Ahmedabad DS

Implementation of Business Implementation of Business Development Services (BDS) for SMEs: Development Services (BDS) for SMEs: Dyes/
Chemicals (including Packaging) Dyes/ Chemicals (including Packaging) Sector, Sector, Ahmedabad Ahmedabad
A Diagnostic Study of the Cluster
Submitted to: SIDBI New Delhi
By: Entrepreneurship Development Institute of India Ahmedabad
30th June 2009
Index
Diagnostic Study Report of Dyes, Chemical & Plastic Packaging Cluster, Ahmedabad
Sr. No. 1
Chapter Introduction 1.1 Objectives 1.2 Rationale for the Proposed Study 1.3 Method of Implementation 1.4 Diagnostic Study: Methodology 1.5 Status of Enterprise Development in the Cluster Global and National Scenario of Dyes and Chemicals 2.1 Dye Stuff Industry-Global vs. National Scenario 2.2 Chemical Industry-Global vs. National Scenario The Ahmedabad Dyes/Chemicals (including packaging material) Cluster 3.1 Dyes/ Chemicals Industry Structure in Ahmedabad 3.2 Product categories of the cluster 3.3 Place and Geographic locations of the cluster Production Process of the Cluster 4.1 Dye stuff 4.2 Chemicals 4.3 Plastic Packaging material History of the cluster 5.1 The beginning 5.2 The foundation 5.3 Earlier cluster development projects in the Cluster 5.4 Turning point 5.5 Progressive march 5.6 The packaging 5.7 The Road Ahead Vital statistics of the cluster: Profile & Status 6.1 Area wise distribution of the units in the Cluster 6.2 MSME distribution of the units in the cluster 6.3 Sector wise classification of the SME units 6.4 Distribution of BDS providers 6.5 Nature of Services sampled and surveyed 6.6 Ownership Profile of the BDSP 6.7 Comparative advantage of Private BDS over Public BDS 6.8 The pricing criteria used by the BDS 6.9 Willingness to meet full cost of BDS by SME Comparative Value Chain analysis 7.1 Typical comparative Value Chain addition for Dyestuff/Chemicals (illustrative) 7.2 A typical comparative Value Chain for Reactive Yellow FG 7.3 A typical comparative Value Chain of Acid Black 210 7.4 A typical comparative value chain of a plastic bag (Liner)
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BDS Linkages Matrix 8.1 Overview of the BDS Market 8.2 BDS Market structure 8.3 Status in MSME Analysis of Business Operations 9.1 Limitations of existing BDS firms 9.2 Major issues and BDS embedded strategic solutions 9.3 Areas for deciding advantages and limitations of the Public/Private BDS 9.4 Who Does Who Pays Matrix (WDWP) 9.5 Focused Group Discussion 9.6 Current Pressure Points SWOT Analysis of the Cluster Cluster Map Cluster Vision Short term goals Annexure-I Annexure-II Annexure-III Annexure-IV Annexure-V Annexure-VI Annexure-VII Annexure-VIII
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98 100 102 104 106 110 111 113 114 115 116 118
Chapter 1 Introduction
Till 1990, small enterprise sector in India, was protected from international and large company competition, however, after 1990, a significant policy shift was witnessed in the country, in favour of economic liberalization. Protectionism gave way to competition, and the role of markets became significant under the new policy dispensation. With the opening up of the economy and to an extent withdrawal of the protection, the rules of the game suddenly changed. Small entrepreneurs were in many sectors/sub-sectors ill prepared for it. All of a sudden the cost efficiency, quality, prices, technology and consumers became critical than ever before, aspects that they had neglected for too long. Recognizing the vital role of small-scale industry (SSI) sector in the economy, the policy framework in India increasingly laid emphasis on promotion and growth of small enterprises. The shift was in favour of providing real services instead of concessions, subsidies and protection from competition. Realizing the constraints that the owner-managers face in managing and sustaining their small ventures, the Government had created a huge support infrastructure, which provided subsidised business development services to facilitate easy access to quality raw material, machinery and appropriate technology; credit on favourable terms; support in domestic and export marketing, quality improvement; entrepreneurial and managerial training; consultancy and counselling services, etc., to small industry owner-managers. Like in many other developing countries, in India, the efficacy, effectiveness and competence of these government led-supply driven provisions of BDS have remained sub-optimal. The limited success of parastatal agencies in providing timely, adequate and qualitative support to small-scale industries thus calls for emergence and growth of private Business Development Service markets. Under these circumstances, one would expect Business Development Service Providers, as the brokers of capital and knowledge, to become increasingly important in the process of this global trend and help small entrepreneurs combat competition. While BDS market for regulatory aspects is reasonably developed, it is not so in the case of the market for strategic BDS, which is very critical, due to a variety of reasons. Realizing the importance of this vital issue, the Government of India has recently taken a proactive step by implementing the Small and Medium Enterprise Financing and Development Project (SME-F&D) in multi-donor 4
