Govt doesn't encourage electronic component manufacturers: Flextronic

One of company's major customer Nokia, recently threatened to quit India as country is least favourable market to operate now

The $24 billion Flextronics, an American supply chain solutions company, has said that the Indian Government did not encourage domestic electronic component manufacturers and high imports are hurting the company, which has a manufacturing facility near Chennai.

It may be noted, one its major customer Nokia, recently threatened to quit India as the country is least favourable market to operate now.

Speaking to reporter after announcing company’s new global business services in Chennai, Ashok Dhawan, Country Manager, Flextronics today told reporters that “Government has not encouraged domestic electronics component manufacturers. There is too much of imports hurting our plans.”

Flextronics offers design, manufacturing, distribution and aftermarket services to original equipment manufacturers.

The company started its manufacturing plant at Sriperumbdur in 2006 and was seems to be disappointed on the revenue it clocked in. The reported revenue from this plant was around $100 million, as against its expectation of over 3-4 times.

The number of employment which the factory was suppose to create was around 8,500, Media reports quoted when the factory was announced, but it could create only around 4,000.

The utilisation level at the factory was also at around 35% as compared to Chinese factory's almost 100% utlisation. Dhawan said the company is exploring possibilities to increase the capacity utilisation by bringing some of the products from China to Chennai. Some of the major customers which Flextronics caters to include Nokia and Microsoft.

While stating that the Centre understands the concerns of the industry, but it kills one industry by encouraging the other through huge imports, said Dhawan.