Japans Mitsubishi Electric to Build India Plant for $231 Mln

The Indian arm of Japans Mitsubishi Electric Corp (6503.T) said on Tuesday it will invest 18.91 billion rupees ($231.2 million) to set up a manufacturing facility in the southern state of Tamil Nadu. It said the company would make inverters and factory automation (FA) control system products at the two-floor plant built on a 15,400 square-meter site near Pune. It added that the new facility will increase Mitsubishi Electric India Pvt Ltd’s capacity to meet demand in a rapidly growing market. The Indian market is expanding at an annual rate of about 8%, driven by growth in sectors such as automobiles, food and beverage, pharmaceuticals, and data centers, the company said. The plant will start operations in December next year.

It said the Japanese engineering giant will invest about 180 billion yen in related facilities worldwide over the five-year period ending in fiscal 2026. Its power systems business, which handles equipment used in the generation and transmission of electricity, aims to boost sales by 400 billion yen to become a leading manufacturer in the sector globally, the company said. It added that it has already introduced production and Just-in-Time techniques to raise productivity at its factories and address profitability risks posed by a stronger yen and rises in material costs.

In India, the company has established a base in Pune and boosted its FA business by acquiring a local distributor and strengthening its engineering team to support customers. The firm also started making inverters in the country last year. Its product lineup includes motion controllers, power monitoring products, inverters, electrical discharge machines, and laser processing systems.

The company said that its air conditioning and refrigeration systems business in India focuses on reducing energy consumption, contributing to environmental preservation, and providing a high level of customer satisfaction. Its products are used in various applications, including commercial refrigeration, air conditioning, and heating systems.

It said the project would be the first of its kind in India and would help the company expand its export capacities. The company will employ 2004 people for this project, it added. Tamil Nadu Industries Minister Thangam Thennarasu, Additional Chief Secretary Industrial Department S Krishnan, and Mitsubishi Electric India Managing Director Kazuhiko Tamura laid the foundation stone for the plant at Mahindra Industrial Park Chennai (Origins), a joint venture between the Mahindra World City Developers and Sumitomo Corporation. Origins are located close to Chennai’s three major ports, which will allow MEI to reduce its imports of components. It said it would also help create opportunities for ancillary industries to come to the state and increase employment. It added that almost 60 percent of the workforce will be comprised of women. MEI plans to export its products to over 60 countries across the globe. The plant will produce more than 2,000 air conditioners and compressors annually. The investment is by way of 100 percent foreign direct investment. It added that it would help the company reduce its dependency on imported components and improve its competitiveness in the global market.