The foundry industry in India may find it tough to sustain the 15 per cent growth rate because of dwindling iron ore resource.
Iron ore for the foundry industry is mainly supplied from mining pits in Karnataka, Goa and Chhattisgarh. The ban on mining of iron ore in Karnataka and Goa has impacted the supply of high grade iron ore for pig iron.
Power supply woes
In addition to iron ore supply, the supply of uninterrupted power in all the major foundry clusters of West Bengal, Karnataka, Punjab, Tamil Nadu, and Gujarat, is poor, said Mr Vinod Kapur, vice-president, World Foundry Organization.
“In Tamil Nadu, foundries are being forced to run just one shift per day. Besides, every year, the power tariff is going up significantly. The ban on mining of iron ore has impacted foundries which are basically small and medium units are not in a position to secure supplies as it will significantly increase the cost of production,” he added.
Dr H. Sundara Murthy, President, Institute of Indian Foundrymen said, “For the next five years, the foundry industry will be on the growth trajectory, reaching an all-time high of 20 per cent. Unfortunately, poor supply of iron ore and erratic power supply to foundry units are seriously impacting the growth of the sector.”
There are an estimated 5,000 foundries in India producing castings of grey iron, ductile iron, SG iron, malleable steel, non-ferrous and steel totalling about 9.05 million tonnes (2010) annually.
The industry employs five lakh people and indirectly about 1.50 lakh people. Country's share in the global market is approximately 10 per cent of 91.67 million tonnes. India is the second largest producer of foundry-based castings, while China is the market leader with 43 per cent (39.6 million tonnes) of the total output.
In India, majority of the foundries are placed under the Micro, Small and Medium Enterprises (MSME). The foundry industry has been consistently growing at a rate of 13 per cent to 14 per cent since 2001 except in 2008-09 (12 per cent) because of global recession.
A recent study conducted by the World Foundry Organization (WFO), revealed that the worldwide casting production increased by 13.7 per cent (91.4 million tonnes), whereas India showed a growth by 22 per cent in 2010 primarily because of new projects and increase in local demand.