Marc Weinmann, Chairman, VEM Tooling
‘I’m quite optimistic about the coming years’
“I see many new developments happening in India. But, at the same time, on a broader base, a lot of groundwork needs to be done. For instance, there’s a need for improvement in a lot of areas such as trust among customers and suppliers, and financial planning, which is a major pain area for all toolmakers, among others,” says Marc Weinmann, Chairman, VEM Tooling.
Q. Please give us an overview of the challenges currently faced by toolmakers during the COVID-19 pandemic. Also, could you please explain their significance in hampering growth and business prospects?
The COVID-19 pandemic has adversely impacted the global supply chain and affected the functioning of businesses across various sectors. Toolmakers are finding it challenging to deal with this crisis. For instance, owing to low order volumes and holding off on new development projects from OEMs and Tier-1 companies, toolmakers are currently grappling with excess capacity and financial management.
Undoubtedly, customers are willing to develop tools in India instead of approaching overseas suppliers that are offering better pricing. However, the local buyers are quoting irrational prices and payment terms, which does not bode well for Indian toolmakers.
In simpler words, everyone in India is talking of developing the local mould making market, but no one seems to be willing to really support this cause. The Indian buyers’ approach seems short-sighted and disinterested in forging long-term partnerships.
Q. As per estimates, ~70% of Indian tooling demand is being met domestically and ~30% via imports. What could Indian toolmakers do to reduce imports?
Indian toolmakers lose out to their global competitors because, in most cases, they are not equipped to meet the tooling demands. They need to join hands and focus on improving their processes to match the standards of other dominating tooling industries across the world. The industry also needs to explore alternative ways to enhance their productivity. For instance, they should consider investing in design automation, high-end machining processes, better manufacturing process and measurement capabilities.
Q. With the automotive industry going through an uncertain time, what other emerging sectors could toolmakers explore?
Rather than focusing only on automotive, toolmakers need to believe that they have a world of opportunities waiting to be tapped. For instance, when the pandemic struck, some toolmakers decided it was best to diversify. They started with the manufacturing and distribution of disposable face masks, and other healthcare products, to meet the growing demand for these. So, the medical industry is definitely a good option here. Pharma and packing industries could also be explored. The Indian government has been promoting indigenous production and has allocated an impressively high amount for the defence sector. I think toolmakers could consider exploring the defence sector as well. However, TAGMA needs to assist toolmakers here. The association needs to create a forum for toolmakers to help them understand the needs of various industries and access the opportunities that these industries have to offer.
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 pandemic has made the world realise that if we want to survive, we need to adapt to the changes that come our way. So, if toolmakers are looking to survive and thrive in the long run, they will have to adopt automation. Most tool rooms are sceptical about adopting automation because of the costs involved. However, they need to find ways around that. For instance, smaller tool rooms in India could actually consider merging. They could build on each other’s strengths and become far more competitive.
Q. What short and long-term opportunities do you see amid the COVID-19 crisis for Indian toolmakers?
With global trade being affected, I see local customers exploring local suppliers to get the job done. This could be looked at as a short-term opportunity. In the long-term, I think the disruption in the global supply chain has made industries across the world realise why they need to consider other manufacturing destinations. I think India is emerging as a preferred manufacturing hub. But here, I believe it’s all up to Indian manufacturers and their suppliers. They must find feasible ways to work together and make the best of this opportunity.
Q. After a challenging 2020, what are your expectations of 2021? According to you, how will the industry shape up in the coming days?
I am quite optimistic about the coming year. I see many new developments happening in India. But, at the same time, on a broader base, a lot of groundwork needs to be done. For instance, there’s a need for improvement in a lot of areas such as trust among customers and suppliers, and financial planning, which is a major pain area for all toolmakers, among others.
Besides this, I’m hoping to see a change in the way banks and other financial institutions amend their approach towards the industry. I hope, like their international counterparts, they choose to support the industry instead of only thinking about business risks.
This interview was first published in TAGMA Times newsletter
