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Final Report (March 2014)
Project Code: 2013IE10
Mapping of
Non-financial gaps in
Kolhapur Foundry Cluster
Supported by
Small Industries Development Bank of India (SIDBI),
New Delhi
© The Energy and Resources Institute 2014
Suggested format for citation
T E R I. 2014
Mapping of Non-financial gaps in Kolhapur MSME Foundry Cluster
New Delhi: The Energy and Resources Institute. 53 pp.
[Project Report No. 2013IE10]
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Table of Contents
EXECUTIVE SUMMARY ............................................................................................................................... I
CHAPTER 1 – BRIEF BACKGROUND AND CONTEXT ...................................................................................1
1.1 Project overview and objectives ...................................................................................................1
1.2 Introduction .....................................................................................................................................1
1.2.1 Geographical location of Kolhapur Cluster ......................................................................2
1.2.2 History/evolution and turning points of the cluster.......................................................3
1.3 Cluster vital statistics .....................................................................................................................4
CHAPTER 2 – METHODOLOGIES ................................................................................................................5
CHAPTER 3 – MAJOR FINDINGS .................................................................................................................7
3.1 Cluster Actors..................................................................................................................................7
3.2 Principal stakeholders ....................................................................................................................8
3.2.1 Kolhapur Engineering Association ....................................................................................8
3.2.2 Institute of Indian Foundrymen (IIF) - Kolhapur chapter ..............................................8
3.2.3 Others .....................................................................................................................................9
3.3 Analysis of business operations (AOBO) of the foundry units ................................................9
3.3.1 Foundry castings manufactured in Kolhapur Cluster and its uses ...............................9
3.3.2 Major market/ customers..................................................................................................11
3.3.3 Purchasing / distribution criteria ....................................................................................12
3.3.4 Raw material procurement................................................................................................12
3.3.5 Manufacturing process .......................................................................................................13
3.3.6 Technology ..........................................................................................................................14
3.3.7 Quality Control Mechanism/Testing/Productivity ......................................................15
3.3.8 Management of firms .........................................................................................................15
3.3.9 Cooperation in product and process improvement .......................................................15
3.4 Pressure points summarized .......................................................................................................16
3.5 Analysis of BDS providers ..........................................................................................................17
3.6 Who Does Who Pays (WDWP matrix) ......................................................................................19
3.7 Past/Current developmental initiatives in the cluster ............................................................20
3.8 SWOT analysis of the cluster ......................................................................................................20
3.9 MSME Schemes .............................................................................................................................22
CHAPTER 4 – SUGGESTION AND RECOMMENDATIONS ............................................................................ 25
4.1 Vision and objectives of the cluster ............................................................................................25
4.1.1 Cluster vision ......................................................................................................................25
4.1.2 Long term objectives ..........................................................................................................25
4.1.3 Short term objectives ..........................................................................................................25
4.2 Problem areas and suggested solutions ....................................................................................26
4.3 Development/strengthening of critical BDS services .............................................................28
CHAPTER 5 – ACTIONABLE POINTS ......................................................................................................... 31
Annexures .............................................................................................................................................41
Annexure 1: Questionnaire for BDS services ..................................................................................43
Annexure 2 : List of units surveyed .................................................................................................51
Annexure 3: List of participants in the stakeholder workshop ....................................................53
List of Tables
Table 1.3 Key industry statistics in Kolhapur cluster .............................................................................4
Table 3.3.2 Major OEMs procuring from cluster ...................................................................................11
Table 3.5 Analysis of BDS Providers .......................................................................................................18
Table 3.6 WDWP Matrix ...........................................................................................................................19
Table 4.2 Analysis of business operations ...............................................................................................26
Table 5.1 Action Plan for development of Kolhapur Foundry cluster ...............................................31
List of Figures
Figure 1.2.1: Location map of Kolhapur ....................................................................................................2
Figure 1.2.1 Location map of Kolhapur - Sangli ......................................................................................2
Figure 3.3.1(a): Automotive castings ..........................................................................................................9
Figure 3.3.1(b): Steel castings ....................................................................................................................10
Figure 3.3.1(c): Aluminium castings........................................................................................................10
Figure 3.3.1(d): Prominent products of Kolhapur Foundry Clusters ..................................................11
Figure 3.3.3: Purchasing process of OEM in the cluster .......................................................................12
Figure 3.3.5.1: Manufacturing process of typical foundry unit in Kolhapur .....................................14
Executive summary
The MSME (micro, small and medium enterprises) sector is a major contributor to the Indian
economy. It accounts for about 45% of manufacturing output and 40% of exports. As per the
annual report of the Ministry of MSME, Government of India for the year 2010–11, there are
an estimated 28.9 million SME units that generate and provide employment to 69.5 million
persons. There are many resource intensive SME sub-sectors such as brick, engineering,
forging, foundry and chemicals etc. where energy/material costs account for as much as
40% of the product cost. However the SME sector remains a largely neglected and underserviced sector, from resource efficiency point of view.
The Foundry sector is an important contributor to the national economy. Kolhapur foundry
cluster is a major hub of castings in India. The industrial cluster is spread over an area of
around 19 square kilometres. Kolhapur was traditionally an agro-based economy. Demand
for oil engines and agricultural implements grew with industrialization in the region. This
led to the emergence of the foundry industry which evolved around the 1960s. Today
Kolhapur is a leading foundry cluster, renowned for manufacturing quality castings. There
are over 300 MSME foundry units in Kolhapur primarily manufacturing ferrous (iron)
castings covering both SG iron and grey-iron castings supplying mainly to the automobile,
pump-set and sugar industry.
The industries in the cluster have formed associations based on their geographic location
and the categories of products manufactured. The Kolhapur Engineering Association (KEA),
located in the heart of the city is the apex organization of the cluster with over 500 members
drawn from foundries, automotive, sugar, textile, agricultural implements, engineering, and
other industries. Additionally, many of the foundries of the region are also a member of
Indian Institute of Foundrymen Kolhapur Chapter (IIF). The services and activities of the
associations include grievance redressal, training and organizing seminars, etc.
In order to obtain a holistic view and map the entire eco system of the cluster and
understand cluster dynamics, a study was undertaken during February-March 2014 in the
cluster. One-to-one meetings were conducted with around 50 key stakeholders drawn from
MSME units, industry associations, BDS providers, local academic institutes and financial
institutions. This helped in understanding their roles, type of activities undertaken, gaps in
the cluster and strength/weaknesses of the cluster. In addition, a focus group meeting was
conducted to validate the findings of the study and present the activities proposed to the
industry and other major stakeholders. To understand the nature of BDS services in the
cluster a matrix using the tool „who does who pays‟ has been prepared.
The present BDS market in the cluster is underdeveloped. For those areas where BDS
providers exist, their capacities need to be built to enable them to provide proper services to
the local units. The scenario can be categorized as low demand and low supply. There is a
need to develop market for BDS services. Limited BDS providers are available in key areas
such as infrastructure improvement, basic testing and training facilities, marketing
/branding, product development and environmental protection. The MSMEs make limited
use of government institutions providing these BDS services in the cluster such as
universities, ITI‟s, etc. The study revealed that the industry requires services in the area of
common product testing, skill development, basic road infrastructure, market
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diversification, productivity improvement (Kaizen activity) and energy efficiency/pollution
control.
The major gaps identified in the cluster are:
Infrastructure related
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
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Need for common testing facilities (NABL certified testing facilities for chemical/
physical testing including radiography of material/finished products). Requirement of
two labs since major industrial areas are located far from each other.
Poor road and other basic (street lighting and street drainage disposal) infrastructure
in all industrial estates (MIDC Shiroli, MIDC Gokul Shirgaon, Laxmi Industrial Estate,
Sangli-Miraj)
Need for better connectivity with major industrial towns such as Mumbai, Bangalore
etc.
No common waste sand disposal site
Lack of casting simulation laboratory, CNM software facility
Lack of training facilities: on modern machines such as CNC
Need for Truck Terminals at MIDCs
Skills development/Manpower


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Shortage of manpower on process related skill development such as moulding skills,
melting operation skills, casting simulation, Auto CAD, wielding, for machining
operations such as CNC operators and programmers
Lack of knowledge of fabricators/supervisors on basic engineering drawings
Lack of trainers on advanced wielding techniques
Composite facility required for skill development of the employees with respect to
personality development and soft skills such as presentation, communication,
purchase management
Need to upgrade and improve training delivery mechanisms at local polytechnic
Lack of employee skills on proper costing and inventory management.
Workers need to be trained on safety awareness and fire fighting
Productivity/Quality



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High production costs due to lack of implementation of quality control tools such as
5S, Kaizen, six sigma
Unaware about benefits of implementing lean manufacturing techniques
Lack of testing facilities in the cluster
Lack of training and demonstration
Lack of knowledge on casting defect analysis and quality inspection
Lack of BDSPs in this segment
Marketing


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Lack of information about new markets, limited reach to outside cluster new OEMs.
No efforts made for exports, lack of knowledge on export potentials
Absence of marketing strategy and infrastructure in most units
No common marketing/branding initiatives undertaken
ii
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Lack of participation in trade fare and exhibitions
Lack of knowledge on market and product diversification.
Technology improvement/Product development

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No R&D capacities with SMEs for new product development
Need to improve surface finish and quality of castings
Need assistance to adopt energy efficient technologies and BOPs
Lack of mechanization of the molding process
Need for improvisation in metallurgical properties/grades of castings and unit yield
Energy-Environment




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Little initiatives directed towards energy efficiency by the management.
Lack of knowledge about energy savings potential in induction melting and
compressed air systems
Lot of indoor pollution in the foundry units. Need to of improve design of hood and
air extraction for induction furnace
Entrepreneurs / Managers do not have a tab on energy consumption (process wise /
equipment wise)
Lack of awareness of environmental norms and requirement of pollution control
systems
Lack of assistance from state pollution control departments
Management/awareness generation

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
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Lack of management expertise for inventory management and value engineering
Lack of established systems for HR practices
Weak knowledge of activity based costing (ABC)
Lack of awareness on Government Schemes/financial incentives
Strengthening industry associations



Capacity building of industry associations office bearers required
Lack of outreach capacities of KEA
Need for a facilitation desk at the association level for assistance of units on taxation
availing government schemes etc.
Based on the discussions with various stakeholders in the cluster, a four year 'Prioritized
Action Plan‟ action plan to develop the cluster and help achieve cluster vision by providing
infrastructure and BDS services has been formulated. The action plan which is detailed in
Chapter 5 of the report includes activities in the focus areas of:

