D.K Jain Agrawal Metal Works INDIA

Transcription

1 D.K Jain Agrawal Metal Works INDIA 1

2 Indian History Till the India was not a major manufacturing Nation. Indian had nothing much to export as manufactured goods, except natural resources coal, iron ore and textiles etc. India was not even self sufficient in growing food for our people and used to import food grains from overseas. Similarly we were quiet deficient in production of crude oil and had to depend highly on imports. 2

3 Overview of Copper Industries in India Primary Producers Till late 1990 s due to regulated economy M/s. Hindustan Copper Ltd., an Indian Govt. Unit was the sole producer of Primary Copper, from the ores available at their captive mines located at Khetri Rajasthan & Malanjkhand M.P. The capacity of production of Cathode was nearly 8,400 MT per annum till mid 1960 s. HCL had a Brass Slab Casting and Hot Rolling Unit at Ghatshila to produce Brass Sheets in sizes of 1200 x 1200 mm. 3

4 Secondary / Fabricating Industries Just after Independence in 1947, Copper fabricating industries were in small scale setup, started catering to the needs of the Indian consumers and industries manufacturing Utensils, Handicraft, Petromax and Radiator Tanks etc. The Rolled Product was mainly Hot Rolled. The growth of the industries were quite slow and sluggish till 1970 s. 4

5 Impediments for the development of Manufacturing Industries 1) Government was encouraging the substitution of Copper with Aluminium in certain electrical uses through statutory directives, as India was self sufficient in Production of Aluminium and Copper was scarce. 2) Restriction on direct import of copper by levying high custom duties to the tune of 150%. 3) No assistance was available from the government in terms of financing infrastructure 4) No fiscal concessions were available. 5

6 Impediments for the development of Manufacturing Industries 5. Banks were even not very optimistic to extend funds to new Companies, as interest rates were very exorbitant to the extent of 16 to 18 % per annum. 6. Stringent license requirements created the major hindrance for the following: a) Starting up of new copper and Copper Alloy fabricating industries b) Expansion of the existing fabricating units 6

7 Economic Crisis The beginning of 1990 s constitute an important landmark in the history of economic growth of India. This period experienced a serious foreign exchange crisis, acute balance of payments and severe industrial recessions. Certain stringent measures were taken by the Government to tide over the crisis. This was accompanied by certain bold steps, towards decontrol and liberalisation, making radical departure from the policies, followed over the previous four and a half decades. 7

8 De-Regulation of Indian Economy In the year 1994, the then Finance Minister a renowned economist, presently Indian Prime Minister Dr. Manmohan Singh, took some very tough and bold decisions to de-regulate the economy, inviting Foreign Direct Investment which, of course brought many challenges as well relief to the Indian Industries. The De Regulation spurted growth in Primary Copper Production in the Country. The only Primary producer, Hindustan Copper increased its Cathode Production from 8,400 MT per Year to 49,500 MT per Year. 8

9 De-Regulation of Indian Economy Also indigenous production of Copper Cathodes started from Concentrates imported from overseas by the Private sector namely Sterlite Copper and Birla Copper each with an installed capacity of 100,000 MT Per Year. Presently, both the above units have increased their production to 950,000 tonnes per year, and have plans to increase it further. Both of them have established manufacturing capacity of CC Copper Rod of size 8 mm to 19.6 mm to cater the demand of Indian Copper wire drawing Industries. 9

10 After Effects of De regulation Restrictions on production capacities were removed. Control on imports of Capital Goods was relaxed. Imports of copper cathodes by the actual user industries were allowed thus easing the availability of the copper to the downstream fabricating industry like Rolling and Extrusion. Custom duty were reduced on Copper and other alloying elements like Zinc, Tin & Lead etc. With the result, Copper fabricating industries also started adopting newer manufacturing technologies. 10

11 Growth of Manufacturing Sector - New Millennium The real growth to India coincided with the New Millennium due to the boom in the Information Technology Sector. India started earning good amount of foreign exchange from the IT-service sector due to handsome value addition. With the inflow of the foreign exchange, the Indian Government started to invest in infrastructure like Power Generation and transmission Development of Road, Rail, Air Networks & Housings etc. Growth in infrastructure became a catalyst for huge manufacturing growth in the country. 11

12 Growth of Metal Industry Primary Copper & Zinc producing units. The Augmentation of capacities by the primary producers of Copper has today made the country self sufficient for the requirement of copper Cathodes and also catering to the requirements of other Asian countries. India is Self sufficient in meeting its demand s of Zinc as an alloying element for the Copper and Copper Alloys manufacturers. Hindustan Zinc Limited is the sole producers of Zinc ingots at Udaipur Rajasthan. Downstream secondary fabrication industry Downstream secondary fabrication industry have benefited from the domestic availability of primary Copper and Zinc thus spurting in the growth of manufacturing sector of the country. 12

13 Current Scenario of Indian Fabricating Industry Indian Fabricating Industries are capable of manufacturing conventional alloys like Copper, Brass, Phosphor Bronze, Nickel Silver and Cupro-Nickel, etc. However High Performance alloys are not being developed so far as we did not foresee much demand in the country, however are willing to develop whenever volume picks up. Today Indian fabricating industry is rolling Copper Foils upto thickness of mm and brass foils upto thickness of 0.05 mm conveniently and has build up the production capacity of around 10,000 MT per annum so far. 13

