Global slowdown hits Indias foundry exports

Written by Economy Bureau | Kolkata | Updated: Feb 14 2009, 07:35am hrs
The countrys foundry exports to the US , the UK and the Middle East have gone down by almost 50% owing to the global financial meltdown.

Castings worth $400 million were exported during the first half of 2008-09, but the same period in 2009-10 may see the exports fall to $300 million.

"Indian foundries exported castings worth $400 million during the first half of 2008-09, but it will hardly be $300 million in the first half of the next fiscal owing to the recession," RP Sehgal, president of The Institute of Indian Foundrymen, told FE.

Total exports in 2007-08 were around $740 million. "The figure is 10% of the overall industry value," Sehgal said.

According to him, the foundries will take two years to get back the market position in exports in the first half of 2008-09.

There are 4,550 foundries in the country, out of which 25% have shut down owing to the crisis. Around 1.5 lakh jobs have been lost.

There are 400 registered foundries in the east. Seventy have closed down, resulting in the loss of around 40,000 jobs.

The main factors behind the closures are a fall in exports and lack of domestic demand for castings. "Sales have gone down by 70% in the auto sector and by 35-40% in infrastructure," Sehgal said on the sidelines of the inaugural session of the 57 th Indian Foundry Congress in the city on Friday.

Sehgal said the government has deferred plans for investment in the infrastructure sector owing to the elections. However, he is of the opinion that the slump in foundry sales will start improving gradually from June. "Innovation in technology is needed to push up sales."

Nationally, foundries produce around 7.8 million tonne per annum. He said production will dip by 15% owing to lack of demand.