The economic meltdown has hit the foundry industry hard with around 150 units shutting shop, resulting in job losses of 1.5 lakh.
R P Sehgal, president, The Indian Institute of Foundrymen, said that the problem in West Bengal was even more acute as most of them were from the SME segment. Around 60 units have closed down in the state while job losses were 40,000-50,000.
On an all-India basis, closure of units were 150 of a total of 3,000. Sehgal pointed that the ones, which were functional had cut production by 40 per cent. However, things were likely to improve in the coming months. By September, 85-90 per cent of normal production was likely to be resumed, he said.
About half of the foundry units were dependent on the auto sector. The foundry industry was banking on a revival of the auto demand on the back of lower interest rates.
The problem of the industry has compounded with the fluctuation in input material prices.
In the beginning of 2008 input prices had increased exponentially, hitting the industry and finally when prices came down, so did finished product prices.
Also, the foundry units were already carrying raw material bought at peak levels.
Sehgal said, “Taking into consideration the global market for the requirement of castings, India holds 1.01 per cent of the entire market through exports. This presents an opportunity area for the foundry industry in India.
“Even during this economic downturn India can aspire to grab a larger share of the global market, for instance up to two per cent opening an avenue for growth, which means that we can almost double the production and be a high flier.”
Sehgal was speaking at a press conference to announce the 57th Indian Foundry Congress in Kolkata between February 13 and 15.