Rajkot Foundry Industry Regaining Foothold

A few months ago, the foundry sector in Gujarat, particularly Rajkot, was in a dismal state. The unprecedented economic crisis and the subsequent downturn in the global auto sector had crippled the small-scale foundries, eroding their margins as well as competitiveness.

SMEs, which constitute the bulk of the Rajkot foundry industry, were struggling to stay afloat in the face of dwindling sales and plunging margins. Over 50,000 people engaged in the sector lost their jobs during the last financial year as orders from key consuming sectors like the engineering and automobile sectors dried up considerably.

However, the industrial scenario is slowly turning positive with the resurgence in orders from the chief consuming segments.

Industry to make a comeback

After witnessing a long lull in business activity and suffering huge losses over the past few months, Rajkot foundry units are buoyant about the spurt in domestic demand.

“About 6 months ago, the foundry industry in the city, particularly the small and mid-sized units, suffered heavily as offtake of their products from Auto Parts Manufacturers firms fell substantially. However, things have started improving in the last 2-3 months and we hope that the foundry industry will regain its stronghold in the market in the coming months,” said Bhavesh Patel, President of Rajkot Engineering Association (REA).

Following the revival in demand from the engineering and auto sectors, the foundry units in the city have enhanced their production capacities by 55-60%, up from 30-40% in December last year.

“Last year, many small-scale cast-iron foundry units were compelled to reduce their output levels and cut down on their working hours in response to the reduced demand and severe liquidity crunch. However, as orders are coming in, we have to increase our capacities and work on product quality to meet the increased demand,” said B Thaker, Proprietor, Bajrang Foundry, a Rajkot-based grey iron castings unit.

Though the domestic market is moving northwards, the foundry export sector is yet to experience an upswing. The pressure on exporters is expected to ease once the global market starts picking up. Till then, SMEs in the Rajkot foundry industry have to tread with caution and keep an eye on the international market movements.

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