DMG to set up plant in India

DMG India, the Indian subsidiary of the Euro 1.9 billion, Gildemeister Group of Germany, a manufacturer of CNC metal cutting machine tools, is setting up a manufacturing unit in India by 2009-end at an initial investment of Euro 15 million. This will be its second manufacturing unit in Asia after China and 12th in the world.

The company, which started its Indian sales operations in 1999, opened a technology centre in Bangalore early last year at an investment of Euro 4 million and expand it further this year at an investment of Euro 3 million, said Thorsten Schmidt, director, sales and service worldwide and CEO, Asia.

"We are initially investing Euro 10 million during 2008 for the new manufacturing facility in India and presently looking out for a suitable place. We have identified two locations - Pune and Bangalore - and decide on that once we get an approval from the government of Germany," he said.

The company needs to take approval from the German government because its products are meant for dual use and used both for defence and commercial purposes. "We have approached our government and are waiting for their approval. This is a regular procedure for us and we hope to get it very soon," he said.

Talking to Business Standard, at Tooltech 2008, the tenth edition of cutting tools industry exhibition, here today, Schmidt said in the second phase, the company is looking at making India as an export hub for CNC machines to the South East Asian countries.

"We are presently selling around 180 machines in India and we will start our new factory with a capacity of around 400 machines. We expect the Indian market to absorb around 300 machines next year."

The major drivers of growth for DMG, he said will be automotive and auto components sector, aerospace, MRO, die and mould, and other manufacturing sectors.

In 2007, DMG sold 180 CNC machines in India, a growth of 80 per cent over the previous year. In value terms the company earned Euro 27 million. During 2008, DMG aims to sell 250 machines.

According to S G Narayan, Managing Director, DMG India, the additional growth will come from a series of new machines launched by the company this year.

"Automobile and aerospace sectors will be the key drivers of growth for us in the next few years. There will be a demand for 25,000 CNC machines in the next five years in India. As the country is witnessing a boom in these sectors, we see a lot of orders from MRO (maintenance, repair and overhaul) facilities," he said.

MRO industry alone is expected to place orders worth Rs 500 crore for supply of machine tools in the next couple of years, he said.