Raw material price hike forces foundry industry to curtail production

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By Nayan Dave

Despite increasing demand, foundries across the country are in the process of reducing production activities following an unprecedented hike in raw material prices.

Three important centres for the foundry industries, including Kolhapur, Belgaum and Rajkot have cut production by 50%, claimed Devendra Jain, president of The Institute of Indian Foundrymen (IIF), adding that most of the foundries in these three cities are operating thrice a week.

According to Jain, in a span of just a month, prices of pig iron and steel scrap, important raw materials for foundries, have jumped from Rs 56 to Rs 68 per kg and Rs 34 to Rs 40 per kg, respectively. Rates of another important input, ferro silicon, have jumped from Rs 100 to more than Rs 250 in the past 4-5 months, he added.

“Foundries are also facing problems in sourcing chemicals from China. Due to container shortage, the chemicals are reaching Indian ports not before 12-15 weeks. Earlier, chemical shipments from China used to reach within four to six weeks. Moreover, there has been a steep rise in prices of foundry chemicals ranging from 40-60%,” said Subodh Panchal, past president of IIF. Increasing prices of diesel and petrol have also adversely impacted foundries as transportation of sand and bentonite has become costlier by two folds, said Panchal.

As per IIF data, there are nearly 7,000 foundries across India. The Indian foundry industry is ranked second globally with a production of 10 million tonne per annum. It is catering to the automotive, tractor, power train, railways, energy and engineering sectors in domestic as well as overseas markets. Directly and indirectly, India’s foundry industry provides employment to nearly 20 lakh people. Exports of Indian foundries is around $3.1 billion. Gujarat has the lion’s share of 30% in total production of foundries across the country. Nearly 3,000 foundries are operational in the state, mostly at Rajkot, Ahmedabad and Vadodara.

IIF is hosting the 70th Indian Foundry Congress along with an international exhibition on foundry technology, equipment, supplies and services (IFEX) and cast expo from Sunday to Tuesday at Gandhinagar. During the event, panel discussions would be held to address the issues related to the foundry industry in India. The industry is hit hard by the pandemic situation, current war crisis and uncertainty for raw-material supply and fluctuation in costing.