JHAGADIA, INDIA (Jan. 31, 6:50 p.m. ET) -- The western Indian state of Gujarat is fast emerging as the next major auto hub. Lanxess AG is tapping into the market with local production, opening an engineering resins compounding plant in Jhagadia on Jan. 31.

The company also revealed plans to build a compounding plant in Brazil.

In Gurarat, “the short-term and mid-term goal is to cater the Indian automobile industry, which is the sixth largest in the world and projected to be the third largest by 2017,” said Michael Zobel, managing director for semi-crystalline products for Lanxess Deutschland GmbH, in an interview with Plastics News at the facility.

The plant is the second for Lanxess in the region, after a facility in Wuxi, China. Lanxess first announced plans for the Jhagadia plant at the K 2010 trade show.

Zobel said Lanxess plans to set up a plant in Brazil by 2013.

“We will set up the plant around the auto hub in Brazil,” he said, although he declined to identify the location. Lanxess plans to invest $20 million in that project.

Lanxess invested around 10 million euros ($13.5 million) in the Jhagadia facility, which has an annual capacity of 44 million pounds. The Indian plant will cater to carmakers like Volkswagen, Ford and Tata Motors, all of whom have already committed to major investments in Gujarat.

The plant will target customers in the ASEAN countries like Thailand, Malaysia, Indonesia and Vietnam in the next five years, he said.

Zobel said the company built a flexible facility where capacity can be hiked depending upon the demand.

The plant will compound Durethan polyamide and Pocan polybutylene terephthalate. About 80 percent of the output will be Durethan, Zobel said.

Applications include door handles, intake manifolds, cylinder heads, underhood and interior parts.

Leverkusen, Germany-based Lanxess will supply resin to the plant from facilities in Belgium and Germany.

Besides the Jhagadia site, Lanxess has a new head office for India in Thane.