With an initial 75 employees, Modine’s Chennai facility will serve as a base from which the company can expand its engine and PTC product lines to new markets. This supplements the 2007 opening of Modine India’s engineering and design center, which supports product development activities to meet the increasing customer technology requirements.
The Indian facility which supports Modine’s global expansion initiatives will serve the country’s rapidly growing engine, commercial vehicle and off-highway markets. The plant will also support key Indian customers as the demand for high technology heat exchangers and systems continues to increase, driven largely by tighter emission regulations and the expanding domestic economy. The Indian facility will make heat transfer systems – radiator and charge air coolers and oil coolers for engines.
“We are pleased to be in our facility and continue the preparations for production launch activities scheduled for December 2008”, said Jerry Kapoor, Managing Director, Modine India. “The smooth start-up reflects Modine’s commitment to the region, the excellent co-operation of our local and global employees and our determination to be a major player in this important market. With our manufacturing operations starting shortly, we have begun work on several product launches for key customers. These programs should position us well to serve major Indian diesel engine and commercial vehicle makers and play a significant role in India’s growing economy.”
Modine India has established one of the most modern manufacturing facilities taking into account the best practices adopted in all the Modine plants worldwide. In fact, as everywhere else, the Indian plant has been built and structured as per the Modine Production System (MPS). The emphasis is on the processes, and a great level of flexibility has been factored into the production system considering the fact that it could be multiple product with low volumes, in some cases. The plant has been designed to take care of the company’s requirement at least for the next five years. The material, product and process flow have been clinically dissected at the design level itself.
“The opening of our Chennai facility marks a giant step in Modine’s evolution as a global supplier that can provide technologically differentiated products and systems wherever our customers are located,” said Mr. Tom Marry, Regional Vice President – Asia. “The Indian market offers a very interesting group of local companies who are actively implementing plans to become more international, as well as global companies who are expanding into the rapidly growing marketplace. In both cases, Modine is very well positioned with market-specific products, manufacturing capability and our in country management team to support these opportunities. We look forward to leveraging Modine India’s experience and capabilities.”
Globally, Modine with fiscal 2008 revenues from continuing operations at $1.9 billion, specializes in thermal management systems and components, bringing highly engineered heating and cooling technology and solutions to diversified global markets. Its products are used in light, medium and heavy-duty vehicles, HVAC (heating, ventilation and air-conditioning) equipment, industrial equipment, refrigeration systems and fuel cells. Based in Racine, Wisconsin, the company employs approximately 7,900 people worldwide at 33 facilities in 15 countries.
Modine had initially committed an investment of $14 million on the Indian project. But considering the growing number of orders received and also the future growth prospects, it has invested an additional $2 million on the Indian facility which is part of Modine’s strategic plan to meet global product demand and increase its presence in the expanding Asian market. However, the initial focus will be on the Indian market, which offers enough opportunities. The priority will be to cater to the growing domestic demand. It will look at exports at a latter stage.
Mr. Kapoor also made a specific mention of the professional approach and the outstanding support extended by SIPCOT in setting up the manufacturing facility. “We went through a single window clearance system, and the whole process was so well co-ordinated that we didn’t have to go through the hassles of getting various clearances. We chanelised all our efforts in getting the manufacturing facility and up and running in a record time. At the same time, we made sure that whatever we put on paper was complied with. We want to make sure that there is no policy deviation, and we also made sure that our vendors also complied with this”.
Modine has been working with most of the OEMs, both domestic and international, on their current and future programs. It has already won some significant orders, including the first major order for power train cooling components from AVIA. The company is also working with Tata Motors, Renault-Nissan and Mahindra International.
Globally, Modine is an OEM to most of the vehicle manufacturers. But what is interesting is that the initial orders that Modine India has bagged are more from domestic OEMs and some from international vehicle manufacturers who have set up business in India. This goes to show that the company is not purely depending on its global affiliations. It has worked with OEMs in India and generated business on its own merits, which is a significant achievement.
Initially the company is to start with the power train cooling products like radiators and charge air coolers module mainly for trucks and the next program to be launched by June 2009 will be on the engine side, for aluminium layer oil coolers. “We are bringing in this product and technology for the first time in the country specifically for light diesel engines fitted on light commercial vehicles and passenger cars. In Europe, the market has completely shifted to aluminium oil coolers for small diesel engines. The advantage is quite significant considering the fact the weight difference could be almost 50% lesser than the stainless steel oil coolers”, added Mr. Kapoor.
Globally Modine has very strong business in aluminium oil coolers. The company has sold millions of units in Europe and North America alone. In India aluminium oil coolers are use for the new generation diesel engines which are currently being imported.
When Modine entered the Indian market, the company also announced its plans to enter the bus AC market. It has also acquired a company in Korea which manufactures HVAC systems for commercial vehicles and passenger cars. The company had planned to import components from Korea and cater to the gr
owing demand in the Indian Bus AC market. That project has been dropped, says Mr. Kapoor. In fact, globally, Modine has decided to divest its stake in the Korean venture. “We decided not to move ahead with the bus AC business and let our Korean counterpart handle it directly”, added Mr. Kapoor.
It may not be the best of times to kick-start a new venture considering the global turmoil and the downturn in the domestic auto industry, but Mr. Kapoor is glad that it has happened now rather than a year later when the company will have been in full stream production. Modine India has clearly laid a strong foundation which will help capitalise on the future growth opportunities in India.
