Tamil Nadu is set to welcome a new advanced electronics manufacturing facility.
European electronics manufacturing services major Zollner Elektronik AG (Zollner) and Indian listed EMS firm Avalon Technologies on Thursday said they have come together to form a joint venture (JV) for manufacturing advanced electronics including Printed Circuit Board Assemblies (PCBA), box-build and system integration products.
businessline has learnt that the manufacturing facility part of the JV is set to come up in Tamil Nadu with Avalon recently signing a ₹1,000 crore investment MoU with the Tamil Nadu government and also acquiring a large parcel of land in Oragadam near Chennai. The amount invested by the two companies in the JV remains undisclosed.
Under the terms of the JV, Zollner will initially hold 51 per cent and Avalon will hold 49 per cent of the JV. Beginning three years after the start of commercial production at the manufacturing facility, Avalon will have an option, subject to certain conditions, to acquire an additional 2 per cent stake, taking its shareholding to 51 per cent and making it the majority shareholder in the JV, the company said in a statement. The JV will initially focus on serving the India operations of established customers.
“This structure lets Zollner lead the JV’s early operations, drawing on its manufacturing and engineering experience, while giving Avalon a clear route to increase its ownership as the business matures,” Avalon said.
With over 25 years of manufacturing presence, Avalon provides a full stack product and solution suite, right from printed circuit board design and assembly to end-to-end box build of electronic systems. It also has full-fledged manufacturing facilities in the US.
Avalon says it will bring its core capabilities such as cable wiring and harness, magnetics, plastics, sheet metal and machining, among others, to the venture, which will serve customers across geographies in sectors including Health Care & Life Sciences, Test & Measurement, Rail and other Industrial verticals.
“This JV is strategically significant for Avalon. It expands our access to customers, opens new verticals and advances our capabilities in highly complex manufacturing. Zollner brings more than six decades of engineering expertise, global customer relationships and full product lifecycle capabilities. Avalon brings an established India manufacturing platform, a strong local supply chain and integrated capabilities across the value chain,” Kunhamed Bicha, Chairman and Managing Director, Avalon Technologies Limited, said.