 "The logo of Foxconn, the trading name of Hon Hai Precision Industry, is seen on top of the company's headquarters in Tucheng, New Taipei. Photo: Reuters")
The workforce at Foxconn's smart phone manufacturing facility in Sri City, currently the only Indian facility run by the Taiwanese electronics manufacturing major, has crossed 10,000 people in a matter of 16 months.
With India's potential market size pegged at 125 million mobile phones in the current year, Foxconn's relentless capacity addition at Sri City only demonstrates the kind of job creation potential mobile phone segment holds in coming days in the country.
Foxconn had started its smart phone assembly plant in a 40,000 square-foot facility in May 2015 at Sri City industrial park in Andhra Pradesh. Three months later Chinese smart phone company Xiaomi had rolled out its first 'Made in India' smart phone Redmi Prime from Sri City facility on August 11, 2015.
Gionee, yet another customer of Foxconn, launched its new 'Made in India' F Series phone F 103 in October, 2015, which too was produced at Sri City facility.
As more number of companies opted Foxconn for their 'Made in India' plans, the company had almost continuously added the assembly capacity at its Sri City factory, whose combined shop floor area now runs into 2.65 lakh square feet. Apart from these two brands, Foxconn also makes mobile phones for Micromax, Lava, Asus among other brands from here.
"One more facility is being built at the existing site by Foxconn and 2,000-3,000 are likely to be added to the existing workforce once these new assembly lines are ready to start production," a source told Business Standard.
On its plans and customers, Foxconn Technology Group refused to give any details: "Foxconn follows a strict company policy of not commenting on any matters related to current or potential customers, or any of their products," Foxconn spokesperson said in response to an e-mail query related to their Sri City operations.
According to a senior AP government official, Foxconn was currently producing 1 million mobile phones per month at its Sri City plant and the company has plans to ramp up the capacity to 4 million mobile handset per month.
Xiaomi spokesperson, whose company is currently using Sri City facility for 75 percent of its mobile handsets sold in India, has refused to comment on the additional capacity being built for the company at the existing location or the status of two new factories it had proposed to set up through Foxconn in other locations. Xiaomi had recently announced that its quarterly sales crossed 1 million phones in March as well as in June quarters in this year.
With new factories announced by Foxconn in states like Maharashtra or the ones being planned by Xiaomi India taking more time, the demand pressure on the existing facility has only been growing by the day, according to sources. "Watching the company's activity in Sri City and the kind of manpower availability surveys being commissioned by the Taiwanese company in AP, one would only get an impression that the company is going to double its operations in Sri City very soon " an official working in Sri City said on condition of anonymity.
Rumours were also abuzz about a possible tie-up with Foxconn by Reliance Jio to make the latter's LYF brand smartphones in India. However, Foxconn refused to make any comment on this as well.
Reliance Jio had launched two smart phone models at a price of Rs 3,499 and Rs 2,999 along with 4G services. According to a Reliance Jio spokesperson, the Rs 2,999 model was particularly gaining popularity and its stocks were getting depleted very fast. Mass production of these entry level smartphones will make more sense if produced locally as locally manufactured phones enjoy tax cuts.
Sensing the job creation potential of of this segment, AP government had set a manufacturing target of 20 million mobile hand sets in the state. The government had offered land and other facilities to 4-5 domestic companies to develop a mobile handset manufacturing cluster near Tirupati in addition to Sri City's Foxconn operations.
The state government had extended tax incentives including reimbursement of net VAT, a 10 year central sales tax waiver among other things to Foxconn. The government also gives Rs 10,000 towards training cost of each employee hired by Foxconn. The company has established this factory in the name of Rising Star Mobiles India (P) Ltd.
