The Hindu Business Line : CII asks valve units to work in unison to beat competition

THOUGH the domestic valve industry has come a long way from making simple valves to producing a wide range of sophisticated ones, displaying a growth rate of 10-15 per cent in value terms, the Confederation of Indian Industry (CII) feels that the industry needs to adopt a common strategy for survival and growth.

The industry, having an estimated domestic demand of about Rs 600 crore of all types of valves, can no longer be viewed in isolation from its raw material suppliers such as foundries and forging companies as there is a need to increase synergy between these entities to bring down costs by employing value engineering concepts.

It is pointed out that the opportunities and potential should be exploited by domestic valve manufacturers to their mutual benefit by developing manufacturing capabilities, sharing common R&D, synergising individual strengths and efforts, eliminating unhealthy competition, and by supplying quality products to the user industries. These measures are necessary against the backdrop of the Indian market being flooded with cheaper varieties of Chinese and Italian valves.

Moreover, with the gradual opening of global economy, the establishment of WTO, dismantling restrictions on trade and the pursuit of liberalised policies by lowering tariffs, the valve industry needs to gear itself up to tap the vast potential it has and also meet the challenges in the export market.

The CII has suggested that all valve manufacturers should join hands appropriately to respond to the emerging challenges by increasing their competitive edge. Production from various valve manufacturing units meets the requirements of the power, oil exploration, refinery, petrochemicals, fertilizer, steel, paper and pulp, and other processing industries. Though there has been growth in the power sector and oil exploration primarily because of public sector funding, rapid growth in the process industries fuelled by private investment is not envisaged over the next few years. The fertiliser industry has been stagnant for the past five years. Though steel is picking up, aluminium and paper/pulp industries will witness only small capacity additions in the next few years.

In a given scenario, the CII have suggested that the domestic valve companies should eliminate any price war among themselves, supply quality products, and make constant efforts to ensure a greater presence in the world market for valves which is worth about $40 billion.

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