In January, Samvardhana Motherson International Ltd (SMIL) announced that its subsidiary, Samvardhana Motherson Innovative Solutions Ltd (SMISL), was entering agreements with BIEL Crystal (Singapore) Pvt Ltd
The move will position the Vivek Chaand Sehgal-led auto component manufacturer as the second major business group, following Tata, to become an Apple vendor. This initiative is part of Motherson’s strategy to leverage its manufacturing expertise and branch out into new sectors, the report said.
BIEL, founded in 1989 by billionaire Yeung Kin-man in China’s Shenzhen, initially specialised in manufacturing watch crystals. Estimates suggest that BIEL now supplies glass screens for around two-thirds of all iPhones, the report said.
The upcoming joint venture, where the Indian firm will hold a 51 per cent majority stake, plans to build a new manufacturing facility in southern India, potentially in Tamil Nadu. The projected investment for this greenfield project ranges between Rs 2,000 crore and 2,500 crore, with an expected revenue of Rs 8,000 to 8,500 crore within four to five years of operation. The consumer electronics segment is expected to launch between July and September, the report said.
BIEL’s production facilities in China’s Guangdong, and Bac Ninh, Hai Duong, Vietnam, are recognised vendors for Apple in India. The company also provides components for various devices, including smartphones, tablets, and wearables, to major brands such as Samsung, Xiaomi, and Lenovo.
Strategic investment partnership
In January, Samvardhana Motherson International Ltd (SMIL) announced that its subsidiary, Samvardhana Motherson Innovative Solutions Ltd (SMISL), was entering agreements with BIEL Crystal (Singapore) Private Limited. BIEL was set to invest in Motherson Electronic Components Pvt Ltd (MECPL), a wholly owned SMISL subsidiary, though joint venture details were not disclosed.
The deal involved BIEL investing in MECPL through 0.01 per cent compulsorily convertible preference shares (CCPS), convertible into 10 per cent equity and up to 49 per cent on a fully diluted basis. BIEL would also provide technical support, while SIML would appoint most directors at MECPL, and BIEL could nominate directors proportional to its shareholding. Any issuance of shares or convertible securities to third parties required joint consent, the report stated.
Apple’s production bases
Amid increasing geopolitical tensions, Apple has recently encouraged its suppliers to broaden their production locations to mitigate the risks associated with heavy reliance on mainland China. In addition to India, Southeast Asian nations such as Vietnam, Malaysia, Thailand, and the Philippines are seeking to benefit from this diversification strategy.
Fuelled by a rise in Apple iPhone exports from India, electronics have surpassed gems and jewellery to become the third largest export from India by the end of the June quarter, moving up from fourth place the previous year. The Tata Group alone has invested over $1 billion in new projects and acquisitions to strengthen its partnership with Apple, the report said.
According to a senior executive, Corning, the manufacturer of Gorilla Glass and a major supplier for Apple, is set to start production at its Tamil Nadu facility in the latter half of 2025.
First Published: Aug 06 2024 | 10:26 AM IST
