Compounding leader A. Schulman Inc. will open its first Indian plant by the end of 2011.
The plant, in Vadodora, at first will operate a single Farrel continuous mixing line and make additive masterbatches, said A. Schulman Asia's general manager and chief operating officer, Derek Bristow.
The 25-employee plant will sell the additive masterbatches into biaxially oriented polypropylene film and other markets, Bristow said at K 2010, which ran Oct. 27 to Nov. 3 in Dusseldorf. India's flexible packaging sector has enjoyed strong growth in recent years as India's massive consumer market has blossomed.
Rotational molding material demand in India also is very strong, Bristow said. Schulman's sales in the country are expected to come from a mix of domestic businesses and multinational companies that are establishing themselves there, he added. “A lot of local businesses are really growing in India,” he said said in a K-show interview.
The plant will be Schulman's fifth in the Asia-Pacific region, joining locations in China, Indonesia, Malaysia and Australia. The latter two plants were added to the Schulman stable earlier this year when the firm acquired ICO Inc.
Schulman's China plant makes masterbatch concentrates and compounds based on engineering plastics, while its Malaysian plant makes masterbatch concentrates and specialty rotomolding powders. In Indonesia, Schulman makes masterbatch concentrates. The firm's Australian plant produces specialty rotomolding powders.
Bristow said this year the Asian market has recovered from any slowdown in business it may have experienced in 2009.
“There was a bit of a slowdown, but now there's a lot of activity,” he added. “A lot of [processing] machinery guys are selling equipment to Asia.”
Fairlawn, Ohio-based Schulman just completed a fiscal year in which overall sales grew 24 percent to almost $1.6 billion. The firm also showed a $44 million profit after losing more than $2 million in fiscal 2009.
In Asia Pacific, Schulman's sales grew 87 percent to almost $85 million, while gross profit from the region shot up 83 percent to almost $12 million.
Looking ahead, Bristow said that Schulman might grow its presence in Asia by acquiring other materials firms. Doing so would allow the company to increase capacity without investing in new extrusion lines.
“Market fundamentals are strong and, overall, we're optimistic,” he said. “The plan is not to go with commodity growth, but with high-value-added niche products.”