Focus on Long-term Benefits, not on Instant Profits: Atanu Maity
Atanu Maity, President & CEO, Steer Enginering

Plastic machines manufactured by domestic manufactures are no ‘less efficient,’ and they are as good as the machines offered by global players, but the higher cost forces customers to go for second-hand machines, says Atanu Maity, President & CEO, Steer Enginering, who has recently been appointed to his current role.

Polymer industry in India is now moving towards evolving as a major global player, and it will definitely be a key driver for companies engaged in manufacturing processing machines.

“At present, there are around 200 players in the country, most of which are small and belong to unorganised sectors, and about 8,000 machines are sold in India every year,” Maity updates. Some of them certainly command respect worldwide in terms of technological advancement. He says that the share of processing machines namely for Extrusion, Injection Moulding and Blow Moulding & Others is about 30, 60 and 10 per cent, respectively.

World-class Ability
“Machinery manufacturers in India are building their machines following the design criterions and performance standards set by the best of the brands from Western Europe & North America with optimum quality, productivity, energy efficiency and reliability. Continued association with global technology leaders such as Battenfeld, Bausano, Italtech, Kuhne, Hosokawa Alpine, etc, through JV or technology license agreement, domestic manufacturers have remained par with globally offered technologies. Global players such as Toshiba, Milacron, ASB Nissei and Sidel are also present in India. These players have a manufacturing base in India, and produce machines having the latest technology in injection moulding and blow moulding for domestic market as well as for export.”

He says that these domestically produced machines find acceptance in developing as well as developed countries such as North America, Europe, China, Japan etc. Few of the machine manufacturers such as STEER have their own R&D facilities and have global patents to their name.

Cheaper Second-hand Machines
But despite this fact, the share of imported machines, particularly second-hand machines and low-cost machines have increased in the country, Maity reveals. “Between 2002-03 to 2012-13, machines were added at CARG of 7.3 per cent. The growth of local machines was at 5.1 per cent CARG, whereas imports grew at 27 per cent CARG,” he adds. According to him, a large number of machines have been imported from China, but now with anti-dumping duty, direct imports from China have reduced, still these machines are arriving via other SE Asian countries, which enjoy FTA benefit. He further updates that industry has seen sizeable growth in past 5 years in tandem with our growing economy. Domestic manufacturers have 54 per cent share in the machinery market, while the share of imports is 46 per cent. Imports are mainly from far East on account of low price and shorter delivery period.

Highlighting the reasons for popularity of second-hand machines, Maity explains that advancements in processing machinery for enhancing the energy efficiency and productivity have occurred in recent past. Under the compulsions to reduce the carbon footprint, processors in the developed world are replacing the older machines with new technology machines. Thus, used machinery from developed world is finding a way to developing world with an attractive price tag. Used – aged machinery population -if allowed to increase- will definitely harm the industry in the long term, but at this juncture low cost machines are creating tough competition for major domestic machine manufacturers. Over past few years approximately 30 per cent of imported machines are second-hand.

Disadvantage of Using Second-hand Machines
“Second-hand machines are cheaper, but it will affect the productivity in the long run, for sure,” he adds further.

“As the second hand machinery import is reported to be of older technology, the use of such machines is likely to impact the productivity, quality and competitiveness of domestic plastics processors. New technology machines help in achieving the fastest possible productions, continuous & smooth operation for long periods, low downtime, no major failures, maximum repeatability due to minimum rejections despite fine tolerances, low materials waste, minimal energy costs and long machine life span. These aged, second-hand machines consume greater energy, have greater variations in dimensions and due to this consume higher polymer per product,” Maity explains further. He exemplifies that a plastic cup produced using an old injection moulding machine with technology of 2000 or prior will consume 1.1KW/Kg and produce part which will weigh 16 gm in 9 sec. The same cup can be produced using latest technology machine in 8 sec, with part weight of only 14 gm and power consumption of 0.8 KW/kg.

According to Maity, the cost of recent technology machines is higher by 30 to 40 per cent than the old technology conventional systems. Indian plastics processing industry is highly fragmented and majority of players are from small and tiny sector; low cost second hand machinery attract them instead of buying new technology machines which are relatively high priced. Also, many a time these processors find it difficult to obtain required funds from FIs and hence are more inclined to buy second hand machinery to meet the production requirement and deadlines.

Steer Engineering’s Contribution
When asked how well-designed are the machines manufactured by Steer Engineering to ensure higher output, better quality and less involvement of people, Maity educates that with around 25 global patents in various stages of approvals, Steer Engineering has developed technology and designs which provide overall improvement in product quality at lower cost due to higher output and less energy consumption. He says, “This improvement is due to special elements, shaft designs which are capable of higher torque, gearboxes that are suited for product requirement. Improved and special material of construction allows operation at higher rpm which not only improves output, but also reduces resident time of melt within extruder.”

“Steer’s strategy is to remain close to its customers and be alert to changes in the market in terms of volumes, technology and applications. Coupled with steady investments in R&D, the company would be ready with capacity and enhance the technological features of its products or the range of services required by our customers,” Maity concludes.

According to Atanu Maity the cost of production in India is higher due to following reasons

Higher Input Cost: In order to bring domestic machines on par with global manufacturers technology components are imported from Europe, USA and Japan. Technology parts which are imported form on an average 25 per cent to 50 per cent of material costs. These imports attract ~8 per cent customs duty leading to increase in prices of finished goods, which in turns make the domestic products uncompetitive in comparison to global manufacturers.

Taxes and Duties: Existing tax structures, duties, FTAs and regulations have created an unequal playing field between domestically manufactured goods and imported goods, imposing higher costs on domestic manufacturers. The current system of taxes leads to distortions to the detriment of domestic manufacturers. While the difference varies across states; the overall tax and duty structure can cause a 17 per cent cost disadvantage for domestic manufacturers. Further, certain automation equipment are required in the machinery for improving productivity, reducing wastage and improving quality levels. These automation equipment, which are currently covered under Tariff Heading 9031, are not manufactured in the country and attract an import duty of ~8 per cent.

FTA: FTAs, in certain cases, are also creating an undue advantage for global competitors seeking to tap into Indian demand. If corresponding measures for creating a level playing field are not adopted, such as, lower duties for raw materials costs, domestic manufacturers will remain disadvantaged. Not only are manufacturers in these countries benefitting, but exports from other countries such as China are also routed through FTA countries to secure greater advantage over local manufacturers.

Lack of Efficient Supply Chain: Quality and reliability of the product is decided by the quality of components put into its construction. Moreover, cost of the product is dependent on cost of parts from supplier. We need to develop efficient supply chain for cost-quality–delivery using the cluster development programs. Lack of efficient supply chain also creates the necessity to carry high inventories & high inventory carrying cost.

Lack of Skilled Manpower: Skilled manpower is in short supply in associate and supervisory category for processing industry as well as in machinery manufacturing. The education system in the current form and curriculum prevalent at institutes and universities does not create industry employable manpower, with the exception of diploma and degree in plastics stream conducted by some of the institutions.

Modern Manufacturing Processes: Most manufacturers have not adopted modern manufacturing processes & systems such as forecasting, advance planning with use of ERP; all these causes longer delivery time of machinery.