Depreciating rupee hits Taiwanese equipment makers

By Satnam Singh
Correspondent

Published: October 10, 2012 6:00 am ET

Related to this story

Topics Machinery, Molds/Tooling

KOLKATA, INDIA (Oct. 10, 11:15 a.m. ET) — Taiwan’s plastics machinery makers are worried about a 40 percent fall in their order books in India, one of their largest export markets, following this year’s sharp drop in the value of the Indian currency against the U.S. dollar.

Speaking at the Indplas 2012 show, held Oct. 5-8 in Kolkata, Taiwanese firms said the depreciation of the rupee has led to big drop in what had been full order books a year ago. But they are hopeful the currency will stabilize and Indian companies will resume capital investment that they have put on hold.

The Indian currency fell from 48.6 rupees to the dollar in early 2012 to 57.1 at the end of June, before recovering somewhat to its current level of almost 53 rupees to the American greenback.

‘‘We have exported a lot of machinery to the automotive industry in India, but due to the slowdown in the Indian automobile market from the beginning of 2012, orders have dropped by almost 40-50 percent from last year,’’ said Grace Lin, the Africa and India Manager for Tianan, Taiwan-based Huarong Plastic Machinery Co. Ltd.

Huarong exported 200 injection molding machines to India in the last three years, and has offices in Delhi, Pune, Ahmedabad and Bangalore. About 80 percent of its business is in the country’s automotive market. But the falling rupee has made its equipment more expensive for Indian firms, Lin said.

She said the company has also been hurt by the closing of Indian car maker Maruti-Suzuki’s plant in Manesar for almost three months, after violence broke out and workers burned down part of the factory.

“The vendors of Maruti-Suzuki have been forced to shut down their operations and stopped sourcing machinery from us,” Lin said.

The company is looking to new markets in India, including in-mold labeling and two-color injection machines, and also is supplying six machines to India’s Central Institute of Plastic Engineering & Technology (CIPET), the first by any Taiwanese company to an Indian government organization, she said.

As well, business slowed down in 2012 for AFTA Technology Co. Ltd., a subsidiary of large Taiwanese press maker Fu Chun Shin, which has been selling equipment to India’s automotive sector for 25 years, including 10 machines making components for automaker Tata’s Nano car, said Diana Sung, a manager for Pune-based AFTA.

‘‘We are waiting for the Indian currency to stabilize against the dollar,’’ she said.

Taiwanese equipment supplier Steady Stream Business Co. Ltd. estimates that business is down almost 60 percent this year as its customers in the automotive industry have put projects on hold, waiting for the rupee to rebound.

‘‘We are hoping the worst is over,’’ said Vice General Manager Kenny Chen.

The company, which supplies tooling, injection molding and equipment, is changing its strategy away from major cities like Mumbai, Delhi and Chennai to move deeper into the Indian hinterland.

‘‘We have now changed the strategy and shifted our focus to Tier 2 and Tier 3 cities,” Chen said.

That’s a switch mirrored by other Taiwanese companies, said May Chien, director of business development for Pilatus International Co. Ltd., the Taipei, Taiwan-based marketing agent for the Indplas show.

‘‘India is big market for us and it cannot be ignored,’’ she said. ‘‘Therefore, we are looking for newer markets in the country. Earlier, we used to be more focused on the plastics shows organized in the cities of Delhi and Mumbai. Now we are focusing on the other parts of India.’’

She said the eastern regions of India could be a big market for Taiwanese companies in the near future.

Taiwanese firms have also been helped by the Indian government decision to put anti-dumping duties of up to 174 percent on some types of injection molding machines imported from mainland China, Chien said.

‘‘We are working hard to maintain a good market for our machinery in India,” she said.

Reflecting growing business in eastern India, the Taiwan External Trade Development Council, a government backed non-profit trade promotion organization, plans to open an office in Kolkata next year, said Chie Yien Huang, India director for TAITRA.

Huang said trade between India and Taiwan had been on an upward trend for five years before it suffered in 2012 because of the rupee depreciation and the recession in the European Union.

India was Taiwan’s third-largest market for plastic and rubber machinery exports in 2011, with Indian companies importing $95 million worth of equipment, up seven percent from 2010, Huang said.

TAITRA brought 11 exhibitors to the Indplas show.


Comments

Depreciating rupee hits Taiwanese equipment makers

By Satnam Singh
Correspondent

Published: October 10, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

West Coast ports dispute impacts machinery imports

February 27, 2015 5:00 pm ET

Asian machinery companies got caught in the West Coast ports labor dispute — causing some headaches to get equipment ready for NPE 2015.    More

Image

Wittmann, Illig among machinery firms boosting investments in India

February 27, 2015 1:34 pm ET

GANDHINAGAR, INDIA — Expected growth in the Indian plastics market is leading several global machinery firms to make investments there,...    More

Image

NFM Welding Engineers opens direct office in China

February 26, 2015 2:05 pm ET

MASSILLON, OHIO — Extrusion equipment manufacturer NFM Welding Engineers Inc. has opened a sales office in Dalian, China.    More

Image

Amut buys Dolci and Bielloni

February 25, 2015 3:41 pm ET

Amut SpA, the Novara, Italy-based maker of extruders, thermoforming machines and plastics recycling equipment, has acquired the Italian company that...    More

Image

Extrusion equipment makers adapting to market demands

February 25, 2015 2:11 pm ET

Extrusion equipment suppliers strive to meet new needs of the marketplace. While they continue upgrading speed, output and quality, they're also offer...    More

Market Reports

Flexible Packaging Trends in North America

North America represents about 30 percent of the global consumption of flexible packaging. Annual growth in this region is forecast at 4 percent during the next 5 years.

For more insight on growth opportunities, drivers of growth and the outlook for 2015, download this report.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events