Machine tool industry seeks low cost funds for expansion

The Indian machine tool industry, the mother of all manufacturing sector, has sought funds at a lower rate of interest to fund their capacity expansions to meet the growing demand from the user industries.

“Presently, the sector is witnessing a huge demand for products from the manufacturing sector, but due to capacity constraints they are unable to meet the demands," said Jamshyd N Godrej, chairman - exhibitions, Indian Machine Tool Manufacturers' Association (IMTMA).

The industry needs to access funds cheaper so that they can expand capacities rapidly to meet the growing demands from user industries like automobile and auto components sector, he said. It would also help Indian industry compete with global companies effectively, he noted.

Talking to reporters on the sidelines of IMTEX 2011 and Tooltech 2011, the 15th international machine tool exhibition, here on Thursday, he said the machine tool industry needs to invest at least $1 billion in the next three to five years to meet the growing demand from the automobile sector, which is expected to see a total volume of 5.5 million passenger cars and 25 million two-wheelers by 2015.

"The IMTMA has submitted a pre-budget memorandum through the Confederation of Indian Industry (CII) to the Union finance ministry recently. We have asked for machine tool clusters with facilities like design and technology centres and common facilities to be set up to help the industry meet global standards," Godrej said.

The industry has urged the government to set up a corpus of Rs 2,000 crore for setting up machine tool clusters.

"The funds can be set apart as soft loans and released in phases and not in one go," Shailesh Sheth, former president, IMTMA said.

To begin with, these machine tool clusters can be developed at Bangalore, Coimbatore, Ludhiana, Pune, Belgaum and Chennai on the models of Italy, Taiwan and China, he said. Earlier, the 15th edition of IMTEX, the world's fifth largest machine tool exhibition and 13th edition of Tooltech were inaugurated by K Radhakrishnan, chairman, Indian Space Research Organisation (ISRO) and Arun Maira, member, Planning Commission.

Speaking on the occasion, Radhakrishnan said, "The manufacturing sector, of which machine tool industry is an integral part, has been a major contributor to the success of the Indian space agenda. About 500 Indian industries of different class are today participating in ISRO's space programme and about 60 per cent of the annual budget of ISRO goes to Indian industries."

He said, ISRO had seen a quantum jump in 2010 in its space missions, thanks to the creation of infrastructure by Indian industries. This year IMTEX is showcasing an exhaustive range of innovations and technological refinements in the complete product segment of metal cutting machine tools.

Over 800 exhibitors from India and abroad are showcasing machines with a total value of Rs 1,400 crore at the exhibition.