Lakshmi Machine Works (LMW), a Coimbatore-based textile machinery manufacturer, is setting up a plant in China. The greenfield textiles machinery unit will be set up through a wholly owned subsidiary, LMW Machinery (Suzhou) Co Ltd, with an investment of $18-20 million, spread over two years.
LMW has already bought a unit in the Jiangsu Industrial Park 120 km away from Shanghai. The facility will start production in April 2009.
China has the largest number of installed spindles in the world at 100 million, compared with 38 million in India. A spindle is a machine that spins yarn, which is later woven for various textile uses. The production capacity of a unit is measured on the basis of the number of spindles installed in it.
In its China plant, LMW plans to manufacture 1 million spindles in a phased manner.
Multinationals in the spinning textile machinery space prefer setting up a base in China due to the concentration of spindles there. R Rajendran, chief financial officer, LMW, said, "As one of top manufacturers in the world, LMW would also like to establish its presence in China, which has the largest spindle market."
To begin with, the company plans to manufacture Ringframe, which is the last chain in the spinning machine sequence. The capacity of a plant is measured by the number of Ringframes installed.
Rajendran said at present, Chinese companies manufacture only short-length frames (480-532 spindles per machine). "LMW proposes to manufacture long-length spinning machines (1,200 spindles per machine). These machines are modular in construction and the setting up and commissioning time is minimised, giving it high productivity. The speed of the machine is also higher compared with the current machinery running in China," Rajendran said.
As China doesn't have the expertise that LMW has in long-length machines, the Indian company plans to use this product to capture a sizeable share in the Chinese spinning market. "LMW proposes to start with assembly operations and gradually begin manufacturing operations. The plan is to source components locally in a phased manner.
The technological components currently manufactured in LMW (India) will be sent to this wholly-owned subsidiary in China," Rajendran said, adding that the project work was on schedule.
The unit will give LMW a competitive edge in the Chinese market. If the company finds it feasible, it will export from China to the Asia Oceanic region later.
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