CHENNAI: The forging industry in Tamil Nadu is facing a tough time as the cost of production of fuel and raw materials like steel and aluminium has increased. Though the industry witnessed a revival in demand, the rise in costs and difficulty in procuring raw materials are hampering business.
“We are forced to buy through third-party traders, and even then, we don’t get materials on time,” said Rajavelu Manickavasagam, managing director of Innoforge, an MSME. “Industries cannot completely pass on the price rise, so industrial units have to absorb some of it and cut down expenses.”
Sources in the forging industry said the price of mild steel jumped from Rs 40/kg to about Rs 65/kg in a year, while stainless steel prices rose from Rs 250 to Rs 350 and aluminium from Rs 250 to Rs 300-350. Likewise, the price of nickel, chromium, molybdenum, and titanium are volatile. The cost of production fuel has also risen. For instance, the price of furnace oil rose from Rs 40/kg to about Rs 68/kg in a year.
The heat-based industry is also facing a labour shortage and is mainly dependent on migrant labourers, said T Navaneetha Krishnan, director of Creative Forgings. He said, “The industry has faced lots of ups and downs since 2020, and now, demand is picking up but we can’t deliver due to the availability and price of raw materials. Also, our margins fell by 30%.”
Industry players said changes in geopolitics have made western countries buy Indian raw materials, making it difficult for small-volume players to stay in the business. Forging industries work predominantly for automakers and power and heavy engineering companies.