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The eBearing News
November 3, 2006
Timken Building New Bearing Plant in India
copyright © 2006 eBearing Inc.
The Timken Company (USA; NYSE:
TKR)
announced it has received approval for and will build a new greenfield bearing manufacturing facility
in India. As approved, the operation will be a newly created, wholly owned subsidiary of Timken
USA, not Timken India Ltd.
The USD $25 million facility will be located in Mahindra City, near Chennai,
the first of a number of unique
private economic development zones being promoted by the Indian government.
Groundbreaking is slated for next month.
Planning for a new production facility in India goes back more than a year; initially, eBearing
was told Timken was budgeting as much as $50 million for a plant in India.
article: Timken India eyes roller bearing production
The new facility was approved at a more understandable $25 million, and will reportedly produce
all types of roller bearings, both for export and sale inside India.
Set up by the powerful Mahindra Group, Mahindra City
[website],
is located on 1,400 acres near Chennai airport. It is presented as, "India's first fully planned and integrated
Business City promoted through a private - public partnership model; a
first-of-its-kind venture encompassing Business, Housing and Lifestyle Zones."
It is just the first of hundreds of such government-sponsored privately operated Special Economic
Zones the government hopes will spring up and help it to compete with China in the world market.
The allure of these islands of development are that they should provide all the advantages of doing
business in India, while addressing all the disadvantages -- by operating their own road systems, power
generation plants, security force, water, sewage and telecom infrastructures, for example.
Another key advantage of the Mahindra City site is that government support of these Special Economic
Zones include a variety of tax benefits, from duty-free raw material and equipment imports
to many other economic incentives, intended to keep Indian-made products price-competitive on the world
market.
Timken India's Ashish Sinharoy said: "The environment is easier to manage, we get tax
breaks, and we can cut down on start-up time."
The Foreign Investment Promotion Board (FIPB;
[website]
) clearance for the Timken project was
announced last month.
Timken's Industrial Group President, Mike Arnold, said: "Our new facility in India represents a
significant expansion of our manufacturing presence in this important economy, and we will continue
to look for strategic opportunities."
By specifically mentioning the search for strategic opportunities, several industry executives in India
told eBearing they believe Timken is signaling its intention to pursue faster growth by acquisition.
Countering that argument, others point out most bearing manufacturers in India are smaller enterprises
that would come up short as acquisition candidates: "while they are viable, very few have
the structure appealing to a foreign corporation."
The Mahindra City plant, as yet unnamed, is expected to come online sometime in late 2007 and eventually
employ as many as 300 people.
Timken India Ltd. has operations in Jamshdpur and Bangalore, employing over 1,000.
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Bruce Carr edited this content.
Copyrighted material; unauthorized reproduction prohibited.
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2011, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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