US firm Milacron to invest $30 million in Indian arm

Mumbai: US-based Milacron Llc, a global plastic processing equipment manufacturer, plans to invest $30 million (Rs.180 crore) in the next three years in its India operations, Ferromatik Milacron India Pvt. Ltd (FMI), according to president and chief executive officer Thomas Goeke.

FMI manufactures plastic moulding machines at its Ahmedabad and Coimbatore plants, in the states of Gujarat and Tamil Nadu, respectively. FMI supplies plastic moulding machines to various industries such as packaging, construction, automotive components and furniture.

In an interview, Goeke said that the firm plans to invest $20 million in its Ahmedabad facility and another $10 million in the Coimbatore facility. The funds will be used for capacity expansion of existing lines and for setting up a new product line.

With these investments the firm is looking to ramp up its India revenues from $150 million (Rs.900 crore) to $300 million (Rs.1,800 crore) in the next three to five years.

“India is an important market for us as it contributes approximately 12% of our global revenues, which is at par with our China operations. We are looking to grow at 20% in India,” Goeke said.

The firm said that it grew at a compound annual growth rate of 15% over the last three years, at a time when the Indian economy was slowing down due to several issues such as policy paralysis, a depreciating rupee and high inflation.

Even during the slowdown the plastic industry was able to manage growth of 10-11%, according to Shirish Divgi, managing director, FMI.

“The drivers for growth in the Indian market are the packaging, which is the largest segment for us today, followed by construction and automotive industries,” Divgi said. However, availability of skilled manpower and availability and high price of land are a few challenges that the company foresees to its growth in the country.

Global revenues for the Milacron group stood at $1.25 billion at the end of the previous financial year. The group plans to invest $60 million every year over the next three to five years and is targeting revenues of $2 billion.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.