The Indian cutting tools industry is at an inflection point, with players consciously striving to manufacture advanced products, locally, thereby minimising the import reliance and reducing cost.
by Mitalee Kurdekar
The Indian cutting tools industry is at an interesting cusp in its evolution process. While the demand for cutting tools from users within the manufacturing sector has been steady and, in fact, growing, unique governmental initiatives like Make in India and a focus on skill development programmes are providing a much-needed impetus to this industry’s progress. Acknowledging such positive intent and change, industry players find this to be an encouraging sign, since metal cutting activities are a critical component of most industrial segments of the economy.
According to IMTMA, India’s manufacturing of machine tools is growing at a healthy pace to meet growing domestic demand. Additionally, it is now seen as an export-oriented manufacturing hub with the Government promoting active policy measures within the Make in India campaign and the goal to make India a regional manufacturing hub. The country, though, still relies heavily on imports with domestic production accounting for less than half of total domestic requirements. This is due to a variety of reasons. These range from the need for highly sophisticated technology tools, high average value but low volumes of certain tools, and low value and high volumes which do not provide enough economies of scale. In the past, with no backing for local manufacturing, the country kept losing valuable forex to advanced economies like Japan, Germany, Italy, South Korea, USA and Europe, and in some cases even China.
Change is Here
“The Indian cutting tools industry is able to manufacture most of the products in India. There are few exceptions which could be due to niche application or low demand in the market. However, we still see import of tools from Taiwan, Korea, Japan, China, etc., because of their competitive pricing and marketing network,” points out Vivek Kumthekar, GM & business head (MTS), LMT Tools India.
However, all this is set to change. The main driver for the industry’s growth is the continuing demand for high quality and productive machine tools, which stems for user demand mainly in the automotive segment. Aiding this demand are new cutting tool user industries like aerospace, defence and heavy capital goods, which are large users of such tools.
L Krishnan, MD, TaeguTec India, explains, “The Indian manufacturing scene is still dominated by auto and ancillaries – they are the prime drivers of demand for cutting tools and other inputs for manufacturing. We are also seeing increasing demand from the aerospace industry. Capital goods sectors like power generation equipment and others are yet to see significant traction.”
But is the dependent demand enough for the change being reflected in the Indian cutting tools industry? Obviously not. Rajesh Gupta, deputy GM – milling & advance materials, Seco Tools India, says, “In today’s scenario, customers are not looking for the investment of the cutting tools in terms of pricing. They are looking for the productivity improvement and the cost per price for operations. They are keen on maintaining the desired quality for the operations needed without compromising the other factors.”
Customers expect investments in the latest technologies and research for productivity features, which will also help the industry remain competitive continuously. Large and medium scale units in India, therefore, are transforming themselves by investing in sophisticated CNC machines, CAD/CAM software, to produce high-quality cutting tools. Even small and unorganised units of the industry are geared to remain competitive within their space while supplying to SME customers. It is obvious that there is an all-round drive to transform the face of the Indian cutting tools industry.
Narrowing the Technology Gap
Many believe that Indian players are now exposed to the latest technologies available, and hence there is little or no gap that exists in comparison to the developed world. But does that mean that Indian manufacturers are getting to work with all the latest technologies to produce their cutting tools. The answer could be mixed at this stage, but things would definitely be changing in the coming years as economies of scale develop with a growing demand for a suite of tools including accessories like inserts, etc.
As Gautam Ahuja, MD, Dormer Pramet India, opines, “In cutting tools, the latest technology is available in India and there is no time gap. All the new products are launched simultaneously in all the markets, and the complete range is available in India as well. Due to a large number of competitive players, it is the market pricing which is the predominant factor.”
Jay Shah, MD, Tungaloy India, justifies the need for constant technological upgrades when he states, “Customer demand for timely delivery of engineered solutions has replaced a mere delivery of quality tools. Process improvement, which would bring in a big change in productivity, is another demand driver from customers today. They are looking for a partner, who can contribute in implementing the best process, within an available setup. It is about exchange of knowledge and experience with the customer.”
