The Hindu Business Line : Rubber goods producers turn to China for machinery

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Chennai Feb. 7 The rubber goods manufacturing industry, which a couple of years ago had cried foul of Chinese imports, has now turned to China to fulfil its needs for machinery. At least 90 per cent of the machinery for the rubber goods manufacturers is now coming from China.

"There is a tremendous growth in the rubber goods manufacturing industry in line with the growth the automotive industry is witnessing. In fact, we can say that we are witnessing a 100 per cent growth. If we have to meet the increasing demand, then we need to have good machinery and currently, only China can meet it, technically and price-wise," say entrepreneurs of the industry.

According to officials of the All-Indian Rubber Industries Association, machinery imports from China for the rubber goods sector increased to Rs 60 crore in 2005 from Rs 15 crore the previous year. Though figures for 2006 are not available, the association says it could have, at least, doubled.

Indian entrepreneurs have been a bit smart in turning towards the Chinese machinery. First, these machinery are technically superior to Indian ones. Secondly, prices are lower than what they would have to shell out for Indian and global machinery of the same kind.

Chinese machinery's superiority comes on the heels of tie-ups entered into by some of the manufacturers with some European companies. "But these people have ended the tie-ups once they learnt the tricks of the trade," says a rubber goods manufacturer.

"We recently bought a (rubber) mixing mill from the Chinese. It cost us Rs 30 lakh. The same machinery would have cost us Rs 40 lakh had we gone to an Indian manufacturer and Rs 80 lakh if we had looked at Europe," says Mr Niraj Thakkar, Director (Tech) of the Mumbai-based Precision Rubber Industries.

Capital costs cut

Mr Y.S. Lathia of another Mumbai-based firm, Lathia Rubber Manufacturing Co, says with the rubber goods manufacturing sector being capital, rubber and labour intensive, such cut in capital costs will make Indian rubber goods competitive in the global market.

"The US imports rubber goods worth $60 billion a year. I think we have potential to export at least $500 million worth of goods to that country. Only such measures can help us," says Mr Lathia.

Mr Anil Sampat, who takes care of the rubber industries association's exhibition affairs, says an Indian manufacturer's order book gets filled for five years within a day. "But the regrettable thing is that the number of machinery manufacturers in the country is declining," he says.

One of the Indian agents for Chinese machinery, Bharaj Machineries, says the firm is expecting to double its sales this year. "The automotive industry's growth is spurring the rubber goods sector. Chinese machinery are definitely giving an edge to Indian manufacturers," says Mr Jaspal Singh Bharaj of the firm.