- Spiralling of prices has resulted in the manufacturing cost of iron castings going up by 20 per cent
- Industries have appealed to buyers for a 13 per cent increase in the buying rates
COIMBATORE: Foundries and engineering industries here have expressed concern over frequent fluctuation of raw material prices.
Spiralling of prices has resulted in the manufacturing cost of iron castings going up by almost 20 per cent during the last two years. Hence, the industries have appealed to the buyers for a 13 per cent increase in the buying rates.
"The prices of all inputs to the foundries are fluctuating erratically. Therefore, the foundries are unable to hold the prices to customers," said a release from the Institute of Indian Foundrymen, Southern India Engineering Manufacturers' Association and the Coimbatore District Small Industries Association.
Prices of pig iron, melting scrap, ferro alloys and alloying elements have all gone up by 10 per cent to 15 per cent. The heads of the three associations briefed presspersons here recently on the impact of the cost escalation.
According to them, there seems to be some shortage in the availability of pig iron since it is value-added and sold. The Government should remove the five per cent Customs Duty on scrap and pig iron. Since supply cannot be increased immediately to meet the demand, the Government should facilitate purchase of scrap at a competitive cost from the international market.
Frequent price change affected the credibility of the Indian units in the international market, they said.
The Government should introduce a scheme similar to the Technology Upgradation Fund for textiles to the foundries. Foundries here exported 1.2 lakh tonnes of castings worth Rs. 500 crore a year.
The cost escalation had put foundries and the engineering units in a quandary. The units were looking at efforts such as joint procurement of raw materials to control the costs. The hike in interest rates and weakening of the dollar had only added to the woes of these units.
Hence, they sought "concrete measures to contain raw material prices", zero import duty for import of raw materials for foundries, ban on foundry commodities in commodity trading and reduction of interest rate on working capital for foundries and engineering units.