Lava in talks with states for manufacturing unit; to invest Rs 250 crore

NEW DELHI: Domestic handset maker Lava today said it is in discussions with various state governments to set up a new assembly unit that will entail an investment of about Rs 250 crore.

Lava has one assembly unit in Noida that has a monthly capacity of making about half a million handsets.

"We are in talks with state governments of Andhra Pradesh, Uttar Pradesh and Rajasthan. We should be able to close in on this before the end of the calender year," Lava International co-founder and Director Vishal Sehgal told.

The project will entail an investment of Rs 200-250 crore in the next two years, he said.

"The unit in Noida will be last mile, while the new unit will be a greenfield facility including tooling, SMT and other areas... We would need a capacity of about 5 million units to get to a certain scale and size," he said.

Global handset makers like Samsung and domestic players like Micromax and Spice also have assembly units in India.

Given the government's push for 'Make in India', device makers including HTC and vivo have evinced interest in starting manufacturing in the country.

Last month, Celkon Mobiles inaugurated its manufacturing facility in Telangana, which has been set up with an investment of Rs 200 crore. Micromax will also set up a unit in the state.

India is one of the fastest growing smartphone markets globally and device makers to keen on setting up manufacturing units here to cater to the burgeoning demand.

According to research firm IDC, Korean electronics giant Samsung led the smartphone market in India with 22 per cent share, followed by homegrown vendors Micromax (18 per cent), Intex (8 per cent) and Lava (7 per cent) and Chinese smartphone maker Xiaomi with 4 per cent share.

Lava also sells mid and high-end smartphones under brand XOLO. It today unveiled its first device under a new online- only brand 'Black', priced at Rs 12,999.

To be sold through eCommerce firm Flipkart, the device features 5.5 inch, dual rear camera module of 13MP and 2 MP, Qualcomm Snapdragon octa-core processor and 2GB RAM.

The 4G-enabled handset comes with 16GB internal memory (expandable to 32 GB) and 3,200 mAh battery.

Asked if Black devices would be assembled here, Sehgal answered in the affirmative.

"We are ramping the capacity of our Noida facility and by October, it should touch one million units. So, within this quarter, we expect to assemble Black here as well," he added.

XOLO is also investing significantly in marketing and advertising of the new brand. "We invest about Rs 50-60 crore for XOLO annually. Black will see about Rs 25-30 crore being put in various ATL activities this year. As part of the first campaign itself, we will spend about Rs 10 crore," he said.