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Foundry 1. Foundry Foundry is a factory which produces metal castings from either ferrous or non- non-ferrous alloys. Metals are turned into parts by melting the metal into a liquid, pouring the metal in a mould, and then removing the mould material or casting. The most common metal alloys processed are aluminium and cast iron. However, other metals, such as steel, magnesium, copper, tin, and zinc, can be processed.

Figure 1: Process flow diagram of a Foundry Industry

Melting of metal in cupola furnaces is the most energy intensive operation in a

foundry unit. The table below provides an estimate of the distribution of energy

consumption in the foundry process.

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Table 2: Distribution of Energy Consumption

Sections Energy

Consumption

(%)

1. Melting 70

2. Moulding and core making 10

3. Sand plant 6

4. Lighting 5

5. Compressor 5

6. Other 4

Source: Arasu and Jeffrey (2009), Indian Foundry Congress.

2. Typology of Product Automotive/oil engines/diesel engines Pumps/valves/fans Electric motors Machine Tools/machine parts Tractor parts/agricultural implements/chaff cutters Food processing industry/sugar industry machinery Textiles machinery Others

3. The World Scenario There are about 35,000 foundries in the world with annual production of 90 million tonnes, providing employment to about 2 million people. USA tops the list in alloy production followed by China, Japan, Germany, and the CIS. In terms of number of foundries China has the highest score (9374), followed by India (6000) and then CIS (4000). The share of Iron foundries is the maximum i.e. almost 56%, followed by steel with 14% and then the non-ferrous ones with 30%. The global market potential of metal is estimated to be about US$30 billion. The growing environmental concerns and globalization of economies have led to a closure of some 8000 foundries in Europe. These countries have been contemplating to shift their business to the low labour cost centres i.e. the developing countries. World Foundry market is becoming competitive as such France, USA and Spain have established new companies in China and Mexico. Other European

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countries have improved the productivity to annual labour cost gap aimed investments, exploiting knowledge and technical capacity to enlarge the market. Performance of Top 10 Metal casting producing countries during years 2002-

2006

2006 2005 2004 2003 2002

mn

tons Rank

mn

tons Rank

mn

tons Rank

mn

tons Rank

mn

tons

Rank

China 28.1 1 24.4 1 22.4 1 18.1 1 16.3 1

US 12.4 2 12.9 2 12.3 2 12.1 2 11.8 2

Japan 7.9 3 6.6 4 6.4 3 6.1 3 5.7 3

India 7.2 4 6.1 5 4.6 5 4 5 3.3 5

Germany 5.5 5 5.1 6 5 4 4.7 4 4.6 4

Brazil 3.1 6 3 7 2.8 6 2.2 8 2 9

Italy 2.6 7 2.5 8 2.4 8 2.4 7 2.4 7

France 2.4 8 2.3 9 2.5 7 2.5 6 3 6

Korea 2 9 1.9 10 1.8 10 1.8 10 1.7 10

Mexico 1.7 10 1.8 11 2.2 9 1.8 9 2 8

Source: Compiled from Census of World Casting Production, several years.

4. The Indian Foundry Industry The impetus for foundry sector in India was given by the Jute industry in Bengal and the cotton industry in Mumbai in late 19th century. The establishment of TISCO, Bengal Iron Company and the IISCO led to some remarkable new uses of castings, in domestic as well as industrial areas. India ranks second in the world based on the number of foundry units present (4550 units) - after China – and fourth in terms of total production (7.8 million tonnes) (42nd Census of World Casting Production – 2007). Apart from the registered 4550 units there are several unregistered units, which according to various sources range approximately from 1500 to 5000 units. As per the IREDA-CII Report 2004, there are around 10,000 foundry units present in India including registered and unregistered units. Considering that 4550 units are registered, the

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total number of units unregistered is around 5450 units. As per estimation of experts of the foundry sector, there are around 1500 unregistered foundry units that are scattered across the country. This discrepancy in unregistered units is mainly due to the fact that the 5450 units included all kinds of micro and small units engaged in castings. Whereas the 1500 units data incorporates only those foundry units that are engaged in grey iron casting and use conventional cupola and excludes those units that are too micro in nature and use crucible for melting of metals. Also several foundry units had closed due to non compliance with the pollution standard set by the government for example Howrah, Agra and nearby areas. The foundry produces a wide variety of castings such as manhole covers, pipe and pipe fittings, sanitary items, tube well body, metric weights, automobile components, railway parts, electric motor, fan body etc. 90% of the castings produced are from the SSI sector. Most of these units are situated in clusters, with cluster size ranging from 30-500 units. The break-up of production of different varieties of castings is as follows:

72% Steel Castings 10%

10% Aluminium castings 8%

5. Exports

The export of Castings from India (both sanitary and industrial combined) has witnessed a stead growth consistently year after year from Rs.1,404 crores in 2001-02 to Rs.2,997 crores in 2005-06, almost doubled in five years. Year-wise break – up of exports is tabulated below: India today ranks tenth among casting exporting countries.

