The problems have not vanished for the machine tool sector in this Covid impacted financial year (2020-21). The industry is facing a severe cash crunch, and it sees a silverline and is eager to participate in PLI schemes, Make In India and Atma Nirbhar schemes to get back on its feet.
“Post Covid unlock phase, companies are getting orders, life is getting back and production-wise, I think we will reach the pre-Covid levels. When I say pre-Covid, it will happen only around the middle of the year 2021. However, for the sector at the moment in terms of cash flow, it is still a major issue,” V Anbu, Director General & CEO, IMTMA, told BusinessLine .
“In the Covid impacted year, the first quarter (Q1) due to lockdown had major issues like all capital goods and particularly the machine tool sector. Production went down by minus 70 per cent. In Q2, we were slightly better but still minus 30 per cent. The quarter saw marginal improvement. Later in Q3 and now in Q4, I think we have gained confidence. The whole year put together, we were badly hit on cash flow front,” he added.
The Covid induced lockdown severely impacted the supply chain. “In terms of capital goods, you can not come out of that all of a sudden. So, the problem is already there in terms of cash flow,” he said.
Now the post-Covid unlock phase, the machine tool sector is eager to participate majorly in manufacturing, especially through ‘PLI schemes’, ‘Make In India’ and ‘Atma Nirbhar’ to get back on its feet.
“The recent development has made the industry feel confident about the next decade or maybe beyond that. If this continues, the manufacturing sector alone can be $2.5 trillion size. To achieve this here, everybody has got a role, the industry has got a role, academy and research have also got a role,” he added.
The machine tool sector, which was too dependent on the auto and auto component sector, is now getting opportunities in other spheres.
Anbu said, “Today we are talking about railways, railway modernisation, infrastructure. Look at any aspect of infrastructure and the government is allocating funds, already a huge amount has been allocated. Also, electronics is gaining momentum in the country. Also, sectors like toys are attracting people to invest, and obviously, defence is a major sector. This is in addition to general engineering.”