Machine Tools Industry
Machine Tools Industry
Machine Tools Industry
Over Diversification
Market Structure
Talent
to be good, but were mostly used for import substitution and product development, not to build overall competitiveness
Internationally Uncompetitive
Poor domestic technology development and transfer meant good machines built at a high cost and poor quality machines, built at a low cost. Neither were exportable to the discerning, competitive markets of the West.
Several of these characteristics continue to affect the industry even today. The fifth and current phase began in the early nineties after the liberalization of the Indian economy. With market share of the bigger companies expanding and the public sector giants shrinking and those of the smaller companies rising, in-house design capability, entrepreneurial spirit, greater technology friendliness, operational flexibility and lean management, combined to give a greater competitive edge to the smaller companies set up by technocrats, resulting in a significant shift in machine tools production to these medium sized companies. However, these companies produce sophisticated machines and machines of higher capacity either singly, or in small numbers.
International Trends
Given the buoyant trends in calendar year 2004, the previous worldwide slump in the global machine tools industry appeared to be a thing of a past. The top 31 machine tools manufacturing countries recorded a turnover of US$ 45.3 billion in 2004 representing a promising 23 percent growth by value over the previous year. Predictably, some rebounds were more resilient than others, resulting in few surprises. While Japan increased its lead over Germany, Taiwan edged past the United States to be among the top five machine tools manufacturing countries. Italy and China remained in the second and third slot in the last calendar year. Japan expanded its margin yet again to become the undisputed leader in the global machine tools industry. Given the swelling backlog orders for its metal-cutting machine tools, the Japanese machine tools industry is expected to retain its leadership position. Germany likewise gained a respectable eight per cent output, while Italy grew by a marginal two percent in 2004. At the same time Taiwan decisively came out of a slump with a one-third gain in output, China witnessed a robust 34 percent boost in its output. In growth terms, India was also not far behind.
The Asian manufacturers inched their way up to a 42 percent share in the total turnover, while the Europeans, led with a 45 percent share. However, this is still three percent lower than 2003. The surge in global machine tools exports could not have been more pronounced than in 2004, with only two countries recording a decline among 31 nations. Germany followed by Japan, led in the area of exports, shipping more than US$ 5 billion worth of machine tools to other countries. This was followed by Italy, Taiwan and Switzerland in the range of US$ 2.0 to 2.3 billion worth of exports. The United States and Korea came next. Swiss machine tools manufacturers lived up to their reputation as the most exportoriented suppliers as their industry export ratio again exceeded 85 percent. On the import side, China led with US$ 5.8 billion worth of machine tools imports in 2004, representing a huge 40 percent growth over the previous year. While the United States was in the second place, Taiwan took the third place and more than doubled their imports during the last calendar year. Thailand is among the top ten importing countries in 2004. Thailand imports 100 percent of its requirement of machine tools because of its negligible manufacturing of machine tools. China held the record of having the largest deficit in the machine tools trade, which increased to US$ 5.3 billion. Over one-fifth of machine tools consumed worldwide were in China, with consumption worth US$ 9.3 billion. Taiwan also witnessed doubling of its consumption, and moved up to the seventh place among the top ten. In between were Japan, Germany, the United States, Italy and South Korea. Japans one-third-again increase in consumption and the United States one-quarter-again boost has been keeping machine tools production lines busy. Taiwan led in per capita consumption, spending US$ 111 for new machine tools for every person. Switzerland which had been leading on this front over the past several years, came second with per capita consumption of US$ 101. Global Machine Tools Production 2004 2003 (Value in US $ million) (Value in US $ million) Total Cutting Forming Total Cutting 88 % 73 % 55 % 12 % 28 % 45 % 7,885.9 7,737.7 4,154.1 87 % 73 % 55 % 13 % 27 % 45 % Change in US Dollars
Rank Forming 1. 2. 3. 4.
Country
33 % 19 % 12 %
5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31.
of China Taiwan (ROC) United States Switzerland Republic of Korea Spain United Kingdom France Canada Brazil Turkey Czech Republic Austria Sweden The Netherlands India Finland Belgium Russia Australia Thailand Denmark Croatia Romania Portugal Argentina Hungary South Africa Total
4,000.0 77 % 2,892.2 75 % 2,814.2 80 % 2,360.0 85 % 2,298.9 66 % 1,023.5 65 % 877.2 81 % 766.4 70 % 742.2 60 % 463.8 81 % 322.9 31 % 278.1 94 % 254.6 60 % 254.6 40 % 254.6 20 % 220.6 87 % 198.7 12 % 193.8 10 % 161.4 77 % 136.0 71 % 121.9 80 % 84.5 40 % 67.0 100 % 59.3 56 % 42.2 10 % 15.2 69 % 9.9 65 % 5.3 29 % 45,295.6
23 % 25 % 20 % 15 % 34 % 35 % 19 % 30 % 40 % 19 % 69 % 6% 40 % 60 % 80 % 13 % 88 % 90 % 23 % 29 % 20 % 60 % 0% 44 % 90 % 30 % 36 % 71 %
2,980 77 % 2,110.8 73 % 2,274.0 77 % 1,879.4 85 % 2,087.7 63 % 926.1 65 % 664.2 81 % 733.0 69 % 689.6 60 % 371.4 81 % 248.2 31 % 220.4 94 % 220.2 60 % 219.1 40 % 228.1 20 % 145.3 87 % 169.4 12 % 186.4 10 % 156.4 77 % 128.2 72 % 118.1 80 % 72.3 40 % 63.0 100 % 53.1 59 % 37.3 10 % 14.5 68 % 9.0 65 % 4.5 29 %
23 % 27 % 23 % 15 % 37 % 35 % 19 % 31 % 40 % 19 % 69 % 6% 40 % 60 % 80 % 13 % 88 % 90 % 23 % 28 % 20 % 60 % 0% 41 % 90 % 32 % 35 % 71 % 23 %
34 % 37 % 24 % 26 % 10 % 11 % 32 % 5% 8% 25 % 30 % 26 % 16 % 16 % 12 % 52 % 17 % 4% 3% 6% 3% 17 % 6% 12 % 13 % 5% 11 % 17 %
36,787.4
Region-wise West Europe (CECIMO) Asia (including Australia) America 20,766.7 20,190.6 4,035.4 17,758.9 15,456.0 3,349.5 17 % 31 % 20 %
Global Machine Tools Consumption Rank Country Consumption Consumption/Cap US $ / capita 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. Peoples Republic of China 9,260.0 Japan 5,923.8 Germany 5,353.4 United States 4,932.1 Italy 3,316.4 Republic of Korea 2,928.9 Taiwan (ROC) 2,530.7 France 1,203.6 Canada 1,124.1 Spain 1,022.2 United Kingdom 862.6 Thailand 812.9 Switzerland 757.7 Brazil 694.8 Turkey 639.7 India 474.2 Czech Republic 444.0 Austria 383.8 Russia 381.2 Sweden 268.3 The Netherlands 229.8 Australia 220.0 Belgium 170.2 Denmark 160.2 Romania 154.6 Finland 149.0 Portugal 100.6 Argentina 96.4 Croatia 94.0 South Africa 82.1 Hungary 8.9 6,760.0 4,118.7 4,646.5 3,907.9 3,116.1 2,839.8 1,297.0 1,045.9 1,046.5 882.1 644.5 787.6 611.0 581.4 525.9 280.2 346.4 272.7 366.4 221.4 203.3 208.7 195.4 141.2 136.6 126.5 87.0 50.5 115.7 70.0 8.1 37 % 44 % 15 % 26 % 6% 3% 95 % 15 % 7% 16 % 34 % 3% 24 % 19 % 22 % 69 % 28 % 41 % 4% 21 % 13 % 5% -13 % 13 % 13 % 18 % 16 % 91 % -19 % 17 % 11 % 7.13 46.52 64.95 16.83 57.12 60.27 111.24 19.92 34.58 25.38 14.31 12.53 101.69 3.77 9.28 0.45 43.33 46.95 2.65 29.86 14.08 11.05 16.44 29.60 6.92 28.58 9.56 2.46 20.90 1.92 0.89 Rank 24 7 3 16 5 4 1 15 9 13 18 20 2 26 23 31 8 6 27 10 19 21 17 11 25 12 22 28 14 29 30 2004 2003 Change in Per Capita
(Value in US $million)
US Dollars
Apparent Consumption = Countrys Production less Exports plus Imports. Credit & Source : Gardner Publications, Inc.
World over too, industrially developed countries have created market niches on the back of a well-developed and supportive machine tools sector. In India, indigenous machine tools have the highest impact on capital output ratios. Machine tools consumption of Rs.2,500 crore truly supports the advancement of the country's engineering sector output which is estimated to be worth over Rs.1,50,000 crore. In India there are about 450 manufacturers manufacturing complete machines, or their components. There are 150 units in the organized sector. Almost 73 percent of the total machine tools production in India is contributed by 10 major companies in this industry. The industry has an installed capacity of over Rs.10 billion and employs a workforce directly or indirectly totaling 65,000 skilled and unskilled persons. The hub of manufacturing activities is concentrated in Mumbai and Pune in Maharashtra, Jalandhar and Ludhiana in Punjab, Ahmedabad, Baroda, Jamnagar, and Rajkot in Gujarat, Coimbatore and Chennai in Tamil Nadu, Bangalore and Mysore in Karnakata, and some parts of eastern India. All the global leaders namely Makino, DMG, Yamazaki, Haas, Trumpf, Daewoo, Agia Charmilles, Schuler etc. are present in India either through their marketing agents, technical centers, service centers or assembly centers. There are a number of issues of critical importance to the industry. These are: The competitiveness and quality of machine tools manufacturers depend on the competitiveness and quality of its subcontractors Attracting and retaining talented manpower is an issue since the industry can grow only with knowledge accumulation High fragmentation is leading to low economies of scale Indian educational curriculum in the ITIs, or engineering colleges is not geared to impart the all round technical knowledge required by the engineers and operators in this sector. For example, a service engineer in the sector needs knowledge in hydraulics, mechanical, electronics and electrical The market share and total market size of the product range covered by the study as per CMIE data is given below. These include companies who manufacture components as well as complete equipment.
Companies Total No. of companies : 210 Kennametal Widia India HMT Machine Tools Motor Industries Co.
P M T Machine tools Automatics Kabra Extrusiontechnik Lakshmi Machine Works Sandvik Asia Forbes Gokak Wendt (India) I F B Industries Dagger-Forst Tools Premier Automobiles Akar Tools Electronica Machine Tools Batliboi Saraswati Industrial Syndicate S R P Tools I T L Industries D G P Windsor India Miven Machine Tools Guindy Machine Tools Birla Kennametal Ema India Bemco Hydraulics Methodex Systems Praga Tools Rajasthan Udyog & Tools Austin Engineering Co. Lakshmi Precisions Tools Ucal Machine Tools Total market size : Rs.5211.5 Cr.
