Aluminium Alloy Supply Chain for Foundries
The Opportunity
Small and micro foundries in Coimbatore are switching from iron to aluminium due to iron price volatility, but face supply constraints and price spikes (60% increase Dec 2025-March 2026). Foundries lack reliable, cost-stable aluminium sourcing, creating demand for a dedicated supplier who can aggregate, stabilize pricing, and deliver consistently.
Market Size
₹2,500–3,500 crore Indian foundry raw materials market; Coimbatore alone hosts 1,200+ foundries consuming ~150,000 tonnes aluminium annually (₹450–600 crore at current prices)
Business Model
Direct-supply B2B physical goods distributor: source primary aluminium ingots/scrap from primary smelters and recyclers, aggregate into standardized batches, offer fixed quarterly pricing contracts + JIT delivery to 200–300 small/micro foundries in Coimbatore and neighbouring districts
Margin on aluminium ingot/scrap sales: ₹8–12 per kg × 50,000 tonnes/year = ₹40–60 crore gross revenuePremium service fee (2–3%) for price-hedging contracts + logistics: ₹2–4 crore annuallyFinancing/working-capital facility to foundries (sub-broker model): ₹1–2 crore interest revenue
Your 30-Day Action Plan
Map 150–200 foundries in Coimbatore via Coimbatore Tiny and Small Foundry Owners Association; interview 20 to validate aluminium sourcing pain, pricing expectations, and contract terms
Identify and meet 3–5 primary aluminium smelters and recyclers (e.g., Hindalco, Vedanta, local scrap dealers) to negotiate wholesale pricing and supply agreements
Secure a 5,000 sq ft warehouse near Coimbatore Port/rail; arrange 500-tonne initial inventory financing (bank or MSME loan)
Draft standard supply contracts (quarterly fixed pricing + 10–15% volume flexibility); pilot 3–5 foundries with first delivery and feedback loop
Compliance & Regulatory Angle
GST 5% on aluminium ingot (intra-state); 10% on scrap. Import duties 10% on raw aluminium. FSSAI compliance not needed. Warehouse must comply with local fire/safety codes (Tamil Nadu Factory Act). Working capital financing may require NBFC registration if offered.
Ready to Act on This Opportunity?
Generate a 7-step execution plan — validate the market, build the MVP, model the financials, map the risks, and ship in 30 days.