Indian Extrusion Industry The Opportunities & Challenges

Contents: w Extrusions Market in India w Opportunities in India w Towards Solutions

The Indian Aluminium Extrusions Industry w

The demand for aluminium extrusions in India was about 300,000 tonnes in 2010

w

Demand in India is still growing strong inspite of economic fluctuations

w

The building & construction industry is the major consumer of aluminium extrusions in India

w

Future growth will come largely from the solar industry and the industrial sector

w

Usage in the automotive industry is still in a nascent stage

Market size: 300,000 tonnes (2010)

Industrial 28%

Transportation 12%

Building & Construction 60%

India’s per capita consumption of extrusions is amongst the lowest in the world 9.0 8.0

7.7

Per capita consumption (kg)

7.0 6.1 6.0

5.6 4.8

5.0

4.0

4.0 3.0

2.4 2.0

1.6

1.0 0.2 Germany * Data for 2010

Japan

China

France

USA

UK

Poland

India

A highly fragmented industry w The total capacity for aluminium extrusions in India is about 400,000 tonnes w The industry is highly fragmented with over 60 manufacturers of aluminium extrusions

Capacity

No. of players

> 25,000 tonnes

2

Between 10,000 & 25,000 tonnes

5

Between 5,000 & 10,000 tonnes

12

< 5,000 tonnes

43 Total

62

India – Growing Market Opportunities Market segments

Key Observations :

Automotive

w Currently the 5th largest passenger car producer & 8th largest commercial vehicle producer in the world w The Indian auto industry has grown at a CAGR of 16% in the last 5 years

Telecom

w India is now a export base for many global auto majors w Aluminium usage is still at a nascent stage

Mass Transportation

Aluminium Extrusions Usage in Automotives w Current usage of aluminium extrusions is restricted to engine mounts, radiator frames, brake components, seat frames & a few other minor applications

Automotive Production 3,500 3,000

w As opposed to the average aluminium extrusions usage of 11.5 kg in Europe in passenger cars, the usage in India is as low as 2 to 3 kg per car

w Supply to this industry would require tough tolerance adherence, extremely well documented production procedures

2,500 000 units

w Even cars manufactured by European/American manufacturers like Volkswagen, Renault, General Motors & Ford have very low usage of aluminium extrusions

2,987 2,357

2,000 1,778 1,500

1,839

1,545

1,000 500

549

520 -

2006

2007

Passenger Cars

417

2008

577

2009

753

2010

Commercial Vehicles

Automotive

India – Growing Market Opportunities Market segments

Key Observations :

Automotive

w Production of equipment for the telecom

Telecom

Mass Transportation

industry was valued at $11.87 billion in 2010 w Industry is currently facing a lull in growth but is expected to come back on track next year w Production revenue is set to increase to $23.5 billion by 2014

Telecom w Development and sales of enclosures and cooling solution. w Extruded aluminum superior as a heat dissipater. w Outperforms cast aluminum with thermal conductivity that is twice as

effective and copper by lower weight. w Cooling fins can be made very narrow, closely spaced and with high

degree of precision.

India – Growing Market Opportunities Market segments

Key Observations :

Automotive

Telecom

w Metros are being launched in many cities across

Mass Transportation

India w Bombardier & Alstom have set up operations w Friction Stir Welding technology is not available at present

India – Growing Market Opportunities Key Observations :

Market segments w

Building industry is the largest consumer of extrusions Construction is now moving heavily into Tier II and Tier

Building Industry

III cities in addition to Tier I cities w Current demand for extrusions from this sector is

largely for simple door & window sections w The usage of building systems and Unitized systems are

yet to gain large scale acceptance in the market

Solar Power

Challenges in the Indian extrusions market w Aluminium is still used only for simple applications at present in India w Complex applications, a small market by itself, are catered to through imports w Technical know how is significantly lesser than in Europe & USA w Customers prefer to buy “off the shelf” products; This will have to change with more industrial applications coming in w Price is a key driving factor and India is amongst the most price sensitive markets in the world. w Quality extrusions will cost more , but pays in the long run. Evaluate the whole life costs while deciding where to buy from.

Challenges in the Indian extrusions market w

Building & Construction sector is becoming more quality conscious

Architects / Big builders are directly interacting with Extruders for supply of profiles w

Some of changes happening are: Wider sections More complex shapes Tighter tolerances

w

Focus towards buying ‘Solutions’ rather than ‘off the shelf profiles’ is increasing

India – Growing Market Opportunities Market segments

Key Observations :

Building Industry

w With a large population & high solar insolation , is an

Solar Power

ideal location for solar energy production w In 2009, India unveiled a plan to produce 20GW of solar power by 2020; Current production from Solar Power is less than 1 GW w Aluminium is the metal of choice for the Solar Panels being manufactured; About 40-50 tonnes of extrusions are used for mounting systems per MW of installation

Mitigating Climate Change w Reducing the carbon footprint will influence all businesses w Government of India has announced 25% reduction in the emission intensity by 2020 w Measures to be taken: Mandatory fuel efficiency for vehicles by 2011 Model energy conservation codes for buildings & recommend states to make this mandatory Clean technology in power generation Increase the forest cover

Toward Green Solutions w

At one third the weight of steel and extensive design options, Aluminium is the ideal solution for the building & construction

industry w

A variety of options for Green solutions in buildings: Photo Voltaic integrated systems Unitized solutions Double skin curtain walling Thermal breaks Sun light louvers

w

Increased popularity of using aluminium formwork and shutters as it improves construction speed and quality significantly

Focus on energy efficiency w

Buildings account for over 40 per cent of the global consumption of electricity

w

Energy-efficient solutions for buildings are increasingly important

Photovoltaic integrated solutions for active buildings

This window profile section has a low U-value thanks to a skeleton of fibreglass-reinforced polyamide that effectively interrupts the thermal path and reduces convection and radiation between the inner and outer aluminium profiles

Building Integerated Photo Voltaic System (BIPV)

Solar Integrated curtain wall, National Telecom HQ of Sudan

Towards Solutions w With growing demands in India, extruders need to find new ways to differentiate themselves from others

w Extruders know the possibilities & limitations of aluminium extrusions and this knowledge needs to be passed on to customers to help design better products w With more demand expected from the Industrial segments, extruders need to get involved with customers in the design stage itself w Extruders in Europe & USA have moved further down the value added chain and supply fabricated products to customers w This trend is also slowly being adapted by few Indian extruders

12,13,14,15 December 2013 MMRDA Exhibition Centre, Bandra-Kurla Complex Mumbai, INDIA www.zakaluminiumextrusions.com Contact : Ahad | +91 98846 88888 |[email protected]

* Data Courtesy : SAPA Profiles India Pvt. Ltd.

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