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Despite cheap imports, machine tools sector bullish on prospects

G. Gurumurthy

Coimbatore , Oct. 7

THE booming manufacturing sector has kicked up demand for domestic machine tools and the industry has recorded a 30 per cent growth in the last three years. But the flip side is that rising imports have denied the domestic machine tool companies the opportunity to understand the full market demand.

"Today, at least 60 per cent of the total machine tools demandis met by imports and the sad part of it is that used machine tools constitute half of the volume which affects domestic producers," said Mr Shrinivas G. Shirgurkar, Managing Director of the Bangalore-based Ace Designers Ltd, a machine tool making company.

Last year, domestic machine tool production stood at Rs 1,100 crore, whereas the imports of machine tools were higher at Rs 1,600 crore. Bulk of these imports was second-hand machines dismantled from closed engineering firms in Europe, Mr Shirgurkar told Business Line.

The worry for the industry, according to him, is that the 15 per cent import duty is nullified by the second-hand tool importers who under-invoice the value of the imported machines.Mr Shirgurkar, past-President of the Indian Machine Tool Manufacturers Association, said the association had been pleading with the Government for banning imports of machine tools older than five years as this would go a long way to prevent import of junk machines and at the same time protect the domestic machine tool sector.

Despite the problem of cheap imports, the domestic machine tool manufacturers are bullish on the revival of the industry, which is seeing a boom after nearly seven years. All major producers have received good orders in the last two years, especially those involved in the production of computer numerically controlled (CNC) machines.

Ace Designers Ltd reported a turnover of Rs 350 crore in the last fiscal. Hindustan Machine Tools Ltd, the single largest CNC machine manufacturer, had clocked a turnover of Rs 210 crore, while the Coimbatore-based Lakshmi Machine Works Ltd's machine tool division achieved a sales turnover of Rs 103 crore.

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