Contrary to what a visitor might think after surviving a day of death-wish traffic in New Delhi, the Indian market wants and needs more cars.
The nation currently is home to about a million light vehicles. That number is expected to hit 1.3 million in 2006 and continue to rise from there. Korea's Hyundai Motor Co. apparently is sold on the region, as evidenced by its Feb. 10 announcement of adding capacity for 300,000 vehicles at its plant in Chennai, India, by 2007.
Hyundai originally had planned to add capacity for 100,000 there but expanded the scale because of faster-than-expected market growth.
To serve this growing market, four compounders interviewed at Plastindia in New Delhi - DuPont Co., DSM NV, Radici Plastics and Gujarat State Fertilizers & Chemicals Ltd. - said they had plans in the works to add compounding capacity for nylon, the plastic most commonly used in auto applications.
Radici, part of Italian conglomerate Radici Group, has gone so far as to form a joint venture with Indian conglomerate M.K. Modi Group to address this need. The joint venture, titled Radici Plastics Modi Ltd., is expected to begin production of glass-filled, mineral-filled and elastomer-modified nylon compounds at a site near Delhi in early 2007. The business - 60 percent owned by Radici - is expected to employ 100, engineering plastics manager Ajay Singh said.
Radici and Modi have a relationship going back about 30 years, when Radici began supplying Modi with nylon resin for its yarns business. Modi also makes textiles and chemicals.
Global nylon giant DuPont of Wilmington, Del., is considering adding a new line in Savli, India, next year, said spokeswoman Rita Cheung. The firm already operates a pair of lines there.
``The Indian auto market is seeing double-digit growth,'' said Cheung. ``This is an emerging market, and we expect it to continue for at least the next two to three years.
``Automakers here are still replacing metal in automotive. The market is at an early stage. We're dealing directly with injection molders, since there really aren't any large [original equipment manufacturers] yet,'' she said.
DuPont's work could help seed the market for a new nylon resin plant that the firm is opening in Singapore in 2008.
DSM also has been aggressive in meeting market needs in India. The Dutch specialty chemicals maker will add an undetermined amount of compounding capacity at its site in Pune, India, by mid-2007, business development manager Manish Mishra said.
DSM had added about 3 million pounds of capacity in 2005. The 7-year-old Pune plant now can produce about 18 million pounds per year. Overall, DSM does about 70 percent of its Indian compounding in Pune, farming out the rest to toll compounders.
About 45 percent of its output - including polybutylene terephthalate and injection molded PET - goes into automotive, Mishra said. That number could climb quite a bit, he explained, since large-volume nylon parts, such as air-intake manifolds, still have no Indian production.
Mishra said DSM is the only company in India with Underwriters Laboratories-certified nylon. The firm is weighing the addition of thermoplastic elastomer copolyester compounding in Pune as well. The unit currently has annual sales of about $23 million.
In Gujarat, state-owned GSFC may add compounding capacity this year, said regional manager Anit Saxena. That decision depends on the success of new flame-retardant and glass-filled grades that currently are hitting the market. Those grades also are focused on automotive uses.
GSFC, which also is India's only melamine producer, tripled its capacity in 2004 and now can make 33 million pounds of nylon compounds each year.