Machinery makers are looking at a jackpot in the Indian plastics industry, which may need to add as many as 30,000 new machines by 2010 just to keep up with market growth.
That total - provided by the Plastindia Foundation trade group - includes more than 18,000 injection molding machines, more than 6,000 pieces of blow molding equipment and more than 5,000 monolayer film lines.
But as in many emerging markets, a battle is under way pitting price vs. performance.
``Times are changing, and Indian processors are looking for quality machines,'' said Kavish Shah, a marketing executive with Reifenhauser (India) Marketing Ltd., which began importing film and sheet machines into India from Germany last year. The unit is part of machinery maker Reifenhauser GmbH of Troisdorf, Germany.
``There's a lot of competition here, but [Indian companies] now are looking for long-term benefits,'' Shah added. ``They want to buy a machine and use it for a long time.''
Higher selling prices - as well as duties on foreign goods, which although reduced in recent years are still relatively high - represent a challenge for foreign firms, according to Alfred Menhart, area sales director for extrusion equipment maker Kiefel AG of Worms, Germany.
``A machine made [in India] might be of lower quality, but our machines can cost three or four times more,'' Menhart said. ``In some cases, though, a locally made screw will wear out in a year, while ours will last 10 years.''
One company enjoying the sales boom is R.R. Plast Extrusions Pvt. Ltd. of Mumbai, India. The 26-year-old firm is finishing a plant expansion in Mumbai that will be more than 10 times larger than its previous plant, according to Managing Director Ramesh Kamble.
R.R. Plast focuses on sheet extrusion lines for disposables markets. The 75-employee firm posted sales growth of 25 percent in 2005 and expects to do the same in 2006, Kamble said.
The business is part of R.R. Engineering Works, a larger Mumbai-based firm that also makes machines for pipe, profiles, blown film and recycling. The company operates a second plant in Asangaon, India.
Times also are good at Jagmohan Pla-Mach Pvt. Ltd., a maker of blow molding machines in Mumbai. The firm, which does 70 percent of its sales into the export market, doubled its manufacturing space in 2005 and plans to double it again in 2007, said executive Jagdish Shah.
Jagmohan makes machines producing bottles of 6 ounces to 260 gallons. The 27-year-old firm employs 75 and posted sales growth of 8 percent in 2005. Shah said he expects that number to climb to 10 percent this year.
Based on the success of R.R. Plast and Jagmohan, it's easy to understand why machinery makers like Coperion and Battenfeld Gloucester are active in the Indian market.
Coperion has been importing compounding machinery from Germany since 2000, and has seen recent growth from compounders needing to serve India's fast-growing automotive market, according to Coperion Ideal Pvt. Ltd. sales manager D.J. Dhobale.
Coperion Ideal is a unit of Coperion Group of Stuttgart, Germany. The unit recently sold a large machine to Indian resin kingpin Reliance Industries Ltd., but Dhobale said the nature of the market is partial to smaller equipment.
``There are so many small masterbatch makers in India, and many of them are using smaller, used equipment,'' he said. ``There aren't a lot of larger industrial firms yet.''
Despite that challenge, Dhobale said he expects Coperion Ideal's sales growth to be 10-20 percent in 2006.
Gloucester, Mass.-based Battenfeld Gloucester Engineering Co. is a relatively new entrant, first offering its film machinery in early 2005. The firm hosted seminars in Mumbai and New Delhi in mid-2005, each of which was attended by about 50 potential customers.
To date, most interest generated has been for blown barrier film lines for food and medical packaging, international business director David Constant said.
``The market is extremely competitive here, and local prices are quite low,'' Constant said. ``But with the increased awareness of the Indian consumer, flexible packaging is expected to have double-digit growth rates for the next several years. It could be a big opportunity for us.''
``China has slowed down recently, but [the Indian] market is picking up,'' he added.