cooperation. Ministry of Finance, the nodal agency of the Project, appointed the Small Industries Development Bank of India (SIDBI) as the Project Executing Agency. 1.1 Objectives:
The main objectives of the Project is to

Foster BDS market Development Strengthening access of MSMES to BDS Making BDS Providers in cluster self sustainable Developing Role Models with strong demonstration effect Rationale for the Proposed Study:
1.2
The sponsors have selected the products because of dominant presence of a large number of units in the selected location of the city of Ahmedabad. The emergence of such a large number of SME units is due to ever growing textile manufacturing and processing units, in order to avail the ample business opportunity arising out of the textile manufacturing and processing and a weaker presence of bigger players, ignoring the opportunity extended. A large number of units manufacturing dyes and chemicals in different size were established by the local players, which out grew the bigger players in a very short period. Similarly, the growth of petrochemical based products on the western shores of India, found use of plastic material in packaging as an ideal form to be used in place of other conventional modes of packaging such as Metal Drums, Paper Bags, Jute Bags etc. As a result the location of the cluster has a large number of units engaged in manufacturing of plastic packaging and other utility products. The diagnostic phase of the study envisaged a survey of Dyes/Chemicals cluster/value chains and BDS providers to understand the dynamics of BDS provisions in this cluster. The present report entitled Implementation of Business Development Services for SMEs: Dyes/ Chemicals (including packaging) sector, Ahmedabad has been prepared on the basis of the information collected during the field work pertaining to the DSR Phase of the project.
1.3
Method of Implementation:
Method of Implementation, as envisaged, comprise of four phases; 1.4 Diagnosing the problem areas Developing a prioritised Action Plan Implementation Monitoring & Evaluation Diagnostic Study: Methodology:
The Diagnostic Study was designed in two parts; quantitative survey of BDSPs and MSMEs (through structured questionnaire), and qualitative discussion with focused groups, opinion leaders, and a variety of stakeholders of the cluster. A sampling criteria covering maximum diversity of MSMES, BMOS, and BDS hiring/non-hiring experiences have been adopted. The total sample size randomly selected was of 70, the break-up of which is as under.
Table 1 Sample Units covered in the study Sr. No. 1 2 3 4 Stakeholders MSME Units Public BDS Private BDS BMOS & Others Number of Units 33 06 21 10
The list of units visited is as per Annexure I (a) to 1 (d) Tools like who does who pays matrix is used here. All these will help in identification of the pressure points in the BDS market and enable in finalization of a Business/Action Plan so as to ensure holistic development of the BDS market and induce competitiveness in the same. To initiate the process a meeting was organized with the executive members of the committee of Gujarat Chemical Association (GCA) on 23rd March 2009. The list of members participated is as per Annexure II. In order to facilitate macro level understanding of the BDS market scenario two Focused Group Discussions (FGD) were organised in this cluster covering diverse product-market scenario. The list of participants is placed at Annexure III. Moreover, the findings will be disseminated among stakeholders in the forum of a Validation Workshop. Presentations will be made to the Cluster Co-ordination Committee. 1.5 Status of Enterprise Development in the Cluster: The Industrial Policy 2009 has unveiled a roadmap and strategy for bolstering the industrial climate of the state. Laced with innovativeness and
acumen, the policy has endeavoured to remove various road blocks which hampered the industrial growth of the State. The policy seeks to connect industrial development to the overall economic development of the State by exploring and leveraging linkages and opportunities with other economic sectors. It aims to provide comprehensive infrastructure, aims at achieving larger value addition and to streamline procedures and the regulatory framework by aligning institutional mechanisms with the new industrial paradigms and finally integrating private initiative into the industrial development process. Ahmedabad is the commercial capital of the State and a hub of major business/manufacturing activities in the western part of India. It has the required infrastructure facilities. The study was primarily focused on the three GIDC areas in the Ahmedabad city namely Naroda, Odhav, Vatwa and Behrampura.
