Foundry industry starts collective purchase of raw materials
Industry has recently purchased 43 tonnes of raw material, thereby saving about per tonne
To reduce input costs, the foundry industry here along with its counterparts from nearby places have started common purchase of raw materials.
Going ahead in this direction, the industry has recently purchased 43 tonnes of raw material or ‘Ramming Mass’ thereby saving about Rs 500 per tonne.
The raw material has been purchased from a firm based in Alwar in Rajasthan.
President of the Ludhiana foundry cluster Yash Pal Gosain said raw material purchased collectively is a step in the right direction. The decision for collective purchase of raw materials was taken in a meeting of industry people, in January.
Gosain said, “It is a first of its kind step taken by any industry collectively in Ludhiana and will pave the way for other industries to follow and cut their input costs considerably.”
The raw material purchased will be distributed among the member companies of the special purpose vehicle ( SPV), Ludhiana Foundry Cluster Private Limited, as per the orders placed by these.
The SPV will be looking after all the affairs related to common purchase of raw material.
The foundry industry purchases raw material through the dealers. The industry people claim that this not only results in high prices under tough circumstances being faced by the industry to purchase raw materials.
The huge cost of raw materials saw traders compromising on quality whereas the bulk purchase will give them a chance to keep a check on quality. The industry feels that with more industry-members joining the special purpose vehicle and making increasing orders, they will be able to save more on inputs. The initiative is under the programme ‘Scaling up sustainable development of Micro Small and Medium Enterprises (MSME) Clusters in India,’ by foundation for MSME clusters.
Gosain said that foundry industry from Ludhiana with 165 foundry industrial units, Phagwara (18), Gorayan (75), Phillaur (70) and Gorayan (18) can become the members of this company and avail the benefits.
The raw material that the industry purchases includes: pig iron, hard coke, silicon, manganese and some other foundry material.
The industry expects of saving up to 5% of input costs by collective purchase.