DSM to triple production capacity in India

DSM Engineering Plastics, a leading supplier of high-performance thermoplastics, will triple its manufacturing capacity in India from 7,000 to 20,000 tonnes per annum by mid-2008.

The company, which set up India base with the acquisition of Cenka Plastics' assets in 1999, is setting up a greenfield compounding site in the Ranjangaon industrial zone.

"We are investing $20 million for creating initial capacities of 20,000 tonnes per annum by mid-2008," said Jos Goessens, president, DSM Engineering Plastics. The company has acquired a 1 lakh square metre area.

"It has capacities to double its production capacities from 20,000 tonnes if required," he added.

DSM is targetting the infrastructure (construction and power) and automotive segments in India. The use of low voltage switch gears as electrical safety equipment becomes mandatory and has resulted in increased demand for the company's material.

Additionally, with automobile manufacturers working towards manufacturing the Rs 1 lakh car or the sub-$25,000 cars, "There will be an increase in the use of plastics in these cars to achieve the right costing," said Goessens.

On an average, a car uses 150 kg of plastic, "This can be increased to 200-250 kgs per car," said Goessens who is working with Tata Motors on R&D of plastic components that can replace metal components.

The other market Goessens is interested in tapping is the two-wheeler market in India. There is a lot of potential for replacing metal with plastic components in two-wheelers, "In areas like switches on handles, gears, in their engine area and other such components," said Goessen who have already initiated talks with two-wheeler manufacturing firms in the Pune vicinity.

The company is also observing the retail market development and has set up a 50,000 tonne plant in China for manufacturing fresh-food packaging material. "As convenience food shopping increases with the retail boom we will cater to this demand from our China plant," said Goessen.

DSM Engineering Plastics has revenues of $1.37 billion from performance materials.

Its portfolio of engineering thermoplastics include Stanyl which is used for making connectors used for mobile phones and on motherboards of computers, among others. It is a part of the Netherlands based $10.92 billion DSM Group.