Chapter 2 Global and National Scenario of Dyes and Chemicals Industry

The Indian dyestuff industry has been facing difficult times. Low profitability and demand growth combined with increasing importance for environmental protection have resulted in the exit of many small producers. However these factors have seen the consolidation of major players in the industry. Currently there is an over capacity situation in the domestic market that has forced the industry to look at exports for growth. With the closure of many manufacturing bases in the US and Europe, MNCs are shifting to Asian countries like India and China. The share of the MNCs in the domestic production of these two countries has been going up steadily over the last few years. 2.1 Dye Stuff Industry-Global vs. National Scenario:
The Indian dyestuff industry is only about 40 years old though a few MNCs set up dyestuff units in the pre independence era. Like the rest of the chemical industry, the dyestuff industry is also highly fragmented. The industry is characterised by the co-existence of a small number of players in the organised sector and a large number of small manufacturers in the unorganised sector. The distribution of these units is skewed towards with western region (Maharashtra and Gujarat) accounting for 90%. In fact, nearly 80% of the total capacity is in the state of Gujarat. Scenario of International Competition: Dyes and Chemicals are mostly a product of crude oil. The products are manufactured worldwide in developed and developing countries. Europe, United States of America, few Latin American countries were main producers of Dyes and Chemicals. The global dye manufacturing industry originally dominated by suppliers from Europe namely UK, Switzerland Germany, has shifted to Asia over the past 20 years or so. This is primarily because of two reasons. First, due to much lower costs of production in the Asia region. Secondly Asia's growing prominence as the hub for global textile industry. The main competitor, China's share in the world market is estimated to be around 25%. Along with China, Taiwan, India, Japan and Pakistan are among the major dyestuff producing countries in the industry. But in terms of the sheer volume of market share, Europe is the leading. This is due because of its allegiance towards specialty products. The global market share of Indian dyes industry is between 5 - 7%, and it is expected to increase to almost 10% by 2010. Following established trends seen over the past decade, the Asia/Pacific region will experience the strongest growth and increase its share of the global dyestuff
and chemicals market -- representing one-half of world demand in 2013, up from 37 percent in 1998. China is by far the largest single consumer in the world and the fastest growing national market. India will also post rapid increases, but demand levels will remain well below that of China. China alone is expected to account for about two-fifths of global value gains in dyes and chemicals demand between 2008 and 2013. The impact of scale of production as in case of China and Taiwan, bring about vast changes in the economy of cost of product. Table - 2 World Dyestuff Demand (Million Dollars) % Annual Growth 200320082008 2013 5.0 3.9 1.6 2.5 7.8 5.0 2.2 2.0 5.1 4.2
Item World Dyestuff North America Western Europe Asia/Pacific Other Regions
2003 10500 2665 1890 4370 1575
2008 13400 2890 2140 6390 2010
2013 16200 3215 2360 8150 2475
Emerging as a keen competitor, not only to the EU and American producers but even to the Asian countries like China, Taiwan, Indonesia and Thailand, India has made its presence felt and in growing at parallel levels to her competitors. There has been a strong growth in the dyestuff industry during the eighties and nineties. This has been made possible because of the Governments concessions (excise and tax concessions) to small-scale units and export opportunities created by the closure of several units in countries like the USA and Europe (because of the enforcement of strict pollution control norms). The duty concessions offered to small-scale manufacturers had resulted in the large ones becoming uncompetitive to some extent. Price competition was intense in the lower segments of the market. Liberalisation of the economy and large-scale reduction of duties resulted in the reduction of margins for smaller manufacturers. Closure of several small-scale units in Gujarat on environmental reasons also helped the organised sector players. Over a thousand different types of dyes and organic pigments are now being manufactured in the country (both by the organised and the unorganised sector). But the per-capita consumption of dyestuffs is lower than the world average. Dyes are soluble and essentially used in textile products. Pigments, on the other hand, are insoluble and are important inputs to products such as paints.
