New Delhi — Japanese injection press maker Toshiba Machine Co. Ltd. is spending $7 million to expand its facility in Chennai, India, in part to target more exports to the United States and Southeast Asia.
The previously announced expansion will start this year and likely finish in early to mid-2018, bringing its capacity from about 900 machines a year to about 1,400, said P. Kailas, managing director of Toshiba Machine (Chennai) Pvt. Ltd.
Kailas was interviewed at the Plastasia 2017 trade show, held July 8-11 in New Delhi.
The company had previously disclosed plans to expand the factory in 2013, one year after Toshiba bought the facility from Indian industrial conglomerate Larsen & Toubro. But Kailas said the expansion had been put on hold by instability in India's economy, including from the government's demonetization decision in late 2016.
That surprise announcement pulled widely-used 500 and 1,000 rupee notes out of circulation in what the government said was an effort to fight corruption and increase collection of taxes.
"Plant expansion was put on hold as the market has not reacted positively to demonetization announced by the government last November," he said. "The proposed expansion is going to be the first major hike ever since the plant built."
Toshiba said the facility made 800 injection machines last year and is likely to top 900 in the current fiscal year, which ends March 31. He said orders have picked up in the first half of 2017, but were impacted by the Indian government's decision to introduce a goods and services tax, which replaces other national and local government taxes, starting July 1.
"We hope it is a temporary phase and the market would react positively and business scenario improves in the days to come," he said.
With the expansion, Toshiba also plans to increase exports from India to about 300 presses worldwide in the next fiscal year. The company plans to ship 150 presses to the United States from Chennai in the current fiscal year.
"Our target would be the U.S. and Southeast Asia markets," Kailas said. "We have also introduced hydraulic presses in the U.S. market as a cost-effective alternative in an all-electric market."
Toshiba also plans to make die-casting machines in the Chennai plant, he said.