Martin Pinto, Executive Director, Shapers India.

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?
Indeed it has been a very challenging period for the industry, especially tooling, which is consider people’s business. In tool rooms, people always work in teams. And so, it’s difficult to manage toolmaking with social distancing and without regular follow-up meetings. At Shapers, the situation was challenging too. But we managed it well, as we received good support from our team. The first priority was given to our staff’s health, the next priority was managing the business and dealing with our customers’ urgencies.
Also, due to COVID-19, business targets were disrupted. The repercussions will be felt in the 2020-21 financial year. Toolmakers, who invested recently, will face a greater impact. It’s going to take some time for them to recover their initial investment.

Q. Will campaigns such as ‘Atmanirbhar Bharat’ and Production-Linked Incentive (PLI) Scheme in the electronics sector help domestic toolmakers in the long run?
Well, there are changes for sure. The government seems to be serious about doing something to help the manufacturing industry. They are putting in efforts to understand the toolmaking business. With increasing demands in India, toolmaking can contribute significantly to our country’s GDP growth and create many job opportunities for both mid-scale and small-scale industries.
I feel that there’s a need to focus more on understanding the toolmakers’ problems and constraints. Having said that, increasing localisation from many OEMs to meet ‘Atmanirbhar Bharat’ will create many opportunities for
domestic toolmakers in the long run.

Q. As per the tooling report prepared by TAGMA in association with NRI, the market size of the tool room industry in India is estimated to be ~INR 18,000 crore with ~70% of demand being met domestically and ~30% through imports. What can Indian toolmakers do to reduce imports?
I think that there are some good opportunities for toolmakers to enter areas where we can create options for imports. At least 30% (around INR 6,000 crore) of tooling business will have its own challenges owing to complexity of tooling, local infrastructure, poor supplier base and high demand for shorter lead time. There’s a need to work on investments, developing supplier base, and skill building, among other fronts. This is similar to what is already happening in China and Korea. There’s a need to make strong efforts to develop the existing tool rooms and also build new ones where it will be possible to deliver quality moulds in shorter lead time.
To meet these demands, there’s a need to strengthen our capability and capacity. We also need to invest in technology and the latest equipment to improve our efficiency, which is quite poor at this stage, to shorten the expected mould lead time. Toolmakers also need to upgrade their knowledge to develop complex and large tooling in India. Currently, a major part of large tools is imported from China and Korea.

Q. The industry is currently facing many challenges regarding availability of adequate finance, availability of skilled manpower, lack of industry-friendly policies and export incentives. Have the government and associations taken up any initiatives to help the industry?
As I mentioned earlier, the government is making some good efforts to strengthen our industry. In fact, we can see some positive actions with respect to ‘Make in India’. The government policy for localisation is also pushing OEMs in India to promote local manufacturing, thereby trying to reduce imports of finished moulds, and promoting exports from India. Skill development programmes are being undertaken at various levels. One major decision to bring more industries under the MSME umbrella has proved to be a game-changer, as the move is likely to benefit most tool rooms in India. At the same time, we also expect more support by increasing the import tax on finished moulds, and simplifying the process to import steel and mould elements so that tool rooms can get raw materials faster.
When talking about associations, I think TAGMA is already working positively under the leadership of Mr. D. K. Sharma and it can specifically play a big role in taking steps with government bodies to improve the situation for
the toolmaking industry.

Q. Most major global auto manufacturing countries have a strong domestic tooling industry. India is an exception, as a significant part of the tooling demand is still met via imports. What are the reasons for the same? How can we overcome this situation?
Compared to China and Korea, our tooling industry has many limitations due to lack of adequate industrial support. We also depend on imports for mould elements. So, we need to build a strong supporting industry
to avoid heavy investments and to reduce lead time. We also have limitations in processing post-moulding requirements (like special laser cutting/ complex assemblies, special graining, etc.), which we need to develop
in India.
Toolmakers need to purchase many mould elements from Europe, Japan and China by paying in advance. This makes it difficult for many toolmakers against long receivables from customers. Besides, the tooling payment terms are not attractive to increase business. There’s a need to improve these payment terms, as huge investments will otherwise be required to develop those tools.

Q. The automotive industry is going through an uncertain time. In the light of this, what other emerging sectors could toolmakers explore apart from automotive?
I think medical equipment, aerospace, defence, railways, real estate (changing need for interiors) and packaging industry can create additional business opportunities for toolmakers. However, to promote such business, we need to create a strong platform where toolmakers can get to understand the needs of these segments and prepare accordingly.

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?
Yes, automation post COVID-19 will be a major focus considering our experience with the lockdown. We need to prepare ourselves for any possible pandemic or crisis in future. This will also ensure safety of people as it will
reduce physical contact and create a safer working environment. As said by many experts, the toolmaking business will go through big changes in the next few years.

Q. What short and long-term opportunities do you see amid the COVID-19 crisis and growing geopolitical situation?
In the short term, we can see some opportunities due to the disturbed supply chain. Now, toolmakers can support each other to come out of this crisis and strengthen our current supply chain. There is also an opportunity to develop mould elements and mould base parts to avoid imports.
In the long term, we should strongly work on, automation, adopting the latest technology in our industry and increasing localisation to maintain enough control to support the growing demands due to the potential
geopolitical situation. We can also observe the changing market demands and expect more demands for exports to Europe, US and other countries.

This interview was first published in TAGMA Times newsletter 

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