The biggest market for dyestuffs has been the textile industry. The dominance of polyester and cotton in the global markets has decisively shaped the demand for certain types of dyestuffs. On the other hand, the demand for polyamides, acrylics, cellulose and wool was more or less stagnant. Differences in the regional growth rates of textile products too affect demand. The Asian region saw the biggest growth in textile production, followed by North America, Latin America and Western Europe. This suggests the shift in the global textile industry towards Asia. As a result, Asia leads in dyestuff production both in terms of volumes and value, with a 42 % share of the global production; the US is next with 24 % and Europe has around 22 %. Due to a greater use of polyester and cotton-based fabrics, there has been a shift towards reactive dyes, used in cotton-based fabrics, and disperse dyes, used in polyester. These two dyes have been dominant in all the three regional global market, especially Asia. Adding to the shift in textile usage pattern and regional developments is the extent of over capacity in the global dyestuff industry. Capacity is estimated to be around 1.2 million tonnes, with consumption at 0.8 million tonnes, leaving a clear gap of 0.4 million tonnes. National Scenario: Within India, the major players in the pigments industry are Colour Chem and Sudarshan Chemicals while in the dyestuff industry companies such as are Atul, Clariant India, Dystar, Ciba Specialities and IDI are important players in terms of market share. The Indian companies together account for around 6 % of the world production. Nearly 80 % of the dyestuffs are commodities. This means there is not much product differentiation between the goods manufactured by most producers. Since not much technology is involved, duplication of products is also easy compared to specialties. However, in the recent past, there have been attempts by global manufacturers to move to the specialty end of the product profile, with some success. Vat dyes have always functioned as specialty products, with technology playing an important role. Now, companies are concentrating on the higher end of the reactive dyes segment. The trend is now shifting from supplying mere products to colour package solutions. The emphasis is more on innovation, production range, quality and environmental friendly products. Producers are collaborating with equipment manufacturers to provide integrated solutions rather than products. Fiscal policies and changes in the usage pattern of the global dyestuff industry have changed the market shares of Indian companies. Excise concessions for the small-scale sector in the mid and the late 1980s spawned numerous units in Maharashtra and Gujarat. At one stage, there were in the unorganised sector around 1,000 units, with most of them located in Gujarat and Maharashtra. This also led to large-scale evasion of duties.
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However, since the early 1990s, there has been a gradual reduction in the excise duty rates applicable to the organised sector. From 25 % in 1993-94, the excise duty rates were reduced to 20 % in 1994-95, further to 18 % in 1997-98. The latest Union Budget further reduced these rates to 8%. This gradual reduction in the duty rates blunted the competitive edge of the unorganised sector. The organised sector, with better product range, technology and marketing reach, was able to increase its market share. But more important changes have come through the German ban on certain dyestuffs, followed by the implementation of the local pollution control laws. While the organised sector has been able to phase out the production of dyes based on the 20 banned amines by the German legislation, many in the unorganised sector were forced to exit. This was compounded by the local pollution laws, which required setting up of effluent treatment plants, and pushed out companies in the unorganised sector. Technology: The technology for dyestuff manufacturing varies widely from relatively simple (direct azo) to sophisticated (disperse and vat) dyes. Though technology is locally available, most of it is outdated. The problem is further compounded by the fact that the nature of the process changes from batch to batch and, therefore, controlling the process parameters becomes difficult. The Indian industry has made significant progress in terms of technology and production. The dyestuff industry is one of the heavily polluting industries and this has resulted in the closure of units internationally and shifting of units to the emerging economies. Most of the international manufacturers have transferred the technology to developing nations like China, India, Indonesia, Korea, Taiwan and Thailand. This shift of manufacturing capacities is because the industry is perceived as a high-cost and low return one. The batch processing also makes it a labour- intensive industry. Thus, the competitiveness of developing economies increases. However, the judiciary has come down with a heavy hand on several manufacturing units, especially in Gujarat. Restructuring: There has been severe drain on the profitability of the industry. This is due to entry of many new players in the last few years resulting in severe competition and price wars. Restructuring of the Indian dyestuff industry, initiated a couple of years ago, is in progress. The trend was set last year by the market leader Colour-Chem Ltd, which decided to opt out of the dyestuffs business. It has entered into a manufacturing agreement with Dystar India Ltd. There have been other alignments, which would result in improving capacity utilisation of manufacturing facilities and also obtain better reach of export markets.
