By Fakir Balaji, IANS
Bangalore : US-based Fortune 500 company Avnet Inc, a $16-billion electronics marketing and technology major, is scouting for design and product firms in India for strategic acquisitions and to expand its presence in the subcontinent.
“With India emerging as the fastest growing market in Asia for us, we are on the lookout for small and medium design and product firms that would complement our components and add value to our customers’ requirements,” Avnet’s electronics marketing president Harley Feldberg told IANS in an interview here.
Avnet is one of the world’s largest value-added distributors of semiconductors, interconnect, passive and electro-mechanical components to global customers, including original equipment manufacturers (OEMs), electronic manufacturing services (EMS) providers and small-to medium-sized businesses.
Avnet’s technology solutions subsidiary, which specialises in enterprise computing products and embedded systems, provides associated design-chain and supply-chain services.
Entering the nascent Indian electronics market in 1998-99 by acquiring Max Electronics for an undisclosed amount, Avnet’s sales revenue in the country crossed $100-million last fiscal, registering over 50 percent year-on-year growth.
“As a dominant player in the Indian market, we cater to about 300 customers across the country, providing design services, integrated logistics and supply chain support, demand creation and offering expertise in product development to packaging,” Feldberg said.
With global OEMs and EMS providers making a beeline for India to grab a share of the bigger pie of the burgeoning telecom, consumer, automotive and industrial sectors, Avnet is betting on the domestic market to consolidate its presence and sustaining growth momentum.
“We are seeing a paradigm shift in the global electronics market, with record growth in the Asia-Pacific region, led by China and India. The convergence of information and communications technologies (ICT) and globalisation has made innovations and manufacturing shift to east from the west gradually.
“Apart from local consumption in India and China growing at rapid levels and beckoning global players to set shop, the availability of a huge talent pool in chip-design, product development and engineering services have made India a global destination for cost-effective outsourcing and off-shoring,” Feldberg pointed out.
According to Avnet Asia-Pacific president Stephen Wong, the share of marketing and distribution players in the $300-billion global semiconductor and electronics industry was $65 billion in 2006-07, with the Asia-Pacific region accounting for one-third of the sales, thanks to the unprecedented economic growth in China and India.
Having grown by acquiring about 60 firms worldwide over the last 10-15 years, Avnet finds the prospects of a similar growth (through buy-outs) in the subcontinent bright due to the presence of design houses, product firms and component manufacturers/suppliers in large numbers.
Though Feldberg and Stephen declined to name firms that could have potential for buyouts or were worth investing for majority stake, the duo said the company was evaluating some of them from synergistic and marketing or distribution point of view.
“It is premature to share details as we are still studying the market demand for domestic consumption and exports. We believe the acquisition route will be a win-win strategy for Avnet and Indian firms, as both of us will be able to leverage the advantages of a growing local market and our global presence,” Stephen noted.
To capitalise on its market leadership in distribution and in providing technology solutions, the subsidiary is set to double its design engineers team in Bangalore and the country sales force for training and support services to its growing customer base.
“The design team provides a range of services, including turn-key solutions, reference designs, evaluation boards and software support,” said Avnet India head Ramani Sundaresan.
The subsidiary has also tied with independent design houses to develop projects in specialised area or vertical markets such as network solutions, consumer electronics, audio and visual products and digital graphics.
“We will continue our commitment to the India market and focus on delivering what we call ‘support across the board’, enhanced services to support our customers in the region,” Stephen added.