Source: CMIE, Industry Market Size and Shares, February 2005 Total Market Size of all the sectors comprises of Rs. 5212 crores
1.22 1.22 1.20 1.13 0.69 0.58 0.57 0.55 0.51 0.48 0.47 0.44 0.41 0.36 0.29 0.24 0.23 0.23 0.19 0.18 0.16 0.14 0.14 0.11 0.10 0.10 0.09
While the above market shares are indicative, the top players in the various product categories are as below:
Presses ISGEC Electro pneumatics & Hydraulics Ltd. Hindustan hydraulics Bemco Hydraulics
Grinding machines Parishudd Machines Micromatic Grinding HMT PMT Machine Tools
A 10% G 47% F A =150-250crores 5% C=50-100 crores E=10-25 crores G= less than 5 crores
Chart 1
B 8% D 8%
C 10%
Hence the manufacturing competitiveness of the smaller companies and their subcontractors producing the components have a major bearing on the industrys quality and cost competitiveness. This sector is dominated by companies who are owned either by entrepreneurs or individuals and it is evident that induction of professional managers at the top are low. When the companies were asked about their opinion on the future structure of the sector, 19 percent of the companies had no opinion or vision about the future. 31 percent felt that there would be entry of either new players, or foreign players leading to fragmentation. However, 50 percent of the companies felt that the smaller companies will not be able to survive the onslaught of second hand machines being imported into India and the technological changes taking place i.e. from conventional to CNC and hence the market will witness consolidation in the future with the smaller ones unlikely to survive with their present level of competitiveness. 51 percent of the companies catered to the whole range of activities like design and engineering, manufacturing and installation. 7 percent of the companies are into marketing and servicing of domestic as well as imported machines.
M 7%
E 51%
D 12%
A= Design & Manufacturing D=Design,Manufacturing,Errection& Commmissioning E=Design,Manufacturing,Errection, Commmissioning & Servicing M=Marketing,Errection, Commmissioning & Servicing Chart 2
Technology
The machine tools industry can be divided into metal cutting and metal forming sectors. The metal cutting sector can be further classified into conventional and computer numerically controlled (CNC) machines, while the metal forming sector can be segregated into conventional and numerically controlled (NC) machines. Some commonly used metal cutting machines include electrical discharge machining systems (EDMS), machining centers, lathes and automats, boring, milling, drilling, grinding, honing and polishing machines, total NC machines and so on. Metal forming machines include bending, folding, straightening, flattening machines, punching and/or shearing machines, die casting machines and others. The NC machines developed in the 1950s and 1960s did not possess CPUs. The CNC machine tools are essentially NC machines with microprocessors as the CPU. The first American machine tools with a CNC system was developed in 1972 and the first Japanese machine tools with a CNC system was developed in 1976. CNC systems made it possible for microprocessors and programmable logic controllers to work in parallel. This allowed simultaneous servo position and velocity control of several axes of a machine, monitoring of the controller and machine tools performance, and monitoring of the cutting process. For a basic three axes milling machine, with the CNC systems, there could be coordination of feeding velocity and position control of all the three axes. The spindle speed could also be controlled simultaneously. These features enhanced the versatility of a traditional milling machine. Moreover, by employing multiple CPUs, the versatility of the machine tools was increased manifold. The users of machine tools felt the benefit of market fusion of several product functions. This enabled them to modify their manufacturing processes in order to become more productive. CNC machine tools enabled users to increase their productivity by eliminating the time lost in transferring the job from one machine to
another. These machines also help the users to frequently change the design of their products. The Indian industry manufactured its early products through technical collaborations from world-renowned manufacturers. From the mid eighties onwards the industry has relied entirely on its own R&D efforts to develop and market a contemporary range of CNC machine tools. The present turnover of the industry is totally from products developed by the industry in the last decade. A brief review of the technology status in the major product categories is detailed below: CNC turning centers: The Indian machine tools industry produces a range of turning centers in all sizes, from the small to the very large, and for special applications. However, the dominant market is for machines in the size range from 100 mm to 250 mm turning diameters. The Indian machine tools cover this range, but only in standard, basic designs. The current trend internationally is to have turn-mill and mill-turn machines, which are capable of performing more than just the turning operations on a component. Also, spindles with integrated motors and speeds of 6000 rpm and slide traverse rates of 60+ metres per minute (mpm) are common internationally, but these are yet to be offered from Indian machine manufacturers on a regular basis as standard products. Indian machines are adequate to meet basic turning applications but have to be technologically developed further to come abreast with international standards of multi function CNC turning machines. CNC machining centers: As with CNC turning centers, the Indian machine tools industry produces a range of CNC machining centers covering small to very large sizes. These machines are technologically more complex than turning machines. Typically, a CNC machining center has 3 linear movements, one rotary movement, apart from features such as tool changers, pallet changers etc. Indian machine tools meet the basic requirement of machining center operations, and a number of models are produced with both horizontal and vertical spindle configurations. Machines with spindle speeds of upto 10000 rpm, traverse rates of upto 60 mpm are produced by the Indian industry. The current trend in machining centers is to have additional axes of movements to take on complex machining requirements (sometimes as many as 6 or 7), high traverse rates of 100 to 120 mpm, spindle speeds of 10000 to 50000 rpm, some turning and even grinding capabilities on the machining center. Internationally, machining centers are mostly built with at least 5 axes. Modern machines incorporate linear motors for high traverse rates, and integral motor spindles are universally used. At the simpler end of the product spectrum, machines are
configured to occupy very small floor space suitable for line integration for mass production of auto components. The Indian machines are yet to be developed to offer the higher capabilities, which are increasingly required by all industries in India. Against special requirements, very sophisticated machines have been built by the Indian machine tools industry, pointing to the fact that the basic capability to develop advanced technology machines is available with it. CNC grinding machines: Here again, the industry produces a range of machines in small to large sizes, but the more advanced technology features are not yet available on Indian machines except on special machines built to order for specific applications. The main emphasis in grinding machines is on accuracy, surface finish and high process capability. Being a finishing process, grinding machines are built with great care for vibration damping, thermal control and similar other factors which have a bearing on the final component accuracies and finish. World renowned manufacturers of grinding machines have put in a lot of R&D efforts to develop machines with these capabilities. As an example, modern grinding machine beds are made not from cast iron but a proprietary material called Graniton, which is a mix of granite in an epoxy resin in controlled proportion. These beds are claimed to have high damping, good thermal resistance and thereby to deliver superior performance. In surface grinding, features like creep-feed grinding are commonly offered from international manufacturers, whereas these capabilities are not available on Indian machines. Such machines are required by the tool and die making industries, which are on a growth path in India at present. Indian manufacturers of grinding machines have to develop and offer some of the advanced features on their machines to catch up with their international counterparts. Special purpose machines: The Indian machine tools industry has been successful in developing the ability to design and produce special purpose machines for customers in almost all industry segments. This is a very encouraging feature of the industry in that these machines represent high value machines and are more knowledge based in their design and execution. Apart from the large industries, there are a number of machine tools builders in the small and medium category, which have developed this capability over the years, and cater to the requirements of the automobile, consumer and defence sectors. In fact these machines are very price competitive compared to imported equivalents. The special purpose machines manufactured in India often incorporate the most advanced features of technology from all over the world, which are effectively engineered to deliver the required functional capabilities to the customer. This segment of Indian machine tools can be a niche for exports, in view of the cost competitiveness of Indian designs and manufacturing capabilities for these machines. Defence, railways and aerospace are frequent users of special
purpose machines from the Indian machine tools industry apart from the auto component sector. Metal forming presses: Metal forming presses for sheet metal working form one of the most important class of machines required by the industry. With the explosive growth of the consumer durables, electronics and auto industries, these machines represent the core-manufacturing requirement for these sectors. The development of metal forming machines has lagged behind the other types, and the technology gaps are somewhat more visible. Indian machine builders manufacture basic machines such as presses and press brakes but these are not equivalent to their foreign counterparts. The technology of presses has advanced to offer higher stroking rates, inbuilt safety devices, full electronic control, quick change over facilities, automatic parts transfer and other features designed to make them more productive, safer and user friendly. The most spectacular development has been the turret and laser punch press, which has the ability to produce sheet metal components of complex design, automatically in extremely short time periods. These machines are not produced in India, and the user industries depend solely on imports.
The technology absorption of the Indian machine tools industry can be summarized by the following graph:
Technology absorption in Indian Machine Tools Industry
Conventional Machine Tools Stand Alone CNC Machines Time Cycle Flexible SPMs Despite technology gaps, stand alone CNC machine tools produced in India are about to attain technology maturity
Incubation
Consolidation
Expansion
Maturity
Source: IMTMA
Key gaps required to be filled are: multi tasking, high speed machining, dry / MQL machining, dieless forming, precision machines for die and mould industry, linear motion drives, near net shape forming, application of lasers, combi machines, gear working range etc. The metal forming sector will witness technology shifts and high growth in the next 5 years with the small and unorganized sector importing second hand equipment and large / OEM buyers opting for new technologies such as near net shape forming, hydro forming, laser cutting, three point bending and folding etc.
20%
35%
R&D
60%
74%
93%
0%
20%
40%
60%
80%
100%
Chart 3
In the survey it was observed that 93 percent of the companies have their own design and engineering set up which is a significantly high percentage compared to the other sectors. The companies, who do not have their own design and engineering set up, get the design and engineering outsourced. Many of the companies who have design and engineering capabilities are also booking orders from others as a diversification strategy and as per the survey, an amount of Rs.6 crores worth of orders were received by these companies in 2003-04. In fact, the Indian machine tools industry can position itself as the design lab of the world with
detailed designs being outsourced from India as a diversification strategy by the industry as a whole.
Management Efficiencies
The machine tools industry is a very fragmented sector and the marketing abilities of the industry are far from what it is in the other sectors of the capital goods
industry. Larger companies are also handicapped either due to bureaucratic norms or due to lack of capability. This is probably the reason why in this sector, a few manufacturers have formed a consortium which outsources the marketing and aftersales services. This may be a feasible model for the general purpose machines or low technology products. However, with the entry into the high-end solutions or for SPMs, the industry needs to catch up with global marketing strategies and practices. The survey showed that the smaller players comprising of 67 percent of the respondents had no formal strategic planning in terms of growth plans or were barely aware of strategic planning. Only 26 percent of the companies have reported that they have established procedures of strategic planning and a meagre 7 percent did in depth strategic planning. When asked what should be a companys strategy to enhance market share, 38 percent said they followed no strategy at all. Out of the 62 percent the majority felt that the topmost priority in enhancing market share was by achieving higher quality and service. The second priority was felt to be aggressive marketing. Third was to increase the product range and lastly reduction in costs because the Indian companies are quite cost competitive compared to their international counterparts and with the import duties coming down, their cost will further be reduced because components and bought-outs like servo drives, bearings, controls etc. are imported and would be cheaper. An aggressive marketing strategy was followed only by 10 percent of the companies. 65 percent do not even collect competitors information.
