How Hikvision’s new manufacturing facility in India could bolster growth
Source: Prasanth Aby Thomas, Consultant Editor
On October 1, about a 45-minute drive away from the city of Mumbai along the western coast of India, several security industry professionals, a government policy think tank’s representatives, and media gathered at a large newly-built industrial complex. The occasion was the launch of Hikvision’s first factory in India, under its India joint venture, Prama Hikvision India.
The launch was significant to the security industry both in India and abroad. To India, this was a venture in line with the government’s initiatives to encourage local manufacturing. Prime Minister Narendra Modi
, who came back to power for a second term recently with a sweeping victory, had put a lot of emphasis on “Make in India”, as a solution to boost the economy and create jobs.
From the Indian perspective
, this is a significant boost to the government of India’s Make in India program and it will have a positive impact on the Indian surveillance market. Speaking to a&s, Ashish Dhakan, MD and CEO, Prama Hikvision India, pointed out that although the company has production units in countries like Brazil and Russia, they are mainly aimed at meeting the local market requirements, or in some cases, to meet the local regulatory requirements. The India factory, likewise, aims to manufacture enough products to meet the growing local requirements in the initial phase.
Investment and target
Prama Hikvision India plans to invest about INR 500 crore (about US $75 million) in the next three years to develop the factory to cater to the domestic and overseas requirements.
“We have so far invested Rs 500 Cr in this new plant with further investment commitments in the pipeline to ramp up productions, local R&D, upskilling, and giving back to the communities,” Dhakan said. “This new unit has an installed capacity to make 1.5 million cameras per month. It has nine lines that do surface mount technology level manufacturing and enables us to make electronic chips and cameras locally instead of importing them.”
Such a large-scale production target will help the company to provide India-made cameras to cater to the local requirements faster. Dhakan explained that they will soon start the next phase of the expansion of manufacturing facilities in other states.
“Employing over 2000 skilled and semi-skilled employees, the brown-field facility is spread over 12 acres of land comprising end-to-end production capabilities which will also support a localization target of 50 percent initially and gradually transitioning to 100 percent localization in the next 18 months,” he added.
What this means for the Indian market and India
Prama Hikvision’s largest video surveillance equipment manufacturing facility in India is expected to be a game-changer for the Indian security market and its professional security community comprising of dealers, distributors, system integrators, and the end user community.
Bringing manufacturing to India would help Hikvision manage the costs of manufacturing and continue to offer its products at a competitive rate to its customers across India. Dhakan pointed out that India was an ideal place to set up a manufacturing unit because of a sense of entrepreneurship in the country.
“In India, unlike many other countries, there are entrepreneurs and system integrators, who drive the market growth,” Dhakan said. “The entrepreneurs understand the nuances of business, which sometimes go beyond the realm of OEMs.”
Manufacturing in India will also add cost competitiveness and other tangible benefits to Hikvision’s products, Dhakan added. Local manufacturing under the "Make in India" program was the key motivation to open a manufacturing plant in India.
“Definitely, this local manufacturing initiative would bolster trust among end-users,” Dhakan said. “We are selling hundreds of thousands of cameras per month. In India, security professionals continue to support us based on trusted relationships. Our products are available in the market for everyone to test and see for themselves. We are making the video surveillance cameras in India to build the trust, grow the business and show our commitment to service excellence.”
In short, manufacturing in India is part of a larger strategy that Hikvision envisions. Apart from being able to cater to India’s fast-expanding security market and being able to take advantage of local government policies, manufacturing in India reinforces trust and adds competitive advantages.
As far as customers and markets are concerned, it would be interesting to see how this initiative by Hikvision would have an impact on the Indian security industry. India is a complex market with a diverse customer base and local manufacturing is a great way to reach out to them and their needs.