After bull run, Rajkot machine tool units fear setback

Faced with spiralling raw material prices and high energy costs, the Rs.7-billion Rajkot machine tool industry seems to be heading for a downswing after the last five years’ bullish growth run.

Since 2003, the region began emerging as one of the top machine tool manufacturing centres after Bangalore, leaving Ludhiana and Pune behind. During this time, its production increased threefold.

Rajkot-made machine tools are now exported to Russia, the UK, the Gulf and Africa.

However, this dominance could soon be history.

Raw material prices, especially that of steel, has gone up about 40 percent, said Shaileshbhai Kawa, president of the Rajkot Machine Tools Manufacturers’ Association (RMTMA).

In addition to steel, the price of castings was also going up, he added.

‘As a result, we don’t think we can achieve a turnover of Rs.1200 crore (Rs.12 billion) by 2010,’ he told IANS.

The machine tool industry in Gujarat has undergone substantial changes in recent years. The industry is now producing the latest range of competitive customised solutions, including CNC (computer numerical control) machines.

The industry has spruced up productivity by adopting CNC machine tool technology. For this, local manufacturers teamed up with the Indian Machine Tool Manufacturers’ Association, the central government and the United Nations Industrial Development Organisation (Unido).

Rajkot houses around 200 machine tool manufacturing units. ‘There had been a sharp growth in the machine tool industry as a whole and Rajkot had benefited the most from it,’ said Rupesh Mehta, the former president of the RMTMA.

The Rajkot machine tool industry was hit badly in 2002 when India’s the engineering sector faced a recession. Nearly 200 units shut down operations and the annual turnover of the industry plummeted from Rs.2.5 billion to Rs.1 billion during that time.

The situation turned worse following the entry of computerised tools from Taiwan and China. But the cluster development approach in collaboration with the Unido helped the industry do a turnaround.