European electronics manufacturing services leader Zollner Elektronik AG (Zollner) and Indian EMS company Avalon Technologies announced their collaboration to establish a joint venture (JV) for the production of advanced electronics, such as Printed Circuit Board Assemblies (PCBA), box-build, and system integration products.

Reports indicate that the JV's manufacturing plant is planned for Tamil Nadu, with Avalon recently signing a ₹1,000 crore investment MoU with the Tamil Nadu government and securing a sizable land area in Oragadam close to Chennai. The investment made by the two firms in the JV is still not revealed.

According to the JV agreement, Zollner will start with a 51 percent stake while Avalon will possess 49 percent of the JV. Starting three years after the launch of commercial production at the production site, Avalon will have the option, contingent on specific conditions, to obtain an extra 2 percent stake, increasing its ownership to 51 percent and establishing it as the majority shareholder in the joint venture, as stated by the company. The JV will primarily concentrate on supporting the operations in India for existing customers.

“This arrangement enables Zollner to spearhead the JV’s initial operations, leveraging its manufacturing and engineering expertise, while providing Avalon a distinct pathway to boost its ownership as the business evolves,” Avalon states.

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Having more than 25 years in manufacturing, Avalon offers a complete range of products and solutions, from printed circuit board design and assembly to comprehensive box build of electronic systems. It also possesses complete manufacturing facilities in the United States.

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Avalon states it will contribute its key competencies like cable wiring and harnessing, magnetics, plastics, sheet metal, and machining, among others, to the partnership, which will cater to clients in various regions across sectors such as Health Care & Life Sciences, Test & Measurement, Rail, and other Industrial areas.

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“This JV is strategically significant for Avalon. It expands our access to customers, opens new verticals and advances our capabilities in highly complex manufacturing. 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,” Kunhamed Bicha, Chairman and Managing Director, Avalon Technologies Limited says.