The Hindu Business Line : Castings prices may go up on higher input costs

Chennai, Feb. 7 Prices of castings are likely to go up in the next two to three months due to increase in input costs. According to Mr V. Mahadevan, Managing Director of Ennore Foundries Ltd and President of the Institute of Indian Foundrymen, this can be attributed to steadily increasing prices of raw materials and power.

“Though we are doing our best to improve our efficiency to cut cost and increase productivity, it may be difficult for the industry to absorb the increase in production cost entirely,” he said.

Booming auto industry

However, as a result of booming automobile industry and especially the auto ancillary industry, the demand for the automotive castings is witnessing an unprecedented growth.

“I believe that the Indian foundry industry will utilise this opportunity to become an Asian hub for supply of high quality castings for these industries,” he said.

$1 billion investment

Globally, 70 per cent of the castings is consumed by the automotive industry. In India, 30-40 per cent of the total production goes to the automotive industry. Mr Mahadevan said the Indian foundry industry may see at least a $1-billion investment in the next three years in capacity expansion and modernisation of existing facilities.

Currently, with over 4,750 foundries, India is the fourth largest casting producer in the world after China, the US and Japan.

The industry is growing at 10-15 per cent annually. In 2006, India produced a record 7.17 million tonnes of castings.

In the next three years, India may move to the third position, beating Japan, feels Mr Mahadevan.

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