Q: What is the current market scenario of the Indian machine tool industry?
Prashant Sardeshmukh: India is among the top ten markets for machine tools. India’s machine tool industry has undertaken an encouraging leap in terms of consumption and has exceeded the `100 billion mark during the last couple of years.
Production holds a good amount of market share out of this big market size. I believe it is more than 40%. But when it comes to precision, reliability and performance, Indian machine tools have limited capability and we have a lot of room to improve on these crucial indices. The machine tool industry is key to the Indian Government’s ‘Make in India’ & ‘Skill India’ campaigns. Considering its strategic importance in the national economy, the Indian machine tool industry should focus on these key issues.
Q: In the background of the ‘Make in India’ initiative, how do you see the demand for cutting tools growing?
Sardeshmukh: This strategic initiative comes with multiple dimensions of growth. In the days to come we expect to witness good growth in sectors such as automobiles, railways, die & mold, aerospace, medical, electronics & white goods and everywhere the machine tool industry will be a strategic force to propel growth. Therefore, the ‘Make in India’ initiative will also provide a boost to the Indian machine tool industry. And when we talk about high accuracy, high performance machine tools they cannot perform without precision cutting tools. Naturally it is bound to propel the cutting tools business significantly.
Q: Recent reports state that India has overtaken China to emerge as the world’s biggest market for two-wheelers. Since MMC Hardmetal focuses on the automotive industry, how is the company planning to leverage the situation for its business?
Sardeshmukh: This is indeed very encouraging. The Indian two-wheeler market is going to dominate the world for quite a while now. We recognized this potential long back and thus, placed a major thrust on the automotive industry since a long time. The automotive and auto components industry have accounted for 40% of the machine tools consumption in India. In our ten years of business presence in the Indian market, we have provided the best tooling solutions to the automotive industry and have remained their most reliable and strategic tooling partner. Taking this successful streak further, we have now set up a new plant at Aurangabad to manufacture special and make-to-order cutting tools in order to cater to the Indian automotive industry more closely and also to provide them with better supply chain management.
Q: What are the challenges faced by machine tools manufacturers?
Sardeshmukh: Import of used machinery is still quite sizable in India as the number of small & medium scale manufacturers still find the new, high-end machines beyond their reach. Besides this, the delivery time after placing an order is significantly high. But the real challenge for the Indian machine tool industry is to achieve the degree of sophistication, technological precision, and reliability in performance as these are the strongholds particularly of Japanese and European manufacturers. Competing with them on these fronts is the real challenge.
Q: How will the implementation of GST impact the machine tool industry?
Sardeshmukh: GST is a revolutionary tax reform in the history of India and has been the most awaited step for strengthening the Indian economy. The machine tool industry or the manufacturing sector in general has to brace up to the new tax structure. This has put a full stop to the unpredictable and indirect tax regime. I therefore think that a single and simpler structure will boost the investments in India and ultimately extend support to the ‘Make in India’ initiative. The manufacturers will have to redesign their manufacturing and supply-chain strategy to obtain optimum benefits from GST with minimum compliance. All of us are still new to this horizon; let’s keep our fingers crossed.
Q: What are the company’s expansion plans? How are you planning to increase your footprint in the Indian market?
Sardeshmukh: We have started manufacturing special tools which will strengthen our presence in various sectors such as automotive, aerospace, medical, oil & gas, etc. The company has also started regrinding of drills which has benefited small / medium entrepreneurs and increased our reach to deeper pockets of the industry. Most importantly, we are planning to launch our Technical Centre in India with world-class facilities. This will be a state-of-the-art creation and will take us closer to the customers in terms of reliability.
Highlights of the Interview