Home-grown mobile phone maker Jivi Mobiles plans to invest up to Rs 200 crore in setting up a new manufacturing unit in Lonavala with initial production capacity of 5 lakh units per month.
“We are selling around 3-3.5 lakh feature phones per month. By Diwali, we expect to reach sales of 6 lakh units a month. Based on demand, we expect to sell 10 lakh units per month by 2017-18 for which we are setting up additional plant in Lonavala with investment of Rs 180-200 crore,” Jivi Mobiles CEO Pankaj Anand said.
Jivi at present has a mobile assembly unit in Delhi where it produces 3-3.5 lakh mobile feature phones per month.
“We could have opted for a contract manufacturer but due to issue of quality control and supply issues, we have started our own unit in Delhi with investment of Rs 150 crore,” Anand said.
He, however, said that recent announcement by Delhi Chief Minister Arvind Kejriwal of increasing minimum wages to about Rs 14,500 will adversely impact its mobile phone business which is a very low margin business.
“We get average discount of about 13 cents, which is around Rs 35, when we bring parts of mobile phone to India such measures to mandate minimum wage will hamper growth prospect in Delhi. That is one more reason that we are now planning expansion in Lonavala,” Anand said.
The company will hire 500 skilled people to work at Lonavala plant.
“The Lonavala plant will have 10 assembly lines. We will use 1-2 assembly for mobile phone accessories– battery and charger. We expect that plant to produce 30 thousand mobile batteries and 15-20 thousand chargers per month, ” Jivi Mobiles Director Gurdeep Singh said.
Jivi has plans to enter into low cost smartphone market to cater both 3G and 4G users which will help company ramp up its sale.
“We will sell smartphones in the range of Rs 2,000-5,000 because Chinese players with their government support are giving tough competition in smartphone priced above Rs 5,000 a unit. It is really tough for Indian companies to compete with Chinese smartphone companies,” Anand said.
He said the company is focusing on offline retail and presently reaches out to 25,000 retail outlets across the country.
“In this fiscal year, we will double distributors from 550 to 1,000 and accordingly sell out products from 40-50 thousand retail outlets,” Anand said.
He also said that Jivi sells 50 thousand feature phone units per month in the US and 25,000 units every month in Nepal.
“Some people still like to carry feature phone along with smartphone which is the reason we see demand for our phones in the US. We are in talks to expand sales in Bangladesh, Sri Lanka and Myanmar,” Anand said.