Indian equipment maker Kabra Extrusiontechnik Ltd. is spending about 850 million rupees ($18.8 million) to double its manufacturing capacity, as it sees the Indian plastics machinery market growing about 15-20 percent a year for the next five years.
The company, which has joint ventures with several prominent Western firms, said the spending will help it keep pace in its traditional markets and expand into new ones like extrusion equipment for drip irrigation in farms an area that's a priority for the Indian government as it tries to increase food supplies and boost rural incomes.
In an interview at the recent Plastivision 2011 show in Mumbai, executives of the publicly traded firm said they see significant expansion ahead in India's plastics market.
We expect to have an annual growth rate of about 15-20 percent compounded for the next five years, both in our company as well as the general machinery business in India, said Anand Kabra, director of the Mumbai-based manufacturer.
The company claims about 40 percent of the Indian extrusion markets, and also has joint ventures with Germany's Battenfeld Extrusiontechnik GmbH, which owns 14 percent of Kabra, and with Gloucester Engineering Co. Inc. of Gloucester, Mass.
The company also recently formed a technical partnership with Drip Research Technology Services USA of San Diego to make complete extrusion lines for manufacturing drip irrigation systems, a method of precisely controlling water in agricultural irrigation.
Just prior to the Mumbai show, held Jan. 20-24, the firm announced its first sale from the 2-year-old partnership with Gloucester Engineering: a five-layer blown film line to India's Prropyl Packs Ltd., mainly to make barrier film for oil packaging.
Edible-oil packaging is a large untapped market for film packaging in India, the company said, because about half of it is sold loose, increasing the risk of loss of material and product tampering.
Kabra said the Gloucester partnership, which was formed in early 2009, got off to a slower than expected start because of Gloucester's bankruptcy and subsequent new ownership.
In spite of the hurdles, Kabra said, the companies remain committed to the partnership and both see it as an important part of their plans.
We expect to shortly also plan for a lab line [in Daman, India] which will be like a demonstration line where Gloucester customers and Kabra customers can come and have a look, Kabra said. We have a lot of active discussions in the market, both from the Kabra side and the Gloucester side.
He also said he foresees the companies eventually developing a joint process-control system. Now, joint venture machines sold by each partner have that company's control systems.
Eventually a common process-control system is very much viable, Kabra said.
The two firms spent about eight months after the 2009 agreement sending teams from Kabra to Gloucester's U.S. facility to help set up their joint factory at Kabra's campus in Daman, he said.
The first six to eight months actually went for our design and development and manufacturing team visiting Gloucester for the technology transfer, he said.
The two companies formed the venture to make less-expensive versions of Gloucester equipment to sell in price-conscious emerging markets that Gloucester executives said they previously had a hard time targeting.
Kabra owns 55 percent of the joint venture and Gloucester owns 45 percent.
Most of Kabra's exports are to neighboring Asian countries.