Debate continues in India over Chinese press imports

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: February 14, 2012 6:00 am ET

Related to this story

Topics Mergers & Acquisitions, Public Policy, Injection Molding, Machinery, NPE 2012

NEW DELHI (Feb. 14, 12:50 p.m. ET) — Chinese plastic equipment maker Welltec Machinery Ltd. and its Indian partner seem to have found a successful way around the Indian government’s 2009 decision to levy steep tariffs on Chinese injection molding machines.

The company opened a factory in India last year, and officials say they are now expanding it to better tap into the country’s growing market.

Welltec’s investment with Jishu Hozen Machines Pvt. Ltd. in Ahmedabad is one of the more concrete examples of how Chinese companies have changed their approach to India, after the 2009 anti-dumping duties imposed tariffs of up to 174 percent on many Chinese molding machines.

Judging by interviews at the recent Plastindia trade show, those tariffs effectively froze a lot of Chinese firms out of the market, and played a part in improving the financial health of India’s domestic press manufacturers. The duties are scheduled to come up for a review next year, industry officials said.

The tariffs were a key reason Welltec gave for partnering with Jishu Hozen. Their investment has so far paid off, the partners said, with plans to double the size of their factory in the next few months, to 3,000 square meters, and increase production to more than 100 molding machines a year.

Other Chinese firms have changed their India strategies as well.

China’s largest press maker Haitian International Holdings canceled its plans for a joint venture in India and instead built in Vietnam.

Like other Chinese press makers, Haitian was at Plastindia with its all-electric machines, since electrics and machines with clamping forces of more than 1,000 metric tons are exempt from the tariffs.

Haitian’s Zhafir Plastics Machinery Ltd. subsidiary, which makes electric presses in Ebermannsdorf, Germany, plans to open a sales and service office in Mumbai in spring, its first regional office outside its Germany and China factories.

The Welltec joint venture, JH-Welltec Machines (India) Pvt. Ltd. sold 50 presses in the first nine months of operation, meeting its target, H.R. Nagadia, director of marketing, said in an interview at Plastindia, held Feb. 1-6 in New Delhi.

JH-Welltec plans to open sales offices in major Indian cities this year, including New Delhi, Mumbai, Chennai, Bangalore and Kolkata, he said.

Wilson Wong, general manager for Welltec, which is part of Hong Kong-based Cosmos Machinery Ltd., predicted the company would sell 250 presses a year in India in several years.

“We strongly believe that once we open our sales offices throughout India, the sales will go higher,” he said.

Nagadia said JH Welltec has gotten repeat business from customers in India, mostly by selling locally-made versions of Welltec’s energy-saving machines. It does not plan to export from India, at least until volumes get higher, because of the domestic demand, Wong said.

The India facility is more than assembly factory, sourcing more than 50 percent of its components locally, Nagadia said.

India’s press market is growing, and while precise figures are not available, the country’s major producers are estimated to make about 4,000 molding machines a year, with growth estimated at about 15 percent a year.

If you add in the smaller Indian firms and imports, including a substantial number of used machines from Europe and other developed markets, Indian companies probably buy about 8,000 injection presses a year, industry officials said at Plastindia.

It’s a much smaller market than China, but the potential for growth in India has drawn Chinese firms like Welltec, and prompted the Indian government to enact the 2009 tariffs to help its own plastic machinery industry.

Nagadia expects the Indian government to extend the tariffs.

“I think the government will continue it, because they must have seen some positive results from the anti-dumping,” he said. “The Indian suppliers have seen their volumes increase.”

Some Indian companies in the injection molding sector, however, remain unhappy with the tariffs on the machines they buy.

“As an industry, we are looking forward to the removal of the tariffs,” said Raju Desai, director of injection molder Jyoti Plastic Works Pvt. Ltd. in Mumbai, and one of India’s better known processing industry executives.

Desai serves on the managing committee of the Plastindia Foundation, the country’s umbrella trade organization, although he was not speaking for the group, which does not have a position in the debate.

