Opportunities in Custom Steel Castings for Specialized Machinery

In an exclusive interview with Industry Outlook Magazine, Indranil Dutta, CEO of Datre Corporation, shares how the custom steel casting industry in India is currently in place to witness a huge level of growth owing to developments in the railway sector and also touches upon how the foundries are changing their operations to be more sustainable. He also underscores the importance of government-foundry partnerships. He has over 18 years of experience in the foundry industry.

What are the major trends that are driving the growth of custom steel castings? How can manufacturers align their strategies to capitalize on said trends?

The steel casting industry was driven by the demand of the Indian railways so far, mainly from the wagon segment and relatively small from the passenger coach segment. In recent times, there has been a paradigm shift that is gearing towards taking advantage of the passenger segment, under the control of coach manufacturers the ICF, MCF and RCF. Lately, there has been immense demand to upgrade the coaches of premium trains like the Vande Bharat. A railway coach requires numerous safety components to be passenger-worthy. While the production of wagons has seen major changes with the advent of DFC, simultaneous demands for upgrading the coach with regard to speed and safety are also going through a major uplift. While approval of safety protocols is a time-intensive process owing to its sensitivity, manufacturers must understand that this is a long, time-consuming endeavor, and ROI is the key, with Patience being of the essence.

The construction industry also possesses immense potential as it is already a key driver of India’s GDP. The machinery utilized in this sector demands precise steel castings. The US-China trade war has opened the floodgate of global opportunities for India. All involved players alike are attempting to capitalize on a success story beyond the conventional shores. While the standards vary across nations, so it is essential to tailor the offerings to meet every unique standard that’s laid out.

The key for manufacturers to carve a presence in this market is to offer value-added products and services and create brand value around it. Similar to how the IT industry did.

Given the industry's large scope of growth and the opportunities it offers small and medium-sized companies, how can these companies increase their market share in this field?

The government is extending its support for the foundry sector with a large financial outlay in infrastructure. The manufacturing sector, in general, is reliant on three aspects. The raw materials cost, the energy cost and the skilled labor. While the first one is significantly variable with a maximum headwind, as seen in recent times, the labor segment poses a unique challenge owing to shifting demographic interests. While energy costs remain a high fatigue factor for MSMEs, Govt has a big role to play by providing subsidies in order to make the industry globally competitive. In contrast, in the light engineering aspect, like the electronics and semiconductor sectors, assembly lines are mainly driven by female participants. However, the heavy engineering sector is lacking when it comes to the young male demographic, and they do not express the desire to join a manufacturing company.

The productivity in India is relatively low when compared to its foreign counterparts. As the youth here in their 20s to 30s focus on securing government jobs and dedicate precious time in studying for those and they fail to pickup the adequate professional skills in those crucial years, as a consequence, the productivity suffers as most of the time is dedicated in training them for their respective roles. This is a social challenge that has to be overcome.

Every company has its own list of particulars for components. What are the challenges faced by manufacturers in catering to the custom needs of these industries?

Capital is a huge challenge for foundries. It is advisable for companies to pick smaller products that do not demand complexity in the production process. Most existing small foundries are struggling to maintain margins on their sale. Operating a foundry demands a lot of resources. Some may own a foundry, but they lack the ability to maximize its operation. A solution that can be done here is for the government to build a platform that can connect everyone with the resources to come together and cover each other’s shortcomings.

Another problem is the return on investment. Foundries, by definition, demand a huge initial investment, followed by strong working capital, and the returns are not immediate. This is where the journey begins. They have to create a product and derive returns from it by remaining sustainable during this lead time.

The scope of collaboration between steel casting companies and machine manufacturing companies is immense. What kind of output can we expect regarding product quality and innovation?

Collaboration between custom steel casting companies and machine manufacturers invites a sense of responsibility for both parties as their reputations are intertwined. Failure to comply from one party may result in a catastrophic episode that may result in immeasurable consequences. When both parties look over each other’s shoulders, they are bound to grow to heights.

In what ways can the custom steel casting industry adopt sustainability practices without compromising quality?

Companies are already conscious of their carbon footprint by using reusable scrap in their operations, and a level of recycling has already been carried out. Our company changed its sand system by shifting from Acid-based binders to neutral-based ones, more being user friendly, making the disposal of sand a simple and safe process. Thirdly, all the furnaces that the foundries currently use are coal-based, but the moment a line of gas supply is secured, the transition to gas-based furnaces is imminent.

We are already carrying out Water conservation. The focus currently is on solar power. Companies are looking towards solar technology to meet some of their light machinery energy needs, like solar pumps. We are also currently taking up an exercise to install plants on the shop floor which require much lower sunlight to grow.