BANGALORE, INDIA — Later this year, India's Ministry of Commerce and Industry will review whether to continue anti-dumping duties on Chinese-made injection molding machines.
Machinery suppliers commented about the pending decision at the Plastasia trade show, held Feb. 22-25 in Bangalore.
India imposed tariffs of up to 174 percent on many Chinese molding machines starting in 2009, but the five-year term for the tariffs is nearly finished.
The injection press market in India has changed significantly since 2009. One major change: L&T Plastic Machinery Ltd., which played a key role in convincing the Indian government to impose the duties, was sold to Toshiba Machine Co. Ltd. in late 2012.
Also, while sales of Chinese-made presses have suffered, manufacturers from Taiwan and Malaysia have stepped up efforts in India, executives said at Plastasia.
However, a weak rupee has made imported machines more expensive, so even manufacturers of lower cost presses are reporting flat-to-weak sales in India.
"Interestingly, the government is losing even [its] 7.5 percent import duty as Chinese machinery continue to pour in via Malaysia, with whom India has signed [a free-trade agreement]," said Milind Agnihotry, general sales manager for Zhafir Plastics Machinery Ltd., a subsidiary of Chinese press maker Haitian International Holdings.
Haitian has invested in overseas factories in recent years, in Vietnam, Brazil, Turkey and Germany, and it has offices and service centers in India, Japan and the United States. Agnihotry was optimistic about the company expanding its operations in India — if the Indian government responds positively on the anti-dumping question.
"We have some plans, but until barriers are removed, the best could not be brought here. We don't know when the conditions would become conducive again for [an] India foray," Agnihotry said.
Zhafir shipped almost 300 machines to India in 2011. In the current fiscal year — which ends in March — it has already sold around 270 machines, so the company expects 2012 sales in India to be flat compared to 2011.
Tianan, Taiwan-based Huarong Plastic Machinery Co. Ltd. sold about $4 million in injection presses in India in 2012, according to Grace Lee, the company's manager for India and Africa.
"Last year was not such a bad year for us. Despite volatile currency fluctuations in India, we were down by 10 percent over the previous year," Lee said.
"Compared to that, [our] China business was down by almost 35 percent," Lee said. Sales in China suffered from the slowdown in growth for plastics manufacturers that export outside China.
"[The] China market is huge, but heavily depends on export orders. If the companies continue to get export orders, they keep sourcing machine from us," Lee said.
A big order placed at the end of 2012 by a prominent vendor for Videocon Industries Ltd. helped improve Huarong's sales in India last year. Huarong entered the India market in 2010 and recorded growth of about 10 percent growth in 2011.
In an effort to rekindle growth in the subcontinent, Huarong has introduced vertical injection presses in India.
"We were selling only the horizontal presses until last year, which are affected by the weak Indian rupee against [the] dollar. Besides, competition is more in the horizontal presses from local as well as overseas suppliers," Lee said.
"Few other Taiwanese companies are supplying the vertical lines in India, therefore, less competition and bright growth prospects," Lee explained.
Huarong opened an Indian headquarters in Delhi in 2012, and it has regional sales and service operations in Pune, Ahmedabad and Bangalore.
Another Taiwanese press supplier, Jon Wai Machinery Works Co. Ltd., sold about 80 presses in 2012, down from its annual average of about 100.
"The first half was slow last year but [the] auto parts industry picks up in the second half and that improves our sales," said Jon Wai's Harrison Chun. Also, India's currency appears to have stabilized.
"Therefore, buyers have started placing orders again as they could not postpone the sourcing anymore," Chun said.
The company's overall sales also suffered from the financial meltdown in Europe, Chun said.
Jon Wai hopes to regain the lost ground this year. The company is seeing growth in western and southern India thanks to investment in the automotive sector.
Malaysian press suppliers gained ground in recent years thanks to a free trade agreement with India.
"We are selling on an average about 100 injection molding lines every year in India," said Han Changhua of Klang, Malaysia-based ESM Precise Manufacturing Sdn. Bhd.
"We are pricewise competitive thanks to [the free-trade agreement], as our machinery is not levied with a 7.5 percent import duty." The company hopes to sell 150 machines in India this year.
ESM has sold presses as large as 2,300 metric tons of clamping force in India, but said 400-ton models are more popular in the region.