MM Forgings to Deploy 100–150 Robots, Each Replacing About 3% of Workers

MM Forgings plans to deploy 100–150 robots across its facilities to address manpower shortages and rising labour costs, with each robot capable of replacing roughly 3 per cent of workers, according to its CMD.

Robot Deployment Planned

MM Forgings, a Chennai-based auto component manufacturer, plans to deploy 100–150 robots across its facilities, according to its Chairman and Managing Director Vidyashankar Krishnan. The company said the move is intended to address manpower shortages and rising labour costs.

Krishnan, speaking at the Auto Ancillaries’ Virtual Investor Conference, stated that each robot can replace roughly 3 per cent of workers. He explained that automation is becoming necessary as labour costs continue to climb, and that the manufacturing sector faces stiff competition for workers from the services industry.

Labour Cost and Manpower Pressures

Krishnan noted that manpower costs are rising very rapidly, and that one way to mitigate them is to look at productivity everywhere and across the board. He added that the manufacturing sector faces stiff competition for workers from the services industry, giving the example that someone working as a janitor in a mall does not have to work as hard, or in as harsh an environment as in a forge shop.

The company did not announce a specific number of job cuts. The robot deployment is explicitly attributed to replacing human workers due to cost and availability issues, as stated by the CMD.

Capital Expenditure Plan

Krishnan said the company plans to invest about ₹160 crore in capital expenditure next fiscal. The investment will go toward completing the 16,500-tonne press, finishing installation of the 4,000-tonne press, and adding some capacity on the machining side. He added that if there are new customer interests and cash availability, then the capex could increase up to ₹200 crore.

US Revenue Decline

Krishnan also reported a sharp decline in revenue from the US market, which has affected overall growth. He said the company has lost almost 10 per cent of revenue in the US. While it has grown in other geographies, including India, it has not grown overall only because the US market has tanked.

The US share in MM Forgings’ revenue has dropped from about 16–17 per cent earlier to around 9 per cent now, he added. He described this as a huge reduction the company has had to face, and said that otherwise it would have seen some growth this year as well.

Growth Outlook

Despite the setback in the US, Krishnan said demand conditions remain favourable. He stated that the US market is very strong and the Indian truck market is doing well. Subject to similar macroeconomic conditions — particularly geopolitical tensions not throwing a spanner in the works — the company should be able to easily achieve 20 per cent growth next year. He added that the company has the parts and the orders for that.

He also noted that the company has consistently invested nearly ₹1,000 crore over the past five years, which is expected to provide a strong growth tailwind.

Sources

MM Forgings plans to deploy up to 150 robots amid manpower shortage - The HinduBusinessLine