Infrastructure:
Establishment of a Common Facility Centre (CFC) offering major
services namely (1) casting simulation facilities for designing and prototyping; and (2)
training facilities; Setting up of a state of art testing laboratory accredited by NABL
under PPP mode in the cluster; Improving Roads facility in all industrial estate;
Allocation of land in each industrial estate for truck terminal. None of estates have
place for truck parking, large truck often cause blockage of small roads; Installation of
sign boards, maps in all industrial estate, for proper understanding of route
iii
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Skill development: Mobilization of regional youth, increasing industry-academia
interface, training programs on Casting simulation, Melting and moulding process,
Safety and fire fighting, Soft skills training and Proper costing and purchase
management
Productivity improvement: Implementation of total quality management and lean
manufacturing techniques.
Marketing: Formulate and implement unit level marketing and business development
strategies, establish a common marketing consortium, assistance for exports
Energy Efficiency: Identifying energy conservation measures in units and supporting
implementation, training on basic energy conservation techniques, creation of energy
management cell and training them to conduct energy audit in foundry units
Management: Capacity building of unit owners on contemporary management
practices in small businesses, training on soft skills, establish HR procedures in
selected units; Inventory Clerk Training for top management
Strengthening of industry associations: Capacity building of industry associations of
Kolhapur and Sangli, setting up of facilitation desk
These actions if implemented with BDS support will comprehensively address the gaps/
pain areas/ pressure points of the Kolhapur foundry cluster units and promote holistic
development of the units. These action points were also presented to the industry
stakeholders during a focus group discussion held in Kolhapur and the industry is very
keen on implementing these activities.
iv
Chapter 1 – Brief Background and Context
1.1 Project overview and objectives
The study "Mapping of non-financial gaps in Kolhapur engineering cluster" which is
supported by Small Industries Development Bank of India (SIDBI) focuses on non-financial
issues Business Development Services (BDS) hindering the growth and competitiveness of
the cluster. The objective is to carry out a detailed analysis of the cluster with a view to
identify non-financial gaps and suggest appropriate measures to achieve the desired
situation. The major focus will be on non-financial issues, infrastructure and marketing.
The study focused on identifying gaps for non-financial services (BDS), existing institutional
mechanism in order to improve the supply of BDS in these clusters and increase the
availability of other transactional support services to enhance and supplement the BDS
supply. The study further aimed to map the infrastructural gaps in the Kolhapur cluster.
This report includes suggestions, recommendations and actions that could be taken to
address the identified gaps.
1.2 Introduction
The MSME sector in India has emerged as the engine of economic growth by contributing
significantly towards industrial production (45%), exports (40%) and employment
generation (70 million) – the second largest source of employment after agriculture.
Notwithstanding the same, the growth of MSME sector in the past few years is considered
much below its potential growth rate. This is because the MSME sector remains a largely
neglected and under-serviced sector, from infrastructure and BDS services point of view.
The major constraints hindering the growth and development of the MSME sector are the
lack of availability of adequate/timely credit at affordable price, high quality infrastructure
and BDS services. These non-credit needs (access to strategic services including training,
capacity building, skill improvement, marketing inputs, product development, productivity
enhancement, design, common facilities, credible information access etc.) have been
identified from time to time by several working groups including the 11 sub-groups of
Ministry of MoMSME which dealt with both credit and non-credit needs of MSMEs. It is
imperative to provide these services to the MSME sector to make it more competitive and
provide an impetus to its growth. It has also been observed that the balanced approach
towards both credit and non-credit needs strengthens the eco system for MSMEs.
Foundries manufacture various types of castings which can be divided into the following
categories — ferrous, non-ferrous, aluminium alloy, graded cast iron, ductile iron, and steel.
Castings are mainly used in automobiles, railways, pumps, compressors and valves, diesel
engines, cement industry, electrical industry, textile machinery, sanitary pipes and fittings,
power generation, construction, and many other specialized applications. About 32% global
output of foundry industry goes to auto industries and the balance to other downstream
engineering sectors. The current foundry industry is worth USD 34 billion and the
Automotive Mission Plan (AMP) of 2006–2016 envisages a four-fold growth by 2016.1
1
IIF Presentation – International Foundry Forum, Barcelona 2010
1
The Indian foundry industry is a leading engineering sector with annual production of over
7 million tonnes of castings, accounting for about 8–9% of total castings production in the
world. There are approximately 4,500 foundry units in the country out of which 90% can be
classified as small-scale units, 8% as medium-scale units, and 2% as large-scale units.
Foundries manufacture various types of castings which can be divided into the following
categories: ferrous, non-ferrous, aluminium alloy, graded cast iron, ductile iron and steel.
The foundry industry is dispersed across various geographical clusters, of which the
Kolhapur cluster is one of the major ones. It accounts for 7-8% of total casting production by
India. The cluster is spread over an area of around 19 square kilometres. There are around
2,000 manufacturing MSME units in the Kolhapur cluster, of which around 350 are foundry
units. Kolhapur foundry cluster covers sectors such as automobiles, railways, pumps,
compressors and valves, diesel engines, cement industry, electrical industry, textile
machinery, sanitary pipes and fittings, power generation, construction and many other
specialized applications.
1.2.1 Geographical location of Kolhapur Cluster
Kolhapur is a major MSME foundry cluster situated in the southwest corner of Maharashtra
and shares its eastern and southern border with the state of Karnataka. The geographical
location of Kolhapur is shown in figure 1.2.1.
Sangli
Kolhapur
Figure1.2.1
1.2.1:Location
Locationmap
map
Kolhapur
Figure
ofof
Kolhapur
- Sangli
2
Kolhapur foundry cluster is in two districts: Kolhapur districts and Sangli district having a
total of around 300 foundries. Sangli city is situated 65 km towards east of Kolhapur.
1.2.1.1 Kolhapur
Kolhapur is situated on the Pune - Bangalore National Highway No. 4. Kolhapur serves as
the headquarters of the Kolhapur district. Kolhapur is connected to major Indian cities
express trains. Kolhapur is also connected by road with Mumbai to the north and Bangalore
to the south by National Highway 4 which extends all the way down till Chennai. The city is
located about 395 kms from Mumbai and 240 kms from Pune. Kolhapur is one of the fastest
growing cities in Maharashtra and is one of the highest per capita income cities in India. The
city is a hub for industry, comprising of over 1000 energy intensive industries covering
different sectors. These industries comprise mainly of automotive, foundries, engineering
spares, sugar industries and textile mills. There are nine industrial estates in Kolhapur, of
which three are Maharashtra Industrial Development Corporations (MIDC) and six are
corporate industrial estates. Several large Indian companies have established presence in
Kolhapur including Kirloskar Oil Engines, Vardhaman Textiles, Raymond Textiles, Menon
Group, Gokul Milk, Eurotex, Ghatge Patil group of industries, etc.
1.2.1.2 Sangli
Sangli district is located in the western part of Maharashtra. It is surrounded by Satara,
Solapur districts to the north and northeast, Vijapur district to the east, Kolhapur and
Belgaum districts to the south and Ratnagiri district to the west. The physical settings of
Sangli district shows a contrast of immense dimensions and reveals a variety of landscapes
influenced by relief, climate and vegetation. There are nine industrial estates in Sangli, of
which three are Maharashtra Industrial Development Corporations (MIDC) and rest are
corporate industrial estates. Several large Indian companies have established presence in
Manganga Sahakari Sakhar Karkhana, Babasaheb Desmudh Shetkari Sahakari Soot Girni,
Anilraj Textiles, Madhavnagar textile mills, etc.
1.2.2 History/evolution and turning points of the cluster
The history of Kolhapur can be tracked back to the Satavahan empire era. Kolhapur district
blessed with fertile soil and watered by 14 rivers was traditionally an agro-based economy.
The second and third decades of the 20th century witnessed Kolhapur coming to the
forefront in sugarcane cultivation and downstream jaggery manufacture became a major
industry. Improved methods and appliances came into demand and oil engines were found
to be more efficient. Cane crushers made of steel became popular and were imported from
England. In course of time, routine wear and tear created a demand for replacement parts,
and farmers went to Kolhapur city, where skilled craftsmen, normally employees of
machinery traders reconditioned them. Thus, a large business for repair of cane crushers
came up in Kolhapur.
The outbreak of the Second World War in 1939 further propelled growth of the domestic
foundry industry. The supply routes by sea were disrupted and increasing cane production
pushed up the demand for agricultural machinery and oil engines. The skilled mistries then
began to make first spare parts for imported machinery and subsequently, simple
3
agricultural implements. Oil engines soon became the mainstay of industrial activity in
Kolhapur.
As industrial activity grew, Shivaji Udyamnagar was established and given land for
promoting industrial activity. At this time, the Kolhapur Engineering Association was
allotted land and the industrial base of Kolhapur came up through a cooperative effort. The
growth of the local agricultural machinery and oil engines industry created the need for
locally available castings. This led to the emergence of the foundry industry in Kolhapur.
The fourth and fifth decades of the 20th century saw several progressive entrepreneurs
including S. Yashwant, Y.P Powar, Mirasaheb, Hudli, Gadre, Samani, Utkur and C. Menon
emerge and ensure rapid growth of the Kolhapur engineering and foundry industry. The
post-independence period saw continued growth of the oil engine industry which required
cast components and several foundries started after 1960. Today, Kolhapur is an established
foundry cluster, renowned for manufacturing quality castings in India. In fact, some large
corporates including Reliance Industries have invested in foundry industries of Kolhapur.
1.3 Cluster vital statistics
More than 60% of the units in the Kolhapur foundry cluster are engaged in casting
tractor/auto parts and pumps/valves. The detailed industrial statistics of the Kolhapur
foundry cluster are provided in table 1.3.
Table 1.3: Key industry statistics in Kolhapur cluster
Particulars
Unit
Number of MSME foundry units
Number
Number of micro units
%
Number of small units
%
Number of medium units
%
Total direct employment 2011-12
Number of workers
Total turnover 2011-12 (as per D&B estimates)
INR crores
Total export 2011-12
INR crores
Total production 2010-11
Tonnes
Share in India‟s total casting
%
Source: One to one discussions with entrepreneurs and KEA officials
Number
300
65% (195)
25% (75)
10% (30)
40,000
3100
1140
600,000
9%
Out of the 300 foundries present in Kolhapur, about 250–275 units are present in the
Kolhapur district and 20–25 units in the Sangli district. While units in Sangli are located
mainly in the Miraj and Palus industrial areas, foundries in the Kolhapur district are spread
across eight major industrial estates. These include:

Kolhapur city
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Shiroli MIDC
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Gokul Shirgaon MIDC
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Kagal 5-star MIDC
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Ichalkaranji industrial estate

Jaisingpur industrial area

Laxmi industrial area

Hatkanagale industrial area
4
Chapter 2 – Methodologies
Foundry units in the Kolhapur cluster manufacture myriad kind of product categories such
as automobiles, railways, pumps, compressors and valves, diesel engines, cement industry,
electrical industry, textile machinery, sanitary pipes and fittings, power generation,
construction and many other specialized applications. A thorough analysis of the secondary
data revealed that more than 60% of the foundry units in the Kolhapur cluster are engaged
in the production of products such as automotive parts, manifold, flywheel, housing,
couplings and valve body. Therefore, the study focused on following foundry industries in
the cluster:

Ferrous foundry

Non-ferrous foundry
To map the entire eco-system of the Kolhapur cluster including identifying non-financial
gaps in the cluster, know the status of BDS in the cluster & identify the potential to develop
these services, understand needs of the industry and come out with concrete activities to
address these needs, a detailed study was undertaken in the cluster. A structured
questionnaire (provided in Annexure 1) was developed to guide the discussions with the
MSME units and other stakeholders. A list of questions beginning with exploratory and
probing questions on the subject escalated into questions seeking information and data in
detail regarding the gaps in various non-financial areas mainly infrastructure, skill
development, marketing, technology, energy efficiency, pollution control, awareness of
government schemes, productivity and so on.
To conduct the study effectively, a cluster coordinator (based on the competency and
familiarity with the cluster industries, geographical area and local language) was deputed in
the Kolhapur cluster to conduct the study and interact with the stakeholders. Questionnaire
based interactions/personal interviews were conducted with about 50 stakeholders (list
provided in Annexure 2) in the Kolhapur cluster drawn from:

MSMEs in the clusters – covering different types of industries

BDS providers for various segments like infrastructure, marketing, skill development,
finance, technology, energy efficiency and so on.

