By IANS,
Ahmedabad : Japanese printing ink manufacturers might shift their production to low-cost manufacturing countries like India as a result of the current global financial meltdown, an industrialist here said Wednesday.
Jayanti Patel, chairman and managing director of Meghmani Organics Limited (MOL), returned from a visit to Japan recently after participating in a road show on Vibrant Gujarat Summit 2009.
Patel told IANS that during his interactions with the Japanese manufacturers he gathered that they were in a “mood to shift production to such areas, but they were yet to firm up their plans”.
Asked whether MOL saw an opportunity to set up a second printing ink project with Japanese partnership if such relocation took place, Patel said: “We may be interested and we are open. But things have not yet reached that stage”.
Reviewing the performance of MOL in the context of current liquidity crunch, Patel told reporters here the company would in no way be affected because of the structure of its product portfolio.
The major part of the company’s revenue is generated by agro-chemicals (pesticides) division. The demand for pesticides is not only steady but continues to grow as every country’s goal is to prevent food losses due to pest attacks and ensure food security.
Ashish Soparkar, managing director of MOL, said the company has already notched up net sales of Rs.4.55 billion in the current fiscal year compared to Rs 5.93 billion for the whole of 2007-08.
“We have been growing every year at the rate of 15 to 20 percent and we are quite confident of closing the current fiscal with a minimum 15 percent growth,” Soparkar added.
He said apart from agro-chemicals, the pigment segment too is poised for growth. The demand from user industries like paints, printing inks and plastics has not shown any major down-trend.
Soparkar said this division could also see some big exports as user industries abroad have started exercises to source inputs from low cost manufacturing regions.
He said the Rs.5.50 billion chlor alkali projects at Dahej in South Gujarat being implemented by its subsidiary Meghmani Fine Chemicals is on course. Trial production will commence by March 2009 and commercial production will commence in April next year.
Natwarlal Patel, a director in the company, said the management had taken many pro-active steps like adopting a flexible approach to marketing, a willingness to make price adjustments to retain customers. Nearly 85 per cent of customers are repeat customers and the balance are new clients.
MOL has also assured its 1000-strong work force that there will be no job cuts or retrenchment.