The industry members
of the Textile Machinery Manufacturers’ Association (TMMA) India, expressed, in
its recently held 60th AGM, positive sentiments about the overall growth in
their respective businesses in the coming months. Majority of the companies
shared that after negligible business during first 2 quarters of 2020-21, they
have started getting orders being honoured by their clients. Both greenfield
and brown field projects are being negotiated with their clients these days.
Their capacity utilisation was close to 100 per cent and they would be able to
achieve up to 80-90 per cent of their annual turnover as compared to previous
year in the fourth quarter of the fiscal year.
However, the industry
showed serious concerns about the rising prices of the raw materials especially
steel. The order bookings which were closed at prices during April-May-June quarter
of 2020, are supposed to be fulfilled by Q3 or Q4 of the current fiscal. At the
time of booking the steel prices were 15-40 per cent lesser than the current
rates, therefore, the increased raw material cost is severely impacting the
basic cost of the machines to be supplied.
Coupled with
increased fuel cost by 20-25 per cent between April 2020 to January 2021, the
prices of other commodities, transportation, material handling and
manufacturing have also risen.
There is already
restriction on the import of steel and other products due to MoS circular that requires
mandatory BIS certification of foreign companies. The domestic steel producers
are in a monopolistic scenario wherein they have been dictating the prices.
There are a number of high-quality Stainless-Steel products which can’t be
produced in India, but are required in very low quantities. These restrictions
are only putting more hurdles for domestic machinery manufacturers to produce
their machines at competitive rates and qualities in comparison to their global
counterparts.
For ‘Make in India’
campaign to succeed, the government needs to be more pragmatic and be open to
the industry. The textile machinery industry expects an industry friendly
budget from the Government this year. A prudent monetary policy shall take the
growth trajectory of the Indian industry to the next level in the years to
come.
However, the industry
also articulated serious concerns that if the raw material prices remains at
same level or escalate further, the prices of the textile machineries shall
also increase at least 15-20 per cent with in the current fiscal year.