Office bearers of cluster level industry associations namely Kolhapur Engineering
Association, Institute of India Foundrymen – Kolhapur Chapter, Gokul Shirgaon
Industry Manufacturers Association (GOSHIMA), Shiroli Manufacturers Association
of Kolhapur (SMAK), Ichalkaranji Engineering Association and L K Akiwate co-op
industrial estate, Jaysingpur

District Industries Centre (DIC)

MSME-Development Institute (MSME-DI)

Government agencies and academic institutes in the cluster

Local technical consultancy organizations (TCOs) and R&D institutes

Local Banks and financial institutions
The number of units/stakeholders surveyed include:
No. of enterprises
Number of units
Micro
20
Small
25
Medium
5
5
In order to validate the findings of the study
and obtain the consent of the industry and
other major stakeholders on the activities
proposed to address the non-financial gaps
and develop the BDS market, a stakeholder
consultation (see picture) was conducted in
the Kolhapur Engineering Association on 27
March 2014. The participants (list provided
in Annexure 3) in the discussion were
drawn from MSME units, industry
associations, BDS providers, banks and
other major stakeholders. Findings of the
study in terms of gaps identified and activities proposed were presented to the participants
and their feedback was sought on these. This helped in validation of the findings and
ensured the buy in of the industry towards the recommended activities. The findings of the
study and the activities proposed were also presented to SIDBI branch office in Kolhapur to
obtain their feedback and inputs on the same. The Inputs/suggestions provided by them
have been incorporated in the report and the activities proposed have been approved by the
local office
6
Chapter 3 – Major findings
3.1 Cluster Actors
The primary stakeholders in the cluster are the engineering units based in Kolhapur, Shiroli,
Gokul Shirgaon and Sangli. The other stakeholders include various government agencies,
industry associations, regulatory bodies, research and academic institutions, testing and
training institutes and BDS providers. These cluster actors provide various services to the
cluster units, such as training of workers, testing facilities, energy efficiency/environmental
protection, financial services, technical know-how, regulatory and advisory services, raw
materials supply, supply of technologies etc. Some of the major cluster actors located in and
outside the Kolhapur cluster and catering to the SMEs of the region are mentioned below
under various categories:
MSME Industry Associations
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Institute of Indian Foundrymen - Kolhapur
Kolhapur Engineering Association (KEA), Kolhapur
Gokul Shirgaon Industry Manufacturers Association (GOSHIMA), Gokul Shirgaon
Shiroli Manufacturers Association of Kolhapur (SMAK), Shiroli
Manufacturers Association of Kagal (MAK), Kagal
Ichalkaranji Engineering Association, Ichalkaranji
Krishna Valley Chamber Of Industries & Commerce, Sangli
Sangli Miraj MIDC Manufacturers Association, Miraj
Shri Laxmi Industrial Estate Manufacturing Association, Ichalakaranji
National level industry association

National Productivity Council represented by Institute of Engineers, Kolhapur
Public Sectors / Government Agencies Functioning in the Cluster
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Directorate of Industries, Kolhapur
Directorate of Industries, Sangli
Maharashtra Industrial Development Corporation (MIDC), Kolhapur
Maharashtra Pollution Control Board (MPCB), Kolhapur
Maharashtra Energy Development Agency (MEDA), Kolhapur
Kolhapur Chamber Of Commerce & Industries, Kolhapur
Engineering/Management Colleges and Universities

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Shivaji University, Kolhapur
Government Polytechnic, Kolhapur
Kolhapur Institute of Technology, Kolhapur
D.Y. Patil college of Engineering and Technology, Kolhapur
TKIET –Engineering College, Warna Nagar
Ashokrao Mane Institute of Engineering and Technology, Vadgaon
7
Technical and Vocational Training Institutes


Industrial Training Institute, Panhala/Kushire, Kolhapur
Industrial Training Institute, Shiroli, Kolhapur
Original Equipment Manufacturers (OEM‟s)




Kirloskarvadi Works - Kirloskar Brothers Limited, Sangli
The Kolhapur Steel Limited - Kirloskar Brothers Limited, Shiroli
Ghatge Patil Industries Limited, Kolhapur
Menon Bearing (P) Limited, Kolhapur
Banks/Financial Institutions









SIDBI, Kolhapur
Bank of India, Kolhapur
State Bank of India, Kolhapur
Bank of Baroda, Kolhapur
Central Bank of India, Kolhapur
HDFC Bank, Kolhapur
The Shamrao Vithal Co-op Bank Ltd, Kolhapur
The Sarswat Co-op. Bank Ltd., Kolhapur
Dombivli Nagari Sahakari Bank, Kolhapur
BDS providers (marketing, productivity, technology, energy efficiency, technical inputs)



Institute of Indian Foundrymen, Kolhapur
Kolhapur Engineering Association (KEA)
Individual Consultants
3.2 Principal stakeholders
3.2.1 Kolhapur Engineering Association



The Kolhapur Engineering Association (KEA), located in the heart of the city is the
apex organization of the cluster. The KEA was set up in 1947 and is a prominent
organization of industrialists in the city.
KEA has a membership of over 500 members comprising of foundries, automotive,
sugar, textile, engineering and other industries.
The services and activities of the association include training and organizing seminars
etc. The association has a conference room and a 125 seating capacity auditorium.
3.2.2 Institute of Indian Foundrymen (IIF) - Kolhapur chapter


The Institute of Indian Foundrymen (IIF) - Kolhapur chapter is the key institution
working specifically towards the needs of the Kolhapur foundry industry. The chapter
has strength of about 275 members comprising of foundry units as well as individual
foundry consultants, equipment suppliers and Local Service Providers (LSPs).
The Kolhapur chapter is quite active in the cluster. The chapter not only provides
8

support on technical issues and growth of the members, but is also dedicated towards
addressing various issues faced by the cluster regarding raw materials, labour, etc.
In addition, activities of the chapter encompass seminars, workshops, technical
programs at managerial level, and monthly training programs for shop floor workers,
trade fair visits and dissemination of newsletters and other knowledge products.
3.2.3 Others



To serve MSME units of the region, the Government of India with cooperation of State
Government of Maharashtra established the MSME testing station in Shiroli. The
MSME testing lab offers numerous testing facilities including physical testing,
microstructure testing, spectro analysis as well as chemical testing.
Industrial Training Institute (ITI), Kolhapur was set up pre-independence in 1940. The
ITI is a Centre of Excellence in Production & Manufacturing. At present institute is
spread over in the vicinity of 29.21 acre land having three big Workshops, Main
building, Advanced Vocational Training System building , Students Hostel,
Staff Quarters & administrative building. But the MSMEs in the region are not
satisfied with the quality of students trained by the institute However due to the weak
linkage of local industry with ITI‟s at present, the attendance of workers in these skill
development initiatives is very -low.
Bank of India is the lead bank in the cluster having their specialized branch in the
cluster dedicated to MSMEs and is named as SME branch. Other commercial banks /
financial institutions active among SMEs in the area are SIDBI (Kolhapur), Bank of
Baroda, and co-operative banks such as Shamrao Vithal Co-op Bank, Sarswat Co-op.
Bank and Dombivli Nagari Sahakari Bank.
3.3 Analysis of business operations (AOBO) of the foundry
units
3.3.1 Foundry castings manufactured in Kolhapur Cluster and its uses
Foundry industries in Kolhapur manufacture diverse range of castings. Foundries are
ferrous or non-ferrous castings, the ferrous castings are further classified as CI & SGI casting
and steel & alloy steel castings, Brief categorization is given below:
Cast iron and SG iron castings
Around 70% of foundries in Kolhapur cluster are
involved in ferrous castings mainly cast iron and
SG iron. Foundries produce CI casting of grade
200 to 300 and SG iron casting of grade 400 to
700. Major castings are automobile and tractor
parts such as axle, gears, transmission
components, housings, engine parts, steering
assembly, brake system, hydraulic lift assembly.
Different types of castings such as flywheel,
housing, motor frame, pulley, valve body, gear
case covering, plates, actuating disk, manifold,
nearing caps, rotor, rings, piston head, links, and
9
Figure 3.3.1(a): Automotive castings
many more are also manufactured. The units manufacturing these products mainly use
green sand moulding and few use shell moulding. Lately few several entrepreneurs in the
cluster have also started machining of castings using contemporary machines such as CNC
(Computerized numerical control) and VMC (Vertical milling centre).
Steel and alloy steel castings
Around 20% of foundries in Kolhapur
cluster are involved in steel and alloy
steel castings. The units in the cluster are
doing various types of steel castings
such as pump casings, open impeller,
closed impeller, diffusers, bearing
brackets, steam chest, manifolds and
many more. Steel casting units and
Figure 3.3.1(b): Steel castings
machining units exist in conjuncture, the
casting units generally work on the CO2 sand moulding and the machining of castings is
done using contemporary machines such as CNC and VMC.
Non-ferrous castings
Around 10% of foundries in Kolhapur cluster are involved in non-ferrous castings. Major
non-ferrous castings produces are aluminium, others include brass and copper. Aluminium
castings are produced mainly using
gravity die casting; few units‟ use
pressure die casting. The main
aluminium
castings
produced
include brake drum, tractor bullcages, flanges, flywheel, pulley,
bearing support, breaker, actuator
Figure 3.3.1(c): Aluminium castings
and many more.
The major products manufactured under each category ranges of the prominent foundry
castings produced in the Kolhapur cluster are summarized in Figure 3.3.1(d).
10
Kolhapur Foundry
Cluster
CI and SGI
castings
Flywheel
Transmission
components
Housing
Motor frame
Valve body
Pulley
Gear case
covering
Actuating disk
Manifo
Steel and alloy
steel castings
Pump casing
Impellers
Diffuser
Bearing
brackets
Steam chest
Manifold
Piston rings
Links
Non-ferrous
castings
Brake drum
Tractor bullcages
Flanges
Flywheel
Pulley
Bearing support
Actuator
Breaker
Figure 3.3.1(d): Prominent products of Kolhapur Foundry Clusters
3.3.2 Major market/ customers
Most of the foundry units in the cluster supply their casting either directly to OEMs or to
OEMs via big foundries; around 30% of castings are exported. The major OEMs undertaking
procurement from the cluster are listed in table 3.3.2.
Table 3.3.2 Major OEMs procuring from cluster
OEM
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Mahindra and Mahindra
Tata Motors Ltd
Eicher Motors Ltd
Swaraj Mazda
John Deere Tractor
KSB Pumps
Kirloskar Brothers
Lada Pump Pvt Ltd
Laxmi Pump Pvt Ltd
Mather & Platt Pumps Ltd
Audco India Ltd
Kirloskar Oil Engines Ltd
Eicher Engine Pvt Ltd
Product Category
SUV and Tractors
LMV and LCVs
(Mini trucks / buses )
Pumps and Valves
Oil Engines
11
OEMs located inside the cluster:

