The industry’s output is expected to touch Rs 3,100 crore in 2010-11
Business is booming again for the Indian machine tool industry after the nightmare years of 2008 and 2009, when the financial crisis led to order cancellations, deferment of deliveries and pressure on bottomlines.
The industry’s output is expected to touch Rs 3,100 crore in 2010-11, from a low of Rs 1,425 crore in 2008-09 . The 117.5 per cent surge in two years has resulted from large order inflows caused by the resurgence of the economy, and the boom in the automobile and auto components industries.
The Indian Machine Tool Manufacturers’ Association (IMTMA) expects that the industry’s turnover will reach Rs 3,870 crore in 2011-12, a growth of 24.8 per cent over the current fiscal year.
This has emboldened IMTMA to set an ambitious target of growing at a compound annual growth rate (CAGR) of 25 per cent over the next 10 years. The size of the industry is expected to be Rs 23,000 crore by 2020.
“The machine tool industry has coped well across the globe after the market downturn. IMTMA aspires to grow to 10 times the industry’s current turnover, and for this we suggest a proactive policy-level intervention,” said C P Rangachar, managing director of Yuken India Ltd and former president of IMTMA.
However, there are several challenges. Production capacities need to be scaled up to meet demand and the product base widened to cater to the infrastructure, aerospace, defence, power and automotive sectors. Funding is another big challenge: not many banks are ready to extend finance, while competition from free trade agreements (FTAs) and WTO sectoral negotiations may affect the industry, Rangachar said.
IMTMA has drawn up a 10-year roadmap for the industry and has further strengthened partnership linkages with the government and other policy-making institutions. It has submitted a Vision 2020 document and a perspective plan for 2010-2020 to the Union ministry of heavy industries and public enterprises.
The vision document seeks the setting up of a corpus fund for capacity building and attracting investment within the industry; implementation of a ‘capital goods industry support’ scheme; machine tool parks, common facility centres, marketing and business development support and a technology development fund.
“To achieve a CAGR of 25 per cent, the industry needs to invest Rs 4,000 crore over the next 10 years in technology development to enhance competitiveness. While the industry will invest Rs 2,000 crore, we are seeking a matching grant from the government to achieve the desired targets,” Shailesh Sheth, a past president of IMTMA, said.
He said the entire investment and the corpus fund would be utilised in extending loans to manufacturers at the lowest interest rate for technology development.
IMTMA has also reiterated its plea to the government to sanction Rs 1,400 crore for establishing machine tool parks. Rangachar said the proposal had evoked a positive response from the government, which now plans to set up a park on a pilot basis.
IMTMA’s other demands include regulating the import of used machines; keeping the machine tool industry out of FTAs; upgradation of the Indian Institutes of Technology (IITs) to help increase the availability of skilled manpower; and the starting of courses in machine tools by engineering colleges. It has also suggested reconstitution of the Development Council of Machine Tools.
“Our vision is to develop machine tool technology and raise production to reduce import dependence, counter technology denial, provide sustained manufacturing competitiveness and strengthen national security,” Rangachar added.
IMTMA aims to secure a domestic market share of 50 per cent for local producers in five years and 67 per cent by 2020.
It is amid this backdrop that the association will hold its flagship event, IMTEX 2011, the 15th edition of the international metal cutting machine tool exhibition, here from January 20 to 26. Companies from 23 countries – including China, Russia, Germany, France, the UK and US – will participate this year.
The exhibition will feature over 800 exhibitors displaying 750 machines with a total value of Rs 1,400 crore. Held concurrently with IMTEX 2011 will be Tooltech 2011, an international exhibition of cutting tools, tooling systems, machine tool accessories, and metrology and CAD/CAM.
Sheth said, “New sectors such as aerospace, healthcare and energy have helped the industry focus on high-end technology and innovation. This has led to many new countries like the US participating in this year’s IMTEX.”
