The Hindu Business Line : The wind is unfavourable for Hyderabad fan industry

While some of the big pharma boys are moving shop to Bidadi in Himachal Pradesh, the typically small-sized fan industry, mostly in the unorganised sector, finds itself in a more difficult position.

Though 2-3 units have shifted out of Hyderabad, for the more than 600 small and tiny units making fans and fan components in and around Balanagar industrial area, it is not a viable option.

The waiver of sales tax, excise duty and other benefits in the three States provide a saving of Rs 60 per fan manufactured, compared with rates in Andhra Pradesh, says the Fan Manufacturers Association.

Given the fast changing market dynamics, the Fan Manufacturers Association is to ask the State Government to provide 100 acres of land to set up a `Fan Park' Ten units have closed down in six months, claimed the Fan Manufacturers Association.

Higher power rates in the State, the increasing competition from China & Pakistan, especially in the global market, thegrowing labour costs, technology issues and the uneven competition that the SSI units were being subjected to vis-à-vis the branded fan manufacturers, are threatening the survival of a large number of units.

Crammed into about 10 sq. km in the industrial area of Balanagar (which is now very much part of the expanded Hyderabad City, the Hyderabad fan industry contributes 30 per cent of the country's production. The estimated demand for fans in the country during 2005-06 is of the order of 150 lakh, according to a survey by Small Industries Service Institute (SISI), Hyderabad.

Estimates put the market size for fans in the country at around Rs 1500 crore, in both the organised and the unorganised sectors. The total production is about 200 lakh pieces annually. Of this, a major share of 120 lakh pieces is contributed by the unorganised players, with a rough sales value of Rs 400 a piece.

The organised players manage about 80 lakh pieces at Rs 1,000 a piece. The export figures are seen at 6.6 lakh.

All is not discouraging however for the Hyderabad Fan Manufacturers. Help has started coming their way. The Union Ministry of Small Scale Industry, through SISI , recently conducted a study on the Hyderabad fan cluster. The National Institute for Small Industry Extension and Training (NISIET) has lent its support.

According to the report prepared by Mr Arvind Patwari, Deputy Director of SISI here, in the Hyderabad fan cluster about 30 units could be considered very good with investment ranging from Rs 15-25 lakh and turnover of around Rs 2-4 crore. About 100 units are medium with investments of Rs 2-4 lakh and turnover of Rs 60-75 lakh. Nearly 170 units are assembly type units with investments up to Rs 1 lakh.

The turnover of Hyderabad fan cluster is in the range of around Rs 200 crore. The direct employment is of the order of 10,000 people, while the indirect jobs are shared by more than 50,000. While the raw material availability is comfortable, marketing was identified as one of the weakest points of the SSI units.

The cluster mantra can bring in a host of advantages to the fan manufacturers, feels Mr Patwari.

If the interventions under the cluster approach are supplemented by the creation of common facilities either near the existing industrial area or at a Fan Industry Park, that the Association has requested the State Government, it can definitely give a shot in the arm.

One positive move that has taken shape is the building up of a database of the units and members in the Balanagar fan cluster. It has also created a Web site: hyderabadfans.com.

The ambition of the Association, with the help of SISI and NISIET, is to establish a quality mark for Hyderabad fans - HY-FN - made in the cluster.

Once the infrastructure is created, it would be possible to source for loans, have a testing facility, get a CNC machine and pool strengths to meet the demands of the job markets for the bigger players also.

Four units have got BIS certification. Several units have shown interest to participate in the buyer-seller meet in Dubai.