Year

Sanitary Castings

Industrial Casting

Total

2001-02 524.00 880.00 1,404.00

2002-03 609.00 1,038.00 1,647.00

2003-04 867.00 1,058.00 1,925.00

2004-05 1,242.00 1,383.00 2,652.00

2005-06 1,530.00 1,467.00 2,997.00

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6. Foundry Clusters of India

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S.No.

State Place No.of units

Approx Producti

on (Tonnes/ Annum

No. of workers

Typology Product

1 Andhra Pradesh

Hyderabad 100 37700 Fan, Automobile spares, Refrigeration and General Engineering castings

2 Andhra Pradesh

Vijayawada

3 Chhattisgarh Durg, Raipur

4 Gujarat Ahmedabad 650 3,00,000

9,000 Pumps and pumps part and automotive.

5 Gujarat Jamnagar

6 Gujarat Rajkot 904 2,50,000

30,000 Automotives, textile machinery, machine tools, diesel engines.

7 Haryana Samalkha

30 36,000

2,000 Chaff cutters, Auto components Manhole Covers, Oil engine, Pump sets, Sugar/Textile Machinery

8 Haryana Faridabad 140 150,000

7625 Auto components, agricultural implements

9 Karnataka Belgaum 250 360000

Automotive, pumps, machine tools

10 Maharashtra Gadchiroli

11 Maharashtra Kolhapur 300 200000 Automotive, pumps.

12 Punjab Mandi Govindgarh

13 Punjab Batala 200 150000

Agricultural implements, machine tools

14 Punjab Ludhiana

15 Punjab Jalandhar 350 240000

Agricultural implements, machine tools

16 Rajasthan Jaipur

96 1,00,000

10,000 Agricultural implement and machinery, fans body, transmission hardware, automobile components, etc.

17 Tamil Nadu Coimbatore 400 372000

Pumps and pump parts, textile machinery

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18 Tamil Nadu Chennai 105 250000

19 Uttar Pradesh Agra 125 315000

Generator set parts, engine parts and agricultural implements

20 West Bengal Howrah 320 120,0000

12,000 Manhole covers, sanitary fittings

7. Technical Institutions

S.No. Name of the Institution

National Institutions

1 The Energy and Resources Institute (TERI)

2 Petroleum Conservation Research Association (PCRA)

3 National Productivity Council

4 National Metallurgical Laboratory

5 Engineering Export Promotion Council

6 Bureau of Indian Standards

Regional Institutions

1 Bengal Engineering & Science University, Shibpur, Howrah, W.B

2 Jadavpur University, West .Bengal

3 Central Institute of Tool Design, AP

4 Defence Metallurgical Laboratory, AP

5 NSIC- National Small Industries Corporation Limited

6 SNIST- Sree Nidhi Institute of Science and Technology, Ghatkesar,

Hyderabad

7 CBIT- Chaitanya Bharati Institute of Technology

8 A P Productivity Council

9 Belgaum Material Testing Center

10 Product and process Development Center , Agra

11 Field Testing Station, National Test House, MNIT

12 C-MAT LAB: Center for material testing, Hyderabad

13 Product and Process Development Center, Agra

14 Small Industries Service Institutes

15 Regional Testing Center, Mumbai

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8. Financial Institutions

S.No. Name of the Institution

1 State Bank of India

2 Federal Bank, Howrah

3 Indian Overseas Bank, Kadamtala

4 Hong Kong Bank, Kolkata

5 SIDBI

6 AP State Finance Corporation

7 Belgaum Industrial Cooperative Bank

9. Associations

S.No. Name of the Association

National

1 The Institute of Indian Foundrymen (head office in Kolkata and IIF chapters in Ahmedabad, Mumbai, Coimbatore, Kolhapur, Delhi and Pune).

