Ease of Doing Business for MSMEs: Business units in the forging industry in Tamil Nadu are going through a rough patch as the cost of production of fuel and raw materials such as steel and aluminium has increased even as the industry saw a revival in demand, said a report by The New Indian Express. “We are forced to buy through third-party traders, and even then, we don’t get materials on time,” said Rajavelu Manickavasagam, Managing Director of Innoforge, a forging MSME in Hosur. “Industries cannot completely pass on the price rise, so industrial units have to absorb some of it and cut down expenses,” he added.

The prices of raw materials such as mild steel have increased from Rs 40 per kg to about Rs 65 per kg in a span of one year while the price of stainless steel increased from Rs 250 to Rs 350 and aluminium’s price jumped from Rs 250 to Rs 300-350, according to sources in the forging industry, the report noted.

Similarly, the prices of nickel, chromium, molybdenum, and titanium were volatile. The cost of furnace oil had also increased from Rs 40 per kg to about Rs 68 per kg in a year. Furthermore, the forging industry is dealing with the labour shortage and is primarily dependent on migrant labourers, according to T Navaneetha Krishnan, Director, Creative Forgings, a closed die forgings unit, the report quoted.

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“The industry has faced lots of ups and downs since 2020, and now, demand is picking up but we can’t deliver due to the availability and price of raw materials. Also, our margins fell by 30%,” he added.

Industry players noted that due to changes in geopolitics, western countries are purchasing Indian raw materials, resulting in challenges for small volume enterprises to continue the business, the report said.

Forging is a metalworking process that compresses metal to achieve the desired structure. These industries primarily work for power, heavy engineering companies and automakers.

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