The Indian machine tool industry which has set a growth target at a compounded annual growth rate (CAGR) of 15 per cent during the 12th Five Year Plan period, has urged the Centre to set up a Machine Tool Technology Development Fund with a corpus of Rs 1,000 crore to help the industry source technology from companies abroad.
“To grow at a CAGR of 15 per cent in the next five years we need to create new capacities and that requires high technology. Indian machine tool makers lack the technology to improve their product portfolio. To get technology we need to tie up with overseas companies. So, we have asked the government to set up a technology fund to help companies enter into joint venture arrangements with overseas companies,” Vikram Sirur, president, Indian Machine Tool Manufacturers’ Association, said.
He said, the key enabler for achieving the desired growth rate is to set up a technology development fund to support product development. “We are in talks with the ministry of heavy industries for this and the ministry has shown a positive response,” he told reporters. Sirur said, the machine tool industry is overburdened with high interest rates and is unable to borrow funds from the banking sector to expand capacities. Unlike China where the interest rates are in the range of 2-3 per cent, Indian industry has to pay more than 14 per cent which makes it unviable, he said, adding the IMTMA has proposed to the government to create a low interest revolving fund to help the industry.
“We have been working with the government for finalising the plan for the 12th Five Year Plan. What could be the scenario by the time the 12th Plan is over? Demand growth is expected to hold steady at 15 per cent CAGR. This means production is required to grow at 25 per cent to increase our marketshare at 33 per cent of the total consumption going up to 50 per cent. A mere three-fold increase in production is expected during the 12th Five Year Plan period,” he said. The IMTMA has drawn up an action plan to achieve the targeted growth of 15 per cent CAGR, he said.
For 2010-11, the machine tool industry saw a turnover of Rs 11,650 crore with the domestic production of Rs 4,096 crore. For 2011-12, it is expected to grow 10-15 per cent. For 2012-13, the IMTMA has estimated the industry to see a turnover of Rs 13,500 crore. Shailesh Sheth, media chairman, IMTMA, said IMTMA is organising the second edition of IMTEX Forming, an international exhibition on machine forming in Bangalore from January 19 to January 24 at the Bangalore International Exhibition Centre (BIEC). Touted as the biggest b2b exhibition, IMTEX Forming will have 450 international exhibitors from China, Austria, Belgium, Canada, Finland, France, Germany, Greece, Holland, Italy, Japan, UK and USA among others.