Indian injection press maker L&T Plastics Machinery Ltd. is investing 100 million rupees (US$2.18 million) in its factory to double capacity there, and is in talks with an unnamed Italian machinery maker about jointly making molding machines, the company's top executive said at a trade show in India.
The Chennai-based company, one of India's largest plastics equipment makers and a former joint venture partner of Sumitomo (SHI) Demag Plastics Machinery GmbH, said its growth has been buoyed by surging demand in India. It estimates the overall Indian market for injection presses will increase 20 percent this year.
CEO P. Kailas disclosed in a Jan. 23 interview that the company is talking with an Italian press maker about forming a partnership. L&T already manufacturers some machines for the Italian firm, he said.
[The Italian firm] will probably stop manufacturing lower-tonnage machines [in Europe] because of the high cost of manufacturing in Europe, Kailas said at the recent Plastivision 2011 trade show in Mumbai. [It] will source the machine from me, probably to be co-branded L&T and that company's name.
He declined to name the firm.
L&T said the expansion will double capacity at its Chennai facotry to about 1,500 machines a year. In its current fiscal year, which ends in March, the company expects to make about 800 machines, he said.
The firm has had a topsy-turvy recent history, with its injection press sales plunging to about 330 machines in 2009.
That year, L&T also bought out its former joint owner, Sumitomo Demag, in what Kailas said was a disagreement over strategic direction. Sumitomo favored more emphasis on all-electric machines than L&T wanted in the Indian market.
But the company has since rebounded, as both India's market has taken off and the Indian government in early 2009 put in place steep tariffs on Chinese-made injection machines, a decision that eliminated many Chinese manufacturers from the Indian market.
L&T filed the initial anti-dumping complaint against Chinese machines, and was later joined by other local manufacturers.
L&T's sales growth since has come in India's domestic market, as the company has seen export sales drop from 350 million rupees (US$7.6 million) in 2007 to about 120 million rupees (US$2.6 million) now.
The company lost many of its export channels when it severed ties with Sumitomo Demag, according to Kailas. L&T is working to build up channels independently again, he said.
At Plastivision, the company introduced two new machines: an upgraded version of its all-electric, in 100- and 150-ton models that target applications like clean room medical molding, and its own design of a two-platen machine, Kailas said.
L&T is part of Indian conglomerate Larson & Toubro Ltd., one of India's largest companies.
Kailas said the corporate parent had explored selling off the plastics machinery unit three years ago, but decided against it. Now Larsen & Toubro has given the plastics unit a sales target of 5 billion rupees (US$109.4 million) in two years, up from current sales of about 2.1 billion rupees (US$45.9 million), he said.