The forging industry in India's largest industrialized state, Tamil Nadu, is encountering a challenging phase as the cost of production materials like aluminium and steel and fuel has soared. Despite a revival in demand, the industry faces higher expenses and difficulty obtaining raw materials.
Rajavelu Manickavasagam, the Managing Director of Innoforge Pvt. Ltd., said, “We are forced to buy through third-party traders, and even then, we don’t get materials on time. Industries cannot completely pass on the price rise, so industrial units must absorb some of it and cut expenses.”
According to our report from the forging industry, the price of mild steel leapt from INR 40/kg to about INR 65/kg in a year, while stainless steel prices surged from INR 250 to INR 350 and aluminium from INR 250 to INR 300-350. Nickel, chromium, molybdenum, and titanium prices are also volatile. There has also been an increase in the cost of producing fuel. Furnace oil went from INR 40/kg in a year to INR 68/kg.
T Navaneetha Krishnan, the Director of Creative Forgings, said that the heat-based industry also faces a labour shortage and relies mainly on migrants. He added, “The industry has faced many ups and downs since 2020, and now, demand is picking up, but we can’t deliver due to the availability and price of raw materials. Also, our margins fell by 30%.”
Small-volume players said geopolitical changes had forced western countries to buy Indian raw materials, making their operations difficult. Automakers and companies involved in power and heavy engineering are the top employers in the forging industry.
Responses
