Tamil Nadu - Coimbatore   

Forging units in crisis

COIMBATORE: The Indian forging industry fears that high steel prices and slump in commercial vehicle segment will derail the recovery hopes of the sector. A release from the Association of Indian Forging Industry said that compared to 2007-2008, capacity utilisation had declined to even 20 per cent in some units.

This resulted in closures and job losses. Across the country, several units had closed down. Though the first quarter of 2009-2010 showed signs of recovery, problems such as non-availability of power, high steel costs and availability of cheap imported forgings were a matter of concern to the sector. Steel costs Rs.5,000 above ex-factory prices here than in other countries.

Though the prices of scrap, coke and iron ore had come down by nearly 50 per cent in other countries, the steel prices had not dropped in India.

About 30 forging units, including seven to eight in Tamil Nadu, had closed down in the last few months, rendering about 40,000 people jobless.

The association had written to the State Governments that had substantial presence of forging units, seeking relief measures for the sector.

The association sought one year holiday period for export-related computations as exports had come down by nearly 50 per cent because of the slowdown.

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