New Delhi — Machinery maker Milacron Holding Corp.'s large factory in India typically exports almost a third of its annual production to Africa. But shipments have been badly hurt by the crash in global oil prices and currency volatility, according to a company executive.
But the company has been quick to fill the shortfall by exporting machines to other markets.
“The crash in global oil prices coupled with currency volatility and political instability in most of Africa led to dwindling of exports by almost 50 percent to that region,” said Shirish Divgi, managing director of the Ahmedabad, India-based Ferromatik Milacron India Private Ltd.
He spoke on the sidelines of a conference on sustainable infrastructure and plastics in New Delhi in late February. The company is a unit of Blue Ash, Ohio-based Milacron Holdings Corp.
Plastics firms in oil exporting countries like Nigeria are key customers for the Milacron factory, he said, but economies there have been hurt by oil price drops following the removal of sanctions against Iran in 2016.
The other major reason for the fall in exports is the shortage of U.S. dollars throughout the continent and particularly Nigeria, which along with Kenya, are Ferromatik's major markets in Africa.
The company has been exporting over 500 injection molding presses to Africa out of total annual production of 1,500, he said.
Divgi said the company was quick to fill the shortfall by opening other markets.
“We have now been allowed to directly export to Southeast Asia, the Middle East and some Latin American markets, hitherto catered by the U.S. operation,” he said.
It has made inroads in Thailand, Indonesia and Malaysia, in particular, he said.
The India operation has been exporting to the United States and Europe, too.
“We are also targeting to double exports to Europe this year from about 50 machines in 2016,” he said.
Ferromatik last year said it had expanded the Ahmedabad campus, boosting annual capacity to 2,100 molding machines this year and an expected 2,500 in 2018.
As part of that expansion, it beefed up production for multi-layer high-speed blow molding machines and extrusion lines.
The operation registered growth of 24 percent in 2016, despite the demonetization of high value currency notes enforced in early November by the Indian government, Divgi said.
“We have not been affected as our client base spreads largely among global corporate entities in the packaging and automotive sectors and not individual businesses,” he said. “We are targeting growth of 12 percent in calendar 2017.”