Wal-Mart, the world’s largest retail chain that sources more than $5 billion worth of goods from India, may soon bank on Indian expertise to keep track of its products on the shelves.
Radio Frequency Identification (RFID) products, which are used by large retailers to monitor sales, will now be manufactured from India.
Gemini Communications, a Chennai-based technology company, has recently set up South Asia’s first RFID manufacturing plant in Chennai. China and Taiwan have the maximum number of RFID plants in the world.
In 2004, retail giant Wal-Mart had made the use of RFID mandatory for its 1,500 stores and suppliers across the globe.
Indian software companies such as TCS, Wipro and Patni Computers have been developing software for RFID. Wipro, which manufactures RFID designs for German retailer Metro, has said RFID will be a focus area in the future.
The Chennai plant will manufacture the RFID range of readers, antennas and tags that giant retailers and pharmaceutical companies deploy to manage their inventories for saving costs.
The plant has the capacity to manufacture 10,000 RFID tags in an hour and currently the plant is utilised around eight hours a day. “We utilise only 40-50 per cent of our capacity and as business grows, we will see more capacity utilisation,” said R Ramkumar, CEO, Gemini Communication.
Gemini, which has started getting export orders from Southeast Asian countries, the Middle East and Europe, has chosen Chennai due to the abundant availability of quality manpower in the state.
This is the first instance of these products being manufactured out of India.
“We have seen chip fabrication units and mobile phone assembly going to Chennai, but if RFID manufacturing achieves scale, this could put India in the high-end hardware manufacturing segment,” says Vinod Agarwal, CEO of chip-fabrication maker SemIndia.