Can you give us a brief overview of the forging industry in India and is expected growth in coming five years?
As per the survey conducted by Association of Indian Forging Industry (AIFI) in 2016, the estimated turnover of the 384 forging units operating in FY 2014-15 was Rs. 27,835 crore providing employment to approximately 100,000 people in the country. The report also suggests that investment in plant and machinery also increased from Rs. 15,500 crores in FY 2013-14 to Rs. 27,833 crores in FY 2014-15.
With an installed capacity of around 37.6 lakh MT, Indian forging industry has a capability to forge variety of raw materials like carbon steel, alloy steel, stainless steel, super alloy, titanium and aluminium.
Overall production of forgings increased from 21.1 Lakh MT to 22.5 Lakh MT registering an 8 percent growth. The overall capacity utilisation of industry is also improved in FY 2014-15 stood at around 60 percent against 55 percent in FY 2013-14. The rise in capacity utilisation is mainly supported by increase in demand from automotive and auto component industry while decline in infrastructure-related capex, sluggish IIP number throughout FY 2014-15 witnessed stagnant forging demand from industrial sector.
Going forward, with the revival in domestic auto market (which already show initial sign of revival) and higher export sales, the forging component sector prospects look promising. Another area of growth for forgings in near future, are in defence, aerospace and railway procurement.
Over the medium to long term, growth in the forging industry will be higher than the automotive industry growth given the increasing localisation by auto OEMs, rising export from India for both vehicle and component and make in India initiative-defence, aerospace, railway and automobile.
Forging production in India likely to grow at CAGR of 9.5 percent for the period of 2015-18 and reach to 29.7 Lakh MT in FY 2017-18 from 22.5 Lakh MT during FY 2014-15.
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