The Hindu Business Line : Forging body shifts base to Pune

Talking to presspersons, Mr B.N. Kalyani, President, AIFI, and Chairman and Managing Director, Bharat Forge Ltd, said the new office would have a depository of information, as also a central area where the industry members could meet. It is proposing to begin activities such as training, facilities for product-testing and validation for the small and mid-size companies and research and development centre. These activities are likely to begin this calendar year, he said. The AIFI family consists of 85 members who command a market share of about 80 per cent of the total production of the Indian forging industry. Its endeavour is to establish a dialogue/interaction between the industry and its global counterparts.

AIFI has also become a member of ForgeNet, a platform created for National Forgings Association Worldwide.

Commenting on the forging scenario, he said the year 2002-03 had started with negative growth but had shown positive growth from October and this was mainly due to the revival of the automotive sector.

The industry had registered export earnings of Rs 650 crore for the year ended 2003 and is estimated to close the current fiscal (2003-04) at Rs 752 crores. He noted that by the end of the current fiscal, indications were evident of growth in the domestic business by about 15 to 20 per cent and exports by about 25 per cent. He said at present exports are to the tune of Rs 650 crore as compared to Rs 80 crore, a decade ago. The major markets are the US, Europe and China.

Mr Kalyani noted that prior to recession, which started three years ago, capacity utilisation in the industry was about 65 to 70 per cent. However, recession in the automobile industry, especially in the commercial vehicle sector, had lowered capacity utilisation to 40 to 50 per cent during the past three years. "This apparent under-utilisation of capacity is due to the fact that following the upsurge in the demand and production of the automotive sector during the first half of 1990s, most of the forging units embarked on capacity expansion and technology upgradation,'' he said.

Asked about the steel scenario, he said the increase in steel prices was a global phenomenon and was not restricted to the Indian market alone.

He said China had increased its consumption of steel by 140 million tonnes and this had created shortages in basic commodities such as iron ore, scrap and coke. China, which was an exporter of coke, had withdrawn its exports and the Indian market is at a loss due to this, he pointed out.

Recently, the Government had removed the main restriction on imports and reduced import duty on many inputs used by the steel industry (suppliers to the forging industry) and unless the benefit was passed on the users it would not make a significant impact on this industry.

He added that the industry was hoping for a solution by the year-end.

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