Cutting tool: Signs of green shoots?

May 14, 2018 1:43 pm

The cutting tool industry is key to the government’s flagship ‘Make in India’. Here’s an in-depth analysis on the recent performance of cutting-tool industry in India.

Recent performance of cutting-tool industry in India
According to Gautam K. Ahuja, Managing Director, Dormer Tools India Pvt Ltd, the cutting tool industry has been growing in double-digit figures in the last year and is one of the highest in the last 4 years whereas Amul Shinde, Director – Channel Sales, Seco Tools India (P) Ltd opines that the cutting tool industry in last one and half year has done very well and has been growing at rate of around 6 per cent.

The growth of the cutting tool industry is aligned with the automotive industry which is the largest consumer of cutting tools. According to Shinde, automotive is the biggest potential segment for cutting tool industry. It drives the auto ancillary, subcontractors, even large part of die and mould industry and boosts the general engineering segment as well. Hence, when automotive sentiments are good the cutting tool industry does well. A lot of focus of cutting tool industry this year has been the push for digitalisation and the productivity, he adds.

Commenting on the recent market scenario, Prashant Patkar, Vice President – Sales & Marketing, Miranda Tools said, “Markets have settled down after GST implementation and are on growth path now. Also, it helped in getting rid of unorganised players operating in cutting tools segment, thereby reducing sale of spurious products. Important sectors like automobile and auto components done very well, fuelling cutting tools consumption.”

Miranda Tools is also in the opinion of positive future growth. Patkar said, “Overall, we witnessed a good growth from our core products and high-performance tools. Also new product launch helped garner higher share of market in premium segments. We hope that this momentum will continue for the next financial year as well.”

Also, with the ‘Make in India’ initiative, a lot of new investment is happening in aerospace, defence and railways sectors. This will ensure good growth of the cutting tool industry in the coming years. “Dormer Pramet India is one of the fastest growing cutting tool companies in India and it is our endeavour to increase our market share every year,” informs Ahuja.

Are green shoots visible for domestic players?
The Indian economy is the fastest growing large economy in the world, due to the high inherent demand and exports. Most of the large economies are now growing well and this is generating good demand for exports as well. Thus, Gautam K. Ahuja of Dormer Tools India believes, domestic players can take advantage of the current situation and expand their business. He adds, “Most of our customers are going in for capital investment, buying new machines and expanding their business. There is good demand for quality suppliers.”

Prashant Patkar of Miranda Tools observes: “India has been a hub for major automobile and auto component manufacturers, which drives the consumption of cutting tools. A similar growth in power generation, railways and defence production will help increase the demand. Growth in Indian machine tool industry will propel consumption of cutting tools.”

However, he believes, “Due to gradual changes in machining materials and metal cutting machine technology, it is important for domestic players to constantly upgrade the products and invest in R&D.”

Major growth drivers
According to Patkar, “Strong growth in important sectors like automobile and auto components, heavy engineering and light engineering will drive the consumption of cutting tools. Under ‘Make in India’ initiative, investments are seen in railways and defence establishments that are major consumers of cutting tools.” Further, the government’s thrust to increase manufacturing share in GDP is expected to propel manufacturing activities in all the sectors, thereby increasing the overall demand for cutting tools.

“New emerging sectors like aerospace, medical, green investment in auto sectors are likely to enhance demand for metal cutting tools,” Patkar adds.

Shinde opines: “Aerospace industry is picking up in a big way. Order books of Airbus, Boeing, Embraer and others are full, and are struggling for meeting delivery times. This reflects in the supply chain behind as well. So, productivity and cost pressures are making MNC component producers to source from India. This means that in India there is going to be huge demand and exponential growth for cutting tools and knowledgeable people who can offer solutions and insights into exotic materials machining.”

Ahuja concludes by saying: “Overall, the Indian economy is growing at a good pace and this is the right time to be India.”

The cutting tool industry has been growing in double-digit figures in the last year and is one of the highest in the last 4 years.
Gautam K. Ahuja, Managing Director, Dormer Tools India

Markets have settled down after GST implementation and are on growth path now.’
Prashant Patkar, VP – Sales & Marketing, Miranda Tools

The cutting tool industry in last one and half year has done very well and has been growing at rate of around 6 per cent.
Amul Shinde, Director – Channel Sales, Seco Tools India (P) Ltd