India has an emerging middle class estimated at 140 million strong, and Richard Myers intends to be in the right place to take advantage of it.
The president of M2M International Ltd. of Wallaceburg, Ontario, just launched a joint venture in Chennai, India, with Synergentic LLC to design and engineer injection molding tools. By the spring of 2006, the partners aim to have 12 full-time designers, and soon after that, will begin making molds for domestic manufacturing and export.
``There are people there who are going to want to buy toasters, to buy washing machines, and eventually more of them are going to be buying cars,'' Myers said in a May 20 telephone interview.
M2M and Romeo, Mich.-based Synergentic already work together to make molds elsewhere in Asia. So when Synergentic's Bharat Reddy recently turned an eye to his native India - beginning with die-casting and sheet-metal work - he again teamed with M2M for injection molding.
India's growing plastics industry and the strength of its engineering capabilities - combined with the lower wages there - mean that Myers can see the potential to get good products out the door at half the price of North American production.
The Ontario firm already has brought Indian engineers to Wallaceburg to learn more about what M2M and its customers will expect of them.
In 2006, the mold maker will send an engineer to Chennai - formerly called Madras - for a year to oversee growth there.
``We've had a good relationship with Bharat and his group since 1999,'' Myers said. ``When we look at India, we can see the quality of the people and it's relatively easy to hire an engineer who speaks English.''
Precise timing of M2M's plans in India will depend on feedback from potential customers during a visit to Chennai this summer.
Myers is far from the only business owner looking at potential growth in India, even in the mold- making industry.
Pleasant Precision Inc. of Kenton, Ohio, invested in a 50-50 joint venture in 1999 with Filtrum of Pune, India, for product development work.
PPI and its engineers in Pune can take advantage of the 12-hour time difference between North America and India, allowing the U.S. firm to have someone working through what is its overnight hours on drawings that can be ready to go first thing in the morning.
Much of the growth potential for India is not merely a matter of time or money, though.
With a population of more than 1.1 billion, India is the second-most-populous country in the world, ranked behind China's 1.2 billion. And India is growing, said William Wilson, chief economist for Keystone Business Intelligence India, a Chicago firm specializing in linking midsize businesses in the United States and India.
India already has a middle class of 400 million people in addition to the new emerging middle class, and it does not have the restrictions on family size that China has, meaning that the subcontinent is expected to pass China in population soon.
Wilson estimates that by 2030, the country will be the world's third-largest economy.
``I believe India has a great deal more potential than China,'' he said.
So far, the country has been known more for its call centers, providing staff to handle questions consumers may have about their computers or printers. But manufacturing also makes up 25 percent of its gross domestic product and is growing at a rate of 8 percent annually.
South Korea's Hyundai Motor Co. Ltd. recently announced plans for its second assembly plant in Chennai, making it part of an auto industry that made more than 1 million cars last year.
Recent economic reforms have opened the country to more overseas investments, while its history as a British colony also supplies it with a common language Westerners are comfortable with, Wilson said.
While there are more than 40 regional languages on the subcontinent, English is the business standard.
Keystone has been working with American businesses interested in developing joint ventures or making acquisitions in India, but it also hears from Indian firms interested in investing in the West.
``India's more than just a platform to outsource call centers or payroll or tax work,'' he said. ``India offers a platform to outsource detailed engineering.''