Chain-makers have reason to cheer

"Bottling and dairy industries offer good prospects," says an official of TI Diamond Chain, part of the Chennai-based Murugappa group. "Nearly 15 per cent of the Rs 70,000-crore investment approvals has come from the liquor and soft drinks industry."

domain-B's currency converter - check it outTo tap the potential, chain majors like TI Diamond Chain (Rs 125-crore turnover), LG Balakrishnan and Bros (Rs 194 crore) and Hybro Chains are now rolling out non-corrosive stainless steel chains, hitherto imported.

Despite this positive note, manufacturers are singing the now familiar Chinese tune price-cutting. "We cant fight the Chinese government," says LGB managing director B Vijayakumar, referring to the unseen subsidies given to the manufacturing units located there.

Both LGB and TI Diamond Chain export large quantities to the replacement market in Europe, Southeast Asia and South Africa. TI Diamond Chain also sells small numbers to some overseas OEs. "But maintaining the current level of exports in the wake of Chinese aggression is very difficult," says Vijayakumar.

Not only in the export markets, even in India the Chinese motorcycle chains have wormed their way into some OEs. "I wont doubt the Chinese product quality; they are certainly six times cheaper than ours in the international market," says an industry official.

"Chinese chains have affected realisations in the standard chains market and we have taken measures to improve our product and plans to offer value-added differentiated products," says Murugappa group general manager (corporate communications) K Chandrasekaran.