TECHNOLOGICAL PRODUCT MARKETING

Where do we encounter in technologies in everyday life?

Technologies are everywhere – Yet not always visible

What will be there longest has to be carefully planned!

(Years)

Indian Machine Tools Industry

The current Indian Machine Tools sector is very Small in comparison to the global market size

Global Machine Tools Market

Total world market size; USD 65.3 bn

World leader Japan has USD 10.5 bn has 16% market share

China leads consumption with US $ 9.3 bn in 2004 ( 20% of world wide

production). It imported US $ 5.8bn ( 62%)

Indian Machine Tools Industry

• Domestic Market Size : USD 620 mn ( consumption)

• Ranks 19th in overall world machine tools production

• Contributes 0.5% to overall world production

• Exports : USD 11 mn

• Exports mainly to developed countries

Manufacturers are geographically dispersed

• Top 10 producers account for 70% of the output in India

• Around 70% of the players are in the small & medium scale sector

• Hubs of manufacturing centres located near the raw material industry or user industries

Machine Tool hubs in India

• Mumbai and Pune in Maharashtra;

• Batala, Jullunder and Ludhiana in Punjab;

• Ahmedabad, Baroda, Rajkot Jamnagar, and Surendranagar in

Gujarat;

• Coimbatore and Chennai in Tamil Nadu;

• Bangalore in Karnataka.

Production has grown at a high rate during the period 2002 to 2006

CNC Conventional

Met

al F

orm

ing

Met

al C

utt

ing

Production Rs 528 mn CAGR 47%

Production Rs 860 mn CAGR 30%

Production Rs 7387 mn CAGR 43%

Production Rs 2113 mn CAGR 37%

70% of production

87% of production

bending machines, presses, cold-heading machines,, shears, coil slitters, and

stamping machines

Turning centres, Machining centres, grinding centres (70% of total metal cutting

output)

74

320

75

472

61

463

0

100

200

300

400

500

600

2002-03 2003-04 2004-05

Exports of Machine Tools (By Operation)

Metal Forming Metal Cutting

Metal Cutting constitutes bulk of the exports

Machine centres, Lathes , Electro discharge machines and HSC drilling tools together account for ~75% of exports ( in FY 2005 )

Figures in INR mn

Shortage in production capacity has resulted in rising imports

4507

5093

9655

7420

18208

10360

0%

20%

40%

60%

80%

100%

2002-03 2003-04 2004-05

Consumption Breakup - Machine Tools India

Imports Domestic Production

101 %

43 %

CAGR

The surge in domestic demand, capacity constraints and lowering of import duties have led to a doubling of imports

The percentage share of imports in total consumption has also risen from 47% in 2002-03 to 64% in 2004-05

Figures in INR Mn

* Net duty after MODVAT

Domestic demand fuelled by growing end user industries

Domestic market grown at a CAGR of over 11% ( FY 2000 - FY 2005). Exports have grown even higher at about 25% CAGR

Grown at about 20% in FY 2006. Government’s thrust on infrastructure development, and growth in core sectors like textile and agriculture are expected to sustain high growth in this sector

The sector has grown at rate of about 13% in FY 2005. The growing middle class, rising affordably, changing lifestyles have all contributed and continue to contribute to this sectors growth pace.

Domestic market size at USD 8.7 bn and growing at a rate of 15% per annum. Industry estimated to grow at 25% till 2010.

Auto Components

Capital Goods

Consumer Durables

Automotive

Indian machine tool industry is most amenable to investments by foreign players

100% FDI is allowed

Machine tools manufacturers are exempt from obtaining an industrial licence to manufacture

Manufacturers are free to select the location of the project

Only specific items under machine tools are reserved for production by the small scale industry

Import duties have been constantly reduced to promote increased import and usage of machine

tools

India enjoys several advantages for the growth of machine tool industry

Design Skills

Lower cost of manufacture

Availability of raw materials

Availability of skilled manpower

Presence of support industries (like foundry)

Growth in end user industries

Leading players in India

Pioneer in Machine tools business in IndiaLeading manufacturer of conventional and CNC machines Revenues of INR 2902 mn

Largest machine tool manufacturer in the Private sectorCollaboration with German Machine Tool manufacturing CompanyManufacturer of CNC horizontal and vertical machining centers, Special Purpose Machines,

ACE Designers Ltd., is a leading manufacturer of CNC turning centers and Auto LathesPart of the ACE Group of companies that manufactures and exports CNC machine tools, grinding machines, turrets etc., to Europe and USAGroup Revenues close to INR 2500 mn

Jyoti is a leading CNC machine tool manufacturer from GujaratHas recently tied up with French CNC manufacturer Hurron Graffenstaden SAS to produce Special Purpose CNC machines to be sold in Europe and other western countries

Batliboi Limited is among the leading engineering and machine tool manufacturers in IndiaMachine tool business revenues of INR 400 mn

Leading players in India ……..

