Forging industry cries for attention

The Association of the Indian Forging Industry on Friday called for immediate attention and action from the policy makers in Maharashtra and Gujarat to help the industry capitalise on the turnaround prospects.

The Association of the Indian Forging Industry (AIFI) on Friday called for immediate attention and action from the policy makers in Maharashtra and Gujarat to help the industry capitalise on the turnaround prospects.

Addressing a press conference Asheet Pasricha,joint director,Trinity Engineers Pvt Ltd and AIFI spokesperson for the Western region. In spite of being the largest hub for forgings in the country,the forging industry in the region has faced the brunt of the downturn. Around 5 units had closed down and more than 20,000 jobs have been lost. Today,we are seeing some robust signs of revival as OE business has shown increase. However,four key issues threaten our pricing and productivity levels versus other manufacturers across the country. This could completely derail our chances of recovery, he said.

Referring to the recent MSEDCL proposal for an overall tariff hike of 48 per cent on power for the industrial consumer,he added,The effect of power price hike would cost a burden of 100 points to entire Maharashtra and add up to the existing burden of 125 points which is due to Octroi in Pune. We also have to contend with steel prices in India being higher than the landed cost in competing countries and cheaper imports from China.

Pasricha said that the preferred supplier status for OE in the domestic auto segment could soon be lost if the government does not take the necessary step in time. In todays cost conscious environment we could easily lose this status never to be regained. We believe the policy makers in Maharashtra and Gujarat must review the situation carefully and provide relief to us both on power cost and octroi, he said.

Jinendra Munot,chairman,Varsha Forging Ltd. and member,AIFI said that the current rates of Octroi would be a burden This means that the units in Maharashtra will not be able to compete or even survive as compared with their counterparts in other states. If power prices go up further we will definitely become uncompetitive, he said.

The current octroi rates:
* Steel : 1.65%
* Industrial Oils and Lubricants : 2.50%
* Spares for Equipment : 2.50%
* Other consumables : 2.5% to 3.5%

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