like. The plant would ship products such as mobile phone handsets, telecom infrastructure equipment including base stations, and set-top boxes for the direct-to-home TV services market.

It would have the capacity to make two million mobile phone handsets a month by December 2006. Currently, the company's Pondicherry facility has the capacity to produce 500,000 handsets. Its Bangalore plant focuses on telecom infrastructure equipment.

By December, Flextronics will also employ about 1,500 people in its new plant occupying 10 acres (out of a total of 250 acres) in the initial phase, compared to 680 currently in its facilities in Bangalore and Pondicherry.

Asked if the work done out of Bangalore would move to the park in Chennai, Mr Gururaj said: "We would consolidate all high-volume operations in Chennai. But low-volume products would still be made in Bangalore." Phase II would see the set-up of units of Flextronics' suppliers and even customers inside the park.

Asked if Flextronics played a direct role in the setting up of units by both suppliers and clients in the vicinity of its own units, Mr Tim Dinwiddie, Senior Vice-President, South China Operations, said that the Indian operations would typically follow the company's Mexican model, where Flextronics played landlord to suppliers and helped them set up units. In China, an ecosystem already existed when Flextronics came and the company faced no great difficulty in sourcing raw materials initially.

The company is in discussions with about 25 suppliers for setting up units in its Chennai park "but no decisions have been reached yet," according to Mr Gururaj.

He also said that about 70 suppliers across the Asia-Pacific region attended the meet with the IT Minister of Tamil Nadu when he visited Flextronics' Malaysia facility recently.

Flextronics expects its Chennai operations to follow the trail blazed by the Doumen plant.The facility employs about 26,000 people who occupy 3.1 million sq ft of workspace over a total area of 150 acres.