MARKET/ PRODUCT DEVELOPMENT STRATEGY
C 26%
D 7%
A 40%
B= Some awareness of strategic planning C=Established procedure of strategic planning D=Strategic Planning clearly defined Chart 4
When asked whether the companies were interested to form strategic alliances either for technology, marketing or services to enhance their market share, only 19 percent of them considered this as an option. In fact a handful of 10-15 companies are already into strategic alliances with global players and are reaping the benefits.
38% 10% No strategy or few goal Financial goals formulated Financial or nonfinancial goals formulated Mission & vision translated into goals & objectives
Chart 5
It is quite evident that the sector lacks the managerial efficiencies and capabilities with mostly the market leaders having a strategic planning process in place. Most of the players in the SSI category are not willing to come out of the category even though there are opportunities because of the financial constraints faced by them to invest in further capacity building. The ones who are beyond the SSI limit are not in an investment mode because they are apprehensive about the growth prospects and some are already bearing the brunt of the reduction in customs duties and import of second hand machines. Except for the top 15 percent companies, the rest are driven by demand led growth. No efforts are forthcoming from their end to explore export markets, or diversify to other products because of lack of technological edge, or cost competitiveness. One fourth of the companies were interested to enhance their market share through mergers and acquisitions and that included the PSUs.
ISO CERTIFICATION
56%
40%
60%
Chart 6
Quality consciousnesses of the sector is average with only 56 percent of the companies having reported to be ISO certified or are in the process of certification.
There are a handful of companies who also manufacture CE certified machines. The problems of quality are higher in this sector probably because the industry depends more on outsourced products where quality standards may be difficult to enforce. Many a times due to cost considerations, the companies cannot afford to procure the high quality reputed imported/indigenous components due to which the performance and accuracy of the machines suffer. However, the machine tools industry is believed to have improved its quality in the recent past as compared to what it was 3-5 years back. The industry needs to improve its quality further since the user segment has also rated the quality aspects lower than the imported machines. The ISO certified companies have a market share of 85 percent. However, it is important that all the companies are quality conscious since specifically the smaller companies are supplying machine tools to the component manufacturers whose quality in turn determines the quality of the equipment. Due to the fragmented nature of the industry and the small size of the players, most of them have not implemented any of the latest soft technologies like Six Sigma, Kaizen, Lean Manufacturing, TPM etc. and in fact many of them are unaware of the benefits provided by these. Except for the top 20 companies, many of the smaller companies are not even aware of these soft technologies. An effort is underway with UNIDO approaching the smaller manufacturers in a cluster form and helping them to achieve higher productivity and quality standards through these soft technologies. 33 percent of the companies surveyed have undergone a business process reengineering in the past three years to make themselves more competitive in the face of increasing international competition. 26 percent of the companies underwent downsizing to enhance cost competitiveness. The level of computerization is very poor in this sector with minimum investment by the companies. Only 0.5 percent of sales on an average is spent on procurement of hardware and software required for either automation in manufacturing or in information technology. A few companies having realized the benefits of IT are planning to invest more but this according to them would depend on their understanding of the future prospects of the sector. The highest expenditure in IT by an individual company is Rs.1.5 crores in 2003-04. The total expenditure by the companies under survey was Rs.6 7 crores in 2003-04.
LEVEL OF COMPUTERIZATION
High 16%
Invoice
Chart 7
Chart 8
TRAINING & HRD
70% 60% 50% 40% 30% 20% 10% 0%
Companies who spend on training Spend less than 10 L Spend 10L-50L 10L-100L 100L-500L
65%
40%
21%
2%
2%
Chart 9
When it comes to training and spending on HRD, surprisingly only 65 percent of the companies spent on training and HRD when the training aspect is very important for this sector. Companies who have facilities to train user companies operators and maintenance personnel will be able to increase their market share in this highly competitive product segment. Most of the companies have agents who undertake the after-sales service on behalf of the companies. However, training to improve employee motivation, productivity and efficiency should be looked into since the sector perse does not pay high rates of remuneration to its employees. On an average, companies have reported that 60 percent of the orders are delivered on or before time and another 25 percent within one month of the delivery due date. Though some of them have attributed the reasons for delay in deliveries to delays in receiving customer clearances, the majority of the companies have attributed it to non-availability of material and manufacturing. Since a substantial portion of the bought outs are imported and due to lack of proper infrastructure and lack of supply chain management, this is an issue which needs proper attention. Three fourths of the companies have reported that they have outsourced some of the core functions of their organization like manufacturing, design, marketing, HR, IT and other support services.
The sector needs to upgrade its manufacturing technology and business processes to improve its productivity and also educate itself on the planning process to tackle the delays in delivery either by subcontractors, or by the companies themselves. The companies who manufacture the components for this sector are the bottleneck due to their lack of capacity and availability of infrastructure. They too need to be educated to improve cost competitiveness and delivery. Due to the sudden increase of investments in the automobile, defence and engineering sector in the last one year or two, the industry is just out of the recessionary phase and has been unable to cope up with the demand surge since no additional capacity had been added. Benchmarking with International Companies Some broad indications in terms of benchmarking of the industry on the basis of financial parameters have been done against a few global players, this is provided in Annexure VII. The international companies against which Indian companies have been benchmarked are Schuler, DMG and Makino.
Operational Efficiencies
Financial Parameters The last two years have been excellent in terms of growth in sales for the machine tools sector with an average sales growth rate of 45 percent with some of the member companies showing sales growth rate as high as 80-95 percent.
EXPORTS AS A PERCENTAGE OF SALES (2003-04)
14.70%
15.00% 10.00% 5.00% 0.00% export for the industry export for non electric machinery
5.80%
Chart 10
SALES AND EXPORT OF DOMESTIC COMPANIES 2000 1500 1000 500 0 80 160060 47 42 40 910 20 0 2001-02 2002-0- 2003-04 2004-05 03 Company Sales(crores) 64 1100 Export(crores)
Chart 11
As is evident, the cost of raw materials as a percentage of net sales has been increasing as a result of the rise in steel prices and increase in bought-outs. The percentage of raw materials to sales for international companies is in the range of 44-53 percent. For the machine tools industry, the CMIE Industrial Financial Aggregates and Ratios indicate that the percentage has increased from 45.9 percent to 47.85 percent in 2003-04.
47.85% 46%
54%
2004-05
1.90%
2003-04
Chart 12
Chart 13
The power consumed to sales as evident in the other sectors has been showing a steady decline over the years.
55.00% 50.00% 45.00% 40.00% 2002-03 2003-04 2004-05 51.90% 51.40% 44%
Chart 14
Value added for an industry is the difference between the value of the output and the value of the input namely raw materials & bought outs. In other words, we can attribute this difference to the value added to the product by the company. The value added as a percentage of net sales has shown a sharp decline in 200405. However it has been specifically noticed that the value added for the companies manufacturing SPMs were much higher than those companies manufacturing standard products. The reasons for the decrease in value addition may be attributed to : Increase in cost of raw materials With the increase in sophistication of the machine, the percentage of bought out imported components has increased. The manufacturers have not been able to increase their prices due to competition from second hand imports and imported machines. Due to the small size of the industry the input costs cannot be negotiated to its advantage Inventory on an average was found to be 23.7 percent of the net sales or in other words, the inventory turnover was 4.2. However, if we do not consider the figures of the PSUs, the inventories as a percentage of net sales falls to 19.4 percent in 2004-05 increasing the turnover to 5.15. It has been noted that most of the companies manufacturing special purpose machines have very low inventory to net sales. Only companies manufacturing standard products has a higher inventory to net sales. The international companies have an inventory turnover in the range of 3.4 to 4.4.
70 60 50 40 30 20 10 0
59
58 50 48 42
48
2002-03
2003-04
All companies
Chart 15
As is evident from chart 15, the working capital management of the sector has improved over the years in view of the mounting competition. However, without the PSUs the average days of receivables is quite low at 42 days when compared to others in the capital goods industry. This is because the sector comprises of small players who operate with advance and payment prior to despatch whereby their receivables are comparatively low. International companies have a higher number of days sales of outstanding between 39 days to 138 days. The comparison may not be on an equal basis since some of the companies have diversified products and the segment figures are not available in the public domain. On an average, the working capital as a percentage of gross sales was found to be 22.5 percent in 2003-04 and all the companies had a positive working capital. In this figure, the working capital of the PSUs has not been considered because all of them have negative working capital. The percentage of working capital to gross sales has shown drastic decline between 2003-04 and 2004-05.
WORKING CAPITAL AS A PERCENTAGE OF GROSS SALES
2004-05 2003-04
15% 22.40%
21.50%
Chart 16
The average cost of wages to gross sales for the industry was found to be 16.5 percent in 2003-04.
The range varied from a low of 4 percent to a high of 54 percent. Without considering the PSUs the average wages to gross sales fall to 11.8 percent. The average wages per employee was found to be Rs.2 lakhs and it varied from Rs.0.3 lakh to a high of Rs.2.88 lakhs. International trends indicate that the cost of wages to sales is very high especially in the European countries at 27-30 percent. This industry has a problem of attracting the right kind of talent because of low wages. Moreover the curriculum followed by the engineering colleges do not meet the needs of the industry. Retaining of good engineers has been difficult due to the boom in the IT industry. Even in the skilled and unskilled level, the availability of workmen from the vocational training institutions is not sufficient. IMTMA is doing some work but obviously it is not enough to cater to the entire industry. The average sales per employee in 2003-04 were found to be Rs.13.75 lakhs and it ranged from Rs.1.98 lakhs to Rs.61 lakhs. IMTMA benchmarking shows sales per employee at Rs.30 lakhs. The employee productivity is very low in comparison with international companies where sales per employee ranged from Rs.81 lakhs to Rs.146 lakhs. The average value added per employee was found to be Rs. 7.5 lakhs. Profitability The profitability of the sector has shown an increase in 2004-05 over 2003-04. The PAT of the companies who have reported their latest figures has shown an increase of 52 percent in 2004-05 over 2003-04. The average return on capital employed has shown a dramatic improvement in 2004-05 over 2003-04. The EBIT to sales inclusive of losses by some of the PSUs is in the range of 8 percent and it increases to 11 percent without the PSUs. The profitability of the domestic sector is much better compared to the international companies where EBIT/sales ranged between 2-6 percent. It was noticed that in general, 36 percent of the companies in this sector had a debt to equity ratio less than one. The debt to equity ratio of the PSUs were higher than 2:1 and very few of the smaller companies had a debt to equity ratio more than 2:1. Capital Investment Inspite of the good profitability seen by the machine tools industry, only 30% of the companies surveyed have a capital expenditure plan and the amount is Rs.350 crores for the next 2-3 years.
