Jain Irrigation Systems of India plans to set up its first factory in Africa by the end of next year as part of an effort to push up annual sales fivefold by 2015.
Anil Jain, chief executive, said he was evaluating potential sites in Africa for factories to make specialised systems based on drip irrigation– a type of irrigation equipment of which Jain is the world’s second- biggest supplier.
The idea of the plant would be to produce systems that could be sold around the continent as part of Jain’s plans for a big increase in its sales of $1bn last year.
“Africa needs a lot of investment [in drip irrigation] and we are in a good position to supply a lot of the equipment which could help in this,” Mr Jain said.
The chief executive said the company might decide to build a new factory in a new development, or it could take over an existing operation as part of an acquisition.
In the past five years, Jain has spent about $150m acquiring 20 companies during a period of rapid growth. It says it wants to overtake as the biggest company in drip irrigation Netafim of Israel, a company that was one of the pioneers in the industry when the concept was invented in the 1960s.
Irrigation systems of this sort combine technologies in pumps, controls, filters and special pipe fittings for dripping water at controlled rates called emitters. Because the water is channelled directly to plant roots as often as every hour, it can improve crop yields even in parched areas, working with much less water than conventional types of irrigation hardware.
Drip irrigation is sometimes known as micro irrigation.
Of the company’s revenues last year about a third came from outside of India.
The company – which is listed on the Mumbai stock exchange although it is 30 per cent owned by Mr Jain and his family – has factories in the US, Brazil, Turkey, Australia and Spain as well as India.
A particularly useful purchase, Mr Jain said, was the deal in 2008 in which the company bought Thomas Machines of Switzerland, a leader in the niche technology of making high-speed production machines for plastic “drip-feed” pipes. This has given Jain in-house supply of these machines and helped to boost productivity.
Over the next few years Mr Jain said that he believed growth in demand would be higher in India than elsewhere.
But he is keen to make acquisitions around the world in particular to gain access to advanced technologies that could help further expansion.
The chief executive said: “There are some possibilities around the world of purchasing companies with knowledge about specific technologies that could be helpful to us in fields such as pumps.”
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