About the Industry

The Indian Metal Casting (Foundry Industry) is well established. According to the recent World Census of Castings by Modern Castings, USA India Ranks as 2nd largest casting producer producing estimated 7.44 Million MT of various grades of Castings as per International standards.

The various types of castings which are produced are ferrous, non ferrous, Aluminium Alloy, graded cast iron, ductile iron, Steel etc for application in Automobiles, Railways, Pumps Compressors & Valves, Diesel Engines, Cement/Electrical/Textile Machinery, Aero & Sanitary pipes & Fittings etc & Castings for special applications. However, Grey iron castings are the major share approx 70 % of total castings produced.
There are approx 4500 units out of which 80% can be classified as Small Scale units & 10% each as Medium & Large Scale units. Approx 500 units are having International Quality Accreditation. The large foundries are modern & globally competitive & are working at nearly full capacity. Most foundries use cupolas using LAM Coke. There is growing awareness about environment & many foundries are switching over to induction furnaces & some units in Agra are changing over to cokeless cupolas.

Production Share

Exports trends

The Exports are showing healthy trends approx 25-30% YOY as can be seen from the charts below. The current exports for FY 2005-06 are approx USD 800 Million.

Employment

The industry directly employs about 5,00,000 people & indirectly about 1,50,000 people & is labour intensive. The small units are mainly dependant on manual labour However, the medium & Large units are semi/ largely mechanized & some of the large units are world class. Most foundries use cupolas using LAM Coke. There is growing awareness about environment & many foundries are switching over to induction furnaces & some units in Agra are changing over to cokeless cupolas.

Important Foundry clusters in India

There are more than 5,000 foundry units in India, having an installed capacity of approximately 7.5 million tonnes per annum. The majority (nearly 95%) of the foundry units in India falls under the category of small-scale industry. The foundry industry is an important employment provider and provides direct employment to about half a million people.

A peculiarity of the foundry industry in India is its geographical clustering. Some of the major foundry clusters in the country are shown in the map.

Typically, each foundry cluster is known for catering to some specific end-use markets. For example, the Coimbatore cluster is famous for pump-sets castings, the Kolhapur and the Belgaum clusters for automotive castings and the Rajkot cluster for diesel engine castings.



A summary of the five major foundry clusters in India - Belgaum, Batala/Jalandhar, Coimbatore, Kolhapur and Rajkot - is provided below.

Foundry Cluster: Belgaum

Belgaum, located in the state of Karnataka, is an important foundry cluster. There are about 100 foundry units at Belgaum. The geographical spread of the cluster includes Udyambag and Macche industrial areas. The foundry industry at Belgaum came up primarily to cater to the needs of the automobile industry at Pune.

Belgaum is recognised to be a reliable source of high precision, high volume and economical castings. A significant percentage (almost 20%) of the foundry units at Belgaum has ISO 9000 certification and export casting.

The foundry industry at Belgaum caters to a wide variety of end-use applications as can be seen from the table below.
Distribution of foundry units at Belgaum by end-use markets Automotive/oil engines 31 %
Pumps/valves 21 %
Electric motors 10 %
Tractors/agricultural implements 7 %
Food processing industry 5 %
Others 26 %

Cupola is the most common melting furnace at Belgaum. Three out of every four foundry use cupola as their main melting furnace. Most of the cupolas are of conventional designs. Divided blast cupola is not very common yet in the cluster. Low ash coke is commonly used in the cupolas.

About 40% of the foundry units have electric induction furnace, which are used either as the main melting furnace or for duplexing with cupola. A relatively small percentage (about 5%) of the foundry units uses rotary furnaces.

Foundry Cluster: Coimbatore

Coimbatore, located in the state of Tamil Nadu, is an important foundry cluster in Southern India. The foundry industry at Coimbatore came up mainly to cater to the needs of the local textile and pump-set industries. There are about 600 foundry units in Coimbatore. The geographical spread of the cluster includes Thanneer Pandal/Peelamedu, Ganapathy, SIDCO, Singanallur, Mettupalayam Road and Arasur Village.

Most of the foundry units cater to the needs of the domestic market. Small percentages (about 10%) of the foundry units are also exporting castings. Nearly half the number of foundry units is manufacturing castings for the pump-set industry. The distribution of the foundry units by end-use markets is given below.

Distribution of foundry units at Coimbatore by end-use segments Pumps/valves 46 %
Food processing industry 7 %
Textile machinery 6 %
Electric motors 6 %
Automotive 4 %
Others 31 %

Cupola is the predominant melting furnace employed by the foundry units. Majority (about 70%) of the cupolas in the cluster are of conventional designs. Electric induction furnaces are used by just 10% of the foundry units, mainly to manufacture graded castings and for duplexing operation.

Foundry Cluster: Batala and Jalandhar

Batala and Jalandhar, located in the state of Punjab, are important foundry clusters in Northern India. The majority of the foundry units is in the small-scale and produces grey iron castings. About 15% of the foundry units are also exporting their products.

