Ignore us at economy's peril, says foundry body

The growth of auto components and automobile industries might be badly hit if the foundry industry was ignored. The foundry sector, the mother industry for engineering, automobile, oil, cement and others, was in a lurch with no caretakers, said K S Satyanarayana, president of The Institute of Indian Foundrymen.

While the auto components sector was growing at 25 per cent for the last several years, the foundry industry barely grew by 5 per cent. The lopsided growth was an unhealthy sign for the $20 billion auto components industry and it might dent the country's economy, said Satyanarayana.

Foundry engineering deals with melting metals and allowing liquid metals to solidify into desired shapes. They are subsequently machined to make components that are used by a wide range of end users, the largest being the auto components sector. About 30 per cent of inputs for auto components come from casting, with the balance coming from forging, fabrication and the like.

The foundry industry grew from 3.2 million tonne to 4.6 million tonne between 1999 and 2004 and to 6 million tonne in 2004-05.

But, the current growth rate is insufficient to position the industry at a sustainable level. The industry has set itself a growth target of 15 million tonne in the next 5 years and 20 million tonne over the next 8 years.

The industry needs to focus on quantitative and qualitative growth to achieve the target. An estimated 50 to 60 units are engaged in exports. All of them, however, are not into high-end castings, with many exporting low-end components on account of the price advantage.

According to Satyanarayana, the first requirement is an evaluation of gap in terms of existing quality levels and the internationally acceptable quality standards. The industry then had to prepare strategies to bridge the gap at the unit levels, he added.

Technology upgrade by leading exporters may enhance opportunities in the international markets. Surprisingly, about 90 per cent of the existing 500 units in the country do not have the capacity to maintain world-class productivity and optimum scaleability.

The industry captains should play a leading role for better growth and sustainability of the foundry sector as a whole.