Zetwerk eyes joint ventures, acquisitions to foray into components manufacturing; plans to expand handset business

Josh Foulger, President of Zetwerk Electronics

Homegrown electronics manufacturing company Zetwerk is planning to form joint ventures and secure technology transfers with global component manufacturers that are part of global value chains (GVCs) as it diversifies into component manufacturing. The company is also exploring potential acquisitions to grow its electronics components ecosystem, which will see the next leg of investment, including new factories.

“We are looking at partnerships so that we can grow this inorganically. We are looking for players from around the world who would be keen to partner with a company that understands this ecosystem. All of these things will be lining up in the next few weeks and months,” Josh Foulger, President of Zetwerk Electronics, told Moneycontrol.

Foulger said potential partners will be those connected to global value chains (GVCs). “GVCs will make a very big impact on this decision. Once we find the right partner, we will decide whether it will be a technology transfer, strategic technology arrangement, joint venture, or even an acquisition,” he added. “We are open to different forms of engagements with partners.”

The IT Ministry has finalized the contours of an ambitious incentive policy for electronic components manufacturing. The outlay will be around Rs 23,000 crore spread over six years, lower than the Rs 40,000 crore the electronics industry demanded.

The government is looking to target components such as display modules, sub-assembly camera modules, printed circuit board assemblies, lithium cell enclosures, resistors, capacitors, and ferrites.

“The government will soon come up with what they call the EMS 2.0 policy, which will entail significant export percentages and component expansion… that’s where I see a lot of our investments going. As global value chains look at India for renewed reasons, our ‘India Plus’ story will start. We will tap into our earmarked funds to expand,” he said.

Foulger added that the company will consider expanding its manufacturing presence with another facility in the coming fiscal year, targeting the component manufacturing space.

The company inaugurated its seventh manufacturing unit in Chennai on Saturday. The unit will focus on consumer durables for domestic and international demand.

The executive said that smartphone manufacturing in India will witness a “very mature” supply chain evolving over the next 18 months, especially in the Android segment.

Zetwerk is also focusing on expanding its handset business by engaging with smartphone brands and their ODM partners.

“The inquiries have started to increase. It is a big category, and we will be there in a big way. We are poised to benefit in the mid-term. We are looking for quality partners,” he said.

He noted that the Indian government is aware of the growing non-Android smartphone ecosystem and is expected to make the “right decision” regarding the Production-Linked Incentive (PLI) scheme for smartphone manufacturing, which is set to end in 2026. He added that original equipment manufacturers (OEMs) are awaiting the government’s decision.

“The government is always cognizant of what is important. Certain decisions were made five years ago, and those conditions may not be the same today. The government will make the right decision on what PLI 2.0 for smartphones could be,” Foulger said.