Indian Manufacturing Expansion Part of Cummins Global Plans

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Researched by Industrial Info Resources (Sugar Land, Texas)--Industrial engine manufacturer Cummins Incorporated (NYSE:CMI) (Columbus, Indiana) is making forward plans for investment in manufacturing plants across the world. In December 2010, the company announced plans to build a $70 million filtration and alternator plant in Turkey. For details see December 15, 2010, article - Cummins to Set Up Manufacturing Site in Turkey to Produce Filtration Units, Alternators.

This month, three plants with a total investment of $111 million were inaugurated at the company's Indian mega site at Phaltan in Pune, India, with a further tripling of the company's Indian investments in the pipeline.

Cummins is also looking at possible new plants and expansions in Africa to manufacture engines for the mining, oil and gas, and power generation sectors with an investment of $75 million over five years. With operations already established in Nigeria and South Africa, the company could make further investments in these countries and also look at opportunities in Egypt, Angola and Morocco. In 2010, Cummins invested about $620 million in global capacity expansion. Another project is under way in China to build 3.8-liter diesel engines for trucks and vans, and the company is evaluating whether these engines can also be made in India.

The 300-acre site at Phaltan is divided between a domestic tariff area and a special economic zone for exports. The site benefits from "mega project" status from the Maharashtra state government. Tata Cummins (Jamshedpur, Jharkhand) will manufacture engines for industrial markets, commercial vehicles and power generation, and Cummins India (Pune, Maharashtra) will set up an engine-rebuild center for high-horsepower engines. Cummins Technologies India ReCon (Pune) will operate the facility for the remanufacture of engines and components.

Tata Cummins is a joint venture formed in 1993 between Cummins and Tata Motors Limited (NYSE:TTM) (Mumbai, India) and produces B series and ISB electronic engines at the Jamshedpur plant. The new plant will manufacture BS III emissions-compliant B-series mechanical engines and ISB electronic engines compliant with BS IV emission standards. The plant is designed to manufacture 90,000 units per year with a scope to expand to 120,000 units per year.

The rebuild center will handle engines ranging from the K19 model (19 liters ) up to the QSK 60 series (60 liters) and will repair all other engine models manufactured by Cummins.

ReCon India's remanufacturing system uses 85% less energy than would be used producing identical new parts. High-quality engines and components will be covered by the company's warranty and built under stringent functional specifications.

The co-locating of the businesses at a common site offers the advantage of scale and greater synergy to operations. Tim Solso, the chairman and CEO of Cummins, said investments of up to $300 million could be made at the site in the next few years, and by 2015, the company's total investment in India could be $500 million, as five new business segments are introduced. By 2015, the Indian operations' contribution to the global business will be 15%, up from the current 10%. Cummins' Indian exports will represent 40% of the company's exports, up from the current 30%.

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