As Indian-made cars begin to flood highways from Bombay to Chennai, BASF AG is following the roar of the engines. On May 6, the company announced plans to extend its automotive offerings in the country with a new compounding plant, further complemented by new engineering and color labs.
The new compounding plant is being constructed at the company's current site in Thane and is scheduled to come online during the second half of 2009. The site will occupy 59,201 square feet and serve the Indian market exclusively, according to Ian DeSouza, Asia Pacific communications manager for BASF's engineering plastics division.
The company did not specify which materials would be compounded at the site.
``Automotive is one of BASF's most important target industry segments and our second-largest source of sales after the chemical industry,'' said Wolfgang Hapke, president of market and business development in Asia Pacific, in a statement. ``In 2007, BASF derived over 13 percent of its total global sales of 58 billion euros ($91 billion) from sales to the automotive industry.''
India's automotive industry is expanding at a rapid clip, with car production growing an average of 15 percent in the last few years, according to Prasad Chandran, chairman of BASF's India unit and head of BASF South Asia.
India's most famous automotive brand, Tata Motors, made headlines early this year when it unveiled a 100,000 rupee (US$2,362) new car - by far the world's cheapest.
``Production figures show that Asia is the fastest-growing region in the global automotive industry,'' Chandran said, ``Innovations in the automotive industry are increasingly being driven by Asian companies, and BASF supports this trend.''
Ludwigshafen, Germany-based BASF plans to invest $2.5 billion in Asia between 2008 and 2012.
BASF Coatings also commissioned a refinish color lab in Mangalore in February 2008. The company plans to triple the capacity of its catalyst factory in Chennai by 2009.
BASF has also set up a computer-aided engineering lab in Thane where its engineers design and optimize new engineering plastic parts with customers.
Hermann Althoff, BASF's group vice president for Asia Pacific Engineering Plastics, said: ``Advanced CAE technology is a key competence of BASF in the field of engineering plastics. Offering this service to customers, combined with local supply from the new plant, is a major milestone in growing our engineering plastics business in India.''
Fuel efficiency is a target of BASF's focus on the auto market, with the company mentioning its catalyst products and plastics. Reducing a vehicle's weight by 10 percent translates into 5-7 percent less fuel consumption.