Rajkot machine tools industry's dream to have double digit growth seems to have gone awry due to ongoing recession. The industry players fear 20-30 per cent decline in the growth of the industry this year. Also, the volume of the turnover is likely to dip Rs. 700 crore by the end of fiscal 2008-09 from Rs 1,000 crore in the previous fiscal.
The machine tools industry in Rajkot was eyeing a turnover of Rs 1,200 crore by 2010.
"Going by the steady growth of 20 per cent year-on-year basis in the past couple of years, the industry was poised to achieve a turnover of 1,200 crore by the year 2010," industry sources said.
Rajkot houses around 350 machine tools manufacturing units and about 700 vendors. Nearly 20,000 people are employed in this industry. Rajkot enjoys leadership position in terms of manufacturing units for machine tools across the country, while it ranks second in terms of turnover.
"Present condition is not so favorable for machine tools industry as the entire economy is under pressure. The Union government has cut down central excise duty for auto sector, which could be helpful to bigger units or companies. Majority of machine tools facilities in Rajkot are small scale units and therefore it is not so effective for us. We may ask the government to levy nominal excise duty. Soon, we will be having a meeting of the industry association for the purpose," said Sailesh Kave, president, Rajkot Machine Tools Association.
"Earlier raw material prices had shot through the roof but they came down drastically later on. This may further impact our business negatively as the products, for which high prices inputs were used, can not be sold at lower prices. It is not affordable to the units," he added.
Machine tools industry is largely linked to auto sector, which is facing tough times due to global meltdown. Around 40 per cent production of the industry goes in auto sector. The turnover of various units came down by 50 per cent in past three months. We can not create new demand. As a result, we are left with no options but to cut our costs," said Rupesh Mehta of Macpower CNC Machines Pvt. Ltd.