Epack is building a large manufacturing facility in Sri City, Andhra Pradesh, to produce air conditioners, refrigerators, washing machines and small domestic appliances under the Hisense brand. The factory will be set up by the newly created subsidiary, Epack Manufacturing Technologies where Hisense will acquire the stake.
"Hisense is in talks to buy up to 26% equity in Epack Manufacturing Technologies," Epack Durable's managing director Ajay DD Singhania told ET. "They have big plans for India and want to even export. There will be a component vendor park too. We have applied for 80-100 acres for the land in Sri City and total investment plans are still under finalisation," he added.
"Hisense is in talks to buy up to 26% equity in Epack Manufacturing Technologies," Epack Durable's managing director Ajay DD Singhania told ET. "They have big plans for India and want to even export. There will be a component vendor park too. We have applied for 80-100 acres for the land in Sri City and total investment plans are still under finalisation," he added.
Singhania did not disclose Epack's valuation or the proposed investment which the subsidiary will make.
Hisense joins Chinese companies such as carmaker MG Motor, smartphone maker Vivo and appliance manufacturer Haier who have or are in the process of partnering with Indian entities. This follows the government's nudge to the Chinese to forge equity alliances with local companies for expanding their presence in the country.
Extra $1B Revenue
Hisense plans to soon seek foreign direct investment (FDI) approval for the proposed deal, an industry executive said.
Investments from companies in countries sharing land borders with India such as China need a multi-department clearance from the Centre as per Press Note 3 norms drawn up in 2020. The Indian government began scrutinising investments by Chinese firms following worsening of bilateral ties after a deadly border clash in June 2020 between the two armies.
A stake purchase is vital for Hisense since it wants to bring its proprietary technologies, design, moulds and production capabilities from China for the Indian manufacturing venture. Both the partners signed the contract manufacturing agreement in October, which Hisense now wants to deepen by acquiring the stake.
Hisense did not respond to email queries.
A manufacturing facility as planned by Hisense will entail a total investment of ₹800-1,000 crore in phases, as per industry estimates.
Epack, which clocked sales of ₹1,419 crore in FY24, is India's second largest contract manufacturer for ACs, catering to brands like Daikin, Voltas, Panasonic, Haier and Blue Star. Amber Enterprises is the largest. Epack is currently converting one of its existing plants with a ₹250 crore investment to kick-start AC production for Hisense, which is expected to get operational by June-July.
Singhania said Epack expects additional revenue of nearly $1 billion over the next five years from the partnership with Hisense.
Currently, Hisense sells televisions in India through ecommerce platforms. These TVs are produced by contract manufacturers Dixon Technologies and Bhagwati Products, owned by Micromax. Hisense has also partnered with Amber Enterprises for ACs. It is now foraying into offline retail sales.
An industry executive said the Chinese company has plans to ink a similar equity arrangement for television manufacturing, but those plans can proceed only after securing FDI approval for the Epack deal. Minority equity partnerships between Chinese and Indian companies is fast turning into a favoured route for Chinese investments in India.
Chinese electronics manufacturer Haier had last year applied to the Indian government to infuse Rs 1,000 crore for a new factory, but the proposal is still awaiting clearance. Haier India is now planning to sell up to 49% stake in the company to an Indian partner in an effort to secure approval for its manufacturing investments.
A stake purchase is vital for Hisense since it wants to bring its proprietary technologies, design, moulds and production capabilities from China for the Indian manufacturing venture. Both the partners signed the contract manufacturing agreement in October, which Hisense now wants to deepen by acquiring the stake.
Hisense did not respond to email queries.
A manufacturing facility as planned by Hisense will entail a total investment of ₹800-1,000 crore in phases, as per industry estimates.
Epack, which clocked sales of ₹1,419 crore in FY24, is India's second largest contract manufacturer for ACs, catering to brands like Daikin, Voltas, Panasonic, Haier and Blue Star. Amber Enterprises is the largest. Epack is currently converting one of its existing plants with a ₹250 crore investment to kick-start AC production for Hisense, which is expected to get operational by June-July.
Singhania said Epack expects additional revenue of nearly $1 billion over the next five years from the partnership with Hisense.
Currently, Hisense sells televisions in India through ecommerce platforms. These TVs are produced by contract manufacturers Dixon Technologies and Bhagwati Products, owned by Micromax. Hisense has also partnered with Amber Enterprises for ACs. It is now foraying into offline retail sales.
An industry executive said the Chinese company has plans to ink a similar equity arrangement for television manufacturing, but those plans can proceed only after securing FDI approval for the Epack deal. Minority equity partnerships between Chinese and Indian companies is fast turning into a favoured route for Chinese investments in India.
Chinese electronics manufacturer Haier had last year applied to the Indian government to infuse Rs 1,000 crore for a new factory, but the proposal is still awaiting clearance. Haier India is now planning to sell up to 49% stake in the company to an Indian partner in an effort to secure approval for its manufacturing investments.
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