NEW DELHI: US-based contract manufacturer Flex will invest about Rs 62 crore towards creating capacity for Huawei in its Chennai plant, even as it looks to increase business from India by diversifying into internet of things (IoT), wearables and other segments including automotive, instead of relying on telecom equipment alone.

The company, which started operations in India in 1996 and has invested over 'couple of $ 100 million' since, has kept aside 100 acres land to scale up operations as it gets more contracts from local players in mobile phone and other industry verticals, top executives at the company told ET.

"If you look at carrier spend globally, it's going flat to down, and most of the traditional spend even from carriers has gone towards data centre," said Jeff Reece, head of Flex Telecom segment.

"We're not trying to decrease our revenue in that area (telecom) but what we are trying to do is increase other areas to diversify such as automotive, aerospace defence, medical, industrial, a lot of technology is emerging in IoT, wearables etc," he added, highlighting some of the 12 segments, each of which makes up over a billion dollars in business globally for the company.

People familiar with the company's investment plans said that Flex, earlier known as Flextronics, has invested $62 million in the Chennai facility so far and will scale up the investment by 15% or $9.3 million (Rs 62 crore) for Huawei's phone manufacturing plans.

Flex has dedicated capacity of 3 million units a year for Huawei, from a total of 10 million at its Chennai plant where it also makes smartphones for Lenovo and Motorola. Production from the facility is set to start making Honor phones from October first week. The contract electronics maker is opening up 45-70 exclusive service centers in India, and is hiring around 1500 new employees to support production and after sales functions, to add to its existing workforce of 10,000.

Flex considers India an important market and expects more manufacturing contracts to come from new mobile phone players. Executives said that the company's ability to quickly scale up production, besides after sales service and logistics back-end that will offer it an edge over other manufacturers.

"We have been strategically investing and developing over the last few years from services standpoint to go to the market with manufacturing, which is the differentiation. Nobody else is not doing anything like this in India," Pat Ring, senior vice president at Flex said.

The company has four main facilities that engage in services including Bangalore, Gurgaon, Mumbai and Kolkata, and it also operates stocking locations for customers that aid in supply to retailers and distributors.

SOURCE: ET Telecom