Sanmina, Reliance ink pact to form a manufacturing JV

Sanmina Corporation, a leading integrated manufacturing solutions company, and Reliance Strategic Business Ventures Ltd. (RSBVL), a wholly owned subsidiary of Reliance Industries Ltd. (RIL), have reached an agreement to form a joint venture by investing in Sanmina’s existing company Indian company Sanmina SCI India Private Ltd. (SIPL). Day-to-day operations will continue to be managed by Sanmina’s existing management team in Chennai, functioning seamlessly from both an employee and customer perspective. The joint venture will create an electronic manufacturing hub in India and prioritize high-tech infrastructure hardware for growth markets and sectors such as communications networks (5G, cloud infrastructure, hyperscale data centers), medical and healthcare systems, industrials and cleantech defense and space. In addition to supporting Sanmina’s current customer base, the joint venture will create a “Manufacturing Technology Center of Excellence,” which will serve as an incubation center to support product development and the hardware startup ecosystem in India, as well as foster research and innovation in cutting-edge technologies, the companies said in a joint statement. RSBVL will hold a 50.1% equity interest in the joint venture company, while Sanmina will own the remaining 49.9%. RSBVL will primarily achieve this ownership through an investment of up to Rs 1,670 crore in new shares in Sanmina’s existing Indian entity while Sanmina will contribute to its existing contract manufacturing business. As a result of the investment, the joint venture would be provided with over $200 million in cash to fund growth, the statement added. Through this joint venture, Sanmina expects to significantly increase the scope of this business over time and expand its Indian manufacturing footprint to serve local and global demand for hi-tech devices across all industries. All manufacturing will initially take place at Sanmina’s 100-hectare campus in Chennai, with the possibility of site expansion to support future growth opportunities, as well as potentially expanding to new manufacturing facilities in India over time based on business needs. Jure Sola, Chairman and Chief Executive Officer of Sanmina, said: “This joint venture will serve both domestic and export markets and represents an important milestone in the Government of India’s Make in India initiative.” Akash Ambani, Director of Reliance Jio, said: “It is vital for India to be more self-sufficient than ours in electronics manufacturing in telecom, IT, data centre, cloud, 5G, new energy and other industries for both growth and security Charting the way to the new digital economy. Through this partnership, we plan to nurture innovation and talent in India and meet both Indian and global demand.”