Downsizing deals - Rajkot foundry industry hit badly
BS reported that more than 50,000 employees of the foundry units in Rajkot had to bear the brunt of the global meltdown during the financial year 2008 - 09. What's more is that the turnover of the Rajkot foundry industry has come down by 80% during the period.
Mr Bhavesh Patel president of Rajkot Engineering Association said that "Most of the units in the foundry industry are working for giant companies across the country and worldwide. Due to the ongoing recession, the US and European market have been badly affected, thus affecting our work. New orders have stopped coming to the industry, besides most of the existing orders being on hold. The present scenario seems to remain so till 2010.”
Mr Brijesh Dudhagara chairman-Rajkot chapter, Institute of Indian Foundry said that "Rajkot foundry industry had about 0.1 million labor employment two years ago. Today, more than 50,000 employees have lost their jobs especially since October to November last year."
Mr Suresh Gadhiya director of Radhe Alloy Cast Pvt Ltd said that "Price fluctuation of raw materials like pig iron, coal, iron ore played a big role in hurting the industry during 2007 - 08. This made production costs very high, thus leading to a collapse in the economy. The entire payment cycle has been disturbed. Foundry owners eventually felt the pinch of the money crisis and had no choice but to cut the production.”
According to industry sources, the workers who have lost their jobs have shifted to other industries with a lower salary scale. Foundry laborers get a minimum salary of INR 5,000 per month and whereas and experienced worker can get upto INR 20,000 per month in a big company.
Rajkot has about 400 foundry units at the micro to large level, which produces all kinds of engineering goods, especially auto components and agriculture parts.
The turnover of Rajkot engineering industry used to be about INR 700 crore per year and the share of foundry was about 60% to 70%. But since the last one and a half years, the industry has been facing several problems due to the global economy meltdown. In the year 2008 - 09 the industry turnover was estimated at INR 200 crore
(Sourced from Business Standard)
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