Sterlite wants land for LCD panel factory

Anil Agarwal’s Sterlite Technologies is looking for land, possibly in Madhya Pradesh, for a factory to make LCD panels, say sources.

The panels would go for television sets, mobile phones and other consumer electronic devices, top industry sources said.

Sterlite executives were not available for comment. Agarwal had indicated a month before that they were keen to invest ~40,000 crore in the LCD plant. Sterlite currently makes optical fibres for telecom and internet services. The LCD unit will see it foray into supplying components for consumer electronic companies. The latter market is expected to grow with the government’s Make in India and Digital India programmes.

The lack of domestic manufacturing in consumer electronics and appliances has been blamed for the lack of scale, incentives and component supplier base. Consumer electronics and durables are the second largest item on the country's import bill after oil. A recent E&Y report says India's consumer electronics and appliances market will touch $20.6 billion (or ~1.23 lakh crore) by 2020, growing at a compounded annual rate of 9.7 per cent. The current market size is estimated at $10 bn (or ~60,000 crore). To encourage manufacturing, the central government had recently announced it was extending the Modified Special Incentive Package Scheme (MSIPS) for five years, streamlining the process and covering more product categories. First introduced in 2012 as part of a National Policy on Electronics, it provides for 20-25 per cent subsidy on capital expenditure for manufacturers of electronics and consumer durables. The move will trigger a wave of investment, experts say, much more than the ~15,000 crore of proposals the scheme got in the first leg between 2012 and 2014. Of these proposals, 16 projects totaling ~2,230 crore were approved by the government, industry sources said.

It is unclear if Sterlite would route its investment in the LCD panel unit through M-SIPS but industry sources say this is likely.

Some other firms such as Panasonic, Videocon and Haier are also expected to tap M-SIPS as they look at increasing their manufacturing from India. So, too, for mobile phone makers such as Lava, Karbonn, Micromax and Intex that are increasingly turning to India as China becomes more economically unviable for them to produce there.