08 Nov 2016 15:19 IST

Intex to go desi for its handset components

Within two years, 70 per cent of the parts will be made locally

Reaching the Noida plant of electronics firm Intex is an arduous task. The vicinity is bereft of bus stops or the convenience of a metro.

However, there are a few signs of development around the Intex facility, in the form of partly-constructed pillars that will soon support tracks of a new metro line, making transport easier for workers. For now, the company provides transportation to over 600 employees. Tea stalls and local eateries have also come up in the area.

Intex, which set up the plant in 2015, can claim some credit for the changes. The factory, spread across 100,000 square feet, reflects the ambitions of the vast influx of citizen from across the country.

Eighteen-year-old Junalie came from Arunachal Pradesh after finishing her schooling, following the footsteps of her brother. One of 60 women in the Intex factory, Junalie assembles over 30 phones per day. She sends money home each month from her salary of ₹7,100.

Workers in the factory earn an average ₹7,000-8,000 each month. While this is in line with the industry average, employees praise the company for better safety measures. Rita, a mother of two, has been working at the Intex factory for over a year after stints at several other firms. “There is a lot of safety here. We were trained on every technology we use,” she said.

The Government’s Make in India policy, under which companies are given incentives, has increased opportunities of employment for young men and women like Junalie and Rita. At the same time, it also improves the cost advantage of companies that have started moving their manufacturing to domestic frontiers.

At present Intex has 30 per cent localisation in its products and intends to increase it to 70 per cent in two years. This would bring down its costs.

“These (locally manufactured components) are giving us an edge of say 10 per cent in terms of cost. “But there are other components that we are importing, for example LCDs, which have become more expensive. So, the expense reduction gets offset by that,” said Amitabh Khurana, Director (Operations), Intex.

Intex has manufacturing facilities in Baddi (Himachal Pradesh) and Jammu (Jammu and Kashmir), besides its three plants in Noida. It plans to open a new facility in Kasna, Greater Noida, spread over 20 acres.

The new consolidated facility can make 35 million handsets per annum, according to the company, and will manufacture mobile handsets, mobile accessories, LED TVs and washing machines.

The company plans to locally manufacture cells for batteries, LCD panels and printed circuit boards (PCBs). It presently imports the PCB from China. “Five to seven per cent of the cost of PCBs will be reduced,” Khurana said.

“Further, there is the quality concern. If we are getting 1-1.5 per cent rejection on the line now, once we start manufacturing here, this will come down to 0.5 per cent. Besides that it is also likely to improve after sales performance,” he said.

Intex had started manufacturing batteries in India about three years ago and its feature phones have become 100 per cent “Indianised”.

Besides the subsidies, one of the biggest assistance from the Government has come in the form of training the workforce. Under one such scheme, while Intex trains people, the expenses are borne by the Government. At the end of the training period, Intex has to retain 80 per cent of the trainees.

The new GST taxation regime is also expected to energise Make in India plans as the import duties on certain components, such as batteries, are likely to rise, pushing the industry towards localisation.

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