Productivity Parameters
MACHINE UTILIZATION
LABOUR UTILIZATION
36%
27%
23% <75%
37%
<75%
>90%
>90%
75-90%
75-90%
37%
40%
Chart 17
Chart 18
Machine downtime ranged from 1 percent to as high as 20 percent in some cases. Labour efficiency ranged between 60 percent to 95 percent. Lower labour efficiency and labour utilization has manifested in lower employee productivity. Labour utilization has been lower as compared to other sectors because of surplus labour since only 26 percent of the companies have undergone downsizing and lack of awareness of productivity methodologies. Only 65 percent of the companies used CNC or NC machines because most of the smaller players get almost 95 percent of their products outsourced and they only do assembling. In fact, as high as 17 percent of the companies get 100 percent of the manufacturing activities subcontracted. However, on an average 75 percent of the companies subcontracted some amount of their manufacturing. The subcontracting was mainly done due to capacity constraints followed by cost considerations. Expediting of delivery at times also necessitated sub-contracting. Procurement lead-time ranged between 2 weeks to 4 months for imported components and less than 6-8 weeks for indigenous items.
modernization of manufacturing facilities. This lack of investment was one of the reasons for the industry undergoing a recessionary phase in the past. When the indigenously available machines are benchmarked with the imported machines the users felt that cost-wise indigenously manufactured machines were very competitive when compared to similar machines from Taiwan and Korea. However, their products have an edge over the Indian ones in terms of quality and accuracy. Chinese products are the cheapest but technologically not superior to the Indian products. The spare parts availability and servicing of the machines were better than the imported machines except for imported spare parts. However in terms of delivery, the indigenous manufacturers were found to be poor. When it came to technology, performance/productivity, machine accuracy, reliability, downtime and safety as well as eco-friendliness, the indigenously manufactured machines were rated 20-40 percent lower than the imported machines. Grinding machines and presses as per the user feedback are an area where the Indian machine tools industry is found wanting. More work needs to be done on presses and high accuracy machines for grinding and other processes like greater automation of loading and unloading and to incorporate the latest technology at low cost or provide value for money. Further the high technology and higher capacity machines are also not manufactured because of lack of demand. The users have desired that it would be helpful if the industry could deliver machines along with automatic gauging systems. Also they feel that the industry should produce more lighter and smaller footprint machines to save on space. The reasons for higher imports were machines not being available at the high technology end required specifically by the automobile manufacturers or the defence sector. Higher imports were noticed in the drilling and tap centers primarily due to poor delivery and capacity constraints of the indigenous manufacturers, in the SPMs and presses due to non-availability of technology. The poor rating on the performance and accuracy of machines have been attributed to lower quality components being used by the industry to be cost competitive. Users have found that even among the imported machines the quality/accuracy or performance of machines from Japan/Korea or Taiwan is not consistent and tend to fall after a passage of time. However, machines from Switzerland or Germany though expensive, tend to be more reliable. Ironically some of the manufacturers too voiced these concerns viz. that the price pressures tend to make them sacrifice quality. When asked if the bigger players in the private sector or public sector had procured second hand machines in the past, very few had imported second hand machines and have also reported having had the following problems: Manuals & circuit diagrams were not available leading to problems in operation and servicing
Machines cannot be used directly, need total refurbishing, which negates the reasons for buying cheaper second hand machines Machine electronics are outdated and needed total replacement with the latest version According to the operations and maintenance personnel of the user sector the priority that they give while rating a machine was of the following order: Accuracy and reliability Ease of maintenance Less downtime Availability of spares parts and servicing Power consumption Safety features & eco-friendliness of the machine As the above criteria are considered to be the important factors, Indian manufacturers are constantly behind in the first three parameters. It was noted that most of the customers at present place their orders on the basis of supply and installation. However they have also expressed that in the future, servicing will also be incorporated as a part of the purchase order as long as the equipment suppliers accept a penalty clause for poor performance during AMC. The competitive edge that the domestic manufacturers at present have in the face of the growing international competition is in the area of servicing. However, when it comes to servicing of CNC systems, the major suppliers i.e. FANUC or Siemens have not trained any Indian agency, or manufacturer to service or even diagnose the faults in the card. This at times becomes a constraint faced by the users. When asked about their feedback on the response time of the domestic manufacturers as compared to the imported suppliers, the rating for response to breakdown/service was good and faster than the overseas supplier. Also this was much cheaper. Many a times the foreign suppliers expressed their inability to service their machines which were a major problem faced by the users.
1600
2004-05
Chart 19
The industry has seen a phenomenal growth rate of 45% in 2004-05 due to the sudden surge in the domestic demand. Out of the companies covered by the survey, only 62 percent of them exported their products and on an average the exports as a percentage of sales was only 6 percent .
EXPORTS(Rs crores)
64
80 1600 60 40 20 0
60 50 40 30 20 10 0
47
42
2001-02
2002-03
2003-04
Chart 20
Chart 21
After a downturn in 2002-03, 2003-04 and 2004-05 has seen a surge in exports because of high demand in some of the SAARC countries, Iran & UAE followed by a better image of brand India. The order backlog as on 31.03.2005 was Rs.960 crores which is almost 60% of the 2004-05 sales and the growth projections for 2005-06 as reported by the industry is very optimistic at Rs.2,800 crores, an increase of 75% over 2004-05.
FUTURE GROWTH (Rs. Crores) 6000 5000 4000 3000 2000 1000 0 2005-06 2006-07 2007-08 % growth 75% 3900 2800 39.20% 5200 80% 60% 40% 33.33% 20% 0%
Future Growth
Chart 22
In view of an imminent slowdown in the Indian economy, most Indian machine tools manufacturers focused on potential overseas markets for business opportunities. Sustenance on Indian market alone did not look feasible enough. Further, off late there has been a perceptible change in the image of the Made in India brand in overseas markets particularly true for Indian-built machine tools. Enhanced features, competitive pricing and marketing focus has increased demand for Indian-made machine tools in overseas markets, particularly in Europe, United States, and the East-Asian region. This is what Indian machine tools manufacturers are hoping to leverage so as to post an optimistic export turnover in the next few years. Indian-made machine tools are currently exported to over 50 countries; the major ones being the United States, Italy, Germany, the SAARC countries and the Middle East. (Refer Annexure VIII) Lathes and automats, electro-discharge machines, drilling, machines, and machining centres formed the bulk of export orders for Indian manufacturers. These machines from India are generally favoured in overseas markets primarily due to their cost competitiveness, as compared to those available elsewhere.
SAARC Countries
USA
Germany
UAE
Chart 23
The vision of the Indian machine tools industry is now to step out aggressively and establish a presence in other potential markets. World-over, market leaders have been those who have looked to increase their market presence beyond their national frontiers. As is evident from the above graph, the majority of imports are from countries like Japan, Germany, USA, Italy, China and Taiwan. China and Taiwan are known to be the most cost competitive countries in machine tools and the USA, Germany and Japan are countries who have manufacturers known for their technology, brand image and quality. Most of the companies barring a few are present in India through their subsidiaries.
INDIA'S SHARE OF IMPORTS IN MACHINE TOOLS 2004-05 UK China
Switzerland Korea
Singapore
Germany
Taiwan USA
Italy
Japan
Chart 24
The growth in the Indian machine tools industry is demand driven which is coming from the automobile, engineering, defence, space and textile machinery industry all of which are at their peak. It is foreseen that the good times for the industry has just begun and a phenomenal growth is projected in 2005-06 and beyond with the kind of investment projected. However, it needs to be noted that approximately 70% of the demand is currently being met through imports. In India the vehicle industry is estimated to invest Rs.25,000 to 30,000 crores in the next 4-5 years in capacity building. The auto component industry is believed to invest Rs.2000 crores yearly since auto component exports is expected to grow to US$ 20 to 22 billion by 2015, a growth rate of 33.45 % CAGR. Cost pressures on OEMs will drive more and more companies to outsource the majority of the components from low cost countries like India thereby encouraging additions in terms of manufacturing facilities. The engineering industry are projected to invest a total of Rs.2,500 crores in the next two years due to the investment boom in the construction, mining, power, steel and refining sectors. Ordnance Factories are another major user of machine tools. Defence production is highly specialized, complex and poses unique challenges. Products have to be reliable and consistent in quality and hence the machines producing them need to be of very high technology and accuracy. The technologies and machines being planned for procurement are mostly flexible so as to cater to a wide range of products. During the remaining 10th Plan period, an investment of Rs.560 crores is envisaged for the modernization plan of the Ordnance Factories. The aviation industry in India is growing at a very high rate with the new entrants coming in with purchase of one aircraft per month. These aircrafts will require maintenance subsequently and the aircraft maintenance industry would witness a boom in the years to come requiring the machine tools industry to position itself for their requirements. The international scenario is also equally optimistic. In China it is estimated that the demand for CNC lathes and CNC systems will reach 20,000 machines in 2006. By 2010 the market demand for machine tools will reach US$ 7.23 billion. The market increase will be concentrated on tools such as sophisticated CNC lathes. Foreign manufactured leading edge technology CNC lathes will account for a significant percentage of the projected sales growth. A report by the State Council Development Research Centre, China predicts that annual vehicle demand in China will grow to 9.4 million units in 2010, 13.5 million in 2015 and 18.9 million in 2020 from 5.6 million this year. It has been reported that there will be 3.5 million cars in Beijing by 2008 when the city hosts the Olympic
Games up from more than 2 million units at present. Car demand will reach 5.9 million units in 2010, 10.3 million in 2015 and 17.27 million in 2020, up from 2.94 million this year. Germanys Volkswagen, the biggest carmaker in China, says the market will grow by 10 to 15% a year within the next two decades if the nation achieves an annual GDP growth of 7 to 8%. Volkswagen, running two car joint ventures in China, says the nations car market will grow to 7.9 million units a year by 2013. Last June, GM revived a plan to spend over US$ 3 billion with its Chinese partner the Shanghai Automotive Industry Corp. (SAIC) to double its annual production capacity in China to 1.3 million units by 2007. Executives from Volkswagen say it plans to invest 60 billion Yuan (US$ 7.2 billion) in China. At the beginning of last year, AUX unveiled a plan to invest 8 billion Yuan (US$ 966 million) to produce cars and build an annual capacity of 450,000 units by 2008. In the recently approved master plan for the automobile industry by the Vietnamese Government, the automobile industry forecasts a total output of 239000 automobiles in 2010 and 398000 in 2020 from the existing number of vehicles of 120000 being produced in 2005. For this the industry needs 16000 18000 VND (US$ 1 1.1 bn.) in the period 2001-10 and 3500 40000 VND (US$ 2.2 2.5 bn.) in the period 2010-20*. The Vietnamese Governments master plan report also states that the supporting industries for the automobile industry are undeveloped in Vietnam. Currently, there are about 2000 automobile part suppliers in Thailand (Tiasing 2002) while the corresponding number in Vietnam is only 60 (Quach 2004). Hence there exists a tremendous opportunity for the growth of the automobile component industry and indirectly a vast opportunity for the Indian machine tools industry which has already gained enough experience by supplying to the domestic automobile component manufacturers. The Hungarian market for automotive parts for OEMs is maturing. Asian imports and domestic production dominate sales to manufacturers but according to industry sources, the market is not yet saturated and offers potential for more facilities to be set up thereby encouraging the Indian machine tools industry to explore the opportunities. The demand from Thailand is being reviewed by all the US and European carmakers in terms of adding new production lines. This will mean demand for machine tools and also from the auto component industry. The manufacturing sector in Thailand is expected to grow at 17% in 2006 thereby giving rise to demand for machine tools by the engineering industry. *Source : Decision No.1277/2004/QP-TTG approved the Master Plan for Developing Vietnamese Automobile Industry, October 2004
In addition, during the past two years upto 72,000 entrepreneurs have entered the manufacturing market, which indicates a growing Thai industrial sector and a future potential market for high quality machinery. Presently, there is a demand for moulds and dies in Thailand. Despite a relatively high number of moulds and dies produced in Thailand, there is a high reliance on imports. Investments in moulds and die manufacturing is essential to further develop and expand certain sectors like automotives and electronics. With the buoyant domestic and international demand and the efforts on the part of the Indian machine tools industry to improve technology, quality and performance and at the same time reduce cost, there is no doubt that with a little effort this sector can emerge as one of the front runners in increasing value addition in the country since the value addition by this industry is currently one of the highest in the capital goods industry.
