Amit Kumar Parashar, Sr Vice President – Operations (Tool Room, Central Quality, Service & QS) Subros Ltd.
‘Indian tool rooms should start looking beyond the automotive sector’
“Sectors like packaging, medical appliances, defence, aerospace, railways, mobile manufacturing and the electronics industry, offer high potential, which is yet to be tapped. It is high time the tooling industry enhances its capacity to meet the growing demand from these sectors,” says Amit Kumar Parashar, Sr Vice President – Operations (Tool Room, Central Quality, Service & QS) Subros Ltd.
Q. Please give us an overview of the challenges currently faced by toolmakers during the COVID-19 pandemic, and their significance in hampering growth and business prospects?
The COVID-19 pandemic has hit the world like a tsunami at a time when it was totally unaware and unprepared. It has jeopardised global growth, including that of developed economies such as the US, the UK, Germany, and India as well. As a result of the lockdown in varying degrees, the entire world has enforced a travel ban and made social distancing a norm. This has brought the wheels of the global economy to a grinding halt. Saving lives has now become paramount while saving the economy has become a secondary consideration.
Owing to the pandemic, globally, the GDP projected a minimum 1% dip and there has been a decrease in domestic demands in all segments. As a result, industries are doing everything they can to conserve and protect their liquidity and cash. Project and product launches have been postponed; the ones still in the discussion phase have been put on hold.
These changes have put the tooling industry under stress, as their annual plans, expansion plans, and investment plans have also come to a standstill. The supply chain has also been impacted, as the tooling industry was relying on China to supply std parts, and raw materials when this pandemic began. Finances, too, were affected as the payment cycle was disrupted, which, in turn, impacted the future purchase of std items and raw materials. Besides this, the scarcity of manpower began to affect production in tool rooms.
However, I feel that these exigencies brought in a silver lining. The tooling industry began to think of strategies to implement in order to bring the situation under control. Additionally, the government’s initiatives such as ‘Atmanirbhar Bharat’ and commitment to help the manufacturing industry will help put the tooling industry back on track. It’s all up to us now. I’m sure that if we are able to deliver, the future will belong to the tooling industry.
Q. How will campaigns like ‘Atmanirbhar Bharat’ and Production-Linked Incentive (PLI) Scheme in the electronics sector help domestic toolmakers in the long run?
I think both these campaigns will definitely be beneficial in the long run. The 4-6% incentive provided in the PLI Scheme for the electronics sector will encourage companies to start manufacturing locally and expand their capacities. I’m optimistic that in the coming days, more and more global companies will set up their manufacturing base in India. Localisation of the tooling industry will be the first step to realise the cost benefits. The opportunities are immense.
Major sectors such as automotive, consumer electronics, aerospace, railways, infrastructure development, and mass engineering projects will propel the Indian die and mould industry to substantially grow in years to come. According to a report, the Indian tooling industry is currently valued at INR 18,000 crore and is projected to reach INR 26,000 crore by 2025. I think that the government’s initiatives, risk mitigation measures, and focus on localising manufacturing will help the industry prosper.
The other factors set to make a positive impact are initiatives such as dedicated SEZs for aerospace manufacturing, ease-of-doing business policy reforms, encouraging greater FDIs, overall infrastructure development, promoting and forming dedicated engineering clusters, skill development initiatives that will ensure availability of trained manpower to do the specific jobs, etc. These efforts would enormously provide a greater thrust to this industry, making it one of the key growth contributors to the manufacturing industry GDP in India.
Q. As per estimates, ~70% of Indian tooling demand is being met domestically and ~30% via imports. What can Indian toolmakers do to reduce imports?
Domestic tool rooms are unable to fully meet the tooling demand of the Indian industry. As a result, tools are being imported. If we look at the tooling being imported, they broadly fall into two categories. The first category is critical tooling, which require adherence to stringent quality requirements. For example, like body side panels, fenders, LED lights, back lights. It also includes tooling which requires high dimensional accuracy. For example, aluminium forming and stamping dies for automotive application or electronics. The second category include parts, which require special texturing and smooth finish. Only a small percentage of these belong to the non-critical segment. The reasons why it is preferred to outsource these jobs is because outsourcing them will ensure that they fall within the budget and are available within the set timeline.
