The premiere technical conference for the cast metals industry, the 68th World Foundry Congress, held concurrently with the 56th Indian Foundry Congress in Chennai from February 7-10 helped focus attention on the sector, which plays a key role in the auto industry. Alongside there was also IFEX 2008 – the International Foundry Exhibition which drew 250 exhibitors from overseas and India.
The global production of ferrous and non-ferrous castings is estimated at 80 million tonnes, the value exceeding US $100 billion. The global trade in metal castings is estimated at US $ 10 billion and slated to multiply in the coming years. Many developed countries, which are facing rising production costs, are increasingly opting for large scale outsourcing to India, China, Brazil, Spain, Mexico and countries of the erstwhile Eastern Block. These countries are now adopting the latest manufacturing techniques to meet their needs.
Speaking at the event, Ennore Foundries managing director V Mahadevan said the industry needs to reinvent itself to cater to the burgeoning demands of the automotive industry and exploit the opportunity of becoming the Asian hub for supply of high-quality machined castings.
At present, the Indian foundry industry is the fourth largest casting producer in the world with more than 4.5 million tonnes of ferrous castings. Current growth levels stand at 8-10 percent per annum.
Mahadevan, who recently took over as the president of The Institute of Indian Foundrymen (IIF), said the foundry industry is fast improving its production capacity, quality and delivery schedule requirements, which are critical if the industry is to benefit from the ongoing growth in the automotive industry. This in turn necessitates strong efforts by IIF along with the Confederation of Indian Industry (CII) and even the World Foundrymen Organisation (WFO) to increase quality standards.
Mahadevan is of the opinion that while customers are very organised, the supply chain is not. “I expect to see a lot of consolidation in the next three to four years. Supply chain efficiencies must improve,” he added. Small players catering to local markets will survive, he said but the large-scale OEMs will demand higher quality and efficiency than the SMEs can provide. "Thirty to 40 percent of our output is consumed by the auto industry," he added.
The industry association is trying to co-ordinate clusters to leverage cumulative volumes and effect energy efficiencies and training programmes as a group, he pointed out. The good results achieved in the Pune cluster would be replicated in the Coimbatore belt, the Punjab region and other regional clusters, he said.
Meanwhile, J P Nayak, president of the Machinery and Industrial products division of L&T, one of the major customers of Indian foundries, said while growth is bringing fresh challenges, the fragmented nature of the sector highlighted its limitations.
Of the over 4,700 foundries across the country, 80 percent are SMEs producing only 20 percent 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 come together and receive assistance from industry associations, said Nayak. Another key challenge for the future is energy efficiency due to high power costs and rising environmental concerns.
Clearly, to sustain continuous growth in every aspect, the foundry industry has to embrace change which means technological innovation, improved manufacturing practices to enhance cost effectiveness and upgrading of human resource skills. All these are crucial to gain a competitive edge.