The Indian Abrasives industry is catered to by a few large players and numerous smaller players that specialise in select products where imports from China cater to the lower end of the market. Due to the soft market conditions in many advanced economies, India is becoming a focus market for major global players resulting in intense competition. The market is getting increasingly crowded by overseas competition and low cost imports from ASEAN countries. The world Abrasives market which is currently valued at approximately USD 36 billion is estimated to reach USD 51 billion by 2019. North America and Europe together account for 50-55 per cent of the abrasives consumption followed by China with 17-20 per cent. The Indian Abrasives market size is estimated to be above INR 25 billion.
Buy Industry Analysis
Domestic and Global Outlook
In India, the abrasives industry is dominated by Carborundum Universal and Grindwell Norton, which command 70% of the Indian abrasive market size. The bonded abrasives segment and the coated abrasives segment are important segments in the Indian scenario and contribute maximum in terms of revenue to this industry due to higher comparative margins. Besides the two top players, there are several abrasives marketed by China, Japan and Europe. The abrasives from China are generally the lower end ones. Super abrasives have been seeing growth in the past couple of years and this segment is dominated by the German company, Wendt, which commands 35% of market share in this segment.
The abrasives industry caters to industries such as Steel, Automobiles, Auto Components, General Metal Fabrication and Woodworking. The dependence of the industry on each one of them is about 15% each and therefore the industry enjoys less dependency on these related industries. Taking into account the fast pace growth of the Indian economy and the push given to manufacturing and industrial activities under the Central Government’s ‘Make in India’ initiative, this situation seems highly unlikely. The industry also contributes to the exports of the nation and companies such as Carborundum Universal have manufacturing facilities in Russia, China and are exporting abrasives around the world.
2014-15 was the fourth consecutive year of low industrial growth (IIP increase of less than 3%) and though there are some signs of a recovery, it is too early to say whether the recovery will be weak or strong or whether it will be sustained. Low inflation (largely on account of the decline in global oil prices) and a stable Rupee (vis-à-vis the USD) are the positive aspects of the economy and could fuel a cyclical upturn of industrial activity. Under the current circumstances, a gradual industrial revival is the most likely scenario.
There lies immense potential in the abrasive industry. As stated earlier, the push given to domestic manufacturing under the ‘Make in India’ initiative will help in attracting more investment towards production in India which will help this industry and all those that make use of this industry’s products.
The INR 25 billion organised Indian abrasives industry is expected to grow at a five-year CAGR of 13% to INR 40 billion, in tandem with the strong economic growth expected in India. Traditionally too, the growth in the abrasives industry has been in sync with India’s GDP growth. This highlights the heavy dependence of the industry on India’s economic performance. The robust growth of India’s GDP of over 7% is therefore a big advantage to the country.
Superabrasives currently make up only 10% of the abrasives industry, while the conventional abrasives (i.e. bonded and coated) account for the rest. Increased awareness about the high-end technology and benefits of superabrasives is slowly resulting in a preference for such products. Use of them however in industries other than automobiles is still at a very nascent stage. With increasing awareness, it is expected that the usage of superabrasives will increase over a period of time. This therefore brings out the opportunities for diversification and expansion that lie for the industry and will also enhance margins and overall profitability.
What this report contains:
A detailed overview of the industry
Structure of the industry from both, domestic and international perspectives
Related industries that this industry has inter-dependencies with and their understanding
Detailed analysis of industry segments in terms of the value and depth of corresponding market
Analysis & insights about the elements and critical success factors of this industry using strategic models
A forecast on the state of this industry in 2021, predicting the growth and movement patterns for 2017 - 2021
Our professional analysis on the future of the industry based on strategic actions adopted by major industry participants
Quantitative estimates and forecasts of the growth prospects of the industry using revenue and financial forecasting models