NEW DELHI (Feb. 10, 2:15 p.m. ET) -- Indian-American joint venture compounder Intercontinental Polymers Private Ltd. is building a 44.1 million pound-per-year engineering resins compounding plant in the western Indian state of Gujarat, aimed at both the country’s growing automotive industry and opportunities to switch traditional metal products to plastic.

The new facility in Dahag, Gugarat, will be a ten-fold increase in capacity for the company, which is a joint venture of Intercontinental Export Import, Inc., in Columbia, Md., and Indian injection molder, toolmaker and design house Jyoti Plastic Works Pvt. Ltd.

“The automotive industry has started to move in very fast and along with them, the second tier market is coming along,” said Saurabh Naik, group president and CEO of IEI. Naik also is an executive at the Naik Group, a collection of recycling and plastics processing businesses in the United States.

The Indian auto market is projected to grow from 1.9 million cars a year in 2010 to an estimated 4.7 million by 2015, according to figures from Mumbai-based resin manufacturer Reliance Industries Ltd.

As well, the joint venture is targeting metals conversion in more traditional Indian markets like pumps and agricultural equipment, said Raju Desai, director of Mumbai-based Jyoti.

“There is enormous untapped potential for converting traditional parts from metal to plastics,” Desai said.

Both Naik and Desai spoke at Jyoti’s booth at the Plastindia trade show, held Feb. 1-6 in New Delhi.

The Dahag plant will have four twin-screw extrusion lines, with the equipment likely coming from Western machinery suppliers because the company wants to be able to supply global firms, Naik said.

He said the arrival of more global car makers in India have convinced them that now is the right time to invest.

Automotive manufacturing is a demanding market, and most of the engineering resin compounding work for the global car makers will go to multinational resin firms and their compounding operations, Naik said.

But as those firms run short of capacity in India – and Naik believes they will because some of them are reluctant to increase their capital investments in the uncertain global economic situation -- Intercontinental sees opportunity supplying extra capacity to them, he said.

Jyoti is making other investments as well.

It has just started operation at a new 100,000 square foot injection molding plant in Khadki, Gujarat, with 50 injection presses, Desai said.

The factory will target both exports to the United States and Europe, where Jyoti has sales offices, and India’s market for molded parts made from engineering plastics, said Desai.

Jyoti is also planning to build a 100,000 square foot mold making facility on the Khadki campus, targeting export tooling to Western markets, he said. But Jyoti is searching for a “technology partner” for that facility, Desai said.