Ahmedabad: Reeling under a sharp surge in raw material prices and its shortcomings, more than 5,000 Foundri and technical units inside and around Ahmedabad prepares to stop production for two weeks starting November.
The casting and engineering units in Rajkot, Jamnagar and other parts of the state also reflect on similar steps amid the cost of rotating raw materials, industrial players said.
There are around 1,500 casting units and 10,000 technical units – small, medium and large – around Ahmedabad.
“With the production of increasingly Usel because of the increase in raw material prices and its availability, several members of our members have decided to extend the diwali holidays voluntarily stop production for 15 to 20 days.
Usually, our units remain closed for 6-7 days in Diwali,” said Ashok Patel, President, Association of AHMedabad engineering producers.
“We hope that almost 5,000 units – 1,500 casting and 3,500 engineering units – will join this voluntary shutdown.
About 15% of these units have been closed and more tend to join in the next few days,” Patel added.
Talking about the price surge in raw materials used by casting, Patel added that the price per kilogram of iron iron has soared from Rs 30-32 per kg to 51-52 per kg in eight months, while coal prices have risen from RS 25 to RS 52 per kg in two months.
“Our suppliers have stopped providing raw materials with credit.
As a result, CI castings (cast iron) made by this casting have seen the price skyrocketing to Rs 75-80 per kg from Rs 48-52 per kg earlier,” Patel added.
This casting is used in making machine parts in the industry.
According to industry players, the technical unit found it difficult to buy castings at high prices because they also faced rising steel prices, copper and other raw materials.
Therefore, castings have declined to 60% now.
“When the increase in raw material costs is unbearable and the business also goes down, the unit is left without choice but to close for some time,” Patel said.
The situation is similar in Rajkot, Vadodara, Jamnagar and other parts of the state.
When contacted by Paresh Vasani, President, Rajkot Engineering Association, said that many units plan to choose a vacation DIWali 10-12 days after coal deficiency and high raw material prices.
However, the decision to stop production was submitted to individual units and no decisions taken at the association level, he added.