in India The fabricated metal products industry in ... - Teknikföretagen

Growth in the manufacture sector
is leading to development of the industry
With the domestic manufacturing sector growing steadily, the market for the fabricated
metal products industry is set to increase, because the user industries are
growing steadily. Currently, the industry is highly fragmented and scattered. The
industry is undergoing much needed structural changes and evaluating solutions
to challenges such as low productivity. Measures are being undertaken to develop
the industry close to manufacturing hubs. For instance, Chennai in South India is a
major automotive hub. Since the forging industry derives 65–70 per cent of its demand
from the automotive industry, more forging companies are being set up near
Chennai; for instance, Caparo Plc from the United Kingdom. 8
Size and structure of the fabricated
metal products industry
The fabricated metal products industry produces a wide range of products. It is
characterized by very few large companies, mostly PSEs at the top of the pyramid
followed by a large number of SMEs and even smaller enterprises that are run as
family businesses. The industry is highly fragmented, but over the last few years, it
has been going through significant structural changes.
Forging industry
The Indian forging industry has emerged as a major contributor to the fabricated
metal products industry in India. Forging industry is a basic industry, where
forgings are produced through different methods which include open die forging,
closed die forging and near net shape/ precision forgings. Such industries tend to
grow in a country in relation to the rate of growth of its GDP. The Indian GDP is
expected to grow steadily, so the basic industries will grow and so will the forging
industry.
The industry was more labour intensive previously. It is estimated that the industry
provides employment (direct and indirect) to about 200 000 people. Now with
increasing globalization, the industry is becoming more capital intensive. However,
the high cost of capital (technology) still remains a major constraint facing the
forging industry (especially the SMEs). 9
8) Reference has been made to The Hindu Business Line (12th May 2004)
9) Reference has been made to Association of Indian Forging Industry (3rd August 2008)
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