He elaborates, “Process improvement always leads to the requirement of simple as well as complex special tools. Tungaloy India also has a library of special indexable insert blanks, which can be used for any such complex tools. Therefore, selection of the inserts and concept design would take the shortest time.”
Complimenting with R&D
A big trend that one notices in cutting tools is the intense competition among both global and Indian players to earn a slice of the growing market pie or, at least, to carve out a niche within this market. This has resulted in an increased spend on R&D efforts, which are targeted towards bringing high-technology solutions to Indian customers. Another useful trend is to combine R&D with local manufacturing by taking advantage of trained manpower and innovative engineering skills. Facilitating policies for easier foreign investment, skill development programmes and India’s recent rise on the ease of doing business index have all combined to fast track these efforts for the cutting tools industry. Inventing new and suitable materials in the form of metals and alloys is one such important step.
Prashant Sardeshmukh, VP and director, MMC Hardmetal India, explains his company’s efforts in this context, when he suggests, “All the latest innovations by Mitsubishi are in line with the demand by the industry to improve cutting efficiency and reduce machining costs. Due to strict environmental policies and to increase the resilience of the product, work materials are changing. High-temperature alloys, high-strength materials or composite materials are on demand. In order to cope up with these changes, MMC Japan is investing a handsome amount of revenue in R&D to launch new grades, geometries or coating technologies. We recently launched new shoulder end mills with tangential inserts.”
He adds, “With Mitsubishi’s core strengths in developing varieties of cutting tool materials and coatings, opportunities are plenty. Application-oriented tungsten carbide grades and specialised tool materials like cermet with a hardened surface layer obtained by a special sintering process or CBN with Particle Activated Sintering are developed for achieving longer tool life.”
Krishnan agrees and explains, “The R&D focus of the industry is driven by changing customer focus. Today, customer priorities are higher productivity, process reliability, lower cost of production, and meeting emerging challenges of emission standards (as we migrate to BS VI standards), increased use of newer materials in the aerospace industry, etc. All these drive our R&D efforts. We are investing a significant amount of time and money to develop a bouquet of solutions for the customer to meet some of these demands.”
Gupta adds, “Our R&D is continuously working to develop tools to support our customers to work with challenging materials and operations. The developments are based to meet the challenges and keep our customers productive and cost efficient.”
Policy Support and Expectations
Most industry players agree on the fact that the Government has been the biggest facilitator for the cutting tool industry’s development graph by introducing new policies and programmes that would aid the industry’s growth efforts. The Make in India campaign was a key initiative that worked to bring in global players to the Indian manufacturing scene, and also by supporting new technology adaptation with contracting and funding support. Skill development initiatives of the Government have enhanced the competency levels of India’s trained manpower. Looking to create manufacturing hubs for exports is another initiative that provides export benefits for attracting newer demand volumes for needy units.
Ahuja suggests, “The Government is doing the right thing with the Make in India campaign and by increasing the ease of doing business in India. With all these initiatives, the economy is doing well and India is the fastest growing large economy in the world. Once the manufacturing industries do well, cutting tool, being a consumable industry, automatically picks momentum.” He feels, though, that the Government should give more emphasis to infrastructure development and make it at par with other developed countries.
Kumthekar states, “Make in India is certainly an initiative which has given a boost to local manufacturing. With the increase in ease of doing business and availability of better manpower through the Skill India programme, the manufacturing sector can prosper. The Government needs to continue with this initiative.”
Speaking about another important initiative, Shah says, “GST is certainly a welcome initiative by the Government. This has put an end to all the hassles of documentation that existed with the earlier VAT regime. GST has freed a lot of productive time for entrepreneurs and led to improved business conditions for all.” On his expectations, Shah adds, “As cutting tools form a major support to the manufacturing industry, it would be helpful for the industry if GST is reduced to 5-8%. It will especially give an impetus to the SME segment.”
Krishnan sums up well by saying, “The Government programme of Make in India and increased spend on infrastructure are driving the demand today. In our opinion, the Government will continue to be a key enabler in driving domestic demand for a long time to come with higher infrastructure spend and enabling policies to facilitate ease of doing business. We are seeing results and hope for the best in the coming years.”