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Vikas Gupta

Managing Director

PG Electroplast

2 Ratings

CHALLENGES IN ELECTRONICS SECTOR Keep investing in R&D and product development aggressively

Mar 29, 2022

...mentions Vikas Gupta, Managing Director, PG Electroplast – an electronics manufacturer and plastic moulding services provider – in his interview with Anvita Pillai. He discusses the idea behind opting for the PLI scheme, challenges in the electronics sector due to COVID and more. Excerpts...

Electroplast’s subsidiary, PG Technoplast, recently received approval under the PLI scheme for white goods. What was the idea behind opting for the scheme? What will the funds be channelled into?

The PLI scheme came to us while we decided to expand and backwards integrate our AC manufacturing facilities. The opportunity to contribute to the nation’s vision of an Aatmanirbhar Bharat and to Make in India for the world was something we felt compelled to capitalise upon.

The scheme has annual targets for incremental capital expenditure and incremental sales starting in FY22 and FY23, respectively. We are quite confident that we will achieve both the investment and sales target comfortably and meet all the prerequisites for the incentives. We shall be passing on some of the benefits to our customers and using the rest of them to fulfil our capital expenditure commitments under the scheme. Electroplast’s subsidiary, PG

The consumer electronic sector has been facing unending challenges, from supply chain issues to high freight costs. Can you elaborate on some of the biggest hindrances faced by your organisation?

The supply chain-related issues have been one of the biggest challenges this year. China cracking down on electricity consumption and tightening emission standards has led to sharp capacity reductions for many suppliers. This, coupled with high freight costs, has not only led to margin pressures but has also impacted our production & deliveries. The repeated resurgence of COVID-19 has sown fears across the channel, with channel partners being unwilling to take on new inventory.

Shortage of semiconductor chips has hit the electronics and automotive sector hard. How is Electroplast coping?

The verticals we primarily operate in have managed to escape relatively unscathed. The fallout from the chip shortages is more prominent in the automotive, tablets & computers and lighting industries. We haven’t been hit very hard and expect to make it out without too many issues.

There were plans for your organisation to invest ₹100 crores in expanding your Ahmednagar plant. How far along are you with the project?

Our subsidiary PG Technoplast is setting up a greenfield fully integrated AC manufacturing facility adjacent to PG Electroplast’s existing unit in Supa, Ahmednagar. We are on track to meet the capex budget of this year. It is expected to be the largest single-location manufacturing facility in the contract manufacturing space. The plant is being started in phases, with operations having already begun for some components.

What new development and changes are in the pipeline for PG Electroplast in 2022?

We will keep investing in R&D and product development aggressively and expand our range of ODM offerings across all our product verticals. We are also planning to augment our washing machine capacities with a vision for good growth. Additionally, we are back in the TV assembly business this year. We will be beginning the construction for the second phase of the PG Technoplast plant, which will double our manufacturing capacities for ACs and cross-functionalise the Supa unit to manufacture more products.

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