THE ECONOMIC WEEKLY
Scope for Small Industries
Foundries and Rubber Products
IN the article w h i c h appeared in
the last week's issue oppor-
tunities of profitable investment for
some of the engineering industries
were discussed. The present article
deals w i t h s i m i l a r opportunities in
Foundries and Rubber Products.
CAST I R O N FOUNDRIES
There is scope f o r profitable i n -
vestment in a l l types of foundries.
Engineering industries are dependent
on foundries f o r castings.
units have their o w n foundries and
others get castings done on j o b w o r k
basis f r o m f o u n d r y units. There is
a large number of cast i r o n foun-
dries in the country p a r t i c u l a r l y in
Bombay, Calcutta, A g r a and L u d h i -
ana. Madhya Pradesh, however,
does not have many cast i r o n foun-
dries and offers good scope f o r them
i n its towns l i k e D u r g , R a i p u r ,
Jabalpur and Indore. The first two
towns are very near B h i l a i and are,
therefore, ideally situated f o r the
purpose. There is large
f o r builders' hardware items in these
towns o w i n g to tremendous b u i l d i n g
activity going around these towns
and in B h i l a i . Foundries in these
towns w i t h modern machine shops
attached to them w i l l also get good
orders f r o m B h i l a i factory f o r dif-
ferent types of small items needed
by the plant.
Jabalpur and Indore offer good
scope f o r items of m u n i c i p a l re-
quirements and builders' hardware
items, as the towns are g r o w i n g fast.
They are also c o m i n g up very w e l l
i n d u s t r i a l l y . I n d o r e , h a v i n g a good
number of textile mills, also offers
scope to foundries f o r casting tex-
t i l e machinery spare parts.
In spite of quite a large number
of cast i r o n foundries in Bombay,
there is scope in the l i n e because of
Huge demand in this city f o r item:.
o f m u n i c i p a l requirements, f l u s h e s ,
surface boxes, bends and pipes and
strainers.
H I G H G R A D E CASTINGS
Resides the l i m i t e d scope for low
grade castings, the scope for foun-
dries m a k i n g h i g h grade castings is
excellent. Of the 160 small scale
foundries existing in Bombay, there
By Industrial Economist
are o n l y half a dozen w h i c h are
m a k i n g h i g h grade castings and even
they do not possess equipment re-
q u i r e d for physical a n d chemical
testing. Castings obtained by them
are. therefore, not quite satis-
factory. H i g h grade castings are
required f o r machine tools and com-
ponent parts, diesel engines and com-
ponent parts, locomotive cylinders,
high duty cast i r o n parts f o r r a i l -
ways, such as. chains and horn
Some cheeks and pressure tested soil pipes
The demand f o r h i g h grade castings
for diesel engines and machine
tools is very good, and is l i k e l y to
increase at an annual rate of 15 per
rent and 25 per cent, respectively.
Pressure tested soil pipes are a fast
selling product. There is not a
single f o u n d r y m a k i n g this item in
Bombay.
To install a model cast iron foun-
dry f o r the p r o d u c t i o n of h i g h prade
castings, an investment of nearly Rs
2 lakhs w o u l d be required sand
demand
testing and physical testing equip-
ment alone w o u l d cost nearly Rs
50,000. Other equipment and tools
i n c l u d i n g cupola of 2.5 to 3 tons
capacity would cost nearly Rs
40,000. L a n d and b u i l d i n g , i f own-
ed, w o u l d cost nearly Rs 30 to
40,000. A b o u t Rs 80,000 w o u l d be
needed by way of w o r k i n g capital.
I F SHORT O F CAPITAL
Entrepreneurs not having funds
for the entire project can effect some
saving by t a k i n g land on lease or
both land and covered area on rent.
This w o u l d mean a reduction of
nearly Rs 30,000 in i n i t i a l invest-
ment. Further, they major
equipment, such as physical test-
ing equipment, Sand testing equip-
ment, cupola, hand m o u l d i n g ma-
chine, foundry sand m i l l and
m o u l d i n g oven on hire purchase
f r o m the N a t i o n a l Small Industries
C o r p o r a t i o n , a Government of In-
dia Concern. Thus equipment
w o r t h nearly Rs 80,000 can be had
for i n i t i a l investment of about Rs
15,000. Those wishing to start
foundry for h i g h grade castings in
Bombay need not immediately go in
for physical testing equipment, for
they can avail of the facility avail-
87
January 16, 1960
able at the laboratory put up by the
S m a l l Industries Service Institute
at W o r l i .
A f o u n d r y w i t h o u t a machine shop
w o u l d be an incomplete unit, f o r a l l
castings need finishing. It w i l l have
to w o r k as a j o b b i n g unit, that is.
d o i n g castings f o r other engineering
units. To reap f u l l profits of a
model f o u n d r y , it is necessary to
have a machine shop attached to i t .
