The Hindu Business Line : Japan’s IHI keen to source components from India

The $12-billion IHI Group of Japan is keen to source key components for its construction equipment and other hitech areas, while it is not in favour of establishing a manufacturing base in India at present.

“We have no plans to locate any manufacturing plants outside Japan in the near future. Since India is a potentially big market for our businesses, we are looking at souring components,” Mr Tsuneo Nagase, Deputy General Manager of the International Division of the company, told Business Line here.

The IHI Group has diversified interests in equipment manufacture and expertise in the construction, aerospace, oil and gas etc. Its average annual business turnover from India is of the order of $150-200 million.

To raise capacity

The company, which has tied up with Escorts Construction Equipment Ltd (ECEL) for the supply of a range of crawler cranes, is planning to immediately raise its capacities to meet the big demand. It has a capacity of making 200 crawler cranes per year with the range of 50 to 280 tonnes, he said.

While the turnover from the cranes is about $300 million, the IHI Group is providing maintenance to Indian Airlines, Air Deccan-Kingfisher and IndiGo Air at present, said Mr Koji Hibino, General Manager of its India operations.

The company recently bagged a $300-million contract to build the LNG terminal at Kochi. Work will start in April and would be completed over the next 47 months, he said.

IHI is already implementing the construction project of the LNG terminal being built at Dahej for Petronet. The $1,000-million contract would be completed within the next one year, Mr Koji Hibino, who along with Mr Nagase was in Hyderabad recently said.

In the oil sector, the Japanese major is providing refinery equipment for both Indian Oil Corporation (IOC) and Reliance. Similarly, it is giving a big sized compressor for Oil and Natural Gas Corporation (ONGC).

“The business in India is growing yes, but the big challenge ahead for us is to find vendors to supply small components,” Mr Nagase said.

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