Hoping to capture more of the growing Indian market and tap into lower-cost research and development, Japanese blow molding equipment maker Nissei ASB Machine Co. Ltd. is investing more than $22 million to double the size of its factory near Mumbai in Maharashtra.
The Indian market for Nissei’s machinery remained strong even as world markets sputtered in the global recession, and there is still significant potential to convert products packaged in glass and other materials to PET, said Ichiro Mizuuchi, managing director of Nissei’s India subsidiary. “Very fortunately, the Indian market did not have any recession,” Mizuuchi said.
Nissei broke ground in December, and plans to finish the expansion by October 2012, boosting employment from about 700 to more than 1,000 and expanding capacity for making blow molding machines by 65 percent, he said. The company currently makes about 400 machines a year there.
The expansion will also double its capacity for manufacturing molds to about 2,000 molds a year, Mizuuchi said.
Nissei set up the Mumbai facility in 2000, primarily as a lower-cost manufacturing spot, he said. That remains a significant reason for the factory — about 65 percent of what Mumbai makes is shipped to the company’s headquarters in Nagano, Japan, to be sent around the world.
But sales within India have grown substantially, from only about 10 percent of the Mumbai’s operations in 2000 to 35 percent now, he said. The Indian market for PET packaging is similar to the U.S. market 30 or more years ago, before there was significant switching of products to PET, he said.
If measured by market, Nissei said, India uses PET in bottles and packaging in only about 20 percent of the applications used in mature markets in the U.S. and Japan. And if measured per capita, the gap is much wider — the average Indian uses only about 1/40th of the PET of the average American, Mizuuchi said.
That’s huge potential, he noted, although he said India will not switch to PET as rapidly as the U.S. did, where for example 80 percent of peanut butter jars switched to PET in one year. The switch is expected to be slower because so much of the population in India is very poor and uses very inexpensive packaging like plastic bags or pouches to buy small amounts of milk or liquids, he said.
“Over the next 20-30 years, they will buy this type of PET packaging” he said. “But it will take time.”
India's potential PET market prompts Nissei to expand plant