Rajkot foundry industry sees 50,000 job losses

More than 50,000 employees of the foundry units in Rajkot had to bear the brunt of the global meltdown during the financial year 2008-09. What's more is that the turnover of the Rajkot foundry industry has come down by 80 per cent during the period.

Rajkot has about 400 foundry units at the micro to large level, which produce all kinds of engineering goods, especially auto components and agriculture parts.

The turnover of Rajkot engineering industry used to be about Rs 700 crore per year and the share of foundry was about 60-70 percent. But since the last one and a half years, the industry has been facing several problems due to the global economy meltdown. In the year 2008-09 the industry turnover was estimated at Rs 200 crore

"Most of the units in the foundry industry are working for giant companies across the country and worldwide. Due to the ongoing recession, the US and European market have been badly affected, thus affecting our work. New orders have stopped coming to the industry, besides most of the existing orders being on hold. The present scenario seems to remain so till 2010", said Bhavesh Patel, president, Rajkot Engineering Association.

Brijesh Dudhagara, chairman-Rajkot chapter, Institute of Indian Foundry (IIF) said, "Rajkot foundry industry had about 1 lakh labour employment two years ago. Today, more than 50,000 employees have lost their jobs especially since October-November last year."

According to industry sources, the workers who have lost their jobs have shifted to other industries with a lower salary scale. Foundry laborers get a minimum salary of Rs 5,000 per month and whereas and experienced worker can get upto Rs 20,000 per month in a big company.

In the present scenario, salaries are said to have gone down by 15-20 percent.

"Price fluctuation of raw materials like pig iron, coal, iron ore played a big role in hurting the industry during 2007-08. This made production costs very high, thus leading to a collapse in the economy. The entire payment cycle has been disturbed. Foundry owners eventually felt the pinch of the money crisis and had no choice but to cut the production”, said Suresh Gadhiya, director, Radhe Alloy Cast Pvt. Ltd.

The Indian foundry industry is well established. According to the recent World Census of Castings by Modern Castings, USA, India ranks as the number 6 country in the world, producing an estimated 6 million metric tonnes of various grades of castings as per international standards in 2007.

Various types of casting produced are ferrous, non ferrous, aluminum alloy, graded cast iron, ductile iron, steel etc for application in automobiles, railways, pump compressors and valves, diesel engines, cement, electrical, textile machinery, aero and sanitary pipes and fittings etc and castings for special applications.

There are approx 4500 units out of which 80 per cent can be classified as small scale units and 10 per cent each as medium and large scale units.