NEW DELHI: Micromax Informatics is planning to make smartphones on a completely knocked down or CKD basis in India, by March next year, which could make it the first local manufacturer to take the plunge in the market where all but only Samsung is assembling phones.

"We're on the verge of importing our first set of CKD units," Micromax co-founder Vikas Jain said, adding that the company was looking at beginning before the end of the financial year.

"While we are working on logistics and building infrastructure, it will be at our new facilities either at Telangana or Bhiwadi," he said. The company is yet to decide the capacity of production from CKD units but is expecting its first shipment of CKD units soon. The move will be a step up in value addition for the home-bred handset maker, which makes 3 million phones a month in Rudrapur and Telangana factories, more than half of which falls in the smartphone category.

The company's third plant is set to come up in Bhiwadi, Rajasthan, and the fourth one in Bhopal, Madhya Pradesh. An investment of Rs 2,000 crore has been marked out for making phones and electronics such as televisions, tablets and accessories locally, over the next five to six years.

At present almost all companies that sell phones in India, either import fully built units or semi-knocked down (SKD) phones from China, which can be assembled together with little manufacturing requirement. The process, however, is labour intensive and therefore offers jobs in large numbers to
fairly low skilled workers.

Making phones from completely knocked down (CKD) versions, involves mounting of components onto a printed circuit board (PCB) mechanically, where
the PCB and other components are required to be imported separately from China, and then put together. In terms of value addition, CKD is a step above SKD, and lays the groundwork for assembling components that in turn go into making handsets.

"PCB assembly done locally can provide a 2% cost improvement on bill of material, which can in turn reduce overall cost of the phone," Tarun Pathak, senior analyst at Counterpoint Research said.

The move will aid in quality control and better control on design, which local handset makers have begun to do in house.

Sources :economictimes.indiatimes.com