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The age-old furniture industry in Kozhikode, located perhaps in one of the largest timber trading regions in the world and comprising hundreds of micro manufacturing units and related facilities, is set to be developed in a cluster mode.
A special purpose vehicle (SPV), Zamorians Furniture Consortium Private Ltd, has finalised plans to set up a common facility centre to catalyse the development of the cluster, which, among other things, aims to bring in import substitution for knocked-down furniture from countries like Malaysia, China, Indonesia and Thailand.
The common facility centre is being established by the SPV, which at present has around 35 stakeholders on a public-private partnership basis at an estimated outlay of Rs 15 crore. The Centre will contribute a grant-in-aid of 70 per cent of the cost under its Micro and Small Enterprises Cluster Development Programme, the State Government 20 per cent and the stakeholders the remaining 10 per cent.
Investment
Mr Gangadharan, Chairman of the SPV, said the cluster has over 1,200 furniture manufacturing units, about 20 plywood units and 10 seasoning units. The average investment per unit is Rs 4 lakh and the total annual turnover is to the tune of Rs 480 crore. The units employ a total of 4,800 persons directly and another 10,000 indirectly.
The units are currently constrained by inadequate indigenous design capabilities, absence of training facilities for manpower, non-availability of testing and tool-room facilities, non-availability of capital-intensive quality component development equipment. Moreover, the industry has been severely impacted by the import of knocked-down furniture.
The common facility centre, for which the land has been acquired and preliminary work started, will feature a design studio, testing laboratory, training centre, component development and finishing centre and a raw material processing unit. The cluster approach will also facilitate leveraging financial assistance for upgrading individual enterprises, procurement of inputs and market development.
The cluster development is envisaged to lead to at least 50 per cent increase in the wages of the existing manpower through skill upgrading and new employment generation for about 1,200 persons a year. Also, the cost of raw material procurement will come down by 50 per cent with the subsequent rise in the profitability of the units.
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