Foundry industry upbeat on growth prospects post-GST

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While most industry verticals maintained that GST implementation had slackened their growth in 2017-18, the foundry industry feels the tax rollout has had a positive impact on it. According to Amish Panchal, President, The Institute of Indian Foundrymen, “the industry’s growth was slightly higher at around 6 per cent than the global average of 4-5 per cent.”

“GST rollout has had a positive impact on the industry. Some level of streamlining has happened. The foundry industry encountered two major problems though — on account of inverted duty structure and the delay in getting the refund claims by the exporting units, impacting the working capital flow.”

The industry produced 11 million tonnes of castings in 2017 and the revenues touched a high of $19 billion, including exports worth $2.7 billion (castings alone).

Highlighting the growth prospects, he said: “India is expected to have an edge on the export front with close to 40-45 per cent of total exports to the US. We are hopeful of good growth at least for the next decade as our manufacturing competitiveness has changed dramatically and with the government’s thrust on ‘Make in India’, we foresee greater momentum. Since all engineering and other sectors use metal castings in manufacture, the role of the foundry industry is expected to be vital.”

“Business sentiments during the last three months have been spectacular and demand has soared. If such growth momentum continues, we possibly would be able to achieve 7-10 per cent growth in 2018, he said.

The industry is focusing on value addition rather than tonnage, investing huge sums on automation and efficient production processes. Capacity utilisation has been hovering at 60-70 per cent, Panchal said, adding that the demand for steel and aluminium castings has been good.

Read More at: https://www.thehindubusinessline.com/economy/foundry-industry-upbeat-on-growth-prospects-post-gst/article23459724.ece

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