Regional

2 Howrah Foundry Association

3 Indian Foundry Association

4 Federation of Andhra Pradesh Small Scale Industries Association

5 Belgaum Coal & Coke Association

6 Belgaum SSI Association

7 The Southern India Engineering Manufacturer's Association (SIEMA)

8 Coimbatore Industrial Infrastructure Association (COINDIA)

9 Rajkot Engineering Association

10 Foundry Cluster Development Association, Kolkata. (SPV formed under IIUS)

11 Foundry Owners’ association Rajasthan

12 Vishwakarma Industries Association, Jaipur

13 Federation of Association of Rajasthan Trade Industry (FORTI), Jaipur

14 Ahmedabad Engineering Manufacturing Association

15 Ahmedabad Foundry Society, Ahmedabad

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10. Government Bodies

S.No. Name of the Organisation

1 Central Pollution Control Board

2 Bureau of Energy Efficiency

3 Punjab State Council for Science and Technology

4 Bureau of Indian Standards

5 Commissioner of Industries

6 Rajasthan State Industrial & Investment Corporation (RIICO)

7 Rajasthan Chambers of Commerce and Industry

11. International Organisation

S.No. Name of the Organisation

Donor

1 Swiss Agency for Development and Cooperation (SDC)

2 South Asia Enterprise Development Facility (SEDF)

3 Department for International Development (DFID).

Technical

1 British Cast Iron Research Association (BCIRA)

12. Ministries

S.No. Name of the Ministry

1 Ministry of Coal

2 Ministry of Power- Bureau of Energy Efficiency

3 Ministry of MSME

4 Ministry of New and Renewable Energy

5 Ministry of Petroleum and Natural Gas

13. Howrah Foundry Cluster Opportunities:

1. Upsurge in the automobile market increasing in casting consumption in this sector.

2. Globalisation ushered tremendous market potential for the competitive firms in the cluster.

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3. As a result of recent trend in interdisciplinary research in the engineering institutes and an urge for industry-institute interaction programme accompanied by recent development in IT sector in the state, enough opportunities have emerged before the metal casting cluster to flourish with the state-of-the-art technology.

4. There is an increasing trend by the foreign consumers to import quality casting products due to closure of foundry units in those countries.

5. Renewal in investment possibility by the NRIs in various sectors in recent times has enhanced the prospect of steady growth of the metal casting cluster

Challenges: 1. Competition is going to increase in the changed scenario of global market 2. Other Asian competitors in particular China are emerging as potential

supplier in global market due to better infrastructural facilities, legitimate control of the state and existence of well conceived action plan in the concurrence of any condition of uncertainties.

3. Relocation of the cluster to the proposed new ‘Foundry Park’ with allied and engineering industry at Domjur to be completed within a time frame to avoid notice of closure from WBPCB

4. The majority of benefits derived from the excise duty policy of the central government is enjoyed by big industries posing an uneven competition before small and medium foundry units who are compelled to either loose market or compromise on price or quality

14. Ahmedabad Foundry Cluster: Opportunities: 1. Foundries in developed countries and European countries are closing

down due to higher production cost and stringent pollution laws, creating large gap of demand to fill.

2. High export demands for machined, ferrous and non-ferrous castings 3. Indian automobiles sector is recording two digit growth, creating huge

demand of castings for automobiles. 4. Indian manufacturing base is expanding in may fold, requiring various

castings in huge quantity 5. High export demands of decorative cast articles of non-ferrous 6. Ample scope of technology upgradation 7. Development of tailor made low cost machine to suit the requirement of

small foundry units. 8. Common testing facility to improve the quality 9. Use of simulator in order to reduce the development cost and lower down

the lead time.

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10. Setting up of Raw Material Bank will enable the cluster units to get raw material and consumables at reasonable price, trusted quality and timely delivery

11. Small foundry can work on pattern of order sharing, thus to enhance production base. Machining units can also be a part of order sharing to convert casting into ready to use.

12. The manufacturing base of other engineering product of Ahmedabad can be made use of developing supply hub of sub assembles in which casting is a major part.

13. Local business skill can be made use to market foundry product globally Challenges:

1. The larger produce of the casting of the world can enter in Indian market 2. The foundry units have not established their brand image of supplying

speciality castings 3. The concept of ready to use casting is yet to popularise 4. Use of old technology is resulting in low productivity and higher production

cost may make foundry units non-competitive 5. Inadequate installation of pollution control equipments making units non-

compliant of pollution norms 6. Mega status of Ahmedabad may lead to displacement of foundry units

from Ahmedabad 7. Generation of solid waste and its disposal

15. Belgaum Foundry Cluster: Opportunities:

1. A Good scope for export of castings to the European countries 2. Good potential to market in other segments of domestic market 3. Market can be increased under common brand name and a publicity

through various means like common brochures, catalogues, CDs & through web sites

4. The new environmental policies of Government of India needs cleaner technology or eco-friendly process, energy savings will have impact on the cost of castings.

