Takasago is pumping capital into its wider global expansion strategy and is set on strengthening its presence not only in India but the surrounding SAARC markets of Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri-Lanka.
Rajendra Ghogale, managing director of Takasago International India, said the Indian market is being targeted as it has great growth potential and the company has a minimal presence there.
It is a unique market and very cost competitive, Ghogale told FoodNavigator-Asia, and so “it was deemed necessary to establish a larger presence in India, including manufacturing capabilities.”
According to Indian research group, IAL Consultants, the country is set to become the fastest growing market in Asia for flavours, growing by 10.2% a year to US$380.6 million in 2014, from US$234.4 million in 2009. It is the only country expected to grow by a double-digit rate in Asia over this period.
The new Indian facility has been in the pipeline for three years, he said, and will be situated in an industrial complex in Chennai, the capital of the southern Indian state of Tamil Nadu.
This area was chosen, “due to its port facilities, availability of the required logistic facilities to reach the rest of the Indian subcontinent and the availability of an educated manpower,” Ghogale said.
Within a new township
The area is also undergoing government-driven industrial change with plans to form an ‘industry leading integrated township’, aided by investment from Japan’s Mizuho Corporate Bank, Japanese engineering firm JGC, and Singapore industrial real estate developer Ascendas Group.
“We have acquired five acres of land with the possibility to construct 20,000 square metres of offices and production facilities if necessary,” Ghogale said.
The initial capacity output will be around 15,000 metric tonnes of flavours and fragrances combined, but there are plans for expansion “as our market share and capability requirements grow,” he said.
Ghogale confirmed that the land has not yet been handed over, and so Takasago will establish a temporary manufacturing site in the meantime.
“We are expecting to move to the new site by the first quarter of 2014,” he added, with construction commencing in the second quarter of 2013.
Strengths after Singapore
This move from Takasago comes after a US$32m investment in a new facility in Singapore recently, aimed at strengthening the corporation’s hold in Southeast Asian markets.
The Indian investment is significantly less, Ghogale said, as the Singapore facility will not only serve the needs of an equally fast-growing market, it will also be one of the bases for developing technologies for the emerging markets.
However, he added, that the investment is only less at this initial stage, and “additional investments will be made as the demand for our products grow and as the requirements of the market grow.”
“Singapore and India will work very closely, with both sites sharing technologies, capabilities and knowhow,” he said.
“As the first Japanese company (and multi-national) to invest in this township, we believe this investment will encourage other companies to follow,” Ghogale said.