Foundries in India
What is a Foundry?
A foundry is a place where molten metal is converted into castings using various processes. A foundry may also further process the castings, depending upon the customer's specifications. Castings are manufactured in a single step from liquid metal without intermediate operations of mechanical working such as rolling or forging. Foundry and castings are one of the most direct metallurgical processes, but has provided impetus to almost the mechanical industries in the world with the diversity of products they can make. Virtually all types of engineering alloy can be cast using appropriate foundry techniques. A few important classes of engineering alloys can be formed by casting alone, the most notable example being the cast irons. Common casting alloys in foundries include grey cast irons, ductile cast iron, austempered ductile cast irons, steels and numerous alloys.
Foundries in India
Foundry products like castings are pegged to grow at a CAGR of about 10% for the period 2016 - 2020. India is the third largest casting manufacturer in world, next only to China and USA. Current trends indicate that India is poised to overtake USA as the second largest producer of castings. There are in excess of 5000 foundries in India of which about 85% are small units, 10% are medium sized and 5% are large, organized foundries. Of the bulk castings produced by Indian foundries, the largest chunk is that of grey cast iron, followed by ductile cast iron, steel and non-ferrous alloys. The Indian foundry industry employs about five hundred thousand people directly and about fifteen hundred thousand people indirectly. Most foundries, especially the small, organized foundries in India are labour intensive where operations and handling are manual.
Foundries in India are concentrated as clusters; the most important being Jalandar, Ludhiana, Batala, Delhi, Agra, Rajkot, Howrah, Bhopal, Mumbai, Pune, Kolhapur, Solapur, Belgaum, Chennai and Coimbatore. The chunk of metal castings produced in India is concentrated in these clusters. Each foundry cluster is known for a specific type of castings. For example, the foundries in Kolhapur and Belgaum clusters are known for automotive castings, the Rajkot cluster for diesel engine castings, Howrah for sanitary castings, etc. Of course, this is not a hard and fast rule; most sophisticated foundries can manufacture castings as per the demand.
Foundry Exports from India
The global demand for castings has been on the rise in the recent years. European countries and USA are gradually coming out of the economic slowdown, and are looking to outsource some of their castings manufacturing requirements. The Government of India is trying to propel economic growth of the country by boosting exports. The new manufacturing policy envisages raising the share of manufacturing in the GDP to 25%. As foundry castings are an integral part of most engineering manufacturing processes, the role of Indian foundries is very important part of this strategy. While India may be behind China as far as overall castings exports are concerned, it is the second largest producer of castings globally. Understanding the need to be competitive, the government of India is also modifying its policies so that import of raw material and export of castings is easier. This should boost castings exports from India.
Foundries in India need to invest and increase production capacity. Most of the foundry players in India are small or medium, and only a few quality conscious castings manufacturers have taken efforts to invest and upgrade their technological facilities. China is the most important threat to India as far as castings are concerned, simply due to cheap labour. Indian foundries should be energy efficient and upgrade their work force. Of the 5000+ foundries, only one third or even less have International Quality Accreditation and have the expertise that the clients from Germany, UK, France, US and other countries demand. With an increasing awareness about environmental issues, one major challenge in the foundry industry is stricter laws that prohibit pollution. The tightening of government regulations on the release of waste produced by foundries in the environment is leading to increased investment in waste recycling process and technologies. While this is a welcome step, it increases the overheads on the Indian foundries.
Future Growth Prospects
In India, the automotive sector is the main driver of foundries. About 60% of metal castings are for the autom otive sector, followed by railways, machine tools, defence, aerospace, sanitary fittings, etc.
Casting production in India reached a value of 11 million tonnes in 2018. Indian foundries are expected to grow at a compound annual growth rate of about 12.5% from 2018 until 2023. As of 2018, aluminum castings contributed around 15% of the total castings production in the country. The share is expected to increase considerably by the end of 2023, owing to a shift in demand from iron to lighter castings materials for manufacturing fuel-efficient automobiles and electronic vehicles. The government of India is focusing on expanding the manufacturing infrastructure, and various government sectors are expected to generate demand for a wide variety of machinery and heavy equipment. This will in turn create fresh demand for metal castings.
Further, the thrust of manufacturing companies to reducing weight, especially in the automobile sector, presents growth opportunities to those Indian foundries that are progressive and have the expertise to manufacture such specialty alloys castings.