For its first foray into the Asian market, Eagle-Picher Fluid Systems Ltd. has formed a 50-50 joint venture with Imperial Auto Industries Ltd. to make plastic fuel assemblies in India.
The companies will open a manufacturing plant by March 1998 in Puna, India, to produce nylon monolayer tubing for vehicle fuel systems. The 20,000-square-foot plant initially will employ about 20 and be located at an existing fuel-line assembly plant operated by Imperial Auto, a fluid-systems parts producer, based in New Delhi, India.
The companies plan to renovate the plant, which now makes metal and rubber fluid-handling systems, by adding a tubing extrusion line and metal-bending equipment. The plant will fabricate fuel bundles by forming the metal to the tubing, primarily made from nylon 11 and 12.
The renovation project is estimated to cost about $800,000 over three years.
The plant will help Eagle-Picher test the waters in a market where few fuel-handling suppliers have set up shop, said Jeffrey Armiger, managing director of Eagle-Picher Fluid, based in Market Harborough, England. The firm is a division of Cincinnati-based Eagle-Picher Industries Inc.
Carmakers such as Ford, Volkswagen and Mercedes-Benz expect to open plants in India, he said.
``We wanted to be one of the first in the market,'' Armiger said. ``We're starting off small, and we plan to expand as carmakers set up plants in India. The market is expected to become quite a bit larger relatively soon.''
Armiger said only about 600,000 vehicles were made in India last year. With the potential arrival of North American and European carmakers, that number could swell to more than 2 million vehicles around the year 2000.
Initially, the plant will serve South Korean firm Daewoo Motor Co. Ltd. and Indian carmaker Tata Engineering and Locomotive Co., known as Telco.
With business growing, the companies expect the plant to record annual sales of about $16 million after three years of operation. Eventually, it also could make multilayer and convoluted tubing, depending on customer needs.
Bundy International of Warren, Mich., is one of a few other fuel-line suppliers that has opened plants in that country, Armiger said.
The venture marks the first time Eagle-Picher has taken its fluid-systems operation outside of Europe and North America. The division, which recorded about $32 million in 1996 sales, has plants in Brighton, Mich., and Market Harborough.
The firm also recently opened a 5,000-square-foot development center in Wolfsburg, Germany, not far from Volkswagen headquarters, for prototyping and product engineering work. But it expects to build a fuel-systems plant in Germany by 1999 to take advantage of an increased workload from European carmakers, Armiger said.
Eagle-Picher Industries, which purchased the fluid systems division in 1988 from outside investors, emerged from Chapter 11 bankruptcy protection in November.
Imperial Auto, which reported 1996 sales of about $20 million, makes custom tubing and hose assemblies for hydraulic brakes, clutch and other under-the-hood components.