Lava Dials up Investments with Capacity Expansion in South and North India

Mobile handset vendor Lava International Ltd. said this week that it is deepening its investments in India. To this end, Lava will undertake manufacturing capacity expansion in the country; the capacity addition will enable the company to manufacture as many as 18 million mobile handsets a month. The new capacity additions are expected to come into effect in a phased manner over the next six years, said recent media reports in India. By 2021, Lava’s fresh investments will amount to US$338 mn (as per exchange rates on October 26, 2015).

With many of its rivals already focusing on the future, Lava hopes that its new facilities in Tirupati and Noida will help it compete head-to-head in an increasingly dynamic mobile handset manufacturing market in India.

Sanjeev Agarwal, Lava’s chief manufacturing officer, said that the company aims to have its two plants in Tirupati and Noida operational by the end of 2017. However, the better part of Lava’s investments will be channeled into its Noida manufacturing facility. The sprawling manufacturing plant, spread over an area of 100 acres, will be located on the crucial Noida expressway. The facility will not merely manufacture handsets, but will also house a hardware R&D plant with a sizeable investment of INR 500 crore. Lava’s current hardware R&D facility is located in Shenzhen, China, whereas its software research team sits out of Bengaluru, India.

About INR 500 crore is being pumped into Lava’s Tirupati manufacturing plant, which could potentially cater to demand stemming from the Southern states in India. The manufacturing plant in Tirupati will be crucial in that it will also house units for other cellphone vendors such as Karbonn, Micromax, and Celkon. An appreciable 6,400 jobs are expected to be generated once both the planned facilities are operational.

Besides achieving economies of scale, Lava also hopes that its new investments will receive backing from respective governments and earn subsidies and VAT benefits.


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