The Rs 15,000-crore forging industry is likely to see a marginal fall in production this fiscal from last year’s level of 2.8 million tonnes, following tepid offtake from its principal customer, the automotive sector.
The Association of Indian Forging Industries is not too optimistic of growth in production in the ensuing fiscal too, especially with ballooning steel and energy costs.
The industry is now trying to water down its dependence on the auto sector, which still accounts for a share of about 70 per cent of total production.
“The industry is focussing on new sectors such as power, aerospace, Defence and heavy engineering. In the next three years, it is expected that these sectors will account for a share of 50 per cent of our production,” M. Babu Rao, president of the Association of Indian Forging Industry, told
New sectors
The major players in the industry such as Bharat Forge, Amtek and MM Forgings have lined up significant investments to set up facilities to feed these new sectors.
Last year, the growth had been up by18 per cent, with the capacity utilisation going up to 75 per cent — the current capacity of the industry is estimated at 3.75 million tonnes.
In the light of the rising energy costs, the association has initiated an ‘energy audit’ programme for its MSME members. “We have taken up a pilot project in the Pune forging cluster. The project has established the energy saving potential,” Babu Rao said.
He however said much would depend on the ensuing Budget and how it addressed to the needs of the industry such as reduction in taxes and duties and roll out of GST.
“The bogey of low cost imported Chinese products is also being used by the auto sector to deny genuine cost increases to the domestic forging sector,” he added.