Hit by poor demand, foundry biz to encounter 'dull' 2017: IIF

Domestic foundry industry will witness a 'dull' 2017 in view of the impact of demonetisation and implementation of GST, but a revival was expected next year, its apex industry body said today.
Demonetisation had its impact on the industry particularly in sourcing of metal scrap and "there has been a 20-30 per cent drop in production," Institute of Indian Foundrymen President Anil Vaswani said.
"Demand has slipped and end users are feeling the pinch. By the time, the demonetisation effect fades, we will have GST implemented. Business will continue to remain dull for another six months. 2017 may not be a good year for business. We expect it to revive in 2018", he said in a statement.

On the initiatives taken up by the IIF, he said a Centre of Excellence for casting technology and skill development had been planned in Coimbatore at an investment of Rs 40 crore.
"The proposal, awaiting the Centre's approval, is in the interest of small and medium enterprises and would be set up with the support of MSME Ministry", he said.
The project would be a boon to help small units on the technological and labour fronts to tide over any crisis.

Vaswani said the business was affected in the last few years due to China aggravating power components exports and lowering prices below that of the domestic market.

Elaborating, he said, China manufactures nearly 35 million tonnes of casting per year as compared to Indian foundries which produce only around 10 million per annum.
"Chinese government has provided exemptions to cover nearly 40 per cent of export duties. Importing casting from China is cheaper than purchasing them from Indian foundries," he said.
Noting that 25-30 per cent of foundries located in Southern region contribute "significantly" to the overall growth of the industry, he said, the domestic foundry sector which was growing at 15 per cent till 2008 declined by five per cent due to poor demand.