ROADMAP
The Indian machine tools industry has reinvented itself in terms of its product range in the last one and a half decades. Further, the emphasis was on standard machines whereas today there is a greater focus on NC and CNC machines. Technology and enhanced quality as well as cost competitiveness have therefore improved significantly. On the other hand, imports became easier thereby critical components required for machine tools manufacturing could be easily imported and at lower prices. Customers expectations have also increased in terms of technology as well as better product quality, delivery and service. With the customs duty going down every year, manufacturers of machine tools are facing threats from imports from Taiwan and China which are the most cost competitive countries in machine tools. Domestic manufacturers are facing fierce competition in the high-end technology machines both from the new, as well as second hand machines. SPM manufacturers however feel that they face little threat since they manufacture specialized machines and they operate in a niche market with a high competitive advantage due to the intimate customer relationship. However with increasing customer preference for flexible machines the SPM manufacturers need to realign their product range and strategies. There are still a few SPMs which are not manufactured in India, like the ones catering to explosives manufacturing. Reduction in duties have however helped domestic companies in reducing their costs since certain items used by CNC manufacturers like ball screws, servo drives, hydrostatic drives up to 20 KW and hydrostatic spindles which are not manufactured in India necessarily have to be imported.
To encourage value addition and to help the industry to be more cost competitive, GOI should reduce customs duty to 5% on the following items not manufactured in India: CNC systems and its parts Servo Drives/Motors covered under tariff head 85.01 or 85.04. Precision spindles covered under tariff head 846693 Ball screws covered under tariff head 8583 LM Guideways covered under tariff head 848280 Precision bearings covered under tariff head 8482 Precision gauging and balancing systems covered under tariff head 903180 or 9016.
Indian companies with financial resources and risk appetite should try to get into the manufacturing of the above items, which will help the machine tools industry immensely. There is a huge market for retrofitting of conventional and NC machines to CNC machines and this market will evolve only when customers perceive that they can get the products and services at a lower cost. The constant threat from imports has compelled the domestic companies to look internally and made them improve their products, quality, services and delivery. With the signing of FTAs and RTAs/PTAs, domestic manufacturers feel that they need to upgrade their technology through technology transfer or in-house R&D and reduce costs through innovation and productivity improvement. Companies also need to enhance their production capacities to meet the delivery requirements of the customers and focus more on improving further quality and after-sales service. Some companies are gearing up to face the threat of ever-increasing imports by operating in a very narrow technology band and niche market and reducing their product reliability gap. These FTA/PTA agreements will also open up the export market for companies who have products with competitive advantage in the export market. International manufacturers are already keen to use India as their outsourcing destination. The country imports nearly twice what the domestic machine tools industry produces, to meet the requirement of machine tools for industry in all segments. The share of the Indian machine tools industry in total consumption is around 36%, pointing to an obvious need for the industry to further develop its products and volume to meet the requirements of the Indian user sectors. A substantial part of the imports is in specialized machines of high technology, very large machines and machine types which are not manufactured in India. Customers are increasingly seeking flexible machine tools that can fabricate a diverse range of specific moulds and dies.
A common trend in the market reveals that a machine tools user today can get his job done with less expensive mix of machines. There is a new breed of machines called just enough machines. They are designed such that the machine is just right for a particular job (minus sophisticated features that are hardly used) at a reasonable cost. This is achieved only through higher interaction of the user industry with the machine builders. The industry needs to expand its range of high precision machines and respond to demands for shorter mold lead times via the introduction of automated production systems. They also need to concentrate on technologies for machine tools required for the growing industries like automotive, defence, aeronautics, space, steel, metals and the engineering industry since these industries will have greater investment in the near future both in Asia and beyond. The main focus should be on optimizing the process chain of the customers by shortening the manufacturing time. Industry should invest more on customer driven and market oriented research and development. The primary objective should be to tailor products and services to the specific needs of the customers. These USPs will distinguish market leaders from the rest. New generation machine tools play a significant role in tightening inventory control. Inventories of goods-in-process, benefit from technologies that shorten manufacturing time. Such shortening reflects a combination of a faster machining process, and a reduction in set up time and time consumed by material handling. The increase in the flexibility of machines to produce a variety of products and product mixes eliminate the need to stock a variety of products on the shelf. More importantly, the ability of CNC machines to combine operations has resulted in a major change in work-in-process and wait time. New generation machine tools are smaller and more compact. For instance, machines with multiple types of machining rarely take up as much space as all the machines they have replaced. Machine tools manufacturers should be more focused on making machines with small footprints. The problem with Indian machine tools manufacturers is that when the business is good, they are too busy to spend time on innovation and when the business is bad, they cannot afford to do anything. This is especially the case with the small and medium sized units. This attitude needs to be changed to be successful in the longer run and for that the industry needs to have a vision and strategy. The future trends in this sector are for faster but flexible machines with TPM concepts and use of internet / ethernet to facilitate operations and maintenance of machines. The industry now needs to offer the more advanced technological features on its standard products. For this the investments on R&D need to be increased with an environment where innovation can take place.
The quality aspects of the machines be its performance or aesthetics and delivery will be crucial in the future as customers can access products from all over the world. For continuous improvement, soft technologies like quality circles, Kaizen or 5S should be introduced. The industry suffers from low productivity because the manufacturing model is more labour intensive. With companies trying to be cost competitive, they need to look into the production methodologies, managing the supply chain, with greater outsourcing required to reduce costs. For standard products enhancing volume is a must to raise cost competitiveness. Customers are increasingly demanding higher productivity from their machines and hence companies need to look at the ways and means to reduce the down time of their machines and give better after-sales service for customized manufacturing solutions. The public sector machine tools companies have huge investments and possess the requisite manufacturing capabilities as well as human resources. They need to adapt themselves to the expectations of customer by being nimble footed and responding faster to their needs and problems. Productivity and financial management also require further improvement There is a similarity between the Indian machine tools industry of today and the US machine tools industry in the 1970s. The U.S. industry had remained buoyant throughout most of the 1970s, and in 1980 the U.S. machine tools shipments peaked at more than $5.6 billion (in 1982 dollars). But by 1983 output had plummeted to just over $2 billion. This precipitous fall was reflective of the U.S. manufacturing competitiveness crisis in general, as many corporations slashed capital spending to lower their own costs and sent proportionally larger shares of their parts production to lower cost vendors abroad. Meanwhile, import penetration of the U.S. machine tools market was growing at an alarming rate. Machine tools imports grew from about 34 percent of the U.S. consumption in 1983 to nearly 50 percent in 1986. By 1988, the U.S. share of world machine tools production had slipped to just 7.4 percent on output of nearly $2.8 billion, and America fell to fourth place among the world's leading machine tools producing nations, behind Japan, Germany and Italy. While the causes of the American industry's fall are too complex to fully chronicle here, one important factor was a significant domestic market shift toward standard CNC machines, which clearly favored the emerging Japanese suppliers. American builders were accustomed to making machine tools to order, and incorporating many options of the customer's choosing. Then the Japanese came into the market selling machines from inventory. While that prevented Japanese suppliers from offering much customization, the Japanese machines were manufactured in relatively large quantities and sold at a fraction of the price of the American competition. Moreover, the Japanese machines proved to be highly reliable by
American standards. Soon Japanese suppliers were thoroughly dominating the large U.S. market for machining centers and CNC turning machines. The factors due to which the industry failed to rebound quickly was:
Not enough large firms and little cooperation among small companies. Competing successfully on a global basis requires major investments in capital goods, training, export marketing, and other areas. Compared with its major competitors, the U.S. industry lacked both a sufficient quantity of large firms that could build these capabilities in house and strong mechanisms for creating cooperation among smaller firms. Difficulty in obtaining capital. The U.S. machine-tool makers, like many small manufacturers, have had difficulty obtaining capital to purchase new machinery and finance export sales. The sources of this problem included high transaction costs, lack of long-term relationships with banks, and the overcapacity and low profitability of this sector following the crisis in the early 1980s. The U.S. firms were at a further disadvantage in that their foreign competitors benefited from sustained government incentives to invest in advanced industrial equipment. Although the U.S. government has at different times offered temporary tax incentives that have stimulated demand for machine tools, these have not increased capital investment over the long term. Inadequate supply of skills and disincentives to invest in training. The skill levels of the industrys labor force as compared with those of foreign counterparts were inadequate. This skill gap was apparent from the poor basic qualifications of many existing workers, the collapse of the apprenticeship system that was the main source of skilled labor, and the lack of graduate engineers in this sector. In addition, the structure of labor markets and poor track records of government training programmes had discouraged the U.S. firms from making major investments in worker training that were being made in Japan and Germany. Poor performance in translating technological research into market advantage. Despite its recognized lead in many areas of basic technological research related to machine tools, the United States was less successful than its rivals in translating research success into commercially viable technologies. Among the reasons for the failure of the technology transfer process was the generally weak links between universities and machine-tool firms; the focus of government research on the most sophisticated applications, which often had limited market potential; and the weak cooperation between machine-tool users and their customers. Unsophisticated domestic demand. Domestic users had generally been slow to demand the latest technologies. The major exception to this was in specialized tools for the defence industry, a market in which the U.S. machine-tool industry always remained very competitive.
Weak export capacity and infrastructure. There was a dramatic increase in worldwide demand for machine tools in the latter half of the 1980s, which the U.S. firms failed to capitalize on. Because of the lack of a strong export orientation, the U.S. firms could barely penetrate the world's largest machinetool markets. Firms' ability to export were hampered by a time consuming export licensing regime, tight government enforcement of export regulations from the 1950s governing defence-related technologies, and an absence of export supports (e.g., subsidized trade fairs, low-interest loans) similar to those that aid firms in other countries.
