The contract manufacturer is seeking higher margins by making electronics components like camera modules, while deepening its smartphone and laptop production
The contract manufacturer is seeking higher margins by making electronics components like camera modules, while deepening its smartphone and laptop production
By Sankalp Phartiyal and Menaka Doshi
Dixon Technologies India Ltd. is targeting growth beyond assembling smartphones, its strong suit, to challenge global electronics-making leaders and propel the company to its next phase of expansion.
The contract manufacturer is seeking higher margins by making electronics components like camera modules, while deepening its smartphone and laptop production, Chairman Sunil Vachani told Bloomberg Television in Mumbai. The company, which currently ranks outside the top 10 in an industry dominated by the likes of Taiwan’s Foxconn, wants to be among the five biggest in the world within a decade, he said.
“The vision is very clear,” said Vachani, 57, also the company’s founder. “We need to be in the top ten EMS global rankings in the next five years and the top five in the next 10 years,” he said, referring to electronics manufacturing services.
Dixon’s ambition aligns with that of India’s government, which is trying to lure more manufacturing into the world’s most-populous country with production subsidies. While India is making early progress in attracting brand owners such as Apple Inc. and Samsung Electronics Co., it still lags behind powerhouses China and Taiwan.
Vachani started Dixon with borrowed money in a rented shed outside of New Delhi three decades ago. Today, Dixon makes products including smartphones, washing machines and television sets for brands such as Motorola, Xiaomi, HP and Samsung. That’s earned it the moniker of India’s Foxconn, a reference to the Taiwanese giant also known as Hon Hai Precision Industry Co.
Dixon’s share price jumped rapidly following its 2017 listing in Mumbai, but it has sputtered in recent years as investors have assessed its chances to take on bigger rivals. The stock is down 28% over the past year.
Smartphone manufacturing accounts for more than 90% of Dixon’s revenue, and that business has grown at a rapid clip over the past few years. The company received a shot in the arm this year when it won federal approval to set up a smartphone venture with the local unit of China’s Vivo, which will hold a minority stake.
And Dixon’s now steadily making efforts to move to high-margin products such as servers and even defense manufacturing. It has tied up with a Taiwanese firm to make optical gear used in data centers, and will bolster its IT hardware manufacturing as it opens a second plant late November, he said.
Averytin News Financial update.