Indian injection press maker Electronica Plastics Machines Ltd. is in talks with Danish auxiliary equipment maker Labotek A/S about forming a manufacturing joint venture to make some Labotek equipment in India.
Electronica executives disclosed the talks during an interview at the Plastivision 2011 trade show, held Jan. 20-24 in Mumbai. They said the potential deal is part of the company's strategy to broaden its product range to other types of plastics equipment, even as it expands capacity in its traditional injection molding market.
Labotek owner Peter Jurgensen confirmed the two sides are talking about a manufacturing joint venture. He said it is too early to release details, but the local market has strong potential.
I think there is a huge market, and automation is just starting in India, Jurgensen said, adding that demand for automation will grow as more multinational firms set up manufacturing there. He was interviewed by telephone Feb. 10.
Indian plastics processing companies are beginning to invest more in dryers, conveyors and other auxiliary equipment, and local manufacturing capability for the equipment is crucial, said P.K. Ratnaparkhi, director of parent company Electronica Machine Tools Ltd.
Unless we manufacture it here, it won't be economical, Ratnaparkhi said.
Electronica, based in Pune, India, has already made some conveyers for Labotek, which is based in Frederikssund, Denmark, and exported them out of India, Jurgensen said.
Beyond exploring the Labotek partnership, the Indian firm said it is expanding its own capacity for making injection presses, from about 400 machines a year to 600, and expanding its range of presses, from a maximum of 320 tons of clamping force up to 650 tons.
The last year has seen changes for Electronica in its international approach, as its partnership with China's largest injection press maker, Haitian International Holdings Ltd., came to an end.
Electronica had imported Haitian machines, and the two firms said in 2009 they were about to launch a joint factory in India to make injection molding machines.
But after the Indian government imposed steep tariffs on Chinese-made molding machines later that year, the parties in March 2010 ended their relationship, according to both firms.
The Indian government's decision made Haitian reluctant to invest in the country, and the firm turned its attention instead to building a press-manufacturing operation in Vietnam, where the government is very supportive, said Haitian Executive Director Helmar Franz.
So Electronica, for its part, is making investments of its own and setting up distributorships aimed at broadening its product lines to handle what it said is a growing Indian machinery market.
The Indian press market is currently about 5,000 presses a year, both Indian-made and imported, and could cross 6,000 machines in the next year, according to Electronica.