It could either be the benefit of the mineral potential and the duration of 20-30 years of mining licenses granted in India (or) it could be the fact that the use of this product is omnipresent in almost every industry ranging from households to aviation industry (or) it could be that this non-ferrous metal is produced in as large quantity as 88 million tonnes annually which has grown by 20 times since the past six years.
Yes, We are talking about aluminium fabrication business and how this industry is the second largest metallurgical industry in India. This success of the Aluminium industry has been made possible because of fabrication capabilities which has created a diversified applications for Aluminium. Aluminium fabrication is a process of shaping the aluminium into finished products. Fabrication of aluminium in different shapes, sizes and textures has opened up the possibility of this industry to capture a vast market share, justifying your desire to own a aluminium fabrication business.
Market potential & Licenses required
The advantages that come with aluminium because of its durability, corrosion resistant, lightweight and strengthening properties of aluminium the potential for this metal after fabrication is as vast in terms of domestic demand as an expectant rise by 8-10% between FY (2020-2023).
- MIG and TIG welding
- Adhesive bonding
- MSME/SSI registration
- IS ( 1948-1961)
- NOC by state pollution control board
- BIS quality standard
- GST registration
- Aadhar card and PAN Card
Investment required & Profits made
- Fixed capital investment ₹ 10 lakhs – ₹ 15 lakhs
- Working capital investment ₹ 3 lakhs
- Net profit per year ₹ 6 lakhs
- Return on investment 21%
The demand for fabricated aluminium is mostly a demand for an intermediary or an auxiliary product in the production of a finished product so the consumer market for fabricated aluminium is backed by bulk purchasing.
Therefore this intermediary product targets the following customers :
Aviation industry : The aluminium fabricated is used in wings, fuselages and parts because of its weight-to-strength ratio and corrosion properties.
Construction industry : Because aluminium is energy efficient and sustainable by nature when fabricated its comes of a great use for decorative and structural materials by the construction industry.
Electronics and electrical industry: Consumer electronics make use of fabricated aluminium in refrigerators, laptops thanks to its thermal ability, lightweight, strength and structural properties. Power grids make use of aluminium wirings and conductors in its construction.
Automobile industry : These industries make use of fabricated aluminium in car bodies to make it more fuel efficient lighter and because of aluminium’s capability to absorb crash forces.
Packaging: Used by many households as aluminium cans and foils for packaging because of its texture, Durability and easy workability.
The area required to set up an aluminium fabrication unit would be between 1000-1500 sq m.
Raw materials, Machinery & Manpower
- Hand tools
- Chemicals for anodising
- Glass sheets
- Heavy duty cut off machine
- Drilling machine
- Electrical portable drill
- Anodising machine with rectifier
- Buffing machine with motor
- Double ended bench grinder
- Coolant and boiler
- 2- supervisors
- 3-semi-skilled workers
- 2-skilled workers
- 3-unskilled workers
Moreover, these workers are to be provided with suffice training in terms of equipment usage, machine handling, safety and precaution measures eye
The business model of the fabricated aluminium business can be defined using 4 variants :
Value proposition: The unique selling point and value the fabricated aluminium business is most likely to bring to you is that :
- It’s affordability, applications and properties which has made it a product routine in demand in almost every industry.
- India’s mining license duration of 20-30 years giving the USP of availability of resources and lower cost of imports thereby production.
Target consumers & Competitor review
The target consumers for this intermediary product, fabricated aluminium and The competition in this industry is not as aggressive because there are a lot a niches to cater to. However, the big players in the aluminium fabrication industry.
- Commercial/ retail spaces
- Electrical and electronic industry
- Warehouses and storage spaces
- Aviation industry
- Constructional industry
- Automobile industry
- Household sector
- Hindalco and vedanta
Marketing strategy: The marketing strategy to market these fabricated aluminium products would be :
- Highlighting those properties of Aluminium which are of need in context to that particular industry through advertisements, for example an aluminium foil ad for households highlighting durability of the product etc.
- Coming up with trade discounts, cash discounts, incentives on bulk and frequent purchases made for the industrial sector like aviation, electrical, manufacturers etc.
The fabricated aluminium industry has the potential and has witnessed a growth in the following ways :
- In the domestic market the aluminium production maintained a strong growth of 9% in FY 18-19 while the domestic consumption witnessed a growth of 9.5%.
- The market is expected to witness at CAGR of 12% -15% between FY 2018-2023.
- Moreover the “ Local is vocal” and “ Make in India” initiatives are likely to reduce the imports of aluminium and since development and construction go hand in hand the domestic demand is likely o rise.
An aluminium fabrication business is likely to yield a profit margin of 10.1%.
It you are still doubting your decision to enter into this fabricate aluminium industry we’ve got some facts which are likely to fabricate your decisions :
- Fabricated aluminium products have now become of a routine nature’s to carry out production in every industry thereby increasing the demand and sales prospects.
- India’s capability to acquire the aluminium because of easy availability and lasting mining licenses are generating FDIs and foreign demand from markets like USA, Africa etc.
- The target market for this manufacturing unit is immense so you can choose the niches you want to cater to specifically without experiencing many barriers of entry.
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