NEW DELHI (Feb. 3, 12 p.m. ET) — Italian mold maker Roto Moulds srl and M. Plast (India) Ltd. have signed a technology transfer agreement to boost the Indian firm's capabilities and use it as a base to tap into new markets like the Middle East and Africa.
The two companies, both relatively small mold making shops focused on the rotomolding industry, made the announcement at a January 30 conference in New Delhi and said their partnership could be expanded into a formal equity joint venture if business goes well.
“There are a lot of areas we would like to develop together, like the Middle East and Africa,” said Terzi Manuel, an owner and managing partner of Milan-based Roto Moulds. “[Companies there] want to buy with a good price and good quality. At the moment they can't find it anywhere.”
The companies did not disclose terms of the arrangement, although they said it will focus on steel and stainless steel molds.
As part of the agreement, the companies will spend the next two months in intensive staff training, with Roto Moulds sending technicians to India to train M. Plast personnel, and M. Plast staff traveling to Italy, said Rajendra Shukla, director of Noida, India-based M. Plast.
The deal will let M. Plast improve quality to meet increasing demands in India's market, and give both companies a more globally competitive platform than they can have separately, said Shukla, speaking in a joint interview with Manuel at the 2012 annual conference of the Society of Asian Rotomolders, held Jan. 29-31 in New Delhi.
“For us it's a quality issue – for them it's a cost issue,” he said.
The firms could see “considerable” cost savings from the Indian-made molds, but won't know details until the partnership starts working, Shukla said.
One particular area of focus, he said, will be on underground septic or water storage tanks, a rapidly growing market in India and one where the Italian firm already has a lot of experience.
Both firms said it was also unclear many molds they would make from the partnership, although Shukla said the companies believe in time they could make 200 molds per year, roughly equal to M. Plast's current production.
Manuel said the firms are both thinking about deepening the partnership: “When we arrive at a certain level the goal for both is to go to a joint venture.”
“What we signed is an agreement that we bring here in India our technology to produce a better quality mold,” he said. “On the other hand, for us it would be… an extension of production here in India with a lower price than what we have in Italy.”
He said Roto Moulds has tried to sell into the Middle East and Africa but found its molds were too costly.
The Italian firm said it could export tools from India to Europe but said that many of its European customers prefer their tools to be built nearby for better service.
The companies only met about two months ago, introduced by Indian-American rotomolding executive Ravi Mehra, managing director of mold maker Norstar International, LLC, in Cedarburg, Wis.
It's not the first time playing corporate matchmaker for Mehra, who is also the founding chairman of the New Delhi-based Society of Asian Rotomolders and active in rotomolding trade groups globally.
Mehra was instrumental in the 2007 strategic alliance between New Delhi-based OK Play India Ltd. and Solar Plastics Inc. in Delano, Minn.
Norstar and M. Plast also signed their own strategic cooperation in 2007 for M. Plast to license Norstar's technology to build aluminum molds in M. Plast's factories.
Shukla said they hope within a year to install equipment for casting the aluminum molds in a new factory in Noida. The project has been delayed finding the right staff for that specialized process, he said.