Machine Tools Sector Shows 26% Growth

Total industry production this year has been valued at Rs 257.6 crore, as against Rs 204.9 crore last year.

The industry hopes to rustle up a growth of at least 27 per cent, says Shailesh Sheth, president, Indian Machine Tool Manufacturers Association (IMTI). Production, as a percentage of consumption, is approximately 45 per cent during the present financial year. According to a IMTI study, the gap is being met by imports.

Since imports are priced higher than domestic products, costs to Indian industry as a whole increase, which in turn, reduces its edge.

During 1995-96, growth in imports of machine tools was 99 per cent. Cumulative imports of machine tools for 1995-96 stood at Rs 1, 250 crore compared with Rs 626.6 crore during the previous year. Growing at the rate of nearly 25 per cent for the last two years, the domestic machine tools industry is expected to exceed this figure this fiscal.

 

The industry grows in fits and starts, which explains the lack of production capacities to meet a sudden rise in the demand. Consumption curves, too, display peaks and static segments. For example, DCM Daewoo set up its automobile plant last year, thereby generating additional demand for 600 machine tools.

This demand, however, could not be met by the industry, forcing DCM-Daewoo to import items at an estimated cost of $8 million. Imported machine tools are dependent on material costs and country of origin.

The industry relies on auto component manufacturers and the automobile industry.

It is also dependent on the capital goods sector, though to a lesser extent.

The machine tool sector is pre-dominantly of a small-scale nature, with the major import requirements being sourced from countries such as Taiwan and Korea.