The U.S. plastics industry is looking toward India for some future growth, and Polymer Transaction Advisors Inc. has taken the tiger by the tail in opening a Mumbai office to capitalize on the trend.
The Newbury, Ohio-based company, which specializes in plastics mergers and acquisitions, opened the office March 20, Chief Executive Officer Bill Ridenour said in a recent interview.
The office is managed by Gurudutt Trasy, a U.S.-educated Indian national with a background in chemical engineering and business consulting, and his brother Srikant Trasy, who is an accountant.
Ridenour said he expects the firm will grow in India, driven by the country's demand for consumer goods, local manufacturers' need for U.S. technology and the desire of U.S. companies to tap India's growth.
Polymer Transaction Advisors, founded in 1999, has advised firms around the world on 30 acquisitions, along with about 10 other licensing and joint venture agreements, Ridenour said.
It typically handles acquisitions between $10 million and $30 million, though it also has worked on larger transactions, such as Sekisui Chemical Co. Ltd. of Osaka, Japan's $50 million acquisition in 2007 of Holland, Michigan-based Allen Extruders Inc.
Mirroring China's experience during the last few years, India's population of 1 billion only now is starting to buy cars, washing machines, dishwashers and other consumer goods in large quantities, Ridenour said. Those products require plastics, rubber and other polymers, and U.S. companies have the technology India needs to produce them, he said.
“The Mumbai office is really an investment in the globalization of American industry, particularly with respect to the [northeast Ohio] region,” Ridenour said.
Some Ohio plastics companies already have made entrees into India. For instance, Akron-based Eliokem Inc., the U.S. resin and specialty chemical arm of French firm Eliokem based in Villejust, in 2007 bought the polymer division of India's Apar Industries Ltd. for $27.5 million. More recently, PolyOne Corp. in Avon Lake began construction in 2008 of a manufacturing plant and color lab in Mumbai, said Randy Fortin, vice president of marketing for the international producer of specialty polymers.
PolyOne is just beginning to develop its production capacity in India, but already is doing business there, particularly with its color lab that helps manufacturers with color formulations for plastics. It has not yet specified how much it ultimately might invest in its Indian operations, Fortin said.
Like Ridenour, Fortin said PolyOne is counting on a growing consumer market in India to drive its growth: “The domestic demand in India, for packaging, automotive and health care, we think, will remain strong.”
Olivier Faussadier, Eliokem's director of technology and manufacturing, said in a recent e-mail that the Indian economy is proving to be resilient and already is recovering from the global economic downturn.
He also predicts more business between U.S. and Indian plastics companies.
“It is expected that Western companies and multinational companies will continue to pursue partnerships, acquisitions and joint ventures with Indian companies” as they seek to cash in on India's strong domestic growth, Faussadier wrote.
Gurudutt Trasy recently said that India currently consumes only about 13.2 ounces of plastic per person per year, compared with about 8.9 pounds per person in the United States and 4.1 pounds per person in China. A car made in India only contains about half the plastic of a car made in the U.S. or Europe, he said. But India's consumption of plastic is increasing, Trasy said, and India's plastics market is seeing rapid growth in demand.
Others in the M&A arena share Ridenour's enthusiasm for India. Among them is Mark Filippel, managing director of Western Reserve Partners in Cleveland.
He said his firm last year joined M&A International, an alliance of investment bankers in 37 countries, in order to better serve clients seeking global links.
Polymer Transactions likely will find interest among Indian companies in merger deals, Filippel predicted.
“It's a good idea,” he said. “We do business in China, Japan and other Asian countries, and India is a top priority.”