The Hindu Business Line : Murugappa group plans production base in China

THE Chennai-based Murugappa group proposes to start manufacturing activity in China, the group's Vice Chairman and Director (Business Strategy), Mr M.A. Alagappan, has said. The group already has a representative office in the country.

Talking to newspersons informally here, Mr Alagappan said the group was examining the feasibility of producing one of the many products under consideration. He, however, did not want to name the products.

The idea was to be able to cater to the large Chinese market, apart from exporting from China to other countries, he said. The Murugappa group already has a China connection — last year, the group company Tube Investments of India Ltd bought bicycle components worth about Rs 2 crore from China. "This year it will be even more," Mr Alagappan said.

If the group does set up a manufacturing base in China, it will be its first outside the country.

A new trend of setting up production bases outside the country appears to have begun, among the companies based in South India. Sundram Fasteners has already announced its decision to do so, and the company's China operations are expected to begin shortly.

TVS Motor Company is close to finalising the setting up of a manufacturing base in Indonesia. Incidentally, China is also on the radar screen of TVS Motor.

In an informal chat with Business Line recently, the company's Chairman and Managing Director, Mr Venu Srinivasan, said that some economists expected the Chinese economy to decline in a few years. "That would be the right time to enter China," he said, adding that TVS Motor's entering China had to be timed more finely than the group company Sundram Fastners Ltd, because TVS Motor's investment would be much larger.

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