Avalon Technologies Ltd, a listed Indian electronics manufacturing services (EMS) company, and Germany-based Zollner Elektronik AG have formed a joint venture (JV) to manufacture printed circuit board assemblies (PCBA), box-build and system integration products in India.
The JV will serve customers across geographies in sectors including healthcare and life sciences, test and measurement, rail and other industrial verticals.
Under the agreement, Zollner will initially hold a 51% stake, while Avalon will own 49% of the JV.
Beginning three years after commercial production starts at the JV’s manufacturing facility, Avalon will have an option, subject to certain conditions, to acquire an additional 2% stake. This would increase its holding to 51%, making Avalon the majority shareholder.
The ownership structure allows Zollner to lead the venture during its initial phase, leveraging its manufacturing and engineering expertise, while providing Avalon with a defined pathway to increase its ownership as the business matures.
Combining India manufacturing with global capabilities
The partnership brings together Avalon’s established manufacturing capabilities, supply chain relationships and operating footprint in India with Zollner’s engineering expertise, international customer relationships and end-to-end product lifecycle capabilities.
Zollner has more than six decades of experience serving strategic and high-reliability industries, covering capabilities from R&D and engineering to production and after-sales services.
The partners aim to build a differentiated electronics manufacturing platform in India, accelerate scale and support global customers seeking more resilient and diversified supply chains.
JV to manufacture PCBAs and system integration products
The JV will manufacture PCB assemblies, box-build products and system integration products in India.
Initially, the venture will focus on serving the India operations of established customers.
Avalon will also supply the JV with several of its core capabilities, including cable wiring and harnesses, magnetics, plastics, sheet metal and machining.
This is expected to expand Avalon’s participation across the electronics manufacturing value chain while creating an additional recurring revenue opportunity as the JV scales.
Strategic benefits for customers
For customers, the JV is expected to provide access to India-based manufacturing, localisation support and greater proximity to their operations in the country.
The partnership also comes as global manufacturers increasingly seek to diversify supply chains and establish manufacturing capabilities closer to end markets.
Zollner gains immediate India manufacturing access
For Zollner, the JV provides immediate access to manufacturing capabilities in India for its global customers’ operations in the country.
The partnership gives Zollner an established local manufacturing platform and supply chain network without the multi-year lead time typically required to build a manufacturing ecosystem from the ground up.
Avalon brings more than 25 years of experience in the Indian EMS industry, strengthening Zollner’s ability to scale its presence in the country.
Avalon expands into new verticals
For Avalon, the JV represents an expansion of its existing high-mix, high-complexity manufacturing model.
The company will retain its focus on complex products, long product lifecycles and long-term customer relationships while moving into higher levels of technical complexity.
The venture also opens opportunities for Avalon to serve global customers more extensively and provides entry into healthcare and life sciences and test and measurement, two new verticals for the company.
Zollner sees India as strategic growth market
Zollner Elektronik AG Member of the Managing Board Markus Aschenbrenner said India is a highly dynamic market, both as a growing technology ecosystem and as an important component of customers’ global strategies.
“With the Zollner Avalon JV, we are combining Avalon’s strong local presence and expertise with Zollner’s global capabilities, technological know-how and more than 60 years of experience in EMS,” he said.
Aschenbrenner said Zollner views the JV as a long-term commitment and looks forward to developing the business jointly with Avalon.
Avalon eyes long-term growth
Avalon Technologies Chairman and Managing Director Kunhamed Bicha said the JV is strategically significant for Avalon as it expands customer access, opens new verticals and strengthens its capabilities in highly complex manufacturing.
He said the partnership is consistent with Avalon’s strategy of focusing on high-mix, high-complexity products, long product lifecycles, trusted customer relationships and disciplined, profitable growth.
“Zollner brings more than six decades of engineering expertise, global customer relationships and full product lifecycle capabilities. Avalon brings an established India manufacturing platform, a strong local supply chain and integrated capabilities across the value chain,” Bicha said.
He added that the partnership could provide global customers with a faster and more reliable path to manufacturing in India, with strong long-term potential for both companies.