Financial Daily from THE HINDU group of publications
Tuesday, Feb 03, 2004

News
Features
Stocks
Cross Currency
Shipping
Archives
Google

Group Sites

Industry & Economy - Engineering


Machine tools sector too goes for outsourcing

Amit Mitra

Mumbai , Feb. 2

THE outsourcing bug appears to be biting into new business sectors in the country. First it was the software sector, which was quickly followed by the pharma and clinical research sectors. And now, the latest to hitch a ride with the outsourcing gravy train, appears to be the Rs 1,200-crore machine tools industry.

The logic behind the increasing flow of outsourcing contracts into India is the same — MNCs and foreign corporate houses are looking for outsourcing services that involved more labour, which would enable them to focus on other hi-tech areas.

Like in the case of software and pharma sectors, the global machine tools manufacturers are viewing India as a potential destination for outsourcing their production of low-end tools, especially with the domestic industry beginning to come into international focus, after it recently uncorked its `Made in India' brand campaign.

This was evident by the response to the seven-day Indian Machine Tool Exhibition (IMTEX) that was flagged off in Mumbai on January 28 — about 530 foreign companies from 26 countries are participating in the event.

The outsourcing trend started recently, with a few major players in the private sector, such as ACE and Batliboi Machine Tools bagging a few outsourcing orders from different companies. While ACE got a significant order from Japan, the Rs 200-crore Baltiboi had recently signed agreements with two European companies for supply of certain machine tools.

"The first is a two-year contract with an European country for supply of radial drilling machines worth about Rs 4 crore, while the second is with an Italian company for the supply of CNC bed-type drilling machines used in the dye and mould industries. We are discussing similar deals with other companies. Clearly, I see a huge opportunity for Indian machine tools manufacturers for getting outsourcing orders," Mr Nirmal Bhogilal, Managing Director of Batliboi Ltd, told Business Line.

That the Indian machine tools industry is attracting global majors was indicated by the response from the Switzerland machine tool industry, which is among the world's 10 major machine tools exporting countries, at the IMTEX-2000.

"Switzerland, which exported machine tools worth $215 million in the first three quarters of 2003, is finding it necessary to look at potential partners in countries like India that have hi-tech and cost-effective manufacturing capabilities to maintain and consolidate its global market presence," said Mr David Syz, State Secretary for Economic Affairs, who visited IMTEX 2004. He called for greater collaboration between Indian and Swiss companies that extended beyond buyer-seller meets to include joint exploration of machine tool markets in South-East Asia and China and outsourcing by Swiss companies to Indian machine tool manufacturers.

Another encouraging feature has been the entry of the Indian industry in China, which imported machine tools worth $3 billion in 2002.

More Stories on : Engineering | Outsourcing

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page



Stories in this Section
ISACA wing bags award


Opening the door for more goodies?
Devolution formula must reward States, says Jayalalithaa
IBRD to study Karnataka's development models
`Perception panel' to spruce up Bengal image
Recapture CIS markets, engineering exporters told
Machine tools sector too goes for outsourcing
Polluted Pampa crying for attention
English Indian Clays told to fix pollution problem
Rolling back of customs duty — Picture tube makers fear inverted duty structure
Chile keen on selling wine to India
`India will benefit more in the post-quota period'
Hong Kong woos Indian investment
`Romania will be happy to be a gateway'
Trauma care centres on highways mulled
Transco may buy 620 m.u. to meet power shortfall
CERC orders `free' transmission line availability
REC to fund Bengal thermal project expansion
Shipping cos make most of freight market boom
`More consolidation in steel sector imminent'
Scrap penalty for delay in service tax payment, says PHD Chamber
Karnataka Mayors' plea
JC Penney to increase textile outsourcing from India
Linking cotton yarn price with export `not correct', says SIMA
TT Services to launch Visa support services for New Zealand
Hyundai emerges as second biggest exporter
Centre plans stringent norms for food products — PFA Act amendment on cards
Global Hospitals to expand
Building expo in Delhi from Feb 18
`Duty sops to import copper cathodes may hit small units'
ISRO for info kiosks
KFCC threat to stop film production
MNC drug cos ready to swallow pill
Role of NGOs hailed
Centre gives nod for Coimbatore industrial cluster project
Power centre
Petronet Dahej plant to be commissioned on Feb 9
`Tex Spares 2004' to hold business meet on wind energy
Granite expo
Traditional products pull down H1 export growth
Duty-free credit entitlement certificate route norms relaxed — Service providers allowed to import `any' capital goods
Chhattisgarh paves way for pvt. role in tourism



The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line