Indian-U.S. joint venture compounder Intercontinental Polymers Private Ltd. is building an engineering resins plant in Dahag, India, aimed at both the country's growing automotive industry and opportunities to switch traditionally metal products to plastic.
The new facility will have annual capacity of about 44 million pounds — a tenfold increase in capacity for the joint venture between Intercontinental Export Import Inc. in Columbia, Md., and injection molder, toolmaker and design house Jyoti Plastic Works Pvt. Ltd. of Mumbai, India.
“The automotive industry has started to move in very fast and, along with them, the second-tier market is coming along,” said Saurabh Naik, group president and CEO of IEI. Naik also is an executive at Naik Group, a collection of recycling and plastics processing businesses in the U.S.
The Indian automobile market is projected to grow from 1.9 million cars a year in 2010 to an estimated 4.7 million by 2015, according to information from Mumbai-based resin manufacturer Reliance Industries Ltd.
The joint venture is targeting metals conversion in more-traditional Indian markets like pumps and agricultural equipment as well, said Raju Desai, director of Mumbai-based Jyoti.
“There is enormous untapped potential for converting traditional parts from metal to plastics,” Desai said.
Naik and Desai spoke at the Jyoti booth at Plastindia, held Feb. 1-6 in New Delhi.
The Dahag plant will have four twin-screw extrusion lines; the equipment is likely to come from Western suppliers because the company wants to be able to supply global firms, Naik said. The arrival of more global carmakers in India has convinced them that now is the time to invest.
Most of the engineering resin compounding work for global carmakers will go to multinational firms, he said.
But as those companies run short of capacity in India — and Naik believes they will because some of them are reluctant to increase their capital investments in the uncertain global economic situation — Intercontinental sees opportunity in supplying capacity to them.
Jyoti is making other investments as well.
The company just started operations at a 100,000-square-foot injection molding plant in Khadki with 50 presses, Desai said.
The factory will target exports to the U.S. and Europe, where Jyoti has sales offices, and India's market for molded parts made from engineering plastics, said Desai.
Jyoti also plans to build a 100,000-square-foot mold-making facility on the Khadki campus, aiming to export tooling to Western markets, he said. Jyoti is searching for a “technology partner” for that facility, Desai said.