Hyderabad, June 26 (IANS): Indian mobile phones-maker Celkon on Friday launched its first state-of-the-art manufacturing facility in Medchal near here. This is the first mobile making unit to come up in Telangana, which has already announced plans to set up a cluster for handset manufacturers.

The manufacturing unit with 30,000 square feet area is ready to start production from Day One.

The unit will start with four production lines which will deliver a production capacity of two lakh units per month. The production lines will be increased to 12 and the production is expected to touch five lakh units per month within the next quarter.

Celkon Mobiles chairman and managing director Y. Guru said they aim to reach a capacity of 10 lakh handsets a month. Additionally, the facility will also house a 10,000 square feet warehouse for raw materials and a 5,000 square feet warehouse for finished products.

The facility will manufacture entry-level and mid-level smartphones and feature phones at the moment. Around 60 percent of the mobile phones manufactured in the facility will comprise of feature phones and the rest will be smartphones. The facility is International Standard Organisation certified.

Guru said Celkon will invest Rs.200 crore in the next three months in the facility. He, however, did not divulge details about the investment made so far.

The manufacturing unit will employ 500 people comprising skilled technicians and will eventually scale up to 1,200 people.

He said Celkon will also look at setting up the second phase of the facility. However,it is yet to be decided whether the second phase will be independent or within the manufacturing cluster announced by the government.

Currently Celkon has a sales of 7 lakh handsets a month and is targeting 10 lakhs a month.

"With the production happening in India the consumers will receive a 7 to 8 percent cost benefits on the handsets initially," he said.

Celkon is amongst the first ones in India and the first player in South India to have started production in India.

"We envision the country to become a hub for manufacturing cutting edge devices and have been actively pursuing the cause for the last few years," he said.

State Information Technology Minister K. Tarakarama Rao, who inaugurated the facility, said the government was encouraging manufacturing companies and developing manufacturing hubs in and around Hyderabad.