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Ciba India and IDI had signed a pact to market polyester and cellulose dyes. IDI had also tied up with Ciba for the manufacture and marketing of dyes and pigments. Atul products has completed the acquisition of Zenecas 50% stake in Atic Industries Ltd and tied up with BASF, Germany to market 50% of its production of vat dyes. The restructuring of Sandoz, consequent to the merger with Ciba, has led to the creation of Clariant AG. The dyestuffs manufacturing division of Khatau Group has been merged with its marketing company, Indokem Ltd. 2.2 Chemical Industry-Global vs. National Scenario:
Chemical industry is one of the oldest industries in India. It not only plays a crucial role in meeting the daily needs of the common man, but also contributes significantly towards industrial and economic growth of the nation International Scenario: The global chemical` industry, estimated at US$ 2.4 trillion, is one of the fastest growing sectors of the manufacturing industry. Despite the challenges of escalating crude oil prices and demanding international environmental protection standards now adopted globally, the chemicals industry has still grown at a rate higher than the overall-manufacturing segment. As per industry reports the pharmaceutical segment contributes approximately 26% of the total industry output and approx. 35-40% is dominated by the petrochemical segment. Commodity chemicals is the largest segment in the chemicals market with an approx. size of $ 750 billion while the specialty and fine chemicals segment accounts for $ 500 billion. Some of the major markets for chemicals are North America, Western Europe, Japan and emerging economies in Asia and Latin America. The US consumes approximately one-fifth of the global chemical consumption whereas Europe is the largest consumer with approx. half the consumption. The US is the largest consumer of commodity chemicals whereas Asia Pacific is the largest consumer of agrochemicals and fertilizers. National Scenario: Chemical Industry is one of the oldest industries in India, which contributes significantly towards industrial and economic growth of the nation. It is highly science based and provides valuable chemicals for various end products such as textiles, paper, paints and varnishes, leather etc., which are required in almost all walks of life. The Indian Chemical Industry forms the backbone of the industrial
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and agricultural development of India and provides building blocks for downstream industries. Chemical Industry is an important constituent of the Indian economy. Its size is estimated at around US$ 35 billion approx., which is equivalent to about 3% of India's GDP. The total investment in Indian Chemical Sector is approx. US$ 60 billion and total employment generated is about 1 million. The Indian Chemical sector accounts for 13-14% of total exports and 8-9% of total imports of the country. In terms of volume, it is 12th largest in the world and 3rd largest in Asia. Currently, per capita consumption of products of chemical industry in India is about 1/10th of the world average. Over the last decade, the Indian Chemical industry has evolved from being a basic chemical producer to becoming an innovative industry. With investments in R&D, the industry is registering significant growth in the knowledge sector comprising of specialty chemicals, fine chemicals and pharmaceuticals. The Indian Chemical Market Segment wise is as under: Market Value (billion US$) 20 9
Segment
Basic Chemicals Specialty Chemicals High End / Knowledge 6 Segment Total 35
The Indian Chemicals Industry comprises both small and large-scale units. The fiscal concessions granted to small sector in mid-eighties led to establishment of large number of units in the Small Scale Industries (SSI) sector. Currently, the Indian Chemical industry is in the midst of a major restructuring and consolidation phase. With the shift in emphasis on product innovation, branch building and environmental friendliness, this industry is increasingly moving towards greater customer orientation. Even though India enjoys an abundant supply of basic raw materials, it will have to build upon technical services and marketing capabilities to face global competition and increase its share of exports. As the Indian economy was a protected economy till the early nineties, very little large-scale R&D was undertaken by the Chemical industry to create intellectual property. The Industry would, therefore, have to make large investments in R&D to successfully counter competition from the international chemicals industry. India has a number of scientific institutions and the countrys strength lies in its large pool of highly trained scientific manpower. India also produces a large number of fine and specialty chemicals, which have very specific uses and are essential for increasing industrial production. These