5. Major foundries can ago for small size sand reclamation plant 6. Setting up of common raw material depot will enable the foundry units to

get raw material at reasonable price. Challenges:

1. China could be a strong competitor and making rapid technological advancements and competitive in terms of quality, prices and delivery schedule

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2. Growing environmental concerns regarding pollution emitted by foundries may bring legal complications and also result in closure of units

16. Jaipur Foundry Cluster Opportunities:

1. Good scope for SG Iron casting due to booming domestic automobile sector and demand in export market due to environmental concerns.

2. Good scope for export of castings to the European countries 3. Market can be increased under common brand name and publicity

through various means like common brochure, catalogues and websites. 4. The cleaner technology or eco-friendly process, energy savings will have

impact on the cost of castings 5. Setting up of common raw material depot will enable the foundry units to

get raw materials at reasonable price 6. Setting up of common testing facilities will enhance the quality of castings 7. Availability of moulding sand at very cheap rates. Challenges: 1. China could be a strong competitor and making rapid technological

advancements and competitive in terms of quality, price etc. 2. Lack of attitude for efficiency / innovative competitiveness 3. Skill base of the workers very low which needs to adopt latest technology 4. Growing environmental concerns regarding pollution emitted by casting

units may bring legal complication and also result in closure of units. 17. Hyderabad Foundry Cluster Opportunities: 1. Spending on Defense and Space sectors can increase the opportunities

for developing products and castings of high value for critical applications. 2. Easy availability of inputs 3. The Vizag-Vijayawada-Secundrabad LPG transfer pipeline is anvil and

would reduce usage of furnace oil, ultimately reducing the cost of production of non-ferrous sector and head treatment.

4. Growing environmental concerns in foundries of western countries provides opportunities for sourcing of casting from developing countries like China and India.

5. Availability of inland container depot (ICD), which facilitates exports. 6. Catering to niche markets like Space and Defense. Challenges:

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1. China could be a strong competitor which is making rapid technological advancements in terms of quality, delivery and competitive price.

2. The new environmental policy emboldened by the Supreme Court of India for necessary energy savings, clean technology or eco-friendly process

3. Standardization and testing procedures by testing laboratories.

18. Interventions in Foundry Clusters

The State Bank of India under project Uptech scheme of Govt. of India had taken up foundry cluster of Belgaum in 1997. Under the project detailed studies were carried out for technology upgradation. Seminars on technological aspects were organized and training on shop floor was provided for the personnel working in foundries. Under this scheme Rs. 5.00 Lacs were given to testing center to acquire radiograph equipments. Recently it has come out with new project for energy efficiency, under this subsidies is provided to an extent of 50% of the consultation fee for caring energy audit and for preparation of project report. Finance is also given for accruing machining including cost of renovation etc.. All foundry units can made use of this scheme. 19. Policy suggestions: The future foundry structure demands new manufacturing foresight to fulfil optimal material processing and to meet ever increasing quality demand. Therefore, there is a necessity for continued introduction of innovation in foundry clusters. The intervention under cluster development programme would facilitate net-working and capacity building, brining in efficiency driven competitiveness, stimulate technology upgradation. Bench marking to challenge the best and setting up of CFCs to create state-of-the-art facilities for pattern making and testing facilities would boost the foundry industry in India.

There is urgent need to put in place energy efficiency processes which will not only reduce the cost of products but will have multi-dimension effects. Labour reforms are required for harnessing the benefit of globalisation. Policy of hire-and-fire needs to be adopted for improving productivity. Newly opened Engineering colleges should have metallurgical branch as a policy decision in order to cater to the needs of growing demand of metallurgist in foundry industry. The benefit of Price Preference to the SSI units in government purchase programme is generally not extended by the purchasing departs of the government, which need to be done. The government should devise suitable policy and schemes enabling foundry units to grab the opportunity of exporting castings to the European countries. The

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cost of casting in Europe is 30% more than in India and this should be exploited to export Indian casting to Europe. Various foundry clusters are exporting their products to European markets, but there is need of joint effort on behalf of foundry industry with regard to export.