Exports give succor to Noida metal forging industry.

Metal forging industry in Noida is on a revival trail as several players have taken the export route to recover losses incurred due to slowdown in domestic market for past one year. Also, there has been a slight uptrend in domestic demand as well over the last one and half months.

"Our focus has shifted to exports now," said Sanjeev Sharma, general manager, operations of Sunstar Precision Forge. "In the last 3-4 months there has been a 25 per cent appreciation in orders for the company." The eight-year-old company is based in Greater Noida with an annual turnover of Rs 120 crore. It has footmarks in countries like Brazil, Sweden and Italy and they recently secured a Rs 2-crore order from the United Kingdom.

Another Noida-based company Ashoka Machord also profited by tapping the international market. Gautam Khanna, director of the company said, "We have shifted our focus to offshore market which is accounting for 70 per cent of the business. This has ensured recovery, negating losses. We were exporting only 25 per cent till sometime back." The company is catering to industrial machinery, transmission drives and turnkey projects (cement, sugar plants).

Diwakar Singh, director of CHW Forge mentioned about emerging trends and new product requirements entering into the market. "We are exporting several equipments that are required in wind energy sector. Indian market is still raw for non-conventional sources of energy. We have found opportunity in it." About 40 per cent of Rs 225-crore our turnover is being contributed by exports, he added.

Praful Mokashi, general secretary of the Association of Indian Forging Industry (AIFI) gave some insights about the industry. "Country's export increased from $ 900 million in Jan-Mar quarter to $ 1 billion in last quarter," he said. "Tractor industry, which falls under agriculture cum automotive sector, engages forging industry in Northern India in good measure. This is why Delhi-NCR forgers have done particularly well."

Contrary to other people's observations, Singh looked unfazed about the market gloom. "Personally we have not been affected too much as we are getting orders from our regular customers like BHEL and ONGC."

Khanna said that many players have even increased capacity due to favourable exports. "I believe that the recession would subside after next year's election and domestic market might get better justifying expansion."

He acknowledged that last one year has been particularly bad, but things have looked better in last one and half months. "Companies are getting orders, although small."

Players said that there is stiff competition in the Delhi-NCR region as close to 100 small and big units with a collective revenue size of Rs 3,000 crore are competing against each other. Speaking about the slump in the industry the Mokashi said, "Automotive sector accounts for 70 per cent of the industry's business. It has not been doing too well for over a year now resulting in 15-20 per cent contraction." A CRISIL report on Index of Industrial Production ( IIP) suggests that the  manufacturing sector grew by 2.8 per cent in September as compared to just 0.6 per cent in August.

Mokashi said, "The growth showed in engineering sector too. I see things getting better in first quarter (Jan-Mar) of 2014."

Source : economictimes.indiatimes.com