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find wide usage as food additives and pigments, polymer additives, anti-oxidants in the rubber industry, etc. Chemical Industry in Gujarat Chemical and Petrochemical Industry is the leading sector in terms of the projects filed as well as under implementation category as indicated by the analysis of the investment in chemical and allied sector vis--vis total industrial investment in all sector. The Chemical Industry in Gujarat comprises of about 500 large and medium scale industrial units, about 16,000 of small scale industrial units and other factory sector units. Since August 1991 up to April 2005, chemical and allied sector accounts for an investment of Rs.1671 billion which is 44.81% of total investment of the state. Similarly 1642 projects of the chemical and allied sector involving an investment of Rs. 577.93 Billion have been commissioned/concluded, accounting for about 53.86% share in investment of the total projects commissioned. Also 361 projects envisaging an investment of Rs. 213 Billion are under implementation in Chemicals and Allied Industry. The Small Scale and Factory Sector industry in Chemical and allied field has also shown an impressive contribution in the subsectors of Dyestuff and Pharmaceuticals, Paints and Fine Chemicals producing large number of value added products. The major reasons which could be attributed to such a spectacular growth of this sector in the state are a strong base of petrochemical industry, increasing availability of basic feed stock, relatively low overhead cost, and availability of necessary infrastructure, trained and technical manpower and high degree of entrepreneurship. Gujarat Industrial Development Corporation (GIDC) has set up mega estates, particularly for chemicals at Ankleshwar, Panoli, Vapi, Vatwa, Jhagadia, Vilayat and Dahej to facilitate further development and growth. The industry is strongly supported by industrial infrastructure including 22 common effluent treatment plants, 5 solid waste disposal sites, and chemical terminal ports, LNG Ports, industry specific estates and special economic zones. The lower per capita consumption of many important items at present and growing middle class with increasing purchase power constitutes an attractive market for various products The development of Chemical and Petrochemical Industry requires creation of basic and allied infrastructure facilities and in view of the availability of the same, the Indian/Gujarat Chemical Industry has opportunity to grow within as well as outside the country. Further the motivated entrepreneurs, pool of technical manpower and flexibility to changes in production set up which forms the competitive strength of the Chemical Industry in the State and therefore, will rise to all opportunities for development and growth in the investment.
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The Chemical Industry needs to engage in strategic partnerships with foreign partners with a view to realise and capitalize the latent potential. The existing technology needs to be upgraded with the help of foreign partners. The Chemical Industry in India/Gujarat provides a large scope for collaboration in Technology tie-up, Process Development, Joint Research and Development, Solid and Liquid Waste Management and Market Access for various sub-sectors of the industry.
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Chapter 3 The Ahmedabad Dyes/Chemicals (including packaging material) Cluster
In this chapter, we will elaborate on two aspects of the cluster, viz: the various product mix of the cluster and the geographic spread of the cluster. 3.1 Dyes/ Chemicals Industry Structure in Ahmedabad:
The Ahmedabad Dyes/Chemicals (Including packaging) cluster is located with in the Municipal Corporation limits of the City of Ahmedabad in the central region of Gujarat in the GOLDEN corridor. This corridor is one of the fastest developed by the Government. The products mentioned in the definition of the cluster is having a vide Diaspora of applications. There are more than 1000 different dyestuffs (colouring matters) derived from a vast variety of chemicals. The chemicals have a wide range from organic to inorganic substances. The plastic manufacturing in this cluster is incorporated to the packaging of the dyestuff and chemicals.
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3.2
Product categories of the cluster:
(a) Dyes sector: The cluster comprises under our study is of Dyes/Chemicals (including packaging material). Dyestuff is a broad term which includes dyes and pigments. A dye is a coloured substance or an organic compound, which when applied in a solution to a fabric, imparts a colour resistant to washing. They are largely used by the textiles, paper and leather industry, with textiles accounting for over 80% in India. This links the dyestuff industry's fortunes to that of the textile industry. The important dyes manufactured in the Ahmedabad city are predominantly as under 1. 2. 3. 4. Reactive Dyes like Black B(5), Red ME4BL(195), Yellow (145) etc Acid Dyes such as Black 210, Black 234, Red 18 etc Direct Dyes such as Black 22, Violet 9 etc Pigment Dyestuff such as Green 15, Blue 15 etc
We have mentioned these since these constitute major production of dyes; there are other dyes in the same groups as listed below. Table 3 Dyestuff classification Product Dyestuff Class Reactive Dyes Viscose Dyes Direct Dyes Acid Dyes Application Cotton Fibre Cotton Fibre Cotton fibre Paper, Leather Leather, Fur Wool, Carpets Polyamide Fibre Jute Paper Pigment Manufacturing Cotton Fibre Synthetic / Polyester fibre Cotton, Leather Paper, Plastic Petroleum products Paints Plastics Petroleum Products specially fuel colouring Cotton Fibre
