Hong Kong injection press maker Welltec Machinery Ltd. has set up a joint venture plant in India with Jishu-Hozen Machines Pvt. Ltd (India), a local maker of injection molding machine accessories.
The move by Welltec, which is a subsidiary of one of China's largest press makers, Cosmos Machinery Ltd., aims to give the company a much larger presence in India a growing market that's also been effectively closed to Chinese firms since the Indian government put high tariffs on Chinese-made machines in 2009.
The Ahmadabad, India, operation, which is majority owned by Jishu-Hozen, received formal approvals in January,and will be making Welltec's Se Greenline series of servo-driven, energy-saving injection molding machines.
The company anticipates making about 100 machines there this year, with production growing to 300-400 presses a year in five years, said Wilson Wong, Welltec general manager, in a March 12 interview.
The foundation of our own production base in India will enable Cosmos Machinery to have fast penetration into the market without worrying about Indian governmental anti-dumping regulations, Wong said in a company statement.
He said the Indian plastics market and the demand for injection machines have been growing rapidly in recent years, but the tariffs made it difficult for mainland Chinese firms, while creating opportunities for Taiwanese and Korean press makers.
The India factory is Cosmos' first outside China. Wong called it an important strategic move into international markets to complement its overseas service centers. It will make use of Jishu-Hozen's sales networks in India's industrial cities.
Hiten Nagadia, director of Pune, India-based Jishu-Hozen, said India's tariffs have led to supply shortages of presses in India, with long waits and increasing popularity of second-hand machines.
The establishment of this joint venture can just fill the market vacancy, Nagadia said.
The companies have started small with the joint venture, delivering seven machines to customers, but said they have a goal to be one of India's top five injection molding machine makers in three to five years.
Due to the high demand of [plastic injection molding machines] and market potential in India, we are confident to achieve a significant yearly sales growth in coming years, Cosmos said in a statement.
The companies said they are shipping some parts from Welltec's China factories and buying other parts in India. Jishu-Hozen engineers handle most of the assembly.
Welltec has software engineers and quality managers on site in Ahmadabad.
The joint venture company is called JH-Welltec Machines (India) Private Ltd.
Ahmadabad is a center of injection press making in India, Wong said.