Sabic looks to expand business in India

Sabic looks to expand business in India
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First Published: Wed, Nov 28 2007. 12 30 AM IST
Updated: Wed, Nov 28 2007. 12 30 AM IST
New Delhi: Sabic Innovative Plastics, one of the world’s largest maker of thermoplastics—a form of heat-resistant and recyclable material—is looking to expand its automotive business in India even as car makers such as Tata Motors Ltd and Mahindra & Mahindra Ltd increase the usage of plastic to make body panels and fenders to meet fuel efficiency and safety norms.
The company, formerly known as GE Plastics (GE sold GE Plastics to Saudi Basic Industries for $11.6 billion or about Rs46,284 crore in May), derives around 30% or around $45 million of its $150 million sales in India from auto makers and hopes to increase this to $75 million in the next five years.
“We contribute about 3kg of plastic to India-made vehicles on an average, and are aiming to raise this to 15kg by 2012,” said U. Venkatakrishnan, automotive director, Sabic Innovative Plastics.
A plastic component weighs up to 50% less than the same part made from metal. Using plastic helps reduce the weight of a vehicle, which, in turn, helps vehicle manufacturers meet fuel efficiency norms that exist in their export markets such as Europe. India, too, has set up a panel to implement such norms.
In India, plastics account for up to 80kg of the total weight in a vehicle the size of Maruti Suzuki’s WagonR, which weighs around 1,250 kg.
This compares with an average of 150 kg of plastics in overseas vehicles. Internationally, plastic is used extensively in the bigger vehicles such as large sedans, sport utility vehicles and trucks since there is higher scope to replacemetal components in these vehicles.
“We are investigating the use of plastic for the exteriors of vehicles, apart from the interiors,” said Arun Jaura, senior vice-president, research and development, at Mahindra & Mahindra Ltd, India’s largest utility vehicle maker. “The initial investment in this is still high since there are no economies of scale yet.” Jaura didn’t specify how high the costs were.
Sports utility vehicles typically have more electronic components that add to the weight of the vehicle. This is why manufacturers of these vehicles have to cut down on weight by replacing their metal components with plastic materials. In India, Sabic sees a market for this type of plastic in trucks and SUVs, especially those models that are to be exported overseas. “We are working with Indian companies on future technologies, not only for their domestic models but also for vehicles that are going to be exported,” said Venkatakrishnan.
The only Indian manufacturer that has till date used engineering plastic for the front panel is Tata Motors Ltd, India’s largest truck maker, for its Ace light truck. This is the same material that Sabic used to make the exterior body panels of the Mercedes Smart car in Germany. However, the use of engineering plastic in small cars such as Tatas’ Rs1 lakh car remains a constraint because it is “a low-priced vehicle with not a lot of content to it where you can add value with engineering plastic,” added Venkatakrishnan.
ammar.m@livemint.com
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First Published: Wed, Nov 28 2007. 12 30 AM IST