Demag to source more from its Indian JV
By Venkatachari Jagannathan | 11 Oct 2005
Chennai:
The €1.3-billion German plastics injection moulding
machinery group, Mannesmann Plastics Machinery, is considering
making India a sourcing base for some category of machinery.
The German group is present in India through its arm Demag Ergotech GmbH, a joint venture partner in L & T Demag Plastics Machinery Limited, a 50:50 joint venture between Demag Ergotech and Larsen & Toubro Ltd (L&T). Within Mannesmann Plastics Machinery group, the Demag plastics group is an approximately €330-million business.
According to Pepyn R Dinandt, chairman of the management board, CEO, Mannesmann Plastics, Demag sources around €60 million worth of equipment from its Asian operations in China and India. The group is in the process of rationalising its European operations, he says.
Dinandt says that there is a possibility of sourcing some plastics injection moulding machines from India for the global market that is growing at 3 per cent per annum. "The Chinese plant largely caters to the domestic market there."
The four-year old joint venture L&T Demag inaugurated its new Rs25-crore facility a couple of days ago near Chennai. The company had earlier been sharing L&T''s rubber machinery factory premises, where it was able to make only 350 machines per year.
Growing at 33 per cent, L&T Demag decided to go in for this fresh investment. The new plant has the capacity to make 600 machines. The capacity will be expanded to 1,000 units soon. The company caters to the needs of white goods, automobiles and electrical industry. According to Dinandt, the target turnover for this fiscal is €20 million or around Rs107 crore.
"Nearly 20 per cent of L&T Demag''s turnover comes from exports and with increased capacity exports are expected to increase to 40 per cent," says L&T''s CMD A M Naik.