Bangalore, India-based extruder manufacturer Steer Engineering Pvt. Ltd. is poised to leverage China's market potential and manufacturing competitiveness through its first global acquisition of single-screw pipeline extruder maker Nantong Zhenfeng Machinery Factory in Tongzhou, China.
Founder and managing director Babu Padmanabhan said the foray into China will give the company an unprecedented advantage to address clients' needs in a unified, cost-effective way.
The acquisition has brought us a team of good talent in place as well as expertise in pipe extrusion, foam sheet and long-fiber-reinforced products, he told Plastics News at the Chinaplas show, held May 18-21 in Guangzhou.
Steer's ambitious goal is to challenge Nanjing's current status as China's capital of extrusion machines and take the crown to Nantong, China, instead. To start, the company aims to start building relationship with 25-30 compounding customers and another 25-30 extrusion customers this year. Padmanabhan said the initial target is about 10 percent of the 600-700 potential customers in China.
The sheer size of the Chinese market offers tremendous potential. Padmanabhan said he isn't worried about the temporary fluctuation caused by the global slowdown: A downturn always helps clean up the market and open up new opportunities.
The Nantong acquisition was completed last summer and Steer (China) Corp. officially started on Aug. 8. The factory features 86,000 square feet of manufacturing space, more than 70 employees, and produces a full range of extrusion lines, twin-screw compounders, Yellow Jacket lab extruders, and computer numerically controlled wire-cut machines.
The cross-border acquisition also brings challenges. It's not necessarily cultural differences, Padmanabhan said. It's more about the mind-set and habit. In order to become better aligned, the local workers will need to break some old habits, and Indian investors will learn to act more like the locals.
Padmanabhan said he plans to rotate employees across regions so that they can better understand the corporate culture. We keep the turnover rate extremely low.
Founded in 1993, Steer manufactures extrusion equipment and related major components and peripherals for the pharmaceutical and food industries. It claims 60-70 percent of the market share in India.
With a global workforce of more than 500, Steer's footprint has reached Japan, where its 14-employee facility in Tokyo services more than 150 plant locations in the country. That's more than half of the entire Japanese market, Padmanabhan added.
Steer also established a sales and service branch in Uniontown, Ohio, in January 2008. That office currently has a staff of six.
Padmanabhan said Steer takes pride in being an information provider. We don't keep knowledge or know-how in a black box. We break it down and simplify it for our customers, he said. Its Outline software can be used to visualize and compare data for the configuration of twin-screw extruder liners of all brands and manufacturers.