Kirloskarvadi Works - Kirloskar Brothers Limited, Sangli

The Kolhapur Steel Limited - Kirloskar Brothers Limited, Shiroli

Ghatge Patil Industries Limited, Kolhapur
OEM‟s located outside the cluster:

Ashok Leyland, Chennai

Sonalika Tractors, Hoshiarpur

Mahindra & Mahindra, Nasik

Mahindra & Mahindra, Nagpur

TAFE Tractors, Chennai

Tata Motors, Dharwad
The units are making limited use of BDS services to market their products and diversify
their markets. However, since the automotive sector is currently facing slow down due to
global recession, the Kolhapur foundries are also feeling an impact. The overall price of
inputs has been on the rise resulting in rising prices of castings.
3.3.3 Purchasing / distribution criteria
For sourcing auto castings, the OEMs generally have a pool of permanent vendors registered
with them for supplying all kinds of castings on demand basis. The OEMs calls quotations
from the vendors and no intermediately is involved in the transaction. There exists an
intense competition amongst all the vendors to get orders from the OEM‟s. The purchasing
process being followed by OEMs is shown in figure 3.3.3.
OEM product demand
(call for quotation)
Product manufacture by
vendor
Quotation submission
by vendors
Order placement by
OEM
Competitive analysis
of quotation by OEM
Selection of vendor
Transportation and
delivery to OEM
Figure 3.3.3: Purchasing process of OEM in the cluster
3.3.4 Raw material procurement
The main raw materials and inputs used for the manufacturing of castings in the cluster are
pig iron, scrap, sand, bentonite, coke, aluminium, alloys, etc. The main sources of raw
material in the cluster are:-
12
3.3.4.1 Pig iron
Pig iron is the main raw material for foundry. There are number of private sources to
purchase pig iron, some of these are: Goyal Iron Nagpur, Bajaran sales Shiroli, Seasa
Industries Kolhapur, Sona Alloys Satara, Mehta Traders, Welldeal Engineering Kolhapur,
Sona Alloys Satara.
3.3.4.2 Coke
Over 30% of foundries use cupola for melting and coke is used for combustion. Coke is
procured from following local suppliers: Balaji coke Shiroli, Sri Udyam Co-op Society, Seasa
Industries Kolhapur, Furnace Feeders Kolhapur.
3.3.4.3 Scrap
Iron scrap and steel scrap is next major raw material after pig iron. Around industrial estates
small dealers are present. Major suppliers of scrap are: Shivam, Harpriya, Goyal Iron, Leela
Trade Steel Pune, Fortune, Omkar Enterprises Kolhapur, Venketesh Enterprise Ichalkaranji,
Madhuban Trade Steel Pune.
3.3.4.4 Alloys
To attain required chemistry of casting number of alloying elements such as copper, ferromanganese, ferro-silicon, ferro-magnesium, etc. Suppliers of alloys in cluster are: BMI
Mineral Shiroli, Oswall Mineral Shiroli, Technochem Agencies Sangli, Rodium Alloy
Bangalore, Furnace Feeder Shiroli.
3.3.4.5 Sand
Enormous quantity of sand is used by foundries. Most foundries follow green sand
moulding process for casting. No foundry uses sand reclamation, thus the quantity of sand
consumed is quite astonishing. The major suppliers of sand are: Sree Industries Ichalkaranji,
Master Sales co-op Shiroli, Sai Raj Industries, Mahalaxmi Minerals, Ghatge Patil Industries
Kolhapur.
3.3.5 Manufacturing process
The manufacturing process of a typical foundry unit in Kolhapur is given in figures 3.3.5.1.
13
Raw materials sand
Bentonite coal-dust
chemical binding
systems
Raw metallic materials
pig-iron scrap & Ferro
alloys
Green sand mulling
core sand mixing
Charge preparation
Green sand
moulding
Core
making
Melting in electric
induction furnace or a
Cupola
Core setting & mould
closing
Pouring
Shake out
Sand blasting grinding
removal of gates &
feeders
Finishing
operation
Inspection &
Delivery
Figure 3.3.5.1: Manufacturing process of typical foundry unit in Kolhapur
3.3.6 Technology
The main technology in the foundry process is a “furnace” which is used for melting. The
furnace is either coke fired (cupola) or electricity powered (induction furnace). It has been
observed, that many foundries in Kolhapur have shifted towards use of induction furnace in
the recent past. Industry estimates show that around 70% foundries are now using induction
furnace based melting process and 30% are using cupola melting. Induction Furnaces are a
better option for producing SG iron castings, and since many industries are now shifting
towards this form of production, a simultaneous shift towards induction furnaces has also
been observed. Some units are also duplexing.
14
The other major types of equipment deployed by the foundry units are sand mullers,
intensive mixers, pneumatic grinders, shell moulding machine, core oven, shell core
shooters, knockout machine, shot blast machine and so on. .
3.3.7 Quality Control Mechanism/Testing/Productivity
The foundry units in the cluster are supplying to OEMs and exporting follows the design
and technical specifications provided by the respective OEM. Majority of the units possesses
ISO 9001-2008 certification. Few units possess TS 16949-2009 and TUV NORD. The units are
required to get various testing conducted. Some of tests are: Spectro analysis, humidity test,
tensile strength, micro analysis, radiography, etc. For this, at Shiroli MIDC a government of
India MSME testing center is available. Apart from this private laboratories exist in the
cluster at Kolhapur, Shiroli and Sangli. However, there is a need to upgrade the facilities
available with these labs and need to facilitate these laboratories for NABL accreditation. At
present the cluster units are forced to send their material for testing to NABL accredited
laboratories in the Pune-Mumbai region. The cluster needs a common testing facility where
mechanical and chemical testing of material/finished products can be done. There exists a
need to establish NABL accredited testing facility as well within the cluster.
Additionally, very few units have adopted lean manufacturing/statistical quality control/
process standardization techniques such as 5S, Kaizen, six sigma, total productivity
enhancement, TQM etc., resulting in lesser operational efficiency. Even in foundries where
these are adopted, actual implementation is questionable. Implementation of Kaizen and
TQM can immensely increase the net yield of foundry and reduce rejection costs of these
units who are reeling under competition and constrained margins.
3.3.8 Management of firms
Most of the foundry units in the cluster are family owned businesses and run by owners
themselves. Majority of the entrepreneurs in the cluster do not possess formal technical
education. Those where they have technical knowledge, in some cases the units are not
being run in a professional manner. Few progressive entrepreneurs keep themselves
updated about the latest technological advancement by attending trade fairs, exhibitions,
surfing internet etc. However, sharing of information among the entrepreneurs is quite low.
There are no formal policies/practices in place for Human Resource Management (HRM) in
the units, resulting in lower employee productivity.
3.3.9 Cooperation in product and process improvement
The new product development and R&D in the cluster is done by OEMs only as SMEs do
not have any design, casting simulation software, prototype and R&D facilities available in
the cluster. The OEM‟s supply the patterns to the units and they adhere to these
drawings/patterns while production. Since OEM‟s existing in the cluster buy castings on the
basis of quotations given by individual units, there exits an intense competition among the
units. In general, entrepreneur in the cluster are not cooperating with each other for business
development or joint R&D. Few units (vendors) are undertaking product development/
process improvement in collaboration with Mahindra & Mahindra (M&M). There is a huge
15
gap in this segment and the cluster needs simulation room facilities in the cluster on a CFC
basis.
A summarized analysis of business operations along with problem areas/pressure points
and their suggested solutions is provided in Chapter 4 (table no.4.2) of this report.
3.4 Pressure points summarized
The major gaps/pain areas/pressure points of the Kolhapur cluster units requiring
intervention to facilitate development of the cluster are summarized below:
Infrastructure related







Need for common testing facilities (NABL certified testing facilities for
chemical/physical testing including radiography of material/finished products).
Requirement of two labs since major industrial areas are located far from each other.
Poor road and other basic (street lighting and street drainage disposal) infrastructure
in all industrial estates (MIDC Shiroli, MIDC Gokul Shirgaon, Laxmi Industrial Estate,
Sangli-Miraj)
Need for better connectivity with major industrial towns such as Mumbai, Bangalore
etc.
No common waste sand disposal site
Lack of casting simulation laboratory, CNM software facility
Lack of training facilities: on modern machines such as CNC
Need for Truck Terminals at MIDCs
Skills development/Manpower







Shortage of manpower on process related skill development such as moulding skills,
melting operation skills, casting simulation, Auto CAD, wielding, for machining
operations such as CNC operators and programmers
Lack of knowledge of fabricators/supervisors on basic engineering drawings
Lack of trainers on advanced wielding techniques
Composite facility required for skill development of the employees with respect to
personality development and soft skills such as presentation, communication,
purchase management
Need to upgrade and improve training delivery mechanisms at local polytechnic
Lack of employee skills on proper costing and inventory management.
Workers need to be trained on safety awareness and fire fighting






High production costs due to lack of implementation of quality control tools such as
5S, Kaizen, six sigma
Unaware about benefits of implementing lean manufacturing techniques
Lack of testing facilities in the cluster
Lack of training and demonstration
Lack of knowledge on casting defect analysis and quality inspection
Lack of BDSPs in this segment
16
Marketing






Lack of information about new markets, limited reach to outside cluster new OEMs.
No efforts made for exports, lack of knowledge on export potentials
Absence of marketing strategy and infrastructure in most units
No common marketing/branding initiatives undertaken
Lack of participation in trade fare and exhibitions
Lack of knowledge on market and product diversification.
Technology improvement/Product development





No R&D capacities with SMEs for new product development
Need to improve surface finish and quality of castings
Need assistance to adopt energy efficient technologies and BOPs
Lack of mechanization of the molding process
Need for improvisation in metallurgical properties/grades of castings and unit yield
Energy-Environment






Little initiatives directed towards energy efficiency by the management.
Lack of knowledge about energy savings potential in induction melting and
compressed air systems
Lot of indoor pollution in the foundry units. Need to of improve design of hood and
air extraction for induction furnace
Entrepreneurs / Managers do not have a tab on energy consumption (process wise /
equipment wise)
Lack of awareness of environmental norms and requirement of pollution control
systems
Lack of assistance from state pollution control departments
Management/awareness generation




Lack of management expertise for inventory management and value engineering
Lack of established systems for HR practices
Weak knowledge of activity based costing (ABC)
Lack of awareness on Government Schemes/financial incentives
Strengthening industry associations