He said the tariffs initially raised prices about 10 percent on molding machines in India, but they have since dropped back down. JH-Welltec’s Nagadia said he also believed the anti-dumping duties increased prices and lead times in India’s market.

Desai said since the tariffs came into effect, the Indian machinery companies have improved their competitiveness. He also believes the government will retain the anti-dumping duties.

“It is going to stay,” Desai said. “I don’t think the anti-dumping will go away.”

One of India’s largest press manufacturers, L&T Plastics Machinery Ltd. in Chennai, said it was not clear if the Indian government would extend the duties after the review next year.

It’s a delicate point between the industries of the two countries. Chinese government officials have publicly questioned the duties in speeches at Indian plastics trade shows, and Chinese plastics groups continue to raise the issue with their Indian counterparts.

India’s government argued that its smaller machinery industry was being overwhelmed by Chinese equipment being dumped at unfair prices, while the Chinese responded that they were simply more efficient and were being unfairly targeted.

“The Chinese still lobby the government and we also equally are lobbying the government,” said L&T CEO P. Kailas. “We have to discuss that in 2013. Today it is too early.

“We will definitely approach the government to extend it but it is purely the government’s decision, and how the Chinese government and Indian government [discuss], we do not know about that,” he said.

Kailas has noticed Chinese machines coming in from Vietnam, where Haitian set up a factory last year.

He said that molding machines from Vietnam, the Philippines and Malaysia can be imported into India duty-free, because of trade agreements India has with those countries, but exports of Indian machines to those markets have to pay duties.

“It should be reciprocal,” Kailas said. “Right now I export machines to their country [and] it is not zero duty, but they import to my country, it is zero duty.”


Comments

Debate continues in India over Chinese press imports

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: February 14, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

Cambro investing $30.4 million in new N.C. injection molding plant

April 18, 2014 2:36 pm ET

Foodservice products manufacturer Cambro Manufacturing Co. Inc. plans to set up a satellite production and distribution operation in Mebane, N.C., to ...    More

Image

Producers urge booming Brazilian housing market to use EPS

April 18, 2014 1:08 pm ET

Leaders in Brazil's plastics industry are asking lawmakers to mandate the use of expandable polystyrene (the raw material for expanded EPS) in new...    More

JM Eagle reopens shuttered Colorado plant with 8 PVC lines

April 18, 2014 1:02 pm ET

JM Eagle has reopened its Pueblo, Colo., plant with eight PVC pipe extrusion lines back in operation following an 18-month shutdown.    More

Image

Increased orders prompt Georg Utz to add capacity, equipment in Indiana

April 18, 2014 12:20 pm ET

Plastic totes and tray orders have picked up to the point where manufacturer Georg Utz Inc. has added machines, silos and material feed systems to...    More

PolyQuest spins off FiberQuest unit

April 18, 2014 10:14 am ET

PolyQuest Inc. has spun off its FiberQuest unit — which distributes polyester staple fibers and cotton — as a separate company.    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report provides analysis and discussions of economic and political conditions, market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as strategies being implemented by thermoformed packaging companies. In addition, there are reviews of 25 leading thermoformers in the packaging segment, assessing their growth initiatives and performance metrics over 10 years.

Learn more

Automotive Market Review and Outlook 2014 The Americas

This 75-page report features in-depth analysis of the automotive industry for the Americas. It includes discussions of market trends, legislative/regulatory activity impacting production and threats as well as design strategies being implemented by the major automakers. Detailed charts and data tables outline North American automotive production over the last five years.

Learn more

Plastics Building & Construction Market Review and Outlook 2014 with MS Excel chart data

This report provides in-depth analysis of the plastic building and construction market for North America, including discussions of trends, opportunities, threats and the latest developments in construction trends that impact plastics processors.

Learn more

Upcoming Plastics News Events

May 6, 2014 - May 8, 2014Plastics in Medical Devices 2014

May 12, 2014 - May 12, 2014Plastics News Brazil Pharma Summit

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 3, 2015 - February 7, 2015Plastics News Executive Forum 2015

More Events