No doubt Indian tool rooms have developed the capability to cater to all such tooling needs. However, owing to inadequate infrastructure and capacity, they are unable to deliver within the set timeframe, making overseas tool rooms a preferred choice. Hence, there is a need for tool rooms to be equipped with high-speed machines, die spotting and quality Inspection infrastructure, like CMM, contour checker. They need to invest in CAE tools for designing and must strengthen their project management through tool room specific software readily available for planning and scheduling in order to reduce imports.
Q. The industry faces many challenges pertaining to the availability of adequate finance, availability of skilled manpower, lack of industry-friendly policies and export incentives. Have the government and associations undertaken any initiatives to help the industry?
Yes, definitely! The government is undertaking initiatives through platforms such as NSIC, which offers MSMEs a single window to register, obtain easy financing, assistance to procure raw materials and a B2B portal. Such platforms help small and medium tool rooms not only get a foothold in the industry but also access to technical support. Besides this, initiatives such as ‘Atmanirbhar Bharat’ and ‘Make in India’ are helping our manufacturing industry become self-reliant and increase its contribution towards the country’s GDP.
Tooling is a capital-intensive industry. In its endeavour to provide the right growth stimulus to the industry, particularly with the objective of helping SMEs, the Government of India has now set up tool rooms at Aurangabad, Ahmedabad, Bhubaneshwar, Guwahati, Hyderabad, Indore, Jamshedpur, Kolkata, Jalandhar and Ludhiana. These tool rooms are equipped with the best technology and are aware of the latest advancements in the field. They periodically add new technology like CAD/CAM, CNC machining for tooling, vacuum heat treatment, rapid prototyping, etc. These tool rooms also run training programmes for skill upgradation, which staff working in tool rooms and various MSMEs can participate in.
Q. The automotive industry is going through an uncertain time. What other emerging sectors can toolmakers explore apart from automotive?
Indian tool rooms should start looking beyond the automotive sector. Sectors like packaging, medical appliances, defence, aerospace, railways, mobile manufacturing and the electronics industry, offer high potential, which is yet to be tapped. It is high time the tooling industry enhances its capacity to meet the Q. growing demand from these sectors.
Q. Industry 4.0 and hybrid manufacturing have been around for a long time now. Do you think companies will opt for automation post COVID-19?
The design and manufacturing of dies and moulds represent a significant link in the entire production chain because nearly all mass produced discrete parts are formed using production processes that employ dies and moulds. Thus, the quality, cost and lead times of dies and moulds affect the economics of producing a very large number of components, subassemblies and assemblies, especially in the automotive industry. Therefore, die and mould makers are forced to develop and implement the latest technology in part and process design, including process modelling, rapid prototyping, rapid tooling, optimised tool path generation for high-speed cutting and hard machining, machinery and cutting tools, surface coating and repair as well as in EDM and ECM.
But whether it is in bulk or hybrid manufacturing, tool rooms will opt for automation if there is a business proposition at a lower cost. Also, it needs to be seen as to how the government will support Indian tool rooms in adopting these latest technologies.
Q. What short and long-term opportunities do you see amid this COVID-19 crisis and growing geopolitical situation?
The global die and mould market is anticipated to rise at a considerable rate during the forecast period, between 2020 and 2026. In 2020, the market was growing at a steady rate and with the rising adoption of strategies by key players, the market is expected to rise over the projected horizon. The die and mould market is expected to grow at the highest CAGR during the forecast period, 2020-2026.
On a short-term basis, as the tool supply from Asian countries have been delayed or restricted, the industry is looking to make up for the loss through order realisation domestically. The opportunity exists where the gaps can be filled by the Indian tooling industry, which should be ready to take up the challenge and deliver. For the long term, the promising factor is the ‘Atmanirbhar Bharat’ campaign, where localisation of tooling will offer a major thrust to the automotive and non-automotive sectors.
Given that the origin of the crisis was from China, global supply chains are severely disrupted. From a global perspective, China cannot remain a trusted partner anymore. This creates huge opportunities for India on a long-term basis. Major manufacturing nations in the world have given signs that they wish to diversify the sourcing for global value chains. There will be tough competition to attract investors to India, but this will give a golden opportunity to our tooling industry to get a foothold in the global value chains
This interview was first published in TAGMA Times newsletter