Capacity building of industry associations office bearers required
Lack of outreach capacities of KEA
Need for a facilitation desk at the association level for assistance of units on taxation
availing government schemes etc.
3.5 Analysis of BDS providers
The BDS providers in the cluster were categorized under the following broad heads:

Skill development

Marketing/Branding
17






Lean manufacturing/Quality certifications
Technology providers/suppliers
Raw material supply
Energy efficiency
Product development
Pollution control/environmental management
The study tried to map the critical BDS services required by the local foundry MSME
industry. The study revealed that the industry needs services in the area of infrastructure
(testing and training facilities), market diversification, skill development, productivity
improvement (Kaizen, TQM) and energy efficiency/pollution control. The current status of
the BDS providers in each of the categories is provided in table 3.5.
Table 3.5 Analysis of BDS Providers
Business Consultancy****
Value of
1
No. of BDS
business
Subsidy
Per transaction
Nature of BDS provider
provider
(per annum)
percentage
cost
Skill development*
2
5 lakh
Part
5,000 – 25,000
subsidy
Payment pattern
2
Instalment
Finance**
>10
Around 1
Nil
10,000 – 20,000
crore
Payment pattern
3
Upfront
Government Policies
4
Nil
Nil
Nil
6
20 lakhs
Nil
10,000 – 20,000
awareness
Payment pattern
4
Technology Provider /
supplier
Payment pattern
5
Instalment/Upfront
Market development
2
Nil
Nil
Nil
Raw material supply
25
-
Nil
-
Payment pattern
6
Payment pattern
7
Instalment /Up Front
Energy Efficiency
2+1(TERI)
30 lakh
Nil
20,000 – 30,000
Product development
0
-
-
-
Environment Management
1
20 lakhs
Nil
10,000 – 50,000
25 lakhs
Nil
50,000 – 150,000
Payment pattern
8
Payment pattern
9
Payment pattern
10
Upfront fees
Product quality/Lean/Testing
2
Payment pattern
Upfront fees
*Skill Development here is in context to BDS providers like local training institutes/ ITI‟s and value is an
estimate of fee structure of kind of courses availed by workers of foundry units in the cluster
** Finance includes all the BDS providers like C.A‟s, tax consultants, banks, costing consultants, auditors etc.
**** Furnished data in table are preliminary estimation for soft services only
The present BDS market in the cluster is underdeveloped. For those areas where BDS
providers exist, their capacities need to be built to enable them to provide proper services to
the local units. The scenario can be categorized as low demand and very low supply. There
18
is a need to develop market for BDS services. No BDS providers are available in the area of
market and product development. Limited BDS providers are available in key areas such as
infrastructure improvement, tool room, testing and training facilities. The MSMEs make
limited use of government institutions providing these BDS services in the cluster such as
ITI‟s, etc. The BDS services for which there is a major need for development and
strengthening in the cluster are elaborated in Chapter 4 (section 4.3) of this report.
3.6 Who Does Who Pays (WDWP matrix)
Who-Does-Who-Pays (WDWP) matrix of the BDS providers in the Kolhapur foundry cluster
is provided in table 3.6.
Table 3.6 WDWP Matrix
BDS Function
Skill development
Who does
On-the-Job, private individual
consultants, ITI, OEM‟s
Who pays
SMEs,
candidates
Market development
(a) Web-site, buyer supply
meets for market
promotion & brochures etc.
b) Export promotion
Industry associations Unit
Entrepreneurs, Advertising agencies,
Industrial magazines (Industrial
product finder)
(b) EEPC, Directorate of export and
import, Private experts
M&M, Technical experts, Individual
consultants
SMEs
Payment
mechanism
Direct,
Subsidized in
certain cases
Direct
SMEs
Direct
Raw material supply
Seasa, Local distributors
SMEs
Direct
Product development
OEMs, Private units
SMEs
Direct
Energy Efficiency
TERI
SMEs
Subsidized
Pollution control/
environmental
management
Technology
providers/suppliers
Process improvement
Testing and R& D lab
Pollution Control Boards
SMEs
Direct
Individual consultants, experts
OEM‟s, Private laboratories, MSME
testing centre
SMEs
Direct
Government Policies/
Regulations
Industry Associations, DIC, Internet
No Charges
No Charges
Finance – loan assistance
Commercial Banks, CAs, retired staff
of commercial banks
SMEs
Direct
19
Note: Many MSMEs felt that they separately cannot afford to engage BDS providers for
services such as Quality, HR, technical, etc. and hence require support for interventions and
want the industry association to play an active role for common capacity building programs.
3.7 Past/Current developmental initiatives in the cluster
The following few initiatives have been undertaken in the cluster:

Kolhapur Foundry Cluster project: The project is approved under the Department of
Industrial Policy and Promotion (Ministry of Commerce and Industry) scheme of the
Industrial Infrastructure Upgradation Scheme (IIUS). It is being coordinated by
Kolhapur Engineering Association. According to guidelines Govt. of India is
providing subsidy to the extent of 75%, Of remaining 25%the industrial units must
contribute at-least 15% and the remaining 10% to be provided by the state
government. The important developments which are proposed under this first phase
of foundry cluster scheme includes construction of conference hall and a permanent
exhibition hall along with road development and drainage system at Shahu industrial
Estate Shiroli and industrial zone at Jaysingpur.

TERI-SIDBI-WB project development: TERI with support from SIDBI is implementing
a World-Bank GEF funded project in Kolhapur Foundry Cluster. The objective of this
project is (i) To create increased demand for EE investments by adopting a cluster
approach to facilitate the development of customized EE products and financing
solutions, (ii) To raise the quality of EE investment proposals from a technical and
commercial perspective, (iii) To expand the uses of existing guarantee mechanisms for
better risk management by banks to catalyse additional commercial finance for energy
efficiency and (iv) To establish a monitoring and evaluation system for the targeted
clusters. Under the project over 80 detailed energy audits have been conducted in the
cluster so far and implementation of Energy Conservation Measures (ECMs) are
ongoing in many units,

CII in 2010-11 carried a cluster based exercise to implement Kaizen activity in five
selected MSME foundries.
3.8 SWOT analysis of the cluster
A SWOT (strength, Weakness, Opportunity and Threat) analysis of the foundry units in the
cluster is carried out to understand the real situation of the cluster and the same has been
provided in table 3.8.
Table 3.8: SWOT Analysis
Markets
Current situation
Strengths
Weaknesses
Long term tie ups Declining automobile
with local OEMs
market
Absence of marketing
Steady local
experts in the cluster
demand for
No Systematic Marketing
20
Future
Opportunities
Potential to supply to
OEMs outside the
cluster
Tap export potential in
niche markets
Threats
Weakening of
automobile
markets
Lower
manufacturing
Current situation
cluster products
effort by SMEs
(agri products,
Lack of unit level brandpumps/valves)
building for the products
No common marketing
initiatives undertaken
Lack of knowledge of
opportunities in domestic
and foreign markets and
how to tap these
No service providers in this
area
Skills/
Manpower
Skills acquired
on-the-job
Technology
Capability to
produce volumes
competitively
Inputs
Availability of
raw materials
from dealers
Shortage of manpower in
the cluster
No organized system in
place to train candidates on
foundry process and
operation
No mapping of skill-sets
required in different subsectors/trades
No interaction between
SMEs and academic
institutes providing
technical training
No mechanism to mobilize
and provide fresh
manpower to the units
Low degree of
mechanisation especially
for ferrous foundries
No R&D on product
development and product
quality improvement
Limited technology service
providers
Poor resource efficiency /
higher energy consumption
Lack of NABL certified
testing facilities in the
cluster
High cost of raw materials
Lack of efforts for common
procurement of raw
21
Future
Potential for high
market growth due to
wide gap in population
to vehicle ratio in India
Encourage buyersupplier contacts
through fairs, meets,
web portal etc.
Develop common
platform for marketing.
Continuous pressure on
global OEM‟s to reduce
cost and source
components from low
cost countries
Conduct training needs
assessment
Study on successful
models of training
Conduct training
programs on required
skills
Bridge gap between
industry and academic
institutes providing
specialised training
programmes
costs and prices
of products
made in
countries such
as China
Increased level of
mechanisation
Potential to adopt better
technologies
Develop specialised
BDS for products/
services required by
local industry
Testing facilities to be
introduced
Capacity building on
Scientific quality
control / process
standardisation tools
Common procurement
of raw materials
Huge potential to
Increased cost of
production
Unavailability of
skilled
manpower to
operate modern
machines
Might lose
competition to
vendors with
sophisticated
technology
based outside
cluster
Rise in price of
raw material,
fuels and
Non-availability
of skilled
manpower
locally
Innovation
Business
Environment
Environment/
Capability
criteria
(Health,
literacy,
gender, social
strata)
Current situation
materials Raw materials
wastages due to inefficient
operations
High energy cost structure
because of lack of efficient
processes
Fluctuation in raw material
quality and prices
Interest and
No casting simulation,
willingness if
product design and
facilities are
prototype facilities
available
available in the cluster
Low investment in R&D
Hardly any use of
simulation software and
computerised design
techniques
Lack of Information
sharing
(technical knowhow,
processing techniques)
Lack of incentives from
banks for innovation
Steady
Poor road infrastructure in
improvement in
the cluster
growth of export
Lack of knowledge of
market
regulatory frameworks and
government schemes
High cost of industrial land
in the cluster
Lack of common
infrastructure/CFC
facilities
No long term vision of
industrialists.
Mandatory Social Few units complying to
Welfare scheme
pollution control norms
such as PF, ESI
Low literacy level of
are implemented
workers
for regular
Inadequate common
workers
facilities such as drinking
water/toilets /lunch halls
at workplace
Future
reduce raw material
electricity
wastages through
implementation of
Kaizen activity
Potential to reduce
energy costs by energy
auditing
Set up a casting
simulation facility
having product design
and development
facilities
Structured processes for
information sharing
among SMEs in the
cluster
Develop suitable
eligibility criteria to
reimburse cost of
innovation
Could lose
business to
other clusters
due to lack of
innovation
facilities
Reluctance to
share
information on
innovation
between units
Establish CFC with
latest technologies for
job work, casting
simulation design ,
testing and training
facilities
Create better awareness
of government schemes
and regulations
Export Promotion
Council office can be
located in the district
Need to create better
awareness of pollution
control, safe operating
practices, benefits of
health and hygiene
Rapid changes
in external
environment
e.g. local OEMs
starting
procurement
from other
sources
(Karnataka)
Strict norms by
the government
for pollution
control leading
to limitations on
production
3.9 MSME Schemes
Ministry of MSME is the nodal agency for development of the MSME sector and is
implementing various schemes for the growth and competitiveness of the sector. The
22
schemes are being implemented through a network of its development institutes (MSMEDis) based in each state. Some of the major schemes and financial incentives for the MSME
sector are mentioned below:
Promulgation of MSMED Act, 2006: A significant achievement of the Government is the
enactment of the „Micro, Small & Medium Enterprises Development Act, 2006′, which aims
to facilitate the promotion and development and enhance the competitiveness of MSMEs.
The act has come into force from 2nd October, 2006 and it fulfills a long-cherished demand
of this sector. Apart from giving legal strength to the definitions of micro, small and medium
enterprises, this Act also contains penal provisions relating to the delayed payment to these
enterprises.
Prime Minister‟s Employment Generation Programme: Under this programme, financial
assistance is provided for setting up of micro enterprises each costing up to Rs.10 lakhs in
service sector and Rs.25 lakh in manufacturing sector. The assistance is provided in the form
of subsidy up to 25 percent (35% for special category including weaker section) of the project
cost in rural areas while it is 15 percent (25% for special category including weaker sections)
for urban areas.
Credit Guarantee Scheme: The Government has set up a Credit Guarantee Fund to provide
relief to those MSEs who are unable to pledge collateral security in order to obtain loans for
the development of their enterprises. The Government is making concerted efforts to further
enhance the awareness of the scheme throughout the country for enhancing the coverage of
the Scheme.
National Manufacturing Competitiveness Programme (NMCP): The Government has
launched an all India campaign under the NMCP for the MSMEs, which has ten specific
components aimed at improving MSME processes, designs, technology and market access.
These components seek to introduce the best elements of industrial competitiveness in the
MSME sector, which has often been unable to afford such practices and techniques. The ten
components of the scheme are as under:

Building awareness on Intellectual Property Rights for MSMEs;

Scheme for Providing Support for Entrepreneurial and Managerial Development of
SMEs through incubators.

