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VEM Tooling, a German-owned mould making company with operations in China and Southeast Asia, is opening a factory in India in late November, as it sees increasing interest in sourcing of plastic moulds and parts there.
The firm, which opened mold making operations in China in 2003 and Thailand in 2008, said international customers are getting much more interested in buying molds in India as an alternative to rising costs in China.
“I can see some risks ahead for China, and I can see some huge opportunities in India,” said President Marc Weinmann. “People are anticipating the future.”
The company has a 200-employee mold making factory in Shenzhen, China, that makes about 500 moulds a year.
It plans to keep it the same size — China will remain VEM’s largest single-production base even with the opening in India — but shift China’s work toward more specialised and higher-cost products, Weinmann said.
Beyond the widely discussed rising costs in China, the country is also facing a working-age population that peaked in size in 2012, Weinmann said.
In India, it will open the plant in the city of Pune in late November and expects to employ about 50 there.
It will be an initial investment of about $500,000 (€458,000), much less than the $3m (€2.75m) it spent to open in Rayong, Thailand, six years ago, he said. The company is starting smaller in India but expects to make continuous investment, Weinmann said.
The India factory will initially focus on moulds in class 104 and class 103, up to 100,000 shots and some in class 102, up to 500,000 shots, he said.
Weinmann said some of its existing multinational customers are “very keen on India. They are customers in Europe and the US, and they want to move into India.”
While China’s plastics industry is many times larger than India’s, Weinmann said he expects quick development in India’s industry.
Manufacturing in India may not develop as quickly as China has, he said, but called India the “hottest market in the plastics industry.
“I’m very optimistic about molding and mold making, and I’m optimistic about the parts market,” he said.
India’s much-publicized imposition of high tariffs on injection moulding machines from China in 2009, and then from Vietnam, Taiwan, Malaysia and the Philippines, has raised prices on the molding industry there, but they are manageable, he said.
“It’s a pain but not a showstopper,” Weinmann said.
The company also plans, in time, to start injection moulding parts for customers in India, as it does now in Thailand, where it has 10 injection moulding machines and 70 employees in the tool shop.
VEM started in 1998 as a mould sourcing company, Hong Kong registered VEM Virtual Electronics Manufacturing, before opening its Shenzhen plant. Weinmann said he is the owner of the firm.
It also has sales offices in California, Germany and Mexico.
Contact: Edward Xie
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