TAL Manufacturing Solutions Ltd., the wholly-owned machine tool subsidiary of the Tata group, plans to enter the fast growing Chinese market by offering IT solutions for the engineering sector from 2003. TAL, which was hived off from Telco in April 2000, has a significant client base in the United States and Europe and hopes to repeat the performance in the Chinese machine tools sector. "We are participating in a show to be held in Beijing in March 2003 and this will help us identify distribution units in China.

This would act as a front end for our operations," TAL Manufacturing Solutions Ltd., general manager (marketing) Mr Lalit Kumar Pahwa said on Monday. According to industry estimates, leading machine tool manufacturing countries Germany and Japan have a highly export-intensive industry, whereas China and the US have a huge local market with nearly 50 per cent of the machines produced being used within their country. "We are also pitching ourselves against those players importing equipment after setting up shop in India," Mr Pahwa added.

Managing director Y. Nath said the Indian machine tools sector accounts for a meagre $ 100 million in size when compared to the $ 3 billion Chinese market. Besides contemplating on more direct presence abroad in order to target major user concentrations, the Rs 65 crores company is targeting a Rs 100 crores turnover during this year, with a significant contribution expected from providing comprehensive manufacturing solutions. "Engineering skills in India can be marketed elsewhere at a lower cost and this accounts for a profitable business proposition," Mr Nath added.

He said there is a huge export opportunity for Indian machine tools as a result of cost advantage. "China and US import half of their requirements of machine tools valued at $ 9 billion. It would be difficult for Indian companies to dislodge suppliers from Taiwan and Korea in the lower end of machine tool business." TAL would specifically cater to the needs of high end machine tool companies that are located in Germany, Japan and Italy.

"As leading players are looking at us as a global outsourcing hub, we will focus on developing high performance machining centres, which are aggressively marketed through our agents in USA," Mr Nath added. TAL Manufacturing Solutions does job work for Telco by manufacturing body hoods of Indica, the flagship car at its Pune unit. TAL, which claims to provide a 30 per cent cost benefit to customers, is assembling nearly 500 units of Tata Indica hoods per month.

The Rs 1,700 crores multi-functional unit will also be working on the Indian version of Sedan—Indigo, which is expected to be rolled out this year. The company, which had downsized its staff by half, recorded exports of Rs 1.5 crores in 2001. With a client list boasting of names like Honda and Ashok Leyland, the company is also working on the new version of Daimler Chrysler, officials said.