The foundry units at Batala and Jalandhar are predominantly making machinery parts and agricultural implements. Castings for a number of other end-use applications are also produced as can be seen from the table below.

Distribution of foundry units by end-use segments Automotive/oil engines 8 %
Tractor parts 6 %
Pumps/fans 10 %
Machine parts 33 %
Agricultural implements 35 %
Others 8 %

Cupola is the predominant melting furnace employed by about 95% of the foundry units at Batala and Jalandhar. The majority of the cupolas are of conventional designs. The foundry units at Batala and Jalandhar usually use high-ash coke in the cupolas.

Foundry Cluster: Kolhapur

Kolhapur, located in the state of Maharashtra, is an important foundry cluster for automotive castings. Historically, the foundry cluster came up to cater to the casting requirements of the local industries like oil engine manufacturing, sugar mills and machine tool industry. There are about 250 foundry units at Kolhapur. The geographical spread of the cluster includes Kolhapur, Sangli, Ichalkaranji and Hatkanangale areas.

A significant percentage of foundry units (about 25%) at Kolhapur are exporting castings. The foundry units cater to a wide range of end-use sectors, as can be seen from the following table.

Distribution of foundry units at Kolhapur by end-use markets Automotive/oil engines 42 %
Pumps/valves 17 %
Sugar industry 6 %
Tractor parts/agricultural implements 4 %
Others 31 %

Cupola is the predominant melting furnace employed by about 75% of the foundry units. The majority of cupolas in the cluster are of conventional type. Divided blast cupola (DBC) can be found in some of the foundry units. Most of the foundries use low ash coke. A number of foundry units (about 40%) have electric induction furnace, which is used to manufacture graded castings and for duplexing with cupola.

Foundry Cluster: Rajkot

Rajkot, located in the state of Gujarat, is an important foundry cluster in Western India. There are about 500 foundry units at Rajkot. The cluster came-up mainly to cater to the casting requirements of the local diesel engine industry. The geographical spread of the cluster includes Aji Vasahat, Gondal Road and Bhavanagar Road areas.

Majority of the foundry units at Rajkot produces grey iron castings for the domestic market. A relatively small percentage (about 10%) of the foundry units exports castings such as electric motor castings, etc.

Apart from oil engines, the foundry units at Rajkot cluster caters to a number of other end-use applications, as can be seen from the table below.

Distribution of foundry units at Rajkot by end-use markets Oil engines 42 %
Automotive/textile 15 %
Machine tools 11 %
Pumps/valves 7 %
Others 25 %

Cupola is by far, the predominant melting furnace used by nearly 90% of the foundry units. Most of the cupolas are of conventional type. A local cupola design, called 'Rajkot cupola', is quite popular in the cluster. Use of low ash coke is common among the foundry units. A smaller number of foundry units (about 10%) producing castings for the automotive industry use electric induction furnace for melting.

Product Mix

Grey iron is the major component of production followed by steel, ductile iron & non ferrous as shown below:

The Indian Foundry Industry is trying to focus on higher value added castings to beat the competition.

Investments

India would need approx. $ 3 Billion in investment to meet the demand of growing domestic industry and strong export drive.
Following the economic reforms the Govt. of India has reduced tariffs on imported capital goods as a result the annual average amount of FDI is reported to have increased but is still one tenth of the annual FDI in China. The reforms also encourage the privatization of industry enabling foreign companies to invest or enter into joint ventures with Indian Foundries. FDI projects are permitted an automatic approval process. Several International corporate from USA, EU and East Asian Countries have increased overseas foundry operations in India. I.e… VOLVO foundries in Chennai and Suzuki in Haryana and Sundaram Clayton has joined hands with Cummins, Hyundai Motors with Delphi. Ford India, Tata-Cummins, GM and Ford have contracts of foundry products for export with a value of $ 40 Million.

Raw material & Energy

Since 2003 the steep increase in cost of raw materials and energy have resulted in the closure of approx. 500 units, Overall India is exporter of Pig Iron but must import Scrap metals and Coke etc. Cost recovery for material and energy is very difficult as most contracts are long term contracts without any clause for price adjustment. India has to import coke & scrap. Moulding sand is locally available & India has an advantage on this account
Energy cost typically varies between 12-15%.

Labour

India has major competitive advantage over the foundry industries in the developed countries. The total labour cost account for 12-15%.

Technology

Govt. of India (GOI) has encouraged technology transfer through JV with foreign Companies and GOI has cooperated with UNIDO with many foundry clusters. Indian foundry industry has an edge over China for producing complex machined and precision castings as per international quality standards. The GOI also helps upgrade foundry clusters. The clusters in Belgaum, Coimbatore and Howrah are undergoing modernization under the industrial infrastructure upgradation scheme. More of such clusters are likely to follow

The Institute of Indian Foundrymen has plans to strengthen and develop various foundry clusters.