The western Indian state of Gujarat is fast emerging as the next major auto hub in India, attracting global OEMs and supporting industries setting up facilities to cater to the fastest growing automobile market in the world.

German suppliers are also targeting the opportunity – including the speciality chemical group Lanxess which has opened a semi-crystalline products (SCP) unit at Jhagadiat. The plant produces high-tech plastics used by automakers.

“The opening of this facility is a part of Lanxess' strategy to be present in the emerging auto hubs of BRIC countries,” said Michael Zobel, managing director, semi-crystalline products, Lanxess Deutschland, in an interview at the plant. This is the second SCP plant in the Asian region after one in Wuxi, China. Lanxess also plans a plant in Brazil.

“We are planning to set up another SCP plant in Brazil by 2013,” Zobel said. However, he declined to comment on location. “We will set up the plant around the auto hub in Brazil,” was all he'd admit. Lanxess plans to spend US$20m there.

The supplier spent EUR70m building the Jhagadia plant and around EUR10m on SCP production alone for an annual capacity of 20,000 tonnes. The plant will supply OEMs including VW, Ford and Tata Motors. All already have committed to major investments in Gujarat with new car factories announced recently.

“We are also [talking] with [other] car makers including Mahindra & Mahindra,” said Zobel. Longer term, perhaps five years out, the plant will supply the Asia-Pacific market. “The short- to mid-term goal is to cater to the Indian automobile industry, which is the sixth largest in the world and projected to be the third largest by 2017,” Zobel said. The facility is flexible and capacity can be varied to meet demand.

Lanxess has also opened a new head office in Thane in Maharastra.

Its Indian-made products include Durethan, technical plastics based on Polymide 6 and 6.6 and Pocan, technical plastics based on Polybutylene Terephthalate (PBT). “Eighty percent of production is Durethan, the remaining 20% is Pocan,” Zobel said. Both are a lighter-weight plastic alternative to metals claimed to help carmakers and parts suppliers achieve considerable savings through less costly production methods and easier assembly.

As OEMs are under increasing pressure to reduce vehicle weight to improve fuel efficiency without compromising safety, light weight plastic is fast replacing metal components.

“A car's weight can be reduced by almost 30% by using plastic components,” Zobel claimed. Durethan and Pocan can be used for door handles, intake manifolds, cylinder heads, various other under-bonnet applications and interiors. Raw material for the Indian plant comes from Lanxess factories in Belgium and Germany.

Rhein Chemie relocates rubber additive facility to Jhagadia

Meanwhile, Lanxess wholly owned subsidiary Rhiein Chemie has transferred production from Madurai in Southern India to a new plant at Jhadia. The plant was relocated owing to the excellent infrastructure and good opportunities for future expansion offered by the larger Lanxess factory at Jhagdia and its proximity to key customers.

Rhein Chemie produces Rhenogran (predispersed polymer-bound additives) and Rhenodiv (tyre release agents) for the rubber processing industry. Customers include tyre manufacturers mostly supplying the auto industry. The rubber additive plant has an annual capacity of 2,500 tons.

Rhein Chemie has continuously increased its presence in India in recent years, producing locally and positioning itself as a partner to the local rubber industry. The company's business here has more than tripled in the past four years and it aims to achieve further growth with new tyre-related products.

Last year, Rhein Chemie expanded by acquiring Darmae, a specialist maker of bladder and release agents, and also took over the tyre release agent business of Wacker Chemie. Rhein Chemie supplies predispersed polymer-bound chemicals, processing promoters, vulcanisation and filler activators, anti-sun check waxes, release agents, tyre maker marking inks and high performance bladders.