The investment in machine shop
w o u l d again' depend on the types
of castings that the foundry w i l l
undertake. The better the castings
and this means a good deal of
m a c h i n i n g and finishing the more
is the m a r g i n of profit. A good
machine shop consisting of one
Universal M i l l i n g Machine, 1 Coo-
pers' shaper, 4 centre lathes, 2
d r i l l i n g machines, I double ended
grinder and 1 power hacksaw,
w o u l d cost nearly Rs 80,000. T h i s
entire equipment can again be had
on hire purchase, for about Rs
15.000.
NON-FERROUS FOUNDRY
Non-ferrous foundry offers a.
better scope for profitable invest-
ment than cast i r o n f o u n d r y . The
huge demand for it is increasing at
a fast rate. The i m p o r t a n t items of
non-ferrous castings w h i c h are in
great demand are sanitary fittings,
taps, cocks and valves, hearings for
oil engines and railways, and
bushings and axle boxes f o r r a i l -
ways. Water taps and cocks are the
most i m p o r t a n t of the items men-
tioned above. Present indigenous
production of water taps and cocks
is valued at about Rs 1 crore. Taps
and cocks worth about Rs 25 lakhs
are exported a n n u a l l y . O u r impor-
tant customers are C e y l o n , B u r m a ,
I r a q . Fast A f r i c a , E g y p t , Malaya.
T h a i l a n d and Indonesia. The most
important centres of production of
water taps and cocks are Surat in
Bombay State and Jullunder in the
Punjab. Other centres where taps
and cocks are produced are D e l h i .
Mathura. Agra and Poona.
The demand for water taps and
cocks is expected to increase by 100
per cent d u r i n g the next five y e a r .
Rapid industrialisation is hound to
 January 16, 1 9 6 0
be accompanied by urbanisation.
Further, there is l i k e l y to be greater
stress on health a n d community
services. Consequently, a large
number o f towns w i l l b e covered b y
water supply schemes, w h i c h w o u l d
result in increasing demand f o r
water taps and cocks. E x p o r t pros-
pects are also q u i t e b r i g h t . There
is l i k e l i h o o d of increasing purchases
by n e i g h b o u r i n g countries where
also extension of water s u p p l y
schemes is in progress.
RISING D E M A N D FOR BEARINGS
L i k e water laps a n d cocks, the de-
m a n d f o r sanitary f i t t i n g s i n c r u i s i n g
r a p i d l y and is l i k e l y to d o u b l e dur-
i n g the next five years f o r the same
reasons as those f o r water taps a n d
cocks. The demand f o r hearings f o r
dicsel engines is increasing t o r re-
placement purposes as w e l l as f o r
o r i g i n a l e q u i p m e n t . It is estimated at
about 20,000 ( n u m b e r s ) a n d is l i k e l y
to increase at the rale of 15 per cent
per a n n u m d u r i n g the next five years.
T h e demand f o r r a i l w a y requirements
such as bearings, bushings a n d axle
boxes is huge and is recurring.
W i t h expansion plans f o r railway-
transport system, the demand is
l i k e l y to increase substantially.
Thus several non-ferrous f o u n d r y
units can be put up a l l over the coun-
t r y to produce items discussed dbove.
A unit w i t h a furnace of 200 lbs
m e l t i n g capacity, can be put up w i t h
an investment of about Rs I l a k h .
Equipment and tools w o u l d cost about
Rs 25,000 and w o r k i n g capital re-
quirements w o u l d amount to about
Rs 75,000. M a i n items of equip-
ment are Sklenar Furnace, Pat-
terns. M o u l d i n g Roxes and H y d r a u l i c
Testing M a c h i n e . The entire equip-v
ment is a v a i l a b l e l o c a l l y . Raw mate-
rials are brass scrap and gun metal,
w h i c h are also available l o c a l l y .
ELECTRIC I N D U C T I O N FURNACES
Steel castings by electric i n d u c t i o n
furnace offer the most profitable i n -
vestment o p p o r t u n i t y . Steel castings
are in great demand in the country.
Railways an one of the biggest buy-
ers of steel r a t i n g s , namely buffers
and casings. Steel component parts
for tractors arc also r e q u i r e d in large
quantity. Steel plants have huge
r e c u r r i n g demand for steel castings,
such as. m o u l d s for pig i r o n m a k i n g
machine, etc. For stone crushing
and m i n i n g i n d u s t r y , for components
of electric and pneumatic hoists and
cranes, steel castings are needed in
large q u a n t i t y .
It is not possible to estimate the
demand f o r a l l types of steel cast-
ings that have been mentioned above.
A l l the large-scale producers engaged
in the p r o d u c t i o n of steel castings
are w o r k i n g t o f u l l capacity. A t pre-
sent there is not a single small-scale
u n i t m a k i n g steel castings by electric
i n d u c t i o n furnace.
