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September 03, 2006

"The Shenzhen of India"

Businessworld has an article on how Sriperumbudur (40 km from Chennai) is emerging as India’s telecom manufacturing hub.
There are three types of operations coming up at Sriperumbudur. One, the OEMs like Nokia and Motorola. Then the EMS’ like Flextronics and Foxconn, who supply to OEMs around the globe. Finally, there are the component suppliers who work either with the OEMs or the EMS’. They include Aspocomp (global turnover euro 154 million; printed circuit boards), Salcomp (euro 156 million; chargers), Perlos (euro 667 million; mechanics) and Sanmina-SCI ($12.2 billion; network components).

Each of these outfits will be housed within an SEZ. Apart from them, Velankani Information System (which has set up an IT park in Bangalore that houses Siemens, Elcoteq and Patni Computers) is setting up an ITES SEZ that will house a 5 million-sq. ft manufacturing facility for another set of 20 global telecom suppliers.

...It is great to have telecom majors set up a base in the neighbourhood. But a mobile phone has close to 200 components that need to be readily available. The big boys need a regular supply of components.

Nokia has lined up a dozen vendors who will start manufacturing components in its 210-acre campus. That will meet some of Nokia’s needs. It will yet need more components. It is this need that the Velankani SEZ plans to meet. With an investment of Rs 900 crore in a 250-acre campus in Sriperumbudur, this generic SEZ with 5 million sq. ft will house between 20 and 30 global component suppliers in the next couple of years.

Arun Natarajan is the Founder of Venture Intelligence, which tracks private equity and venture capital in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.