Enabling Manufacturing Sector to be Competitive through Quality Management
Standards (QMS) and Quality Technology Tools (QTT);

Mini Tool Rooms under PPP mode;

Marketing Assistance/support to MSEs (Bar Code);

Lean Manufacturing Competitiveness Programme for MSMEs;

Promotion of Information & Communication Tools (ICT) in Indian MSME sector;

Design Clinics Scheme for MSMEs;

Marketing Assistance and Technology Up gradation Scheme for MSMEs; and

Technology and Quality Up gradation Support to MSMEs.
MSE-Cluster Development Programme (MSE-CDP) : The guidelines of the MSE-Cluster
Development Programme have been comprehensively modified in February, 2010 to
provide higher support to the MSEs. The scope of the scheme now includes grant for
preparation of Diagnostic Study Report; Soft interventions like training, exposure,
23
technology up gradation, brand equity, business development, etc.; preparation of Detailed
Project Report (DPR); hard Interventions in the form of tangible assets like CFC having
machinery and equipment for critical processes, research and development, testing, etc. for
all the units of the cluster; infrastructure Development; and exhibition centres by
Associations of Women Entrepreneurs of women owned MSEs.
Credit Linked Capital Subsidy Scheme : The Credit Linked Capital Subsidy Scheme for
Technology Upgradation of Small Scale Industries was launched in the year 2000. The
Scheme aims to facilitate technology upgradation of SSI units in the specified products/subsectors by providing 15% capital subsidy for induction of Well Established and Improved
technologies approved under the scheme.
Rajiv Gandhi Udyami Mitra Yojana : The scheme aims to promote and support
establishment of new micro and small enterprises through handholding of potential first
generation entrepreneurs, who have already successfully completed Entrepreneurship
Development Programme (EDP)/Skill Development Programme (SDP)/Entrepreneurshipcum-skill.
Performance and Credit Rating Scheme : To sensitize the MSE sector on the need for credit
rating and encourage the MSEs to maintain good financial track record enabling them to
earn higher rating for their credit requirements, the Government in April, 2005 launched the
„Performance and Credit Rating Scheme‟. The implementation of the scheme is through
NSIC. The Ministry of MSME subsidizes the cost of rating by sharing 75% of the fee charged
by the Rating Agency, subject to a ceiling of Rs.40,000.
Financial Assistance On Bar Code : In order to enhance the marketing competitiveness of
MSEs in domestic as well as international market, DCMSME provides the financial
assistance for reimbursement of 75% of one-time registration fee (Under SSI-MDA Scheme)
paid by MSEs to GS1 India for using of Bar Coding.
24
Chapter 4 – Suggestion and recommendations
4.1 Vision and objectives of the cluster
4.1.1 Cluster vision
To promote holistic development of the cluster by establishing state of the art common
infrastructural facilities and expand business on cluster units in unexplored domestic and
international markets through networking, marketing, developing new products and
product quality improvement with support of BDS providers
and public-private
partnerships.
4.1.2 Long term objectives









Establish a state of the art NABL accredited testing laboratory under PPP mode in the
cluster having tool room facilities for product design, casting simulation, prototyping,
testing facilities (chemical/physical testing such as tensile, spectrograph, micro,
radiography, CMM etc.) and training facilities (CNC/VMC machines)
To have proper road infrastructure and public transport facility in the cluster
Significantly expand business of cluster units by increasing interactions with new
domestic/ international buyers
Establishment of common raw material procurement facility and enhancing the
existing facility in Kolhapur society
Develop new BDS and strengthen existing BDS in the areas of business expansion
(marketing, branding, exploring new markets (domestic/international)) and technical
services (productivity improvements, new product development, energy auditing and
product quality improvement)
To institutionalize a mechanism for mobilizing candidates in huge number and
training them to work in industries through a dedicated agency
Promote innovation and R&D facilities in the cluster through exposure visits and
collaboration with academic institutions
To bring about a change in the attitude of entrepreneurs to become more professional
and to bridge gap between SMEs and BDS providers
Establish and institutionalise annual “Buyer-Supplier Meet” and “Technology
Festival” in the cluster (or at-least once in two years)
4.1.3 Short term objectives





Expand business of cluster units by organizing series of buyer-seller meets, exhibitions
and trade fairs
Form an SPV to establish desired CFC under PPP mode
Attract quality BDSPs to the cluster in the area of market expansion, product
development, skill development etc.
To mobilize fresh candidates and train them on operations of foundry process and
operations through existing training facilities
Increase awareness of entrepreneurs on government schemes and incentives for
25







promotion of industry
Strengthening existing industry associations in Shiroli and Gokul Shirgaon on the lines
of KEA and IIF Kolhapur chapter
Improve productivity of units by adoption of lean manufacturing tools.
Strengthen management capabilities of the units and its entrepreneurs on inventory
control, proper costing techniques etc.
Organize training programs on CAD/CAM and CNC/VMC machining
Training existing local institutions for conducting energy audits in foundries
To develop web-site for each industrial estate showcasing foundries with details of
castings produced and advertising the web-site in national and international forums
Evaluate existing testing laboratories, help upgrade them and encourage them to get
NABL accreditation e.g. Laboratory in Polytechnic and /or at existing colleges
4.2 Problem areas and suggested solutions
A summarized AOBO highlighting problem areas/pressure points of the Kolhapur cluster
and their suggested solutions is provided in table 4.2.
Table 4.2: Analysis of business operations
Areas
Marketing
Problem
Lack of market diversification
efforts
Limited efforts to become
vendors to OEM‟s
manufacturing automobiles
outside the cluster
No local BDSPS available for
market expansion
Exporting options remain
unexplored for many foundry
No common branding
initiatives undertaken
Absence of exhibition facilities
Skill set
Shortage of skilled manpowerfor melting, moulding and
machining process (CNC/VMC
operators)
Trained workers on casting
process and operations
No organized facility available
in the cluster to mobilize and
train manpower
Lack of industry-academia
interface
Suggested Solution
Link cluster units to outside OEMs
Identify and develop BDSPs for
market diversification
Establish a common
marketing/branding platform
Organize buyer-seller meets
Establishment of an exhibition
centre in the cluster
Promotional activities such as
Advertisements
Sales / Trade promotion
Product catalogue development
Customer relationship
enhancement
Exhibitions / trade fairs
Publicity
Establish training facilities for
mentioned skills under CFC
Organizing training programs at
local training/academic institutes,
ITI‟s
To institutionalize a mechanism for
mobilizing candidates and training
them to work in industries through
a dedicated agency
Organizing workshops / programs
to bridge the gap between industry
and academia
26
BDS providers who can
solve it
Marketing consultants
Marketing research
companies
Agents / dealers
Event management
firms
Advertisement medias
ITI‟s
Academic institutes
Machinery suppliers
Industry associations
Suggested Solution
Encouraging entrepreneurs to hire
more professionals to manage their
businesses
Organize industry academia meets
in the cluster
Establishment of NABL certified
testing facilities for chemical and
physical testing under CFC on a
PPP mode
Strengthen existing testing facilities
of MSME testing centre
Workshops on Kaizen activity and
TQM as a major tool for enhanced
competitiveness.
Implement lean/Kaizen activity in
selected units on a pilot basis.
solve it
Areas
Problem
Product
quality
Units required to get chemical
and physical properties of their
materials/products tested
Very few units implementing
lean manufacturing techniques
resulting in lower net yield
Lack of testing facilities in the
cluster
Technolog
y
Unwillingness to invest in
modern machines
Low level of automation
Up gradation to modern machines
Organization of “Technology
Festival”
Banks
Contemporary
machinery suppliers
Local consultants
Product
developm
ent
Absence of R&D facilities and
capabilities for new product
development
Design consultants
Technical experts
OEMs
Simulation software
providers
Managem
ent
Lack of professional
management capabilities
Bad inventory management
leading to huge wastages
Low employee productivity
EnergyEnvironm
ent/Pollut
ion
Control
Low priority to pollution
control and environmental
protection
No Common sand reclamation
plant in Ichalkaranji and
Establish a tool room under CFC on
a PPP mode for simulation,
methoding, design and prototype
facilities room
Customized solutions can be
developed for the units that can
make them leverage their current
production capabilities to develop
and manufacture new products
Joint R&D by the units having
similar capabilities
Promote technical tie ups with new
OEMs.
Management development
programmes
Support units to implement tested
management practices
Training programmes on inventory
management and control.
Generating awareness about new
methods of pollution control, latest
equipment etc.
Establishing sand reclamation plant
in Ichalkaranji and Sangl-Miraj
27
Testing equipment
supplier
Testing labs
Technical experts
Management BDSPs
Local Business Schools
State pollution control
board
DIC
Energy Auditors
TERI
Areas
Finance
Governme
nt
policies/s
chemes
Problem
Sangli-Miraj
Low access to finance because
of requirement of collateral
security by the banks
High rate of interest
discouraging entrepreneurs to
take loans in order to expand
their business
Lack of awareness about
MSME /government schemes
and incentives
Need to visit various
government departments for
tax deposit and other related
issues
Suggested Solution
solve it
Workshop on financing schemes
provided by Government/
SIDBI/CGTMSE
Provide support to SMEs to avail
loans
SIDBI
Local banks/FIs
SMERA / CRISIL
Other financial
institutions
Awareness programs to be
conducted
Establishing a help desk in KEA for
assistance to units for government
schemes and taxation related issues
DIC, MSME-DI.
Relevant tax depts.,
SIDBI
Local associations
4.3 Development/strengthening of critical BDS services
The BDS need to be developed in the cluster in the area of skill development, infrastructure
(CFC having testing, training and product development facility), market diversification, and
productivity improvement (Kaizen and TQM). There is an immediate need to develop and
strengthen BDS services in following areas:
Infrastructure
There is a need to establish a common facility in the cluster for the following services:

