German chemical major BASF is setting up a new engineering plastic compounding plant at Thane near Mumbai and tripling the capacity of its catalyst plant in Chennai, keeping the boom in the Indian automotive sector in mind.
“Global automobile companies are routing to India for base and we see it as a huge business opportunity. Automotive sector will be our major growth driver in India,” said Wolfgang Hapke, president, BASF East Asia. Currently, a mid-size car contains chemical products including paints, plastics and fuel additives to the value of some euro 800.
“In Europe, a car, on an average, has 20% plastic material, which in India is just 10%, leaving a lot of room for replacing metal by plastic as it is not only makes cars lighter, more fuel efficient and environment friendly, but also enhances driving comfort and safety,” said Hapke.
“By 2020, the figure of plastic material in vehicles will go up to 25%,” said Hermann Althoff, group vice-president, engineering plastics Asia Pacific, BASF South East Asia Pte Ltd.
To start with, BASF is eyeing an initial capacity of 9,000 tonne at the Thane plant. The plant is expected to be operational by the second quarter of 2009. The group has also set up a computer-aided engineering (CAE) lab for engineering plastics in Thane. The expansion programme at Chennai is also expected to be completed around the same time.
Asked what the investment in the capacity expansion and the new plant will be, Hapke said, “BASF will be investing euro 2.5 billion in Asia during 2008-12.”
During the period 2003-2007, the total investment of the company in Asia stood at euro 2.8 billion. In 2007, BASF posted a sales of euro 58 billion. The automotive sector made up to 13% of the total sales of the company. In the Asia-Pacfic region, it stands at 8%-10% of the total sales of Euro 9.5 billion.
Asked where India stands in it, Althoff said, “India is ahead of the others in the region with 11%-12%.” Some of the group’s clients include Honda, Yamaha, Suzuki, Tata Motors and Ashok Leyland, among others.
