Voltas Ltd's joint venture company with KION Group, Voltas Material Handling Pvt Ltd, has built a INR120 million (USD2.7 million) plant in Pune to cope with rising forklift demand.

The 5,000 sqm (53,820 sqft.) plant can be expanded in future. It is expected to produce about 150 forklifts a month by end of the year, the same capacity as Voltas's main plant in Thane.

KION spokesman Michael Hauger says the new facility, which officially opened last month, will meet increased domestic demand and lower production lead times.

"Also, the new facility is being set up according to modern production concepts and will ensure high levels of quality and reliability from the beginning," Hauger explains.

Voltas has been producing forklifts for over 40 years in Thane, but production capacity at the site is limited and extension would be difficult. The Pune plant will be the basis for future growth.

Hauger estimates the Indian market for forklifts and warehouse equipment in 2010 is about 6,500 units. "The Indian forklift market is still underdeveloped ... This is due to a high share of logistics done in the informal sector, low racking and palletisation, and high share of manual movement of goods.

"This market still has large growth potential."

He says Voltas is still evaluating the number of new staff who will be employed at Pune.

Voltas produced 1,700 forklifts at its Thane plant in 2010. The Pune plant (like Thane) will manufacture counterbalance electric and diesel forklifts. Warehouse forklifts are imported from Europe but KION and Voltas plan to produce them locally in the future.