The last few years had been extremely corrugated for the metals industry. Slow down in the developed world, oil price crash, unstable political situations in many countries and regions, these and similar issues have arrested the economic growth and has adversely impacted the metals demand. On the other hand it is also a fact that metals demand is continuously rising, may be not as expected, but rising. This proves the point that in metals sector, one has to be a really long term player to be able to sustain and grow. Short term outlook of any nature will poison the industry sentiment and kill your own enterprise.
India too witnessed fluctuations in metals demand in the past few years but on year on year basis, the demand seems to be growing. Last few years saw an added emphasis on infrastructure projects and construction sector which are the biggest customer industries for metals. The metro rail projects in many cities, modernization of airports at various locations, massive road building drive also provided the required impetus to the metals industry. New opportunities in modernization of railways and opening up of defence sector will further strengthen this sector. All this improved the numbers as well as the industry sentiment to a large extent. Now most of the metal producers in the country have embarked upon sizable expansion projects. This only shows their confidence in the economy’s future.
The future of foundry sector largely depends on automobile and engineering industry. Both these industries are doing fairly well in past few quarters and are expected to keep a similar pace in the future. This can give a good amount of confidence to foundries and encourage them to invest further in the business. In this situation, Indian metals industry seems to be more interested to cater domestic requirement rather than running after unsure exports markets.
Even if the business prospects are good, Indian metal producers and processors have to upgrade themselves to get the full advantage of this upward economic movement. Most of the processors fall in SME sector and operate with outdated technologies and processes. Naturally this reflects in the final product quality and compromise the business prospects too. Even the big and main producers have to adopt concepts like Industry 4.0 which can substantially enhance the efficiency and induce the much required transparency in the whole system.
I have been always a firm believer of ‘Indian Growth Story’ and strongly feels that the year 2018 will be a much better year than 2017 for metals sector !