Lava to invest Rs 2,615 crore to set up two manufacturing units

NEW DELHI: Domestic handset maker Lava will invest Rs 2,615 crore over the next seven years to set up two manufacturing units in the country, in line with the government's 'Make in India' initiative.

Once operational, the units will have a combined capacity of 18 million handsets per month.

"We have put in place a plan to invest Rs 2,615 crore to set up two more manufacturing units in India -- one in the north and the other in South India," Lava International Chairman and MD Hari Om Rai said.

He added that the expansion will be funded through internal accruals.

"Some portion of the earmarked amount will also go into research and development," he said.

On the expansion plans, Lava International Chief Manufacturing Officer Sanjeev Agarwal said: "The funds will be deployed over a period of seven years. We are in discussions with various state governments and we should be able to close in on a decision in the next three weeks."

He added that the company's second unit will become operational by the beginning of 2017.

"We already have a unit in Noida and by beginning of 2017, the second one will be operational too. We will take a call on the third one later. Once all the three plants are functional, we expect our total output to be 18 million units a month," Agarwal said.

Lava's Noida unit has a monthly capacity of making about half a million handsets.

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.

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.

The company also plans to double its headcount this year.

"We currently have about 7,000 people and we are on track to double this number by March next year. These people will be hired across various roles in manufacturing, R&D, sales and marketing," Rai said.

Lava today launched its new handset under Google's Android One program.

Priced at Rs 11,350, the device features 5.5-inch display, Android Lollipop operating system, 1.3 Ghz quad core processor, 2GB RAM, 32GB internal memory, 13MP rear and 8MP front camera and 2,560 mAh battery.

"Pixel V1 was developed by close coordination between product R&D teams at Lava and Google. We believe the device is the right mix of hardware and software and we are confident of it doing well in the market," Rai said.

It will be available online through Flipkart.com from today as well as over 2,000 stores and over 65,000 multi-brand outlets.

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.