Kennametal India

Lakshmi Machine Works is a leading engineering and machine tool manufacturing CompanyProduces CNC machine toolsAlso has supporting foundry division to manufacture castingsMachine tool revenues close to Rs.1000 mn

Kennametal India Limited is the largest cutting tools manufacturer in India and is a Subsidiary of Kennametal, GermanySales revenues of INR 3631 mn

Other Leading Players are:Heavy Engineering Corporation; Motor Industries Company Limited; Lokesh Machines LimitedPremier Limited; TAL Manufacturing Solutions Limited; Godrej & Boyce Manufacturing Company Limited; Mysore Kirloskar Limited;

Many of the global players like Makino, Mori Seiki, DMG, Yamazaki, Haas, Trumpf, Daewoo,

Agie Charmilles, Schuler , Cummins, Siemens , ABB Ltd etc. are present in India either

through their marketing agents, technical centres, service centres or assembly centres.

The first product developed by Ace designers, Bangalore, was the Auto Lathe - a multi slide automatic production turning machine. Built on the modular concept around the “component to be machined” and supplied as a complete machining solution with custom designed work holding and tooling.

This machine became very popular with the auto components and the two-wheeler industry.

“Today, Ace designers are the largest manufacturer of CNC Lathes in India” with a market share of over 40%.”

Conventional Lathe

NC Lathe

CNC Lathe

Turning Centre

Evolution Of Turning Machines

Conventional Milling M/C

Milling M/C with DRO

CNC Milling Machine

Machining Centre

Evolution of Milling Machines

CONVENTIONAL MACHINES FEATURES

• Low Spindle Speeds

• Low Feedrates on Axes – Cast Iron Guideways

• Not so rigid Bed construction

• Less No. of Tools – one or two

• Very little or no guarding

• Low coolant flow

Limitations of Conventional Machines

• Low Machining Speeds

• Productivity not consistent

• Quality – Operator dependant

• Low safety working environment

Advantages of CNC Machine

• High Material Removal Rate

• Productivity output constant – Target can be easily fixed

• Consistent Quality output

• Close accuracies can be maintained

• Process totally De-skilled

• Safe Operation

Features of CNC Machines

• High Spindle Speeds

• High Rapid Rates of Axes

• Movement of Axes thru Ball Screws

• Hardened & Ground Steel Strips for Guideways

• Anti- Friction lining between mating surfaces

• Multiple Tool Turret

•Completely enclosed Guarding

• CNC Control System with Servo Drives

Major user of CNC MachinesEntire Manufacturing IndustryAUTOMOTIVE

Engines & Parts

Two Wheelers

Four Wheelers – Cars

Heavy Vehicles Trucks

Engineering

Bearings

Hydraulics

Electrical

Tooling

Capital Equipment

Machinery

Transformers/Generators

Aircraft's

Excerpts from the interview….

Mr. A.V. Sathe, Mr. Shrinivas G. Shirgurkar and Mr. B. Machado Promotors of ACE DESIGNERS, BANGALORE

What are the factors driving the machine tool industry?

• The market today is mature and knowledgeable with a wide choice.

• We have companies from the world over operating in the Indian markets.

• Surely the customer is getting more demanding on technology, delivery and pricing.

• The expectation on service, support and buying experience is also becoming very demanding.

What are the issues that are affecting the machine tool industry?

• Export is one of the important challenges faced by the machine tool sector today.

• Industry needs to increase the exports. Strategically we should focus on engineering value addition possibilities.

• Also there is the challenge of upgrading the technology levels of the indigenous products

What are the various options ACE have adopted in order to keep itself in line with latest

technology developments?

• ACE receive technology exposure through visits & participation at International shows, inputs from our overseas associates, close interaction with customer and study of their needs that are presently met by imports.

How do you account R&D & Product

Innovations in the success of ACE products?

• We have been focusing most of our innovations and development efforts on simple cost effective products.

• Our group has been the pioneer in making CNC technology affordable for the small & medium sector.

• We have innovated & developed automation systems and high tech machines that were displayed at the recent IMTEX.

• We plough back around 3% of our revenues into product development.

What are the current developments of ACE in domestic & overseas markets?

• We have always been pro-active on exports and currently export to Australia, France, Germany, Italy, Thailand, and US where we have established associates, stock machines, spares, have factory trained service people.

• ACE Micromatic has just set up its first overseas office in China and we understand the Chinese market.

• Presently exports constitute 6% of our total sales, we are targeting to increase it to 15% by 2010.

What are the key trends that are driving Indian machine tool industry & what are prospects for the industry in near future?

• Indian manufacturing industry has bright prospects , as it has been happening these last few years there is a lot of global manufacturers coming into India for global consumption and also the growth in Indian consumption.

Prospects for the Industry in Future:

• There are also lots of Infrastructure investments that are happening which will also fuel consumption & feed investments. So the markets will continue to grow.

• Yes there will be coarse corrections along the way to factor in real term situations like exchange, demand fluctuations etc. As with any growing market, the competition will also grow and get fierce.

Cont..

• In addition to domestic players many international players will increase their presence become more active and aggressive.

• The focus will most certainly shift from products (machines) to packaged solutions including services. So while there will be exciting growth there is an urgent need to keep getting better, understand needs, and fulfill them quickly, affordably.

• In future the need for higher technology machines (3 axes, 4 axes) more accurate machines, automated machines will become larger and pronounced.

Bibliography

• www.imta.org

• www.acemicromatic.com

• www.ibef.org

• www.dhir.nic.in