Testing (chemical/physical testing) and machining facilities

Training facilities (founder and machining related skills)

Modern casting simulation and product development facility
The foundry units in the cluster require a CFC with the above mentioned facilities. The
simulation laboratory should have design, CAD-CAM, prototype and simulation facilities
for new component development. An NABL certified testing facility is required for testing
chemical and physical properties of material and finished goods. Portable testing facilities
are also required for testing very heavy castings at the unit level. Another most important
service the CFC should have is training facilities to build capacities of candidates on
operations of CNC/VMC machines, and training on foundry process and operations.
Many micro level units need common machining facilities with CNC/VMC, lathe machines,
fettling, sand reclamation service etc.
There is also a major requirement of allocation of land in each industrial estate for truck
terminals None of estates have place for truck parking, large truck often cause blockage of
small roads
28
Manpower/Skill development
There is a shortage of skilled manpower in the cluster. There is an urgent need to train
manpower in foundry processes and machining/operation skills. Additionally, regional
manpower (especially new candidates from Kolhapur-Sangli region) are not willing to work
in foundries. The capacities of local technical institutes need to be enhanced to enable them
to provide quality manpower to the local industry.
BDS for marketing / branding
The scenario for marketing BDS can be classified as low demand and very low supply. The
BDS for market development are almost absent in the cluster Demand is low as the
entrepreneurs are unaware about the opportunities to diversify markets outside cluster and
in foreign markets. At present, the units have confined their sales only to the OEM‟s in the
cluster and few large foundries which are basically manufacturing automobile components.
BDS for marketing need to be identified and developed to work in the cluster. Common
marketing consortiums could be set up to boost business ties with new OEMs and foreign
markets. In order to generate acceptability of the products manufactured in the cluster
nationally and internationally, BDS for branding needs to be strengthened as it would help
in various activities like advertising, web based marketing, preparation of product
catalogue, enhancement of customer relationship, brand building, interaction with outside
OEM‟s and potential business partners, participation in trade fairs and exhibitions etc.
Vendor development / development of new products
Currently the units are producing as per the patterns, drawings and specifications provided
by their buyers/OEMs. The units do not have any in house product development facilities
and common product development facilities are also inadequate in the cluster. The common
facilities could be strengthened through the CFC. BDS for vendor development needs to be
developed /strengthened so as to make the units technologically strong to address market
needs efficiently and to undertake product diversification. Also, there are no casting
simulation facilities available in the cluster. Simulation facility having design and simulation
are required. BDS can also facilitate the units in developing parts for other OEMs/open
markets by assisting them in design, CAD-CAM training and process improvement etc.
Through BDS customized solutions can be developed for the units that can make them
leverage their current production capabilities & expertise to develop and manufacture new
components/parts.
29
Chapter 5 – Actionable points
Based on the discussions with various stakeholders in the cluster, a four year action plan to develop the cluster and help achieve cluster vision
by providing infrastructure and BDS services has been formulated. These actions will holistically address the non-financial gaps in the
Kolhapur cluster. The main actionable points with sub activities are mentioned in table 5.1. These action points were also presented to the
industry stakeholders during a focus group discussion held in Kolhapur and the industry is very keen on implementing these activities.
Table 5.1: Action Plan for development of Kolhapur Foundry cluster
S .No
1.
Focus area
Infrastructure/
Developmental
Activity
1. Establishment of a Common Facility
Centre (CFC) under PPP mode for NABL
accredited testing laboratory and research
centre
1.1 Conduct a diagnostic study to identify
testing/research/training requirements
and their financial viability
1.2 Organize a seminar to present the
feasibility study to relevant
government agencies
1.3 Facilitate formation of a Special
Purpose Vehicle (SPV)
1.4 Exploring potential for funding from
Government schemes including
MSME-CDP and facilitate dialogue
with identified Centre/state
government agencies
1.5 Preparation of a Detailed Project
Report for the Common Facility Centre
Implementer/
BDS provider/
Participants
SPV, DIC, Industry
associations, IIF,
technology providers,
local/national experts,
DCMSME, State
industry local
municipal corporation,
department, SIDBI
31
Outcome
The CFC will benefit the
industry by offering all
essential services under one
roof.
Establishment of a first
NABL accredited laboratory
in the cluster with
chemical/physical testing
such as tensile,
spectrograph, micro,
radiography, CMM
benefitting around 250 units
in the cluster
Development of new
components and parts The
CFC will benefit and can
provide services to not only
around 300 foundries but
also around 2000 MSME
Tentative Budget
(Rs.)
Feasibility study, seminar
organization and
formation of SPV
Rs 5,00,000
For facilitation, DPR
preparation
Rs. 7,00,000
NDA support
Rs.
3,00,000
For establishment of
facility (building and
equipment/ casting
simulation laboratory)
Rs 12 crores
S .No
Focus area
Activity
1.6 Facilitate dialogue between the SPV,
industry associations and GIDC/state
government for allotment of land to the
CFC
1.7 Facilitate approval of funding for the
CFC
1.8 Construction of building and
procurement/installation of
machinery/equipment
1.9 Recruitment of staff: skilled manpower
2.
3.
4.
5.
6.
7.
Implementer/
BDS provider/
Participants
Outcome
industries in the cluster.
Better basic infrastructure in
the cluster
Conduct a detailed infrastructure need
assessment study to identify gaps
(roads, local transport, street lighting,
sign boards) and possible solutions for
local industries
Facilitate dialogue between industry
associations and government
departments (local MC etc.) to seek
solutions to infrastructural problems
Formulate and implement an action
plan to strengthen basic infrastructure
in the cluster using PPP model
Prepare a DPR for dedicated truck
terminal(s) in the industries areas
Support implementation of the report
for a dedicated truck terminal(s)
Conduct a feasibility study and
discussion form on the establishing a
Dedicated truck terminal in
each cluster, no traffic
hurdles
Exhibition facilities in the
cluster
Tentative Budget
(Rs.)
Infrastructure report
Rs. 3,00,000
For dialogue and
consultations
Rs. 2,00,000
For strengthening
roads/street lighting
Rs 5,00,000
DPR for truck terminal
Rs 5,00,000
Implementation
Rs 2,00,000
Feasibility study:
Rs 5,00,000
32
S .No
2.
Focus area
Marketing
Activity
dedicated freight corridor between
Mumbai-Kolhapur- Bangalore
8.
Prepare a DPR for setting up a CFC for
industrial park cum exhibition centre
9.
Support facilitation activities related to
establishment of industrial park
1. Conduct a comprehensive marketing
study of products and present markets
with the objective of identifying new
products/markets for the cluster
Implementer/
BDS provider/
Participants
Leading national/local
BDS providers for
marketing
development, B schools,
engineering units,
Marketing SPV,
Advertising BDSP,
Outcome
Linking of cluster units to
other OEMs
Enhanced business of cluster
units
Major components supplied
under one name through the
common consortium
Enhanced marketing
capabilities of units
Tentative Budget
(Rs.)
Industrial park DPR
7,50,000
Facilitation support
2,00,000
Market assessment:
Rs 5,00,000
Rs.
Rs.
2.
Dissemination of the finding of the
market study and formulating a core
group for follow-up and implementation
3.
Facilitate market diversification of
cluster units by supporting 30 SMEs in
formulation and implementation of
marketing strategies, design brochures,
websites etc.
Organization of 3 buyer-seller meets
with potential new domestic/
international buyers
Market Diversification
Support:
Rs 60,00,000
Facilitating participation of 30 MSMEs in
national/international exhibitions/trade
fairs
For exhibition/trade fairs:
Rs 30,00,000
4.
5.
Dissemination:
Rs 2,00,000
Buyer-Seller Meets:
Rs 6,00,000
Framework of common
33
S .No
Focus area
Activity
6. Prepare a framework on establishment of
a common marketing platform for micro
and small units
7.
3.
Energy/Environm
ent
1.
Support establishment of the common
platform and provide market related
support
Process audit of induction furnace
operation in 10 representative units in
the cluster
2. Support implementation of the
recommendations of the process audit in
5 representative units
Implementer/
BDS provider/
Participants
Outcome
Tentative Budget
(Rs.)
platform: Rs 4,00,000
Support platform:
Rs 2,00,000
Energy auditing firms,
industry associations,
machinery/equipment
suppliers, TERI, CII,
SIDBI
Reduced energy
consumption
GHG emission reductions
Enhanced awareness of
entrepreneurs on induction
furnace efficiency and
system optimization
Air quality improvements
Process audits Rs.
10,00,000
Implementation support
Rs. 5,00,000
3.
Prepare a Do‟s and Don‟ts guide to
optimize energy efficiency in induction
furnaces
Do‟s and Don‟ts guide
Rs 5,00,000
4.
Organize an awareness campaign for
dissemination of do‟s and don‟ts guide
for induction furnace.
Awareness campaign
Rs. 2,00,000
5.
System audit of compressed air in 10
representative units in the cluster
Systems audits
Rs. 10,00,000
6.
Support implementation of the
recommendations of the system audit in
5 representative units
Rs. 5,00,000
34
S .No
4.
Focus area
Productivity/qual
ity improvement
Activity
7. Prepare a best operating practice guide
and short films for compressed air
system
Implementer/
BDS provider/
Participants
Outcome
Tentative Budget
(Rs.)
BOP/films
Rs 7,00,000
8. Organize an awareness campaign for
dissemination of BOP guide/film on air
compressor
Awareness campaign
Rs. 2,00,000
9. Strengthen local academic
institutions/public BDSP on energy
auditing capabilities
Strengthening support
Rs. 5,00,000
10. Conduct a pilot study of indoor air
quality improvement in induction
furnace based foundry units
Pilot Study
Rs. 4,00,000
11. Undertake a demonstration project on
implementation of improved design of
hood and air extraction for induction
furnace based foundry units (jointly with
academic, industry and government)
Demonstration project
Rs. 30,00,000
12. Dissemination and technical assistance
for implementation demonstrated design
in 10 foundry units in the cluster
1. Organize 3 awareness programs on
benefits of TQM and lean manufacturing
techniques
Rs. 10,00,000
BDS providers for
Kaizen activity,
industry associations
35
Productivity of units
significantly enhanced
Huge reductions in rejection
and metal loss in other
Workshops on TQM:
Rs 3,00,000
S .No
5.
Focus area
Technology
improvement
Activity
2. Organize 3 awareness programs on casting
defect analysis and quality inspection
Implementer/
BDS provider/
Participants
Outcome
stages of process
Case studies documenting
best practices
Tentative Budget
(Rs.)
Workshops on casting
defects:
Rs 3,00,000
3. Implementation of TQM/lean/Kaizen
activity in 30 units on pilot basis
Implementation support:
Rs 60,00,000
4. Dissemination of quality improvement
through case studies/short films
manufacture of SG Iron
Dissemination activities:
Rs 10,00,000
Awareness programs
Rs 2,00,000
2.
Provide technical assistance to 10 micro
and small scale units in production of SG
iron castings
BDS provider
Enhanced awareness
TERI
Enhanced technical
capacities of the units
IIT, Mumbai
Adoption of energy efficient
technologies by the units
Technical assistance:
Rs 20,00,000
3.
and small scale units to adopt energy
efficient DBC furnace
Technical assistance on
new design: Rs10,00,000
4.
Provide technical assistance to 10 cupola
based on best operating practices
BOP: Rs 10,00,000
5.
Organize 2 awareness programs on
casting simulation and yield
improvement
Awareness workshops:
Rs 2,00,000
6.
Provide technical assistance to 10
foundry units in casting simulation and
TA for yield
improvement:
36
S .No
6.
Focus area
Skill
development/
manpower
Activity
yield improvement study
Implementer/
BDS provider/
Participants
Outcome
7.
Organize 2 seminars on mechanization
of the molding process
Seminars on moulding:
Rs 2,00,000
8.
and small scale foundry units on
mechanization of their molding process
Support training of 20
entrepreneurs/supervisors on casting
methoding
moulding: Rs 20,00,000
1.
2.
Support advanced training for 50 CNC
operation
3.
Support capacity building of 50
fabricators/supervisors on basic
engineering drawing skills (module 1 &
2)
Local experts, local
training schools, IIT,
Mumbai, Academic
institutions,
Development of successful
training models
Increased industry-academia
interface
Product
development
Support training of 50
supervisors/fabricators on AutoCAD
1. Organize 2 seminars on improving
surface finish and quality of castings
Local engineering
colleges
2.
National level BDSPs
Provide technical assistance to 10
foundry units on improving quality of
castings
Training:
Rs 4,00,000
CNC training
Rs 5,00,000
Basic engineering
drawing:
Rs 10,00,000
4.
7.
Tentative Budget
(Rs.)
Rs 20,00,000
37
Improved quality of cluster
products
Enhanced capacities of the
units for new product
development
Improved metallurgical
properties
AutoCAD training:
Rs 10,00,000
Quality improvement
seminars: Rs 2,00,000
Technical assistance:
Rs 20,00,00
S .No
Focus area
Activity
metallurgical properties of castings and
ASTM standards
4.
8.
Management/Aw
areness creation
1.
Support training of 40 entrepreneurs
on improving metallurgical
properties/grades of castings
Support 2 training programs on value
engineering
Implementer/
BDS provider/
Participants
Outcome
Tentative Budget
(Rs.)
Metallurgical programs:
Rs 2,00,000
Training programs:
Rs 4,00,000
B schools, industry
associations, HR firms,
management
consultants
Better management and
increased productivity of
small businesses
Enhanced productivity of
employees
Established HR procedures
Professionally managed
SMEs
Training programs:
Rs 2,00,000
2.
Support implementation of value
engineering in 10 units on pilot basis
3.
Study of HR practices and workplace
environment in 10 foundry units in the
cluster
4.
Support implementation of improved
HR practices and working conditions
in 20 units on a pilot basis
Implementation of HR
practices: Rs 15,00,000
5.
Conduct 2 awareness programs on
activity-based-costing (ABC) for
foundry units
Awareness programs:
Rs 2,00,000
6.
Support activity-based-costing in 5
units on a pilot basis
Support implementation:
Rs 5,00,000
38
Implementation of value
engineering:
Rs 20,00,000
Study of HR practices:
Rs 5,00,000
S .No
9.
Focus area
Activity
7. Document and disseminate the results
of the pilot studies on ABC
Strengthening
industry
associations,
awareness of units
Implementer/
BDS provider/
Participants
Outcome
8.
Support 2 training programs on
inventory management
Training programs
Rs. 2,00,000
9.
Support implementation of value
engineering in 5 units on pilot basis
Conduct 2 training program for staff of
KEA on enhancing dissemination and
outreach skills
Rs.5,00,000
Training of staff:
Rs 1,00,000
1.
2.
Engage an external media agency to
support upgradation of KEA website
and newsletters
3.
Support establishment of a facilitation
desk at KEA for depositing taxes, bills
etc. and follow-up with concerned
authorities
Overall
Organize 2 awareness programs on
Government schemes (financial/nonfinancial) for MSMEs sector
Newspaper advertisements related to various
activities in the program
MSME Industry
associations of
Kolhapur, B schools,
leading national
industry associations,
MSME-DI, DIC, SIDBI,
CII, TERI
Effective management of
industry associations
Strengthened infrastructure
of industry associations
Proactive associations
Increased awareness of
government schemes
Support upgradation of
website & newsletter:
Rs 6,00,000
Support facilitation desk:
Rs 6,00,000
4.
10.
Tentative Budget
(Rs.)
Document and
disseminate:
Rs 1,50,000
Awareness programs:
Rs 2,00,000
Advertising and Media
agencies
39