14 Current Scenario of Indian Fabricating Industry Presently Indian copper and copper alloy fabricating industries have installed sufficient production capacities to meet the indigenous demand and have started to export to South East Asia. Rough Estimate of Indian Copper Industry Rolled Product :- 1,00,000 MT Extruded Product :- 1,50,000 MT Indian fabricating industry have invested good amount in adopting newer technology and modernization of their manufacturing facilities. 14

15 Adoption of newer and latest production Technologies / Equipments. Horizontal Continuous Casting Lines for Brass and Phos. Bronze strips. Direct Chill Vertical Slab Caster. Continuous casting of Rods through CCR and Up Level Casting. Continuous extrusion/conform technology etc. Newer Generation Rolling mills with Hydraulic AGC & Mass Flow Control. Continuous Degreasing Annealing Pickling (DAP) lines. Tension as well as Stretch Bend Leveling Lines. Laboratory testing equipments viz. OES (Optical Emission Spectrometer), Oxygen Analyzers, Micro Ohm Meters,direct reading conductivity meters & Microscope etc. 15

16 Extruded Products Conforming machines in India have brought a sort of revolution in the extrusion industry as far as copper Rods,Bus bars and Flats & heavy sections are concerned. In the last 5 to 6 years more than 50 to 60 machines have been imported from China which has created a severe competition thus losing the advantage in terms of lower cost of production v/s conventional extruded product which involved higher capital investment longer operation of casting billets, Reheating and Hot extrusion followed by Cold Drawing. 16

17 Opportunity to Indian Fabricating Industry Annual per Capita demand for copper in India is increasing and this trend is likely to continue due to India s very low per capita copper consumption of about 0.6 kg as against world average of about 2.7 kg. Thus there is a good market prospects for copper based semis in India which enlarges scope of further growth of the fabrication industry. 17

18 Constraints Lack of Manufacturer of Capital Goods & Machinery in India & mainly dependent on Import. Higher Payback Periods for Investments in Capital Goods. Lack of Support from Banking Sector and Government. Substitution by cheaper alternative metal like Aluminium and Plastics. Lower Volume & uneconomical order Quantity. Transportation and Logistics. 18

19 Lack of Manufacturer of Capital Goods and Dependence on Import After De-Regulation of the economy, Indian fabricating industries have started augmenting their production capacities by substantial investment in Capital goods. For Copper and Copper Alloy fabricating industries special purpose machine are required for which Indian Capital Goods manufacturers were not geared up at that time since they were also at their infancy stage and were not exposed to the newer technology being followed in developed countries. So few enterprising fabricators ventured to import some machinery from developed countries. 19

20 Substitution High and fluctuating price of copper has led to substitution by cheaper alternatives which is a big threat. Substitution of copper with aluminium in radiators of automobile sector has hit Indian fabrication industries of flat rolled products like sheets, strip etc. very hard. So as the replacement of conventional copper alloy heat exchanger tubes in critical and supercritical thermal power plants by alternate materials. High cost of copper has also hit the Indian handicraft and artware manufacturing industry, - which has been traditionally a major foreign exchange earner for India. Electronic Keys in Car and Builder Hardware are a threat to traditional brass Semis. CCA ( Copper Clad Aluminium Wire is another threat looming over the Copper Conductor Industry. 20

21 Low Economies of Scales causing Longer Payback period on Investment in machineries The machineries for fabrication of Copper and Copper Alloy being special purpose machine are mostly meant for high production capacity as well as very costly. Whereas the volume of the indigenous production is much lower than the production capacity of the machines. Thus do not justify the high investment for low Volume of Copper Production, resulting into increase payback period on Investment. 21

22 Lower Volume & uneconomical order Quantity 1. Since Indian per capita copper consumption is very low, the demand of consuming industries are quite low with small order quantities which falls much below the minimum economical production. 2. In addition, each consuming industry has different make and model of machines for the same product, due to which their requirement of semis also varies in terms of width, thickness, temper, core inner diameter, weight restrictions, hardness etc. which again make it cumbersome to the fabricating industries to serve their requirement. 22

23 Lower Volume & uneconomical order Quantity 3. Indian fabricating industries are compelled to set up a complete integrated facility right from melting, casting, Hot Rolling / extrusion and further processing till its final shape and sizes. 4. This is unlike other countries where mother coils are being manufactured and sold, and the rest is taken care by rendering Services like slitting, cut to length etc. by appointing service centres. 23

24 Transportation and Logistics India is geographically a very large country dependant solely on Road transportation as the rail transport is not well developed and there is negligible water transportation. In India I am sorry to admit that Road Transportation and logistics have not developed as per the expectation and requirement of the industry. Transporting small consignments is a real issue and these small consignments are being transhipped oftenly before reaching their destination. Lack of handling infrastructure at transhipment locations increase mechanical damages as well as tarnishing to the delicate finish products like Copper and Copper Alloys. 24

25 Thank You for your patient Listening D.K Jain Agrawal Metal Works INDIA 25