The investment f o r an electric i n -
d u c t i o n furnace of one t o n capacity
( i t w o u l d give about 1 5 tons o f f i n i s h -
ed castings per m o n t h ) is estimated
to be about Rs 5 to 6 lakhs. Of this,
other equipment w o u l d cost Rs 2.75
lakhs and w o r k i n g c a p i t a l r e q u i r e d
w o u l d amount to Rs 1.75 lakhs. The
m a i n items of m a c h i n e r y are elec-
t r i c furnace and chemical and physi-
cal testing equipment. A l l the items
mentioned have to be i m p o r t e d . The
main raw material is steel scrap
w h i c h is easily a v a i l a b l e in the
country.
RUBBER PRODUCTS
In rubber, several items offer
good scope for p r o f i t a b l e invest-
ment. They a r e :
(1) B i c y c l e Accessories, such as,
pedals and pedal covers, rubber for
brakes and hand g r i p s .
( 2 ) A u t o m o b i l e accessories, such
as bushings, radiator caps, shock
absorbers, door and w i n d o w chan-
nels, m a t t i n g and c o v e r i n g for ac-
c e l e r a t o r , brakes and clutches.
( 3 ) G u r g i c a l goods such as, hot
water bags, ice caps and tubings.
( 4 ) Bottle caps for injection
vials.
( 5 ) Sponge chappals.
Of the above items, bottle caps
and sponge chappals offer better
scope to s m a l l scale investors.
B O T T L E CAPS
Bottle caps made of rubber are
needed f o r i n j e c t i o n vials and are
also used as covers for bottles con-
t a i n i n g cSpsules. H i n d u s t a n A n t i -
biotics, P i m p r i . is one of the largest
buyers of bottle caps. There are
several other manufacturers of drugs
l i k e Glaxo, Dumex, Lederlc, A t u l ,
A l e m b i c and Sarabhai who need
them in large quantities. Production
o f p e n n i c i l l i n , insulin a n i v i t a m i n
injections has risen in recent years
and may be expected to rise r a p i d l y
in the near future.
Bottle caps are presently being
produced by large-scale ' producers.
Their p r o d u c t i o n .is a very, easy
process and is very suitable for
88
THE ECONOMIC W E E K L Y
the small-scale sector. Such items
w h i c h are easy to make should be
reserved for p r o d u c t i o n on s m a l l -
scale. T h e y have an advantage over
large ones in the matter of over-
heads and l a b o u r charges and
hence they are able to produce items
r e q u i r i n g s i m p l e processing, cheapen
Under the Stores Purchase Pro-
gramme, Government has reserved
several of its requirements f o r pur-
chase f r o m small units. Bottle
caps made of rubber is a suita-
ble i t e m to be included in that l i s t .
Pimpri Factory alone can keep
busy a good number of small-scale
units.
A n economic u n i t f o r m a k i n g
rubber caps f o r bottles can be start-
ed w i t h an investment of Rs 75,000.
T h i s excludes cost of l a n d and
b u i l d i n g . The equipment r e q u i r e d
arc Rubber M i x i n g M i l l o f 600 lbs
capacity, 6 presses, I b o i l e r and 2
or 3 dies. The entire equipment
w h i c h is available l o c a l l y w o u l d
cost nearly Rs, 45,000 and can be
had o n h i r e purchase f r o m N a t i o n a l
S m a l l Industries C o r p o r a t i o n b y
p a y i n g i n i t i a l l y 20 per cent of the
total cost.
SPONGE CHAPPALS
There is h a r d l y any need to b u i l d
up a case for the scope of p r o f i t a b l e
investment in chappals. These
chappals were first i m p o r t e d f r o m
Japan and soon became very popu-
lar. T h e i r p r o d u c t i o n in I n d i a was
first undertaken by Batas and
Caronn Shoe Company, b o t h of
w h i c h are large-scale units. T h e i r
s e l l i n g prices were exhorbitant.
r a n g i n g f r o m Rs 7 to Rs 10 per pair,
as compared w i t h the p r i c e of Japa-
nese chappals w h i c h ranged between
Rs 2.50 and Rs 3 per p a i r o f
course, outside I n d i a . T h e huge
m a r g i n of p r o f i t encouraged some
small entrepreneurs i n the N o r t h
to take up their p r o d u c t i o n ; and
they are now s e l l i n g in B o m b a y f o r
Rs 4.50 to Rs 5.50 per p a i r . The
cost of p r o d u c i n g these chappals in
an economic size u n i t in Bombay is
estimated by r u b b e r experts to be
a r o u n d Rs 2.25 per p a i r .
A s m a l l u n i t f o r the manufacture
of sponge chappals can be p u t up
w i t h an investment of Rs 1 lakhs.
The m a i n items of equipment are 1
Rubber M i x i n g M i l l , 12 pressers, 1
b o i l e r 10 H.P., 1 vulcaniser for
shrinkage, 10 dies, 6 slabs and 1
p u n c h i n g machine. This 1 equipment
w i l l cost about Rs. 70.000.