The resurgence started in 1990 when a number of American machine tools builders, in part aided by temporary U.S Government import limits on Japanese and Taiwanese CNC machines, joined in the effort to make cost competitive standard machines, launching an era of aggressive product development that has continued unabated since. Of all these American builders, the one that has achieved the most spectacular success is Haas Automation. Haas continues to introduce new machine models at a remarkable pace, all of which follow the company's low cost, high volume model. Today the company offers a wide range of vertical machining centers, horizontal machining centers, CNC lathes and rotary products. The Indian machine tools industry is also going through a similar situation at present. Except for HMT, there are not enough large firms and there is little cooperation among small and medium players though a few of the medium sized companies have made efforts to come under a unified umbrella to build their own niche market and share the marketing and after-sales service. However, since they each of them operate in a niche market, there is less competition. Indian companies also lack adequate capabilities in terms of export marketing. The survey showed that the industry was very weak in its marketing abilities and depended on separate marketing organizations for sales. HMT though big and able to market its own products, was handicapped in providing an aggressive export thrust due to the legacy of Ministry approvals and other red tapism for travel abroad unlike the flexibility that the private sector enjoys. The Indian machine tools industry needs to be more innovative, bold and aggressive in marketing itself. Indian machine tools manufacturers are also facing difficulties in obtaining capital to finance export sales. They need distributors to hold inventory of
standard products abroad to make inroads into the export market and this requires huge capital. Indian firms also lack the ability to translate technological research into market advantage. Though India has the competitive advantage of engineering skills and low man-hour cost of research assistants, yet this advantage cannot be capitalized due to partly lack of finance and partly lack of coordination between the user sector, the machine tools industry and the Institutes of research. The Indian domestic demand arising from the small component manufacturers who are the sub-suppliers to the engineering, automobile and defence sector is not very demanding with respect to the latest technologies due to cost considerations. However, this segment will create the highest demand for machine tools considering the fact that India is today becoming a manufacturing outsourcing hub for all the major industries worldwide. These component manufacturers would need to invest in most sophisticated and flexible machines for better productivity and quality of products to meet stringent international standards. The Indian machine tools industry on an average exports 6% of its sales and the biggest player viz. HMT exports only 10% of its sales. This low export performance by the industry is due to, reasons as mentioned below: Lack of export marketing capabilities Lack of financial resources to sustain inventory levels necessary to be kept Lack of subsidized participation in trade fairs and trade missions It is evident that for the Indian machine tools industry to be prosperous in the long run it needs to: Build large capacities of cost competitive standard products Build a marketing network in the domestic and international market to make its presence felt To look at its operational efficiencies and build companies with financial power to spend on marketing and R&D Finally like the U.S. Government imposed import limits on Japanese and Taiwanese CNC machines, GOI should curb the imports of second hand machines and the following measures should be adopted: Second hand machine tools having CE Mark should only be allowed for import under OGL Second hand machines of cif value more than Rs.1 crore only should be allowed for import under OGL
The current rate of Excise Duty on machine tools is 16%. Users of machine tools in medium and large scale are in a position to claim Modvat on the Excise Duty paid on the machine tools. However, small scale manufacturers and job shops who accounts for around 50% of the market share for machine tools do not pay Excise Duty on its terminal product and are therefore not in a position to Modvat Excise Duty paid on machine tools. As a result, small scale manufacturers and job shops are required to pay a price higher by 16% for the same machine compared to the medium and large scale manufacturers. This will deter new entrepreneurs and modernization of manufacturing facilities in the small-scale sector. In order to encourage investment in the small-scale sector, it is suggested that the payment of Excise Duty on machine tools supplied to small-scale manufacturers and job shops who do not pay Excise Duty on their terminal products may be exempted from payment of Excise Duty. As per the recent speech by the President of FANUC, he visualizes that by 2010, 50% of the world machine tools production will come from India and China. With this optimism, the Indian machine tools industry should stop thinking of today only and start acting for the future. They need to address issues relating to their working environment, production technologies, managerial capabilities and concentrate seriously on technology and R&D to lead in global markets in the future.
Annexure-VII BENCHMARKING - MACHINE TOOLS Indian domestic Schuler DMG Makino Company (2004) (2004) (2004) (2004) 1 Growth in sales (%) 2 Exports as a % of sales 3 RM / Sales (%) Cost of wages / Sales 4 % 5 No. of days of sales of outstanding (days) 6 EBIT / Sales (%) 7 R&D / Sales (%) Sales / Employee (Rs. 8 Lacs) 9 Inventory Turnover 45 6 54 16 48 8 0.5 Rs.13.75 4.2 16 9 44.64 30 39 4 7 Rs.81 4.4 10 52% 52.9% 27 98 7 -25 ---138 ---
ANNEXURE-VIII
EXPORTS FOR MACHINE TOOLS SECTOR PRESSES Commodity: 846291 HYDRAULIC PRESSES Unit: S.No. Country Values in Rs. Lacs
2003-04 2004-05 %Growth 2003-04 1. 2. 3. 4. 5. 6. 7. 8. 9. AFGHANISTAN TIS ALGERIA AUSTRALIA AZERBAIJAN BAHARAIN IS BANGLADESH PR BELGIUM BHUTAN BOTSWANA 68.12 0.89 0.51 3.70 0.85 79.57 0.98 15.48 7.27 2.28 5.70 19.44 306.40 51.20 495.38 8.62 0.30 12.83 65.88 1.75 -97.34 0.00 0.20 0.00 -21.53 751.68 0.02 0.00 0.00 0.01 42.38 194.72 13.21 37.40 5.55 10.68 7.88 40.58 0.10 0.01 0.00 -81.41 0.02 0.12 0.01 0.01 0.00
10. BURUNDI 11. CANADA 12. DENMARK 13. EGYPT A RP 14. ETHIOPIA 15. GERMANY 16. GHANA 17. INDONESIA 18. IRAN 19. ISRAEL 20. ITALY 21. CONTE D'IVORY 22. JAPAN 23. JORDAN 24. KENYA
25. KOREA DP RP 26. MADAGASCAR 27. MALAWI 28. MALAYSIA 29. MAURITIUS 30. MYANMAR 31. NEPAL 32. NIGERIA 33. NORWAY 34. OMAN 35. PERU 36. PHILIPPINES 37. POLAND 38. QATAR 39. SAUDI ARAB 40. SINGAPORE 41. SOUTH AFRICA 42. SRI LANKA DSR 43. SWEDEN 44. SYRIA 45. TANZANIA REP 46. THAILAND 47. TOGO 48. TURKEY 49. UGANDA 50. U ARAB EMTS 51. U K 52. UKRAINE 53. U S A 54. YEMEN REPUBLC 55. ZAMBIA 56. ZIMBABWE Total
15.08 0.23 0.13 33.04 6.50 32.78 6.98 70.44 2.57 8.51 0.52 4.70 8.84 506.33 73.35 5.68 12.88 0.57 94.82 1.14 28.46 2.01 10.37 4.44 11.77 100.90 1.93 227.60 30.13 50.78 1.29 17.86 2,238.42 2,090.22 -6.62 61.62 38.23 21.35 251.96 33.10 10.70 -97.88 807.70 -84.39 0.86 714.82 88.99 -99.83 874.50 590.76 1.81 0.34 13.30 2,443.37 -78.75 14.24 113.10 104.15 60.56 48.47 46.70
0.00 0.00 0.00 0.00 0.00 0.01 0.05 0.01 0.03 0.00 0.00 0.00 0.00 0.14 0.01 0.01 0.01 0.00 0.00 0.00 0.09 0.00 0.00 0.00 0.01 0.02 0.00 0.19 0.00 0.02 0.00 0.00 0.02 0.03 18.75 0.05 0.00 -73.26 -20.00 0.00 -97.80 0.00 0.01 0.03 -99.30 57.14 271.43 1.01 6,646.67 0.00 0.00 0.00 0.00 -50.00 0.01 0.00 -90.91 -75.00 0.01 400.00
75.63 1,231.28
Commodity: 84629914 VERTICAL STRAIGHT PRESSES Unit: NOS S.No. Country Values in Rs. Lacs Quntity in thousands 2003-04 1. 2. 3. 4. 5. 6. 7. 8. 9. ANGOLA BANGLADESH PR BELGIUM BRAZIL DJIBOUTI KENYA NEPAL PHILIPPINES SAUDI ARAB 6.78 21.87 17.33 19.65 57.07 30.26 38.91 14.47 -26.35 44.35 0.01 107.20 154.75 160.91 74.57 0.32 1.30 20.78 0.21 13.56 0.01 0.01 0.01 0.01 0.01 0.01 0.01 85.71 114.29 100.00 -99.00 1.89 8.19 9.08 0.26 0.00 0.00 0.00 0.00 0.00 0.00 2004%Growth 2003-04 05 0.00 0.00 0.00 0.00 2004%Growth 05
10. SINGAPORE 11. SRI LANKA DSR 12. TANZANIA REP 13. U ARAB EMTS Total
Commodity: 84629920 DIEING/LOBBING MACHINE PRESSES Unit: NOS S.No. Country Values in Rs. Lacs Quntity in thousands 2003-04 1. BAHARAIN IS 2. BANGLADESH PR 3. GHANA 4. U ARAB EMTS Total 54.06 1.96 2.66 58.68 0.20 -99.66 2004%Growth 2003-04 05 0.20 0.23 0.01 0.00 2004%Growth 05 0.00
Commodity: 84629930 TRANSFER & MULTIPLE PRESSES Unit: NOS S.No. Country Values in Rs. Lacs Quntity in thousands
2004%Growth 05 0.00
Commodity: 84629990 OTHR PRESSES (MCHNCL & MANUAL) Unit: NOS S.No. Country Values in Rs. Lacs Quntity in thousands 2003-04 2004-05 %Growth 2003-04 1. 2. 3. 4. 5. 6. 7. 8. 9. AFGHANISTAN TIS ARGENTINA AUSTRALIA BAHARAIN IS BANGLADESH PR BRAZIL CANADA CHINA P RP COLOMBIA 0.81 5.37 35.83 188.58 5.27 0.85 14.43 11.04 5.76 207.11 0.61 1.88 7.44 14.79 73.17 7.62 19.31 394.82 0.00 -99.70 0.00 0.03 0.00 0.00 0.00 0.02 2,300.00 0.00 0.01 -96.88 1.44 7.47 123.15 -34.70 0.17 0.00 0.00 0.00 0.00 -95.99 0.00 327.10 4.72 0.00 0.01 0.00 0.05 0.03 -80.72 -60.00 15.71 5.09 5.02 12.07 40.65 2.88 19.79 50.21 0.00 0.01 -92.91 19.26 2.07 278.30 -58.74 0.00 0.00 0.01 0.00 0.01 0.00 0.00 0.12 -76.92 0.00 0.00 0.00 -83.33 2004%Growth 05
10. DOMINIC REP 11. EGYPT A RP 12. ETHIOPIA 13. FRANCE 14. GERMANY 15. GHANA 16. HONG KONG 17. HUNGARY 18. IRAN 19. ISRAEL 20. ITALY 21. JAPAN 22. JORDAN 23. KENYA 24. KOREA RP 25. KUWAIT
26. LEBANON 27. MADAGASCAR 28. MALAYSIA 29. MYANMAR 30. MEXICO 31. MOZAMBIQUE 32. NEPAL 33. NETHERLAND 34. NIGERIA 35. OMAN 36. PAKISTAN IR 37. QATAR 38. ROMANIA 39. RUSSIA 40. SAUDI ARAB 41. SINGAPORE 42. SOUTH AFRICA 43. SPAIN 44. SRI LANKA DSR 45. SUDAN 46. SWEDEN 47. TANZANIA REP 48. THAILAND 49. UGANDA 50. U ARAB EMTS 51. U K 52. U S A 53. YEMEN REPUBLC 54. ZAMBIA Total 42.25 6.55 56.58 8.02 42.96 17.15 13.42 76.35 82.15 7.00 7.79 3.90 123.16 12.05 1.59 5.30 128.11
3.53 18.07 7.99 260.95 0.00 4.72 6.81 -12.67 0.01 0.04 0.01 1.42 4.41 0.00 0.94 36.03 0.30 0.15 110.09 1.27 6.74 24.48 43.65 101.79 1.62 21.81 0.65 2.68 1,499.00 1,031.95 -31.16 3.31 79.89 -79.86 -49.24 0.01 0.00 0.05 0.02 0.03 541.80 0.01 168.50 -99.64 0.03 0.01 0.01 -88.22 0.00 0.00 -93.77 0.00
0.00 0.00 0.00 0.03 0.00 0.00 0.06 0.02 0.00 0.01 0.00 0.02 0.00 0.04 0.00 0.00
0.00
S.No.
