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Foundry industry seeks Rs 20,000 cr Tech Fund

Mahesh Kulkarni  |  Chennai/ Bangalore 

The Indian foundry industry, which is looking at doubling annual castings production to about 20 million metric tonnes by 2020, has urged the Central government to set up a Technology Upgradation Fund (TUF) with a corpus of Rs 20,000 crore to help modernise the sector.

The Institute of Indian Foundrymen (IIF), has had discussion with the Planning Commission in this regard and a formal proposal would be submitted to the government through the Confederation of Indian Industry (CII), H Sundara Murthy, president, said.“We have already discussed the issue with Planning Commission member in this regard and he has suggested us to submit one common proposal through the CII and has already given its proposal to the apex industry body, which will be forwarded to the plan panel shortly,” he told Business Standard.

The proposed fund would be mainly used for upgradation of technology, capacity expansion, Greenfield development and energy conservation among others. On Wednesday, he said, the is facing several challenges like poor supply of quality power, shortage of key raw materials like iron ore and coking coal, which has resulted into significant increase in the cost of production. “Unless we ensure smooth supply of all these raw materials and supply of uninterrupted power along with suitable technology for upgradation of manufacturing processes, it would be difficult for the industry to survive and compete with China that has started supplying castings to India,” Murthy said.

He said, already, there is about Rs 6,000 crore fund available with the ministry of micro, small and medium enterprises, which is unspent and the has requested the government to provide funds for the foundry sector to modernise and expand capacities.

“In order to achieve the production levels of 20 million metric tonnes by 2020, the needs to make an investment to the tune of Rs 50,000 crore on capacity expansions and set up some greenfield production facilities. The industry should also be given concessional rate of interest for borrowing from the banks,” R V Gumaste, MD, Limited said.

There are an estimated 5,000 foundries in India producing castings of Grey Iron, Ductile Iron, SG Iron, Malleable Steel, Non-Ferrous and steel totaling about 9.05 million metric tonnes annually. About 32 per cent of the castings produced by the industry go into automobile sector. The industry employs about 500,000 people directly and 1500,000 indirectly. India’s share in the global market is about 10 per cent of 91.67 million metric tonnes. is organising the Indian Founry Congress, a three-day conference rom March 2-4 at Bangalore International Exhibition Centre.

India’s castings exports stood at Rs 6,500 crore in 2010-11, showing a growth of 55 per cent over the previous year. Majority of the foundries are in the SME category and growing at a rate of 13-14 per cent annually.

“The total requirement of castings is about 20 million metric tonnes in India per year. There is a projected gap in the supply and the demand of castings. The can look forward to accelerated growth for many years to come as the existing foundries have started investing in capacity expansion,” Vinod Kapur, vice president, World Foundry Organisation said.

First Published: Thu, March 01 2012. 00:26 IST