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Daifuku to expand its presence in Telangana, India

Hyderabad, 12th December 2022: Daifuku Co., Ltd, the world's leading provider of automated material handling technology and solutions plans to construct a new manufacturing facility in the state of Telangana. The new state-of-the-art factory with a footprint of more than 200,000 square feet will augment its current facility of 60,000 square feet and is slated to produce world class intralogistics equipment such as automated storage and retrieval systems, sorting transfer vehicles, conveyors, and sorters.

The first phase of expansion envisages a planned investment of INR 2 billion and Daifuku expects to operationalize its new factory within the next 18 months.

Speaking on the occasion Shri KT Rama Rao, Hon’ble Minister for IT, Industries, MA & UD, Govt of Telangana; said, this is indeed an excellent occasion to celebrate and that’s the reason we wanted to make it happen. The world at large and especially post-pandemic all of us need more infusion of positive news. Daifuku coming to Telangana and setting up a brand-new factory with Rs 450 crs., of investment, providing employment to eight hundred plus people, was indeed something we wanted to celebrate, my compliments to the entire team of Daifuku. You made the right choice I can tell, by choosing Telangana and Hyderabad. Before I came here I had a meeting with the new US Council General, Jennifer Larson. She asked me a very interesting question of what do you think about manufacturing, services, what do you think is the primary sector, as an Industries minister, give me your and your state’s perspective. How do you see this landscape changing in the next few years and few decades. One of the things I told her, whoever I meet, wherever I meet, whichever Industrialist or potential investor I meet, they have a renewed enthusiasm to set up a manufacturing base in India. Post-covid the world has realised that there is too much dependence on China for everything, be it bulk drugs, medical supplies and when the supply chain was disrupted, every single industrialist, be it small, micro, medium or large, was affected one way or other. So the World started thinking of this excessive reliance and excessive dependence on China. You talk to the biggest of the biggest players, the Fortune 500 companies or even the smallest player, they all tell me the same thing, there has to be a China plus one strategy, you can manufacture in China for China and for the rest of the world, we need to start looking at other bases. Because we are similar in our sizes, China and India, 1.4 Bn people each, in terms of the workforce in terms of think force, people draw a over simplified comparison and say, if we are moving away from China the logical place to go to would be India. But lot of overseas investors, be it Japanese, Americans or Europeans they ask me, if China is able to do certain things in a way, why can’t India do it. I tell them one thing that China is a country which is very unique in terms of how it is structured, its controlled and administered. India is very different, India is democratic, India is not one, but there are 28 different Indias if you ask me, because of the federal structure we have, each state is so uniquely empowered. Makers of our constitution had envisioned that India is a union of states, therefore each state and especially the gateway you chose to enter India through will determine your impression of India and how easy you find doing business in India, that’s the general thought I leave with any of my potential investors. Having said that, when I visit countries like US, Japan and other large economies, I was never more impressed than I was impressed with Japan. When I was in Japan one of the things that struck me was the grooming of Japanese kids from a very young age of design thinking, engineering from a very early age. It was a way to tell the kids that manufacturing really holds the key to the growth of the world, to the expansion of your thinking and abilities, as world can’t do without manufacturing. What Japanese are trying to inculcate in those kids is design thinking from a very young age and the importance that needs to be given to manufacturing from an young age. What I admire about a country like Japan and a company like Daifuku, is the amazing tenacity and resilience they have shown over the last few decades. Remember Japan was the only country in the world which had experienced the most tragic, devastating atomic explosion at Hiroshima and Nagasaki, despite the natural disasters, the human intellect that the Japanese have invested in has really propelled them to one of the largest economies in the world, in spite of having very small population, forces of nature stacked up against them. The Japanese continue to be a dominant force economically compared to the West and Asia. What I told the US consul General is that we need to pick up the best elements from each part, India can’t and doesn’t have the latitude, India doesn’t have the luxury to grow at its own pace. You can’t miss this opportunity; we have to seize this opportunity. We are uniquely positioned now when the world is looking at different manufacturing locations outside of China. If India has to latch on to this, we have to do what the US did in the last 30 years in a span of next 10 years, we have to do what China has done in the last 25 years in a span of 10 years. We don’t have the luxury of leapfrogging, we have to jump a few hoops, we have to cover a few bases. We should focus not just on Hi-tech manufacturing or advancements or smart manufacturing. We have to also focus on basic manufacturing, we also need to ensure we also get the efficient smart manufacturing which is coming out as part of Industrial revolution 4.O and we also have to ensure and inculcate design thinking at the school curriculum level and most importantly even in the vocational training institutes we have. We had a meeting with Proctor and Gamble, I told them to tag along one of our institutes, in fact IIIT at Basara, which has some brilliant youngsters, to create an apprenticeship model. It will be a win-win proposition for the company and the student. So, we need four things, basic design thinking at school level, apprenticeship model at higher education level, we have to compete on scale if we have to compete with large manufacturing countries like China. We of course need to create world’s largest pharma parks, industrial parks and through which economies of scale are bound to come. Delighted to share that we are building Telangana’s largest Industrial parks at Dandumalkapur and its shaping up very well. I would wish FTCCI, CII, FICCI or even Japanese come together and create such large parks. We need to learn from Japanese, they have done some very smart things, either they have gone underground in some cases or they have gone up vertically, so we need to do those disruptions or innovations, because land is a very luxurious commodity and is in limited supply and its getting more and more expensive, there is huge demand and it becomes more difficult for the Government to procure and for you to get the land at a reasonable price so that your bottom lines are not affected. How many of Companies from India have really disrupted and become global names, how many of our products are world class and compete on world scale. But unfortunately not many of these disruptions or innovations are truly world class, therefore we need to start thinking on a larger scale, need to be bit more ambitious, we need to start being more aggressive as well. Capital is no more an issue if you have an idea that can really work, unlike in the past. With the world looking at us with renewed enthusiasm, Indian entrepreneurs need to make some bold moves, I request Telangana entrepreneurs to please think big and think of products for the world, not just for India. I am strong believer that we have in us to make world class products.

"This expansion, which will include technology transfer from Japan will not only help us in expecting our localization plans but will also accelerate our product development pipeline in India so that we can serve the needs of our Indian customers with greater efficiency” says Srinivas Garimella, Managing Director of Daifuku’s Indian Subsidiary, Vega Conveyors & Automation Pvt Ltd.

With the Indian economy anticipated to remain as one amongst the fastest growing economies in the world, Daifuku expects that the intralogistics automation market will continue to grow rapidly and plans to employ 250 people and products that on full plant capacity utilization, the number of which may move up to more than 800 as it continues to stay vested in India.

Hiroshi Nobuta, Daifuku Board Member and Responsible officer for its Indian operations while thanking the government of Telangana for being pro-active in fast-tracking its expansion plans, states that India will continue to be a focus market for Daifuku and remains committed to the company’s Indian operations.


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