Country
1. INDONESIA 2. KUWAIT 3. TURKEY 4. U ARAB EMTS 5. U S A 6. VIETNAM SOC REP Total 39.78 15.46 3.93 8.86 11.53
-28.91 16.61
0.02 0.00
-88.24 50.00
28.72
Commodity: 84602940 PROFILE GRINDERS Unit: NOS S.No. Country Values in Rs. Lacs Quntity in thousands 2003-04 1. INDONESIA 2. IRAQ 3. SAUDI ARAB 4. U ARAB EMTS Total DRILLING MACHINES Commodity: 82051000 DRILLING THREADING OR TAPING TOOLS Unit: KGS S.No. Country Values in Rs. Lacs Quntity in thousands 2003-04 2004-05 %Growth 2003-04 1. 2. 3. 4. 5. 6. 7. AFGHANISTAN TIS ARGENTINA AUSTRALIA AUSTRIA BAHARAIN IS BANGLADESH PR BHUTAN 35.78 9.16 7.92 2.69 0.14 20.22 15.22 9.38 4.70 0.65 18.15 14.94 -57.46 2.36 -40.60 -75.86 -10.21 20.00 0.41 4.58 0.17 0.12 15.17 2004%Growth 05 22.59 3.02 3.16 0.29 4.70 5.00 12.95 640.20 -30.90 68.60 -69.04 4.99 1.21 6.20 4.56 -26.43 2004%Growth 2003-04 05 3.53 1.04 0.01 0.00 2004%Growth 05 0.00 0.00
80.08 56,956.04
44.45 37,569.49
8. 9.
BRAZIL CANADA
10. CHILE 11. TAIWAN 12. CHINA P RP 13. COLOMBIA 14. CYPRUS 15. CZECH REPUBLIC 16. DENMARK 17. DJIBOUTI 18. ECUADOR 19. EGYPT A RP 20. EL SALVADOR 21. FINLAND 22. FRANCE 23. GERMANY 24. GHANA 25. GREECE 26. GUATEMALA 27. GUINEA 28. HONG KONG 29. HUNGARY 30. INDONESIA 31. IRAN 32. IRAQ 33. IRELAND 34. ISRAEL 35. ITALY 36. JAPAN 37. JORDAN 38. KAZAKHSTAN 39. KENYA 40. KOREA DP RP
19.14 26,841.55
17.50 87,400.00
5.48 22.01
55.41 0.01
3.50 4.18
311.76 -54.57
12.01 2.33 8.66 1.80 5.40 0.28 5.77 13.80 25.34 3.03 5.24
41. KOREA RP 42. KUWAIT 43. LUXEMBOURG 44. MADAGASCAR 45. MALAWI 46. MALAYSIA 47. MALDIVES 48. MYANMAR 49. MEXICO 50. MOZAMBIQUE 51. NEPAL 52. NETHERLAND 53. NEW CALEDONIA 54. NEW ZEALAND 55. NIGERIA 56. OMAN 57. PAKISTAN IR 58. PANAMA REPUBLIC 59. PAPUA N GNA 60. PARAGUAY 61. PERU 62. PHILIPPINES 63. POLAND 64. PORTUGAL 65. QATAR 66. ROMANIA 67. RUSSIA 68. SAUDI ARAB 69. SEYCHELLES 70. SLOVAK REP 71. SINGAPORE 72. SOUTH AFRICA 73. SPAIN 0.11 3.89 6.33 0.60 0.16 1.99 0.39 4.47 31.43 0.18 1.22 16.26 100.59 5.74 11.24 3.69 0.21 0.11 3.86 4.03 105.88 0.05 0.43 35.97 2.77 6.28
0.25 16.30 0.25 3.10 6.04 81.17 0.79 22.46 0.08 2.00 -45.77 2.32 1.20 0.10 6.59 8.65 7.91 0.70 24.33 0.63 0.01 4.24 7.05 1.46 4.08 28.28 18.97 0.43 45.83 60.95 17.43 9.19 1,074.04 826.80 104.74 532.79 -39.63 140.13 181.89 -39.41 203.45 11.00 1.19 0.75 0.13 0.25 0.01 7.88 11.67 0.05 2.50 3.84 60.80 2.02 116.49 2.02 70.90 114.54 2.69 7.08 33.08 15,650.80 -23.34 85.38 -37.54 34.34 0.08 0.23 9.92 159.53 11.38
0.45 6.86 0.01 1.00 10.58 1.65 17.00 0.01 3.72 9.27 2.35 2.20 3.10 0.03 3.33 0.18 2.00 1.40 0.77 0.36 7.42 8.86 0.10 35.66 14.12 15.07 -81.82 86.67 516.00 44.00 -5.80 -24.10 122.22 828.40 -76.77 645.94 64.85 60.22 670.80 -12.51 -68.87 -69.20 632.30 71.37 -39.70
74. SRI LANKA DSR 75. SUDAN 76. SWEDEN 77. SYRIA 78. TANZANIA REP 79. THAILAND 80. TOGO 81. TUNISIA 82. TURKEY 83. UGANDA 84. U ARAB EMTS 85. U K 86. UKRAINE 87. U S A 88. URUGUAY 89. VIETNAM SOC REP 90. ZAMBIA 91. ZIMBABWE Total
21.23
20.23 0.10
-4.70 67.93
4.60
18.00 0.01
291.30
1,226.79 2,060.21
Commodity: 84592100 DRILLING MCHNS, NUMERICALLY CONTROLLED Unit: NOS S.No. Country Values in Rs. Lacs Quntity in thousands 2003-04 1. ARGENTINA 2. GERMANY 3. MOZAMBIQUE 4. NORWAY 5. SOUTH AFRICA 6. U ARAB EMTS 7. U K Total 20.30 3.00 0.68 0.52 20.72 2.06 0.21 17.09 0.18 0.00 0.00 0.00 2004%Growth 2003-04 05 19.35 0.00 0.00 0.00 2004%Growth 05 0.00
Commodity: 84592950 MULTI HEAD DRILLING MACHINES Unit: NOS S.No. Country Values in Rs. Lacs Quntity in thousands 2003-04 1. ALGERIA 2. AUSTRALIA 3. HONG KONG 4. NEPAL 5. NIGERIA 6. SINGAPORE 7. U ARAB EMTS 8. U K Total 8.59 1.15 11.35 0.17 1.44 27.33 1.67 1.61 63.49 -80.58 39.96 459.33 0.01 0.00 2004%Growth 2003-04 05 3.18 14.63 8.98 6.10 3,486.47 0.00 0.00 0.30 0.00 0.00 -75.00 100.00 2004%Growth 05 0.01 0.01 0.01 0.01 500.00
Commodity: 84659500 DRILLING/MORTICING MACHINES Unit: NOS S.No. Country Values in Rs. Lacs Quntity in thousands 2003-04 2004-05 %Growth 2003-04 1. 2. 3. 4. 5. 6. 7. 8. 9. AUSTRALIA AUSTRIA BAHARAIN IS BANGLADESH PR BHUTAN CANADA CHILE DJIBOUTI ECUADOR 40.22 1.73 1.40 7.70 1.24 22.85 95.99 37.03 6.18 -19.73 0.25 105.89 0.09 1.84 1.44 0.73 110.56 0.08 0.00 0.01 0.04 0.00 0.00 0.05 0.01 0.03 -21.95 0.60 137.01 0.00 0.01 0.00 0.01 0.00 0.00 0.04 2004%Growth 05 0.00 100.00
10. FINLAND 11. FRANCE 12. GERMANY 13. HONG KONG 14. IRAQ 15. ITALY
16. KENYA 17. KOREA RP 18. KUWAIT 19. MALDIVES 20. MALI 21. MAURITIUS 22. MYANMAR 23. NEPAL 24. NETHERLAND 25. NIGERIA 26. NORWAY 27. OMAN 28. QATAR 29. SAUDI ARAB 30. SINGAPORE 31. SOUTH AFRICA 32. SRI LANKA DSR 33. SWITZERLAND 34. TANZANIA REP 35. THAILAND 36. TOGO 37. TUNISIA 38. TURKEY 39. UGANDA 40. U ARAB EMTS 41. U K 42. UKRAINE 43. U S A 44. YEMEN REPUBLC 45. ZAMBIA Total MILLING
15.82
-64.58
0.00
-95.05
0.09 0.45 1.07 26.95 3.66 8.66 112.98 0.12 3.28 0.73 12.63 2.03 28.02 1.55 5.44 110.56 18.42 39.45 0.11 18.79 138.95 55.99 10.51 78.17 9.57 0.80 26.30 9.10 62.69 2.29 31.33 227.56 178.23 0.01 781.69 2,174.90 -19.81 0.01 -98.57 1,220.66 150.39 0.11 0.05 0.00 109.78 1,449.78 17.85 15,769.63 0.00 0.11 252.00 0.02 0.00 24.35 11.11 -78.45 239.06 24.37 20,424.09 1.32 -63.76 0.00 0.04 0.01 0.00 0.00 0.00 0.08
0.00 0.00 0.01 0.01 0.01 0.01 0.00 180.00 -11.11 0.00
0.01 1,000.00
0.00 0.02 0.04 0.01 0.01 0.00 0.01 0.00 0.01 0.00 0.03 0.02 0.00 -87.50 107.69 -98.13 233.33 1.07 2,230.43 0.00 300.00
Commodity: 84593100 BORING-MILLING MCHNS,NUMRCLY CNTRLLD Unit: NOS S.No. Country Values in Rs. Lacs Quntity in thousands 2003-04 1. MALAWI 2. URUGUAY Total LATHES Commodity: 8458 LATHES (INCL TURNG CENTR) FR REMOVNG METL Unit: S.No. Country Values in Rs. Lacs Quntity in thousands 2003-04 2004-05 %Growth 1. 2. 3. 4. 5. 6. 7. 8. 9. AFGHANISTAN TIS ALGERIA ARGENTINA AUSTRALIA BAHARAIN IS BANGLADESH PR BELGIUM BHUTAN BRAZIL 13.40 6.73 1.32 76.09 10.29 9.43 2.63 13.93 25.83 1.15 25.59 13.66 1.36 82.72 -91.73 -0.90 25.71 23.99 719.54 1,843.63 -68.47 136.20 1.82 757.23 5.09 7.65 0.79 54.46 31.57 972.20 45.90 5.90 88.01 556.87 -60.02 1,637.39 28.39 2003- 2004%Growth 04 05 1.90 1.65 3.55 2004%Growth 2003-04 05 0.00 0.00 2004%Growth 05
