Chennai: The Institute of Indian Foundrymen (IIF) has appealed for relief from the steep increase in the rates of raw materials.
According to a press release, the sector contributes significantly in engineering exports which are approximately 25-28 per cent of overall exports from India.
In order to support cost competitiveness the raw materials and key inputs need to be made available at competitive prices as the cost of materials are approximately 60-65 per cent and cost of power is 15-20 per cent at the cost of manufacturing.
The foundries which are the backbone of engineering manufacturing and exports, were already facing serious challenges due to availability of manpower because of migration of workmen to their hometowns, cash flow, additional capex to implement MHA guidelines and many more.
Vijay S Beriwal, President, IIF said, “To worsen the situation further,the prices of key raw material inputs such as pig iron, scrap, steel have registered steep price hike to the extent of 30-50 per cent in last 5-6 months and prices of foundry chemicals have also gone up by 15-20 per cent. The cost of power is already very high in India”.
“This situation is not sustainable for foundries for a long period and more so since most clients in India and in international markets are not willing to compensate for these increased costs rather they are asking for reduction in prices. As a result many of the foundries are closing down in various parts of the country and many have scaled down their operations further,” he said.
IIF strongly recommends that the government should immediately reduce the import duty on pig iron and metal scrap, and has appealed that “Challenges of manpower, skilled labour, inverted MSME Payments/ EMD/ Security Deposit, Export Promotion etc. may take some more time for discussion, planning and implementation.”