Foundry market
The Indian foundry market is expected to post a compounded annual growth rate of more than 10% by 2021, according to a study by London-based Technavio.
The ‘Foundry Market in India 2017-2021’ focuses on:
Automotive industry;
Electrical and construction industry;
Industrial machinery industry;
Agriculture industry;
Other industries;
Automotive industry.
The automotive segment is expected to grow at a CAGR of close to 10% during the forecast period. The Indian auto components industry has experienced strong growth since 2010.
According to Sunil Kumar Singh, a lead analyst for semiconductor equipment research at Technavio, “Some of the factors contributing to this growth include a resilient end-user market, enhanced consumer sentiment, and return of satisfactory liquidity in the financial system.”
The auto components industry accounts for almost 7% of India’s gross domestic product (GDP) and employs close to 20 million people, who directly work for automotive manufacturing or other companies supplying parts for it.
A steady government framework, enhanced purchasing power, huge domestic market, and increasing development in infrastructure have made India the preferred destination for investments.
The need for lightweight automobiles has increased the use of non-ferrous metals in the production process of automobiles.
Moreover, increased demand for automobiles from the emerging middle class in India has prompted manufacturers to increase production.
These factors are likely to drive the demand for castings in the foundry market in India during the forecast period.
The electrical and construction industry will post the highest CAGR of over 12%, for the metal castings from the foundry sector in India due to increasing investments in the construction sector. Many smart cities are being developed and many foreign firms are making huge investments in this sector.
India, with its huge population, is suffering from a power deficit across all regions, and this growing demand will propel the setting up of new power generation facilities and transmission grids. This, in turn, is expected to foster growth in demand for castings during the forecast period.
Castings in the construction market include cast iron pipe; plumbing fixtures; appliances; heating, ventilation, and air conditioning (HVAC); and hardware. Construction contributes to the GDP through private residential investments and commercial investments.
The Make-in-India initiative launched by the government is helping the manufacturing sector grow at a high pace. Several companies, especially automobile companies, are setting up their manufacturing facilities within the country.
For instance, in 2016, Piaggio, an Italy-based two-wheeler manufacturing company, set up its manufacturing plant in Baramati, near Pune, to manufacture its latest product, Aprilia SR 150, in India. Most of the manufacturing plants in India are becoming more and more automated, which requires the setup of industrial machinery.
“The demand for machine tools, which accounts for a 2% share of consumption in the industrial machinery segment, will further drive the demand for castings. The setting up of new manufacturing facilities will also create demand for castings during the forecast period,” says Sunil. fii-news.com
