CERATIZIT is planning capacity expansion in India

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CERATIZIT is planning capacity expansion in India

CERATIZIT is planning capacity expansion in India

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Dec 30,24

In this interview with Rakesh Rao, Melissa Albeck, Member of the Executive Board of the CERATIZIT Group, and Andreas Fritz, President of CERATIZIT Asia Pacific, share their insights on the global and Indian markets.

CERATIZIT is planning capacity expansion in India

Luxembourg headquartered CERATIZIT is a high-technology engineering group specialising in cutting tools and hard material solutions. In this interview with Rakesh Rao, Melissa Albeck, Member of the Executive Board of the CERATIZIT Group, and Andreas Fritz, President of CERATIZIT Asia Pacific, share their insights on the global and Indian markets, as well as the group's plans for IMTEX 2025, where it plans to showcase innovative products and technologies focusing on aerospace, automotive, heavy industry, and electronics.

How did the cutting tools industry perform in 2024 overall, and how was the year specifically for Ceratizit? What are your expectations for 2025?

Melissa Albeck (MA): 2024 has been a challenging year for the cutting tools industry, especially in Europe. The economic situation remains tough, with recent crises impacting market strength, particularly in the automotive sector. The transition to electric vehicles has slowed, leading to reduced machining volumes. However, there are bright spots. The aviation sector shows optimistic potential, and the electronics industry appears promising.

Cost management is a significant issue, with rising expenses necessitating innovative solutions to control costs without compromising quality. This includes optimising supply chains, leveraging economies of scale, and adopting cost-effective manufacturing practices. Efficiency improvements are crucial, with the integration of advanced manufacturing technologies and automation enhancing operational efficiency, reducing waste, and improving productivity and output quality.

Sustainability is also becoming increasingly important and Ceratizit is leading the way in our industry. We are focusing on initiatives such as reducing the Product Carbon Footprint, recovering raw materials from hard metal scrap, and promoting energy-efficient machining processes and more sustainable products.

For 2025, we expect to see a slight growth in the market, but overall, it will remain at a rather low level and the geopolitical situation will remain a challenge.

How do you plan to capitalize on the growing electric vehicle segment within the automotive industry? Which other industries do you see as key areas for growth?

MA: At the end of the day, it always comes down to offering customers the best overall package. In the automotive sector, for example, this includes specific tools for aluminium machining on the product side. In addition, we use a best-in-class approach for specific applications or components to offer our customers the best solutions available. This includes solutions for components in the automotive sector, such as engine components, axles, electric engines, braking systems and aluminium wheel rims.

In the future, the revenue share will also be increasingly generated by other industries due to the overall decline in machining volumes in the automotive sector. The aerospace, energy and medical technology industries, for example, should be emphasised here. We will focus even more on these industries in the coming years.

What technological trends are significantly shaping the cutting tools industry, and how is your company preparing to adapt to these changes?

MA: For the reasons already mentioned, the transition to e-mobility will be one of the major topics. In addition, the processing of difficult-to-machine materials and composite materials will continue to gain in importance and drive R&D and product innovation, as it has in recent years.

Efficiency has always been important for cost reasons. However, in connection with the growing importance of sustainability considerations in the manufacturing industry, it takes on a new dimension. For example, a process that is faster also requires less electricity and causes lower CO2 emissions. Users therefore benefit from more efficient processes in two ways.

How is sustainability influencing the future of the metalworking industry?

MA: It is a significant transformation along the entire value chain. The supply of raw materials must become more circular in the future. Not only because it is better for the environment, but above all because the tungsten and cobalt reserves are finite, and the supply of fresh ore is far too dependent on China and conflict regions. This dependency represents a major risk.

We, therefore, need to get to the point where it becomes the norm for worn-out carbide tools to be returned to the industry's raw materials cycle. CERATIZIT has a recycling rate of 95 per cent for tungsten and can cover the entirety of its cobalt needs through recycling. The industry, however, is far away from such values. And as a nice side effect, this will also make products more sustainable, as the footprint of recycled raw materials is significantly lower.

Large, listed international customers in particular are already receptive in this respect. They are the ones who show the greatest interest in the product carbon footprint of our products, as products with a lower PCF reduce their corporate carbon footprint in Scope 3. However, greater sustainability also means that we need to realign the focus in R&D, for example to raise the quality of recovered raw materials to a high level across the board and increase the recyclability of products. Our upGRADE powders, made entirely from reclaimed raw materials, clearly demonstrate that with the necessary know- how and diligence, premium products can easily be made from reclaimed raw materials.

In addition, sustainability will naturally also have an impact on topics such as processing methods, the optimisation of energy use in product manufacturing and the service life of products - always with the idea of keeping the ecological footprint as small as possible.

What are the main challenges hindering the growth of the Indian machine tools industry?

Andreas Fritz (AF): The machine tools industry in India is experiencing robust growth, driven by an expanding market and the relocation of businesses seeking reliable and economical partners. This growth is further supported by a strong GDP forecast and continuous investments in automation, robotics, and digitalisation. However, there are several key hurdles on the growth path. Despite the advancements, many people still prefer high-tech machines from Europe and Japan. Additionally, the development of production infrastructure towards precision is progressing slowly, and a significant portion of components in machine tools are still imported.

More specifically for the cutting tools sector, the industry faces challenges such as the lack of availability of tungsten and cobalt within India, the absence of recycling technology, and a shortage of the right kind of qualified workforce. With regard to CERATIZIT, however, I believe that we have found a good solution for the issues of raw materials and recycling through our international production network. And we can definitely be proud of our team in India. They do excellent work and are important for our growth strategy in the Asia-Pacific region.

How do you intend to maximise your presence at IMTEX 2025?

AF: At IMTEX 2025, we plan to showcase innovative products and technologies focused on aerospace, automotive, heavy industry and electronics. We will feature advanced solutions such as direct cooling technology, additively manufactured tools and information on our sustainability initiatives. This includes our cutting-edge solutions for specific components and applications in key-industries like the automotive, aerospace, and electronics sectors, to address the needs of our customers.

The aim is to engage with industry stakeholders and demonstrate how our cutting tools can improve productivity and sustainability. We invite visitors to explore our offerings and discuss how we can help them achieve their business goals.

What is your perspective on India as a potential market for your company, and what are your plans for growth in the region?

AF: India is not just a potential market for us, we already have a very strong presence – both in terms of production footprint and market share. However, the country continues to present significant opportunities, particularly with its strong growth in the electronics, defense, and aerospace segments. While the automotive market remains substantial, it has recently faced pressure due to cost increases. Nevertheless, we offer robust solutions across all these sectors.

Our growth plans in India include major expansions to increase capacity at our plants here. Additionally, we maintain strong coordination with other countries in the Asia Pacific region to leverage synergies and enhance our market presence.