10. BURUNDI 11. CANADA 12. TAIWAN 13. CHINA P RP 14. CONGO P REP 15. CYPRUS 16. CZECH REPUBLIC 17. DENMARK 18. EGYPT A RP 19. ERITREA 20. FINLAND 21. FRANCE
22. GEORGIA 23. GERMANY 24. GHANA 25. GREECE 26. HONG KONG 27. INDONESIA 28. IRAN 29. IRAQ 30. ISRAEL 31. ITALY 32. JAPAN 33. JORDAN 34. KENYA 35. KOREA DP RP 36. KUWAIT 37. MALAWI 38. MALAYSIA 39. MALDIVES 40. MAURITIUS 41. MYANMAR 42. MEXICO 43. MOZAMBIQUE 44. NEPAL 45. NETHERLAND 46. NETHERLANDANTIL 47. NEW ZEALAND 48. NIGERIA 49. OMAN 50. PHILIPPINES 51. POLAND 52. PORTUGAL 53. PUERTO RICO 54. QATAR
13.61 155.57 68.50 2.16 32.08 81.73 54.83 5.93 1.51 187.38 5.47 14.00 16.28 0.68 42.52 0.32 0.81 5.84 1.04 27.27 12.48
145.30 21.39 72.04 6.72 8.45 30.19 2.21 1.09 1.30 213.69 48.98 2.01 39.34 30.29 0.31
-22.46 290.96 342.57 884.26 -80.12 579.97 60.58 3,558.42 94.24 44.27
3.10
13.15
323.59
55. ROMANIA 56. RUSSIA 57. SAUDI ARAB 58. UNION OF SERBIA & MONTENEGRO 59. SEYCHELLES 60. SINGAPORE 61. SOUTH AFRICA 62. SPAIN 63. SRI LANKA DSR 64. SUDAN 65. SYRIA 66. TANZANIA REP 67. THAILAND 68. UGANDA 69. U ARAB EMTS 70. U K 71. U S A 72. VIETNAM SOC REP 73. YEMEN REPUBLC 74. CONGO D. REP 75. ZAMBIA 76. ZIMBABWE 77. UNSPECIFIED Total 0.62 20.12 166.50 8.05 6.44 27.31 36.78 0.72 16.73 5.85 15.49 166.60 14.10 326.07 5.96 18.50 0.85 1.29 110.92
4.91 2.25 156.47 1.31 2.57 230.90 70.98 42.89 23.56 12.21 38.68 781.31 57.02 -35.94 -27.01 73.98 41.06
76.30 10,556.42
3,363.57 5,079.21
Commodity: 84581100 HORIZONTAL LATHES,NUMERICALLY CONTROLLED Unit: NOS S.No. Country Values in Rs. Lacs Quntity in thousands 2003-04 1. 2. BANGLADESH PR GERMANY 2004%Growth 2003-04 05 520.55 0.02 0.00 2004%Growth 05 0.15 856.25
3. 4. 5. 6. 7. 8. 9.
GHANA INDONESIA IRAN JAPAN KUWAIT MOZAMBIQUE NEPAL 0.23 5.11 14.89
4.01 27.81 3.99 0.00 0.00 2.01 0.00 26.62 5.21 1.72 2.83 19.97 0.63 77.13 77.24 442.13 472.44 0.00 0.00 0.00
10. NETHERLAND 11. NIGERIA 12. SAUDI ARAB 13. SINGAPORE 14. SOUTH AFRICA 15. SRI LANKA DSR 16. U S A Total
Commodity: 84581919 OTHER AUTMTC,SNGL SPNDL HORZNTL LATHES Unit: NOS S.No. Country Values in Rs. Lacs Quntity in thousands 2003-04 1. 2. 3. 4. 5. 6. 7. 8. 9. BAHARAIN IS BANGLADESH PR IRAN ITALY KENYA MEXICO NEPAL PORTUGAL QATAR 9.01 3.25 1.89 4.88 13.15 6.32 -29.91 0.01 0.00 18.43 131.25 5.75 35.93 2.93 9.86 0.53 -71.95 0.01 0.00 0.00 0.00 -62.50 94.94 0.00 2004%Growth 2003-04 05 8.91 0.03 0.02 0.00 0.00 0.00 0.00 -80.00 100.00 2004%Growth 05 0.00
12. SRI LANKA DSR 13. SUDAN 14. U ARAB EMTS 15. U S A Total
249.33 129.08
Commodity: 84589100 OTHER NUMERICALLY CONTROLLED LATHES Unit: NOS S.No. Country Values in Rs. Lacs Quntity in thousands 2003-04 1. AUSTRALIA 2. BANGLADESH PR 3. GERMANY 4. NEPAL 5. SAUDI ARAB 6. SINGAPORE 7. U ARAB EMTS 8. U S A Total 49.53 0.40 0.35 156.82 112.91 0.78 20.40 214.25 151.45 -29.31 -28.00 2.90 624.28 7.15 14.46 0.00 0.00 0.00 0.22 0.20 0.00 0.01 -11.21 0.00 0.00 2004%Growth 2003-04 05 0.01 0.00 2004%Growth 05
Commodity: 84589934 COPYING LATHES Unit: NOS S.No. Country Values in Rs. Lacs Quntity in thousands 2003-04 1. TAIWAN 2. NEPAL Total 5.44 0.78 6.22 2004%Growth 2003-04 05 0.00 0.00 2004%Growth 05
Commodity: 84589951 CENTRE LATHES, TOOL-ROOM TYPE Unit: NOS S.No. Country Values in Rs. Lacs Quntity in thousands 2003-04 1. BELGIUM 2. NIGERIA 2004%Growth 2003-04 05 0.44 2.76 2004%Growth 05 0.00 0.00
Commodity: 84589959 CENTRE LATHES,OTHERS Unit: NOS S.No. Country Values in Rs. Lacs Quntity in thousands 2003-04 1. 2. 3. 4. 5. 6. 7. 8. 9. BANGLADESH PR CANADA EGYPT A RP FRANCE GERMANY GHANA ITALY KENYA MALAWI 4.44 0.55 12.45 58.71 1.29 10.82 2.25 4.56 1.02 35.93 7.13 11.87 2.16 192.79 295.89 385.12 30.16 4.16 -64.94 0.00 0.01 0.00 0.10 0.00 -71.43 73.98 -57.90 0.00 0.00 2.33 324.35 26.19 72.92 62.56 58.43 4.14 30.19 0.00 0.00 0.00 0.02 0.00 0.00 0.00 0.00 0.00 -40.00 0.00 200.00 25.08 2004%Growth 2003-04 05 11.98 11.46 25.59 0.01 0.20 0.01 0.01 0.00 0.01 -52.22 0.03 2004%Growth 05 0.00 0.00 0.00 -85.19
10. MYANMAR 11. NEPAL 12. NIGERIA 13. PHILIPPINES 14. RUSSIA 15. SAUDI ARAB 16. SINGAPORE 17. SOUTH AFRICA 18. SRI LANKA DSR 19. U ARAB EMTS 20. U K 21. U S A Total
Commodity: 84589990 ALL OTHER LATHES EXCL CENTRE LATHES Unit: NOS S.No. Country Values in Rs. Lacs Quntity in thousands
2003-04 2004-05 %Growth 2003-04 1. 2. 3. 4. 5. 6. 7. 8. 9. AFGHANISTAN TIS ALGERIA AUSTRALIA BAHARAIN IS BANGLADESH PR BELGIUM BHUTAN BRAZIL BURUNDI 1.02 9.47 16.67 249.90 10.29 9.43 2.63 13.93 17.03 13.61 5.39 5.94 29.97 0.88 1.51 100.15 0.37 14.00 7.47 21.19 61.15 1.67 718.74 -92.12 2.80 665.08 55.14 10.84 10.95 25.11 1.68 0.00 0.00 0.04 0.00 0.00 0.00 0.06 -16.19 0.01 923.24 82.57 0.03 0.00 0.00 0.00 0.00 0.00 434.83 5.09 7.65 83.21 49.10 19.77 662.80 45.46 5.90 66.01 0.00 52.43 0.15 -40.99 0.00 0.02 0.02
2004%Growth 05
0.01 0.00 0.24 0.19 0.00 0.06 0.01 0.01 0.17 0.00 0.00
-50.00 64.38
10. CANADA 11. TAIWAN 12. CHINA P RP 13. CONGO P REP 14. CYPRUS 15. CZECH REPUBLIC 16. DENMARK 17. EGYPT A RP 18. GEORGIA 19. GERMANY 20. GHANA 21. GREECE 22. INDONESIA 23. IRAN 24. IRAQ 25. ISRAEL 26. ITALY 27. JAPAN 28. JORDAN 29. KENYA 30. KUWAIT
31. MAURITIUS 32. MOZAMBIQUE 33. NEPAL 34. NETHERLAND 35. NIGERIA 36. OMAN 37. PHILIPPINES 38. POLAND 39. ROMANIA 40. SAUDI ARAB 41. SINGAPORE 42. SPAIN 43. SRI LANKA DSR 44. SUDAN 45. TANZANIA REP 46. UGANDA 47. U ARAB EMTS 48. U K 49. U S A 50. VIETNAM SOC REP 51. YEMEN REPUBLC 52. CONGO D. REP 53. ZAMBIA 54. ZIMBABWE Total
0.81 1.04 21.07 30.66 2.63 8.94 7.11 2.38 4.91 15.20 3.19 8.78 5.38 12.74 1.29 76.78 31.85 5.96 11.96 0.85 3.50 0.62 980.50 1,812.44 84.85 78.81 210.96 4.41 38.98 -86.15 553.99 2.64 21.80 23.56 6.74 148.23 338.33 -47.07 16.16 7.17 6.29 45.88 0.85 545.56 45.50
0.00 0.00 0.02 0.01 0.00 0.00 0.00 0.00 0.00 0.02 0.00 0.01 0.01 0.01 0.00 0.03 0.02 0.00 0.00 0.00 0.00 0.00 0.03 0.17 0.00 0.01 -87.50 275.00 0.00 0.01 0.01 0.00 -36.36 14.29 -33.33 0.01 0.00 -65.22 0.01 0.00 120.00 -18.75