Working together is the key to competitiveness in the foundry industry, according to J.P. Nayak, president of the machinery and industrial products division of Larsen and Toubro, one of the large customers of Indian foundries.
Addressing foundrymen from across the country and the world at the valedictory sessions of the 68th Indian Foundry Congress and the 56th World Foundry Congress, Mr. Nayak said growth was bringing fresh challenges to the Indian foundry sector. While the industrial boom of the last three years had brought tremendous growth impetus, the fragmented nature of the sector meant that growth also highlighted the limitations of the sector.
Of the 4,750 odd foundries across the country, 80 per cent were small industries producing only 20 per cent of the industry’s total output of 7.5 million tonnes per year. These small players would not be able to access the investment, technology and training needed to modernise their foundries and exploit the growth opportunities unless they joined together and received help from industry associations, said Mr. Nayak.
According to V. Mahadevan, president of the Institute of Indian Foundrymen and managing director of Ennore Foundries, the challenge is that while the customers are very organised,
the supply chain is not. “The trend is clear. I expect to see a lot of consolidation in the next three to four years. Supply chain efficiencies must improve,” he said.
Small players catering to local markets will survive, said Mr. Mahadevan. However, the large scale original equipment manufacturers or OEMs will demand higher quality and efficiency than the SMEs can provide alone. “Thirty to forty per cent of our output is consumed by the auto industry,” he pointed out.
The industry association is trying to co-ordinate clusters to leverage cumulative volumes and effect energy efficiencies and training programmes as a group. Mr. Mahadevan said that the good results in the Pune cluster would be replicated in the Coimbatore belt, the Punjab region and other regional clusters.
Key challenge
Energy efficiency was a key challenge for the future, both due to high power costs and rising environmental concerns. This would be reflected in the next World Foundry Congress to be held in China in 2010 with the theme, “Green Foundry”.
The next Indian Foundry Congress will be held in Kolkata next year, alongside the International Foundry Exhibition, IFEX 2009. This year’s IFEX also came to an end on Sunday, having attracted over 9,000 visitors to the 210 stalls. Over 1600 delegates from 31 countries attended the dual congress.
