“Our agreement with Samsung for manufacturing LED TVs is a milestone for our company and will not hurt the relations with other brands for whom we are manufacturing”, says Atul B Lall, Managing Director, Dixon Technologies (India) Limited. During an interview with Swati Khandelwal, Zee Business, Mr Lall said, “Government’s steps has helped India to start its journey as the mobile manufacturing hub”. Edited Excerpts:
Dixon Tech, which has been manufacturing LED televisions for Panasonic and Xioami, has signed a contract with South Korean electronics company Samsung. Let us know about it?
Customer acquisition is an important business activity at Dixon and the recently signed agreement with Samsung is a significant milestone for us. It is a continuous activity and we keep talking with numerous customers. It is difficult to name them but we are working with significant brands. We always try to serve them, our customers, with full capability and bring cost reductions and provide new products to cement our relationship with them. Thus, the company has achieved significant mileage and it is also important for every stakeholder.
Will these new contracts affect the existing relations with existing customers like Xiaomi, as it is the top contributing client with a 65% share in the revenue?
It will not at all. Every customer is equally important for us and we serve them as per their requirements. We are strengthening our relationship with every customer and it is a continuous approach at our end.
There were reports that Dixon is in talks with One Plus as well. What are your thoughts on it and when will you start your work with Samsung?
We don’t have any contract with One Plus as of now. And, when it comes to the other customer, then the business with them is likely to start in the next one to two months.
What is your current capacity/utilization levels and have you planned any CapEx?
We have a capacity of around 36 lakh (3.6 million) LED television, which is the biggest capacity in India. 75-80% capacity of the facility will be used this year. Interestingly, we need to take care of the seasonality in this capacity because the capacity requirement is on a rise during the festive season during Diwali. We understand the growing needs of both, the new and existing, customers and that’s why have decided to increase this capacity to 44 lakhs and it will be ready by April-May 2020. At the same time, the capacity of surface mount and PCBA is being doubled.
Tell us something about the mobile manufacturing facility located at Noida and the brands that will be manufactured at the facility? What will be its revenue share in your books?
Dixon has 2 facilities of mobile. We do a business of around 20 lakh feature phones and 3-4 lakh smartphones from these two facilities. Our existing clients include Panasonic, Gionee, Karbonn and Samsung. Besides, we always try to acquire more customer.
Government has plans to make India a hub for electronics manufacturing. What are the initiatives or recommendations that are expected from the government on this front?
The government is responsible and the steps taken by it has helped India to start its journey of being the mobile manufacturing hub. It things take time and duty intervention is creating an ecosystem of mobile in India. Similar, things are visible on the lighting front that’s why I feel India will emerge as the lighting hub for the global market. So, the electronic manufacturing activity started in India will make sure that India’s significant requirement will be developed in India. And, India will turn export competitive for some products. This is going to happen in the next 2-3 years but it will require policy initiatives and duty intervention from the government. It will also require some support in income tax, which has been announced; interest rate and labour policy. With these 3-4 years of support, India will start manufacturing not just for domestic consumption but also for international markets.
Lighting segment is important for Dixon. But there is pricing pressure on this segment. What is your outlook for the segment?
In the lighting segment, we have had significant growth of 30-35 per cent, this year, when compared with the last year’s growth. Besides having a focus on the LED bulbs, we are also focusing on downlighter and batteries as well as smart solutions. We are trying to have an entire product portfolio along with cost competitiveness to provide our services not only to India but also the international market. Lighting is a very important vertical for us and that’s why we will provide each and every resource to the segment and continue to grow in it. Right now, we are India’s largest OEM in lightings vertical and hope that this position will be maintained in future as well.―Zee Business