Indian machine tool industry on the rise

India has been one of the buzzwords in the machine tool industry for the past month or so as a number of new investments have been announced.

These investments include investment plans of at least eight international companies in the industry. According to a report by Indian business daily Business Standard, the US-headquartered MAG Industrial Automation Systems has set up a subsidiary, while Heller from Germany, and MAUS and Rosa Ermando from Italy, have entered into joint ventures.

Also from Germany, Schuler is planning for joint venture too, and Gildemeister has established a technical center, in Bangalore.

Japanese companies are also attracted to this new tide, with Citizen having opened a representative office, and Amada to set up a manufacturing facility.

Huge market potential

A Chinese leading heavy machinery manufacturer, Guangxi Liugong Machinery Co Ltd, is also planning to establish an assembly plant in India this year, in order to further tap the enormous market potential in India, China Daily reports.

This echoes the view of MAG Industrial Automation Systems, whose President Roger Cope was quoted as saying that the fast growth in the Indian machine tool market was the reason behind their establishment of a subsidiary in India.

The booming manufacturing sector – including the automotive industry – is what drives the Indian machine tool market to grow. In order to grasp this opportunity, a machine tool park in Bangalore has been proposed by the Indian Machine Tool Manufacturers Association (IMTMA).

Challenges

This machine tool industry park – planned to accommodate 100 small and medium enterprises (SMEs) – is to tackle the demand-supply gap in the Indian machine tool industry, leading to an import value of Rs 2,900 crore against a domestic output value of Rs 1,342 crore in the Indian fiscal year 2005-06. The inability of SMEs to scale up quickly is said to be a major reason for the problem.

Another problem of the Indian machine tool industry is a shortage in skilled workers, who are more attracted to the IT sector for better salaries.

Yet, because of higher technological capabilities that India possesses, foreign companies are coming to the country to produce higher-end products. For instance, Rosa Ermando’s joint venture with UCAM will manufacture a special category of machines which have not been produced in India. Also, in the coming three years, Kennametal will start to produce in India some of the specialized machines that it is producing in Europe.

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