In this interview with Huned Contractor, Krishna Joshi, VP - Compounds Business, AMEA (Asia-Middle East-Africa), Mexichem, reveals the company’s plans about setting up a plant for making thermoplastic compounds in India
Some of you may be unfamiliar with the Mexichem name. If so, then many wire and cable companies in India will probably be more familiar with the name AlphaGary and its products in this market – SmokeGuard Plenum, Megolon LSZH/HFFR compounds, amongst others. In 2011, Mexichem added AlphaGary, with its worldwide specialty plastic compounds sites, to its existing portfolio of plastic compound businesses. AlphaGary’s technology, knowhow and its supply chain capabilities have helped to make Mexichem become a leading global player in terms of innovation, product diversity, international manufacturing capabilities, quality and service.
The big news is that Mexichem’s compounds business has announced the construction of a completely new thermoplastic compounding plant at Goa in India, designed to produce ‘speciality thermoplastic compounds’ (including locally customised products) – with a strong focus on the wire and cable industry. The new plant is expected to be operational by early to mid-2018. In Phase I, the plant is designed to manufacture 12 - 15 KT of plastic compounds every year. This site will cater to customers not only in the Indian sub-continent, but also in the Middle East and ASEAN countries.
Commenting on this development, Sameer Bharadwaj, president of the Mexichem compounds business, said, “We have great faith in the Indian market and in its highly skilled and motivated workforce. That is why Mexichem is continuing to expand across the sub-continent. The new plant at Goa will produce specialty thermoplastic compounds based on both PVC and non-PVC polymers, with a strong focus on flame-retardant compounds (specialty PVC-FR and LSZH/HFFR) for the wire and cable industry. In addition to our complete range of existing wire and cable compounds, the site will be geared to meet the specific local needs of our customers in this region. The on-site, fully equipped research and development department that will work on product development projects to support local customers will have access to all global technologies and will work in close coordination with our global technology teams.”
In this interview, Krishna Joshi, VP - Compounds Business, AMEA (Asia-Middle East-Africa), elaborates about the company’s plans for the India market:
Could you provide an overview and history of Mexichem’s global operations?
Mexichem is a global chemical and petrochemical company with annual sales of USD 5.7 billion and a global leader in plastic piping. The company contributes to global development by delivering an extended portfolio of products to high-growth sectors such as infrastructure, agriculture, housing, datacom, water management, automotive, consumer goods, healthcare, among others. With operations in over 30 countries, 120 facilities worldwide and more than 18,000 employees, the company has a track record of successful inorganic growth through acquisitions such as Amanco, Wavin, Polyone Specialty Resins, Ineos Fluor, Alpha Gary and Vinyl Compounds.
Mexichem has recently announced its intent to acquire Netafim, the world’s largest drip irrigation piping solutions provider, which would make revenues close to USD 7 billion. The compounds business at Mexichem operates out of sites in the US, UK, Mexico and Colombia and is looking at establishing a new state-of-the-art compounding facility in India to be fully operational in 2018.
What is the reason for choosing to set up a plant in Goa?
We are looking to leverage existing capabilities in Goa where Mexichem’s Dura-Line business already has manufacturing operations and this gives us an advantage from a project management perspective and administrative support.
What is the range of the products that will be produced in the Goa plant?
Our Goa investment will seek to replicate the full breadth of Mexichem’s compounding capabilities to support growth in India as well as the broader Asian market. We will produce compounds for the wire and cable, medical, automotive, consumer and general industrial applications.
Since Mexichem is known for its specialization in wire and cable products, could you provide more details?
Mexichem’s PVC-FR and LSZH compounds designed for a variety of electrical, electronic, and voice and data wire and cable types were created to achieve the balance necessary for fire performance as well as electrical and mechanical attributes. Whether designing copper or fiber optic cables, our customers benefit from our extensive experience in this market sector from basic flame-retardant PVC materials to low smoke halogen-free compounds intended to support high-speed data transmission. Our extensive list of FR PVC, specialty low-smoke plenum PVC, and low smoke halogen-free (LSZH/HFFR) compounds have undergone rigorous global testing standards on a variety of cable designs. For rugged industrial applications, our TPE, TPO, TPV, and TPU materials offer a variety of features to answer severe weather and environmental conditions.
What is your estimate about the market size for thermoplastic compounds in India?
It is difficult to put an exact number on the market size for thermoplastic compounds, although we do have our own confidential estimates. We believe that the underlying fundamentals of the Indian economy support stable growth.
Will the India plant also cater to exports to neighbouring countries?
The operations we are planning to set up in India will have the ability to serve not only India but also other countries in the region. So, yes we will leverage our operations in India to support growth in neighbouring markets such as the Middle East and South East Asia.
How much will be the initial investment in the plant and associated infrastructure?
We have not disclosed the amount of our transaction publically. We are still working out details of the investment. But our intent and goal is clear and that is to bring to India, the capabilities that have made Mexichem’s specialty compounds successful in other parts of the world.
What will be your strategy for growth in India?
We see Asia and India, in particular, as an attractive and sustainable growth market for specialty compounds due to the increasing need and focus on infrastructure, energy and durable goods related investments. Our growth strategy is to build from our strong capabilities in the US and European markets. We aspire to represent the highest quality in the markets we serve, which will include wire and cable, medical, automotive, and other industrial segments. Mexichem brands such as Megolon®, Smokeguard®, Garaflex® and Alphaseal® have established themselves as leaders in their markets and our effort will be to reinforce those exact capabilities for the benefit of customers in India and the broader Asian region.
What kind of specific research and development will the India plant undertake for local customers?
As we interact with customers in the region, we fully anticipate a need for local research and development to support domestic growth. We will invest in building a world class R&D organisation in India focused on delivering solutions relevant to the local market while leveraging Mexichem’s capabilities. Our current plans include investments in material characterisation, performance testing, product and process development as well as applications development and testing support at the customer interface.