Aluminium dies a new cast for SMEs

New Opportunities: As auto makers shift to aluminium, niche players are taking the lead.

It was Mexico first, then it was China and now it's India. Global opportunities in aluminium die-castings are moving from United States and Europe to markets where low cost is a major advantage.

Add to this the scope offered by a growing automobile industry in India and you get a size of over Rs 15,000 crore for the aluminium castings in automotive segment alone.

This has the country's small and medium castings makers excited, capable as they are of delivering premium quality at a low cost. Says N Bagla chairman of Aurangabad Electricals, part of the Rs 270 crore Bagla group, "Indian die-casting companies have learnt from global partners and added value to the technology which is now proving to be a major advantage."

Aluminium, being lighter and more amenable to machining, is fast replacing iron and steel in automotive component manufacturing with about 58 per cent of the value of an automobile engine coming from aluminum. In the case of motorcycles it is nearly 100 per cent, said Bagla.

Not surprisingly, the group is setting up a unit in Pantnagar, Uttaranchal, as it would like to be close to customers like Bajaj Auto, Tata Motors and Ashok Leyland.

Ditto for the Pune based Ajay Metachem which will soon set up a unit at Manesar to serve the customers in the northern region. "It is very important for big players to have a chain of vendors close to their facilities as they follow just-in-time practices," says Pratap Pawar, chairman and managing director, Ajay Metachem.

The closure of nearly 200 foundries in the US due to high labour costs has made India a strong contender for the global exports market for castings. While the Bagla group exports 40 per cent of their castings, the per centage for P N Sadhu's Sunbeam Auto is set to go up from 10 to 40 in the next couple of years.