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Machine Tools: The sector glowing with opportunities

At present, even though most of the demand for the metal cutting tools are met through imports, production of metal cutting machines has reached Rs 6,562 crore during 2017-18 compared to Rs 5,194 crore during 2016-17, registering a YoY annual growth of 25.7%.
Metal cutting machine tools play a major role in the production of diverse products starting with automobile industry to high precision components for the instrumentation and electronics industries, and everywhere in-between. The metal cutting machine tool industry in 
India has been serving the need for manufacturing by producing a variety of metal cutting machines. However, the industry has yet to 
meet the demand for higher technology machines. As a result, the market share for Indian machines is low, and imports meet a large
part of the demand for metal cutting machine tools.
The Indian landscape
Metal cutting machine tool industry plays an important role in the manufacturing sector. Metal cutting tools constitute about 80 per cent of total metal working machine tools demand in India. About 52 per cent of metal cutting machines consumed in India are imported. Trends in imports of various cutting machines are a) turning machines, b) machining centres, c) milling machines, d) drilling machines, e) grinding machines and f) gear cutting machines.
Of late, there is improvement in macro economic environment, which has resulted in positive growth in the manufacturing sector in India. India has emerged as the sixth largest manufacturing economy in the world. It is expected that the government's thrust on ‘Make in India’ will further boost manufacturing in India. India is the 13th largest manufacturer of machine tools in the world as per Gardner’s world machine tool consumption survey report 2016. The Indian machine tool industry consists of around 1,000 manufacturing units covering large, small and medium companies.
Various operations
Metal cutting is a collection of processes wherein material is brought to a specified geometry by removing excess material using various kinds of tooling to leave a finished part that meets specifications. Based on the working process, metal cutting machineries can be broadly classified into the following categories:
Turning machines: Turning is a metal cutting process for producing a cylindrical surface with a single point tool. The work piece is rotated on a spindle and the cutting tool is fed into it radially, axially or both.
Mchining centre: The term ‘machining centre’ describes almost any computer numeric control (CNC) milling and drilling machine that includes an automatic tool changer and a table that clamps the work piece in place. On a machining centre, the tool rotates, but the work does not.
Drilling machine: Drilling is a cutting process that uses a drill bit to cut a hole in solid cross section materials. The drill bit is usually a rotary cutting tool, often multipoint. The bit is pressed against the work piece and rotated at rates from hundreds to thousands of revolutions per minute.
Milling machine: Milling is the machining process of using rotary cutters to remove material from a work piece by advancing (or feeding) in a direction at an angle with the axis of the tool.
Grinding machine: A grinding machine, often shortened to grinder, is any of various machine tool used for grinding, which is a type of method using an abrasive wheel as the cutting tool. Each grain of abrasive on the wheel's surface 
cuts a small chip from the work piece with the help of shear deformation. Grinding is used to finish work pieces that must show high surface quality and high accuracy of shape and dimension.
Gear cutting machine: Gear cutting is any machining process for creating a gear The most common gear-cutting processes include hobbling broaching, milling and grinding. Such cutting operations may occur either after or instead of forming processes such as forging, extruding casting or sand casting. 
Electrical discharge machining (EDM), also known as spark machining, spark eroding, burning, die sinking, wire burning or wire erosion, is a manufacturing process whereby a desired shape is obtained by using electrical discharges (sparks).
Production and consumption scenario
About 55 per cent of the metal cutting machines consumed in India are imported. Japan is the major source of metal cutting machine tools imports to India. Japan (27%) and Germany (17%) contribute about 46 per cent of metal cutting imports to India. Taiwan, Italy, Korea and China are the other sources of imports to India.
India stands 12th in production and eighth in the consumption of machine tools in the world as per the 2017 Gardner Business Media survey. The country is set to become a key player in the global machine tools industry and is likely to see substantial high-end machine tool manufacturing, with emphasis on manufacturing growth, for which the machine tools sector serves as the mother industry. 
The Indian machine tool industry has around 1,000 units in the production of machine tools, accessories, attachments, subsystems and parts. Of these, around 25 in the large scale sector account for about 70 per cent of the turnover and the rest are in the MSME sector of the industry. Approximately, 75 per cent of the Indian machine tool producers are ISO certified. While the large organised players cater to India’s heavy and medium industries, the small-scale sector meets the demand of ancillary and other units. Many machine tool manufacturers have also obtained CE Marking certification, in keeping with the requirements of the European markets.
Machine tools production in India
Machine tools production has reached Rs 7,293 crore in FY 2017-18 from Rs 5,803 crore in FY 2016-17 at a YoY growth of 25.7%. Machine wise production values are collected from all the members for each quarter and consolidated to annual production values for further analysis. The Indian Machine Tool Manufacturers’ Association (IMTMA) classifies the production of machines into CNC machines, non-CNC machines, metal cutting machines and metal forming machines.
Metal cutting machines production
Production of metal cutting machines reached Rs 6,562 crore during 2017-18 compared to Rs 5,194 crore during 2016-17, registering a YoY annual growth of 25.7%.
Consumption of metalcutting machines
Metal cutting machine consumption in India has reached a value of Rs 11,724 crore during 2017-18 compared to Rs 9,122 crore during 2016-17.
Obstacles in the way
The demand for turning machines is on the higher side. The manufacturers cover the popular range of turning centres, but only in standard and basic designs. In the grinding machines segment, due to the lack of superior technology machines, most of the demand is met through imports. There is a clear lack of developed technology. In order to tackle this, manufacturers can consider investment in developing R&D centres. They are highly dependent on imports, which has to change through a shifted emphasis on developing high-end technologies and price competitive products. Some other problems faced by this industry are low awareness or reliability of brands, highly price competitive market and a lack of complete range of products.
Bright side
Make in India and other policy initiatives may attract investments in defence, railways and other consumer durables. With growth in the user industry, the metal cutting machine tool industry is likely to increase at a healthy growth rate. Auto sector is the major user of machine tools, and is projected to grow 3.5 to 4 times from the current size of $74 billion to reach about $300 billion by 2026. General engineering and consumer durables are likely to grow at 15 per cent during the next two years. Major metal cutting user industries are likely to register healthy growth during the next three years. New emerging sectors such as defence and aerospace, consumer durables, green investment in auto sectors among others are likely to enhance demand for metal cutting machines. Considering growth in all user industries, metal cutting machine tool industry is likely to grow at a CAGR of about 10 per cent during the next three years.
India is preferred by global manufacturing companies as an outsourcing destination, due to cost competitiveness, favourable investment conditions, better engineering and designing capabilities. Metal cutting machinery production in India accounts for less than one per cent of the global production. This offers a significant opportunity for growth to increase production share in an expanding consumer market scenario.


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