100 Stories2015 Expanding the Indian Market - Daramic’s Gujarat Plant

Gone are the days where “doing business in India not feasible” is a common sentiment. One of Asahi Kasei’s businesses in particular has expanded its presence in the Indian market. That is the Daramic™ business, one of the separator businesses of Polypore International, which Asahi Kasei acquired in 2015.

Asahi Kasei has been developing battery separators for smartphones and tablets, and by acquiring Polypore, which is strong in separators for automotive applications, the company aimed to expand its market. Polypore's separator business has two brands: Cellgard™ for lithium-ion batteries and Daramic™ for lead-acid batteries. Cellgard™ has bases in the U.S. and China, while Daramic™ has bases in Europe, the U.S., China, India, and Thailand.

In order to expand the market for Daramic™, the company considered establishing a manufacturing plant in India, rather than in China or Thailand, because of the advantages of low cost and availability of skilled labor, but there were also a number of concerns. In the past, India was considered to score lower than other countries in terms of “ease of doing business.”

One of the reasons for this is that India is a complex market that Japanese companies cannot easily understand, as its taxation system is not standardized within the country and differs from state to state, and its industrial structure is inefficient and mainly family-run, resulting in different cultural practices in each region.

In addition, while in China, the established strategy is to expand inland with Shanghai, Beijing, and Guangzhou as footholds, in India, major cities are scattered over a large area of land, making it difficult to find a strategically advantageous position.

Despite these disadvantages, Asahi Kasei believed in India's potential and decided to establish a manufacturing facility in Gujarat. The fact that India contributes about 20% of sales worldwide also supported this decision.

The success or failure of this decision, which in the public's view was counter-intuitive, attracted a great deal of attention. In the end, Gujarat met the expectations of the public with flying colors. It achieved saleable production in 14 months and stabilized its industrial and automotive separator profiles within six months of operation.

Its manufacturing capabilities have been steadily proven, and Asahi Kasei is set to fund a doubling of its production capacity in India. Gujarat has become a benchmark plant with the capacity to produce all new products invented by the Daramic global team.

This provides further opportunities to launch full-scale operations in India, with a full-scale manufacturing operation finally launched in India in 2017. As of 2021, plans are in place to supply the Indian market with a volume of 72 million m², equivalent to the area of about 141 Tokyo Disneylands.