Apple supplier Wistron secures land to build new site in southern India

MUMBAI (Reuters) - A unit of Apple Inc's AAPL.O Taiwanese contract manufacturer Wistron Corp 3231.TW has won approval from Karnataka to build a new assembly facility in the south Indian state, signaling a potential expansion of iPhone assembly work in India.

FILE PHOTO: An iPhone is seen on display at a kiosk at an Apple reseller store in Mumbai, India, January 12, 2017. Picture taken January 12, 2017. REUTERS/Shailesh Andrade/File photo

The Karnataka state government has approved Wistron Infocomm Manufacturing India Pvt Ltd’s application for 43 acres of land, roughly 65 km (40 miles) from the tech hub of Bengaluru, according to a government document reviewed by Reuters.

Wistron will invest 6.8 billion Indian rupees ($105 million) to develop this land and manufacture smartphones, internet of things (IOT) products and bio-tech devices, the document said.

Wistron, in its proposal to the state government, said the new plant will create about 6,000 jobs.

“When discussions started, their (Wistron’s) requirement was 50-100 acres,” a senior government official told Reuters. “But we were not immediately able to provide all the land.”

The official, who declined to be named as discussions were not public, added the state had assured Wistron of meeting the company’s land requirements.

The expansion of manufacturing facility could mean a widening of Apple’s iPhone assembly in India as the U.S. tech giant has to pay steep duties on devices imported into the country.

Analysts see India - one of the world’s fastest-growing smartphone markets - as key to Apple’s ambitions for a bigger global market share as smartphone sales have slowed in more mature markets.

Wistron’s ICT Service Management Solutions unit currently assembles Apple’s low-cost iPhone SE model in Bengaluru. Wistron also does contract manufacturing work for a broad range of other electronics brands.

Apple and Wistron did not immediately respond to requests for comment.

Cupertino, Calif.-based Apple has, however, signaled its long-term commitment to Wistron’s Indian operations. In a report on supplier responsibility progress earlier this month it said it provides waste management training and has also introduced women’s health programs at the existing Bengaluru plant.

Boosting local assembly or manufacturing will also help Apple cut escalating labor costs in China, where its biggest contract manufacturer Hon Hai Precision Industry Co 2317.TW, widely known as Foxconn, makes a bulk of iPhones and iPads.

Reuters reported in January that Wistron was weeks away from finalizing a land deal in Bengaluru and may soon begin assembly of another Apple model.

The new site at the Narasapura Industrial Area, is located 50 km away from the Bengaluru International Airport. The site already houses the assembly operations of a number of firms like Honda Motorcycle and Scooter India, and Mahindra Aerospace.

($1 = 64.9525 Indian rupees)

Reporting by Sankalp Phartiyal; Editing by Euan Rocha & Shri Navaratnam