Invitation to BDSPs
Sensitization of units
Mobilization of
candidates for training
Rs. 20,00,000
Annexures
41
Annexure 1: Questionnaire for BDS services
TERI is conducting a survey to understand the Services (infrastructure, technical,
managerial) you require regularly in your Business. Based on the survey an Action Plan
would be prepared to strengthen the Business Services in the cluster which would help the
units to become more competitive. You cooperation and time to complete the survey
questionnaire is deeply appreciated.
QUESTIONNAIRE FOR BUSINESS DEVELOPMENT SERVICES
Firm‟s Name:
Interviewee‟s Name & Designation:
Address: (attach business card) if available
Contact No.
Email:
Type of Business:
Years in Business:
Products manufactured
Approx. turnover (Rs lakhs)
Major markets/customers
Number of employee(s): Skilled
Unskilled
Any other details
43
Service providers and infrastructure facilities at cluster level
Existing facilities in the
cluster (name)
(e.g. CFC, testing labs,
common power plant,
common raw material
procurement, roads,
industrial parks, ETPs )
etc.
Which of these need
strengthening
Most used by you and &
annual expenses incurred
Service providers
(technical, skill
development financial
(CAs), marketing,
productivity, etc.)
How often you use them
& annual budget of the
SME
Infrastructure gaps
(facilities required)
44
Loan/credit for plant & equipment/working capital
Present sources
Constraints to access loan/credit?
- Lack of knowledge of schemes for
SMEs
- Documentation requirements of
banks
- Lack of collateral guarantee
- High interest rate
- Any others (specify
Developing skills of employees
Present providers (Govt/Private)
(DIC, MSME-DI, Association,
Polytechnic, Consultants, on-thejob, others)
Constraints, if any
- Knowledge of providers
- Providers not available locally
- Services too expensive
- Services of poor quality
- Any other (specify)
Name some skills where your
employees require training
Are you willing to pay for the
training?
Yes/No
45
Government policies/regulations
Present sources of information
(associations, newspapers, MSMEDI, DIC, banks etc.)
Which schemes have you benefited
from
Suggestions for improvement and
better awareness of policies
Additional policies/regulations
you recommend (top three)
Diversifying markets
Major customers
Market share
Reasons for the trend
Constraints
Increasing/Stagnant/Decline
Suggestions/Requirements
- Association should be
proactive
- Organise buyer-supplier
meets
- Have website for sharing
information
- Have industry yellow pages
- Any others (specify)
What tools do use now?
Market Survey, Trade-fairs,
Yellow pages, Ads, brochures,
One-to-one contact)
46
Technology providers/suppliers
Providers
(Association, Consultants, Tradefairs, yellow pages, word-of-mouth,
industry magazine, websites, others
- please give name)
Constraints, if any
- Association should be proactive
- Organize technology exhibitions
Have website for sharing
information
- Have industry yellow pages
- Any others (specify
-
Reduce Energy Cost
Providers
(Local Consultants etc. )
Constraints, if any
- Association should provide
services
- Provide training to in-house staff
for energy audit
- Develop new Energy Audit firms
- Demonstration projects on EETs
- Any others (specify)
-
Any energy audit done> If yes, when
47
Pollution control/environmental management
Providers (Govt/Private)
(Organizations, Consultants,
Associations, word-of-mouth,
local fabricators - please give
name)
Constraints, if any
Suggestions
(Facilities required)
Improving Productivity/Product Quality
Providers
(Organizations, Consultants)
Have you implemented any
quality control tools, productivity
improvement measures?
(such as 5S, Kaizen, six sigma etc.)
Do you have any quality
certification?
Constraints, if any
(Trainings/Demonstrations etc.)
Supply of raw materials
Providers
(Association, Direct from
manufacturers, Local
Distributors, please give name)
Constraints, if any
48
Summing up…..
Name 3 services/infrastructure you need for growth of the industry
Common
infrastructure facilities
Technical services
Skills development
services
Any other comments/suggestions
49
Marketing services
Annexure 2 : List of units surveyed
Sl No:
Unit Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
MEDA,
Metafare Synthesis
Shivaji University
Desai Industrial Services
Govt. Polytechnic
Gainmax Ferrocast
Shivdatha Castings
Vishwakarma Founders
Gangadhar Alloy
Yash Metallics
Mayuresh Engineering Works
Kohinoor Metallics
Caspro metal Industries
K&K
Shah Presicast
FIE Spherotech I & II
Netmech Founders Pvt Ltd
Technovision Auto Components
Hi cast Industries
Pragathi founders
Shivraj cast Alloys
Radiance Alumina
Marvelous metal Unit II
Sangram Metal Process
Micro metal Industries
Satwekar Industries
Uchagaonkar iron works
Malati Founders Pvt ltd
Shri Ganesh Unit I
Shri Ganesh Unit II
Jadhav Iron Works
Bhavani Iron Works
M K Iron works
Pratap Enterprise (Foundry)
Pratap Enterprise (Machine shop)
Geeta Pumps
Neeta instruments
Onmkar Foundries
Bashko Eng. Pvt Ltd.
Veeresha Castings Pvt Ltd
Marvelous Vimercati
Arrow Metallics
Monark steels
Maruti products
Kolhapur castings
Jadhav Industries
Swaroop alloys
MIDC
Kolhapur
Kolhapur
Kolhapur
Shiroli
Shiroli
Shiroli
Shiroli
shiroli
Shiroli
Shiroli
Shiroli
Shiroli
Kupwad
Hatkanangale
Hatkanangale
Hatkanangale
Hatkanangale
Hatkanangale
Kupwad
Five star
Gokul Shirgaon
Gokul Shirgaon
Kolhapur
Kolhapur
Kolhapur
Lakshmi Industrial Estate
Ichalkaranji
Ichalkaranji
Y P Powarnagar
Y P Powarnagar
Udyamnagar
Shiroli
Shiroli
Shiroli
Shiroli
Kupwad
Kupwad
Kupwad
5 star Kagal
5 star Kagal
Gokul Shirgaon
Gokul Shirgaon
Gokul Shirgaon
Nerli
Gokul Shirgaon
51
Sl No:
Unit Name
MIDC
48
49
50
Ceraflux
Samir casting
Sam flotec
Gokul Shirgaon
Gokul Shirgaon
Gokul Shirgaon
52
Annexure 3: List of participants in the stakeholder workshop
53

Project ReportTemplate

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