Sanmina Corporation and Reliance Strategic Business Ventures Ltd announced that they have entered into an agreement to create a joint venture through an investment in Sanmina’s existing Indian entity.
This partnership will leverage Sanmina’s 40 years of advanced manufacturing experience and Reliance’s expertise and leadership in the Indian business ecosystem. The day-to-day business will continue to be managed by Sanmina’s existing management team in Chennai, which will be seamless from an employee and customer perspective.
Completion of the transaction is subject to customary closing conditions, including regulatory approvals. The transaction is expected to close no later than September 2022.
Reliance Strategic Business Ventures Ltd is a wholly-owned subsidiary of Reliance Industries Ltd while Samina Corporation is already present in India through “Sanmina SCI India Pvt Ltd. Revenues for SIPL were approximately Rs.12.3 billion for the fiscal year ended March 31, 2021.
High-technology infrastructure hardware
The JV will create a world-class electronic manufacturing hub in India, prioritizing high technology infrastructure hardware, for growth markets, and across industries such as communications networking (5G, cloud infrastructure, hyperscale datacenters), medical and healthcare systems, industrial and clean technology, defense and aerospace.
In addition to supporting Sanmina’s current customer base, the joint venture will create a state-of-the-art ‘Manufacturing Technology Center of Excellence’ that will serve as an incubation center to support the product development and hardware start-up ecosystem in India, as well as promote research and innovation of leading-edge technologies.
All the manufacturing will initially take place at Sanmina’s 100-acre campus in Chennai, with the ability for site expansion to support future growth opportunities as well as to potentially expand to new manufacturing sites in India over time based on business needs.
Also read: Reliance Industries Plans Rs.6-Trillion Green Energy Investment In Gujarat
Equity stakes
RSBVL will hold 50.1 per cent equity stake in the joint venture entity with Sanmina owning the remaining 49.9 per cent. RSBVL will achieve this ownership primarily through an investment of up to Rs.1,670 crore in new shares in Sanmina’s existing Indian entity, while Sanmina will contribute its existing contract manufacturing business. As a result of the investment, the joint venture will be capitalized with over $200 million of cash to fund growth.
Featured photograph shows an inverter designed and manufactured by Sanmina. Globally, Sanmina has decades of experience with turnkey design and manufacturing of indoor & outdoor enclosures, systems build & test of complex power systems & inverters.
