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Key driver of demand for the forging industry The key driver of demand of forged products is the automotive industry. About 65 per cent of the total forging production is used in this industry. Thus, the fortunes of the forging industry are to a large extent dependent upon the growth of the automotive industry. Since the automotive industry is set to expand significantly, the forging industry is also expected to develop strongly. The other industries that use forgings include railways, defence, oil exploration companies, cement, steel industry and among other industries. 11 The forging industry market India’s forging industry not only meets almost the entire domestic demand of forgings but is also an exporter and is making a sizable contribution to India’s exports. Technological developments have also contributed to the industry’s relatively steady growth in export. The major markets are USA, Europe and China. As a result of the liberalisation, multinational companies are entering the domestic automotive industry. This has opened up business opportunities for the forging industry. Thanks to outsourcing, opportunities for exports are huge. An increasing number of companies from all over the world are coming to India to procure components and products. 12 Growth of the industry through acquisitions The industry is growing through acquisitions made abroad by Indian companies in the recent past. In fact the industry is very active in terms of Mergers & Acquisitions (M&As) overseas. These acquisitions have largely been made in Europe and USA because the automotive components industry in these places has been stagnating. Indian forging companies like Amtek Auto, Bharat Forge, Sundaram Fasteners and some others have also setup bases in other emerging economies to establish themselves as low cost suppliers. An example of an international acquisition by an Indian company is the acquisition of the Swedish forging giant Imatra Kilsta AB in 2005 by Bharat Forge to increase its presence in Europe. 13 11) Reference has been made to The Hindu Business Line (30th September 2007) 12) Reference has been made to Association of Indian Forging Industry (3rd August 2008) 13) Reference has been made to The Hindu Business Line (22nd September 2005) 12
Stampings and pressings Stampings The stampings industry consists of a few hundred units spread all over India close to the production centres that manufacture electrical and mechanical machinery and equipment. Although SMEs dominate the market, large global manufacturers are setting up their own stamping facilities to reduce their costs. For instance, Honda has started a new plant in India where it plans to manufacture stampings and thereby reduce its costs. Large companies like Caparo Plc of the United Kingdom have also setup manufacturing facilities in India. Caparo Plc also plans to use its facilities in India for exports. Mr. Angad Paul, CEO Caparo Plc, said that the company’s Indian operations will contribute 20 per cent to global revenues by 2010. 14 Some of the large companies in the stampings industry in India are: • Radhika Exim which is one of the largest manufacturers of stampings producing sheet metal, steel punching, galvanized steel and heavy stampings, stamped bars and rods, threaded bars and rods etc. The company exports to the United Kingdom, France, United Arab Emirates and South Africa. • Rajvin Electrical Stampings which manufactures and exports electrical stampings, laminations, sheet metal press components and dies. The company supplies stampings to reputed companies like Crompton Greaves, Mark Electric and Anchor Electrical etc. • Precision Press Tools is a manufacturer and supplier of sheet metal pressed components, press tools and precision machined parts for different industrial uses like automobile industry, electrical and electronic industries. Pressings Manufacture of pressings has developed as an ancillary industry supplying parts to large industries manufacturing automobiles, industrial machinery and consumer durables. As a result, manufacturing facilities for pressings are located around the industries that consume their products. They have developed their product range to closely match the needs of the industries or the clients they serve. 14) Reference has been made to The Hindu Business Line (26th September 2006) 13
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