Basic Dyes Napthol and Bases Disperse Dyes Pigment Dyes
Solvent Dyes
Vat Dyes
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(b) Chemical sector:
Most of the chemicals classified in to sub grouping listed above are manufactured in Ahmedabad to different manufacturing capacities. However majority of the bulk production is located to the regions south of Ahmedabad. Ahmedabad is known to manufacture inorganic pigments used extensively in manufacturing dyes and other catalytic applications. There are Organic compounds in form of Resins and allied class, used in paint and other applications. There are also wide classes of textile auxiliaries, due to the proximity to the market. The chemicals produced and utilized for the manufacture of applications are even greater than the colouring matter. The chemical sector is mostly in to the Organic and Inorganic sections of the chemical table. The Organic section deals mainly with the Hydrocarbons and a link of the carbon chain where as the Inorganic section deals mainly with the metals and metal derivatives. The important chemicals manufactured in the Ahmedabad city are predominantly as follow:
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1. Organic compounds such as H Acid, Vinyl Sulfone, J Acid etc 2. Metal Salts such as Ferrous sulphate, cuprous chloride etc 3. Textile Auxiliaries such as softening agents etc We have mentioned these since these constitute major production of chemicals; there are other chemicals with a wide range of applications as listed below. Table 4 Chemical Classification Product Chemicals Class Organic Chemicals Application Manufacture of Dyestuff Intermediates Manufacture of Solvents Manufacture of Paints Textile application Auxiliary Products Manufacture of Dyestuffs Paints Bullion Auxiliary Products Textile Application Paper Industry Miscellaneous applications
Inorganic Chemicals
(c ) Packaging sector: Plastics packaging products are largely in three categories, based on the mode of operations used in the manufacture of the product. Viz., Extrusion, Blow moulding, & injection mouldings. , items, such as Drums, Carboys, Liner Bags etc We have mentioned these since these constitute major production of packaging material; there are other plastic packaging materials with a wide range of applications as listed below. Table 5 Packaging products classification Product Plastic Products Class Packaging Extruded-Blown films Application Bags/ tubing Wrapping Lining Carboys for liquids Drums for Powder Bulk carrier Packaging of Powder 19
Blow Moulded
Woven Sacks
The range of application in this cluster is limited in our scope of study, only to the packaging of Dyestuff, Dyes Intermediates and Chemicals otherwise than that of the Dyestuff utility. Plastic has other innumerable uses, which makes it a very large cluster with an unmatched size and scale of operations. Even though MOST of the units in Plastic manufacturing cluster fall under the SMEs, still the range of produce plastic industry offers is unmatched to any other manufacturing activity. Spare parts in many industries, bottles, construction work, proposed road building is few to name amongst them. We have therefore restricted our study only to the plastic packaging material used extensively in dyestuff and chemicals, which is sold in bulk. We have not covered another aspect of the chemicals relating to pharmaceutical. 3.3 Place and Geographic locations of the cluster:
The size of cluster is from amongst the units producing dyestuffs and chemicals to the tune of more than 1200 units in the geographical boundaries of the location cited at 3.1 above. The location of the cluster in state of Gujarat is as shown in Annexure IV. Further the areas / locations in the city of Ahmedabad where the units are situated are shown in Annexure V. We can tabulate the spread of cluster as per the tabulation mentioned below. Table 6 Geographical spread of the cluster Enterprise Naroda Odhav Dyestuff, Chemicals Vatwa Narol/Behrampura Others Naroda Plastic Packaging Material Odhav Vatwa Others Location 23% 05% 47% 03% 22% 22% 22% 40% 16% Concentration
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Chapter 4 Production Process of the Cluster

The products of the cluster viz. Dyes, Chemicals and Plastic packaging materials are discussed here in a sequential manner in an illustrative format. These are presented for a study both in a pictorial manner as well as with an overview. The pictorial presentation will explain in brief, different kinds of machinery utilised for the production of the particular class of items. Where as the overview will summarise in a shortest possible manner the flow of process. 4.1 Dyestuff:
The process of Dyestuff manufacturing, in pictorial form is presented as under
Different RAW Materials (Intermediates) are prepared to be ready to react with each other and form a permanent bond to each other in vessels fitted with stirrers and other gadgets
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The ready for bonding RAW materials are mixed to couple/bond with each other under specific process conditions and allowed to form a bond making a dye in Vessels
The dye liquid so formed is further treated to achieve certain quality parameters in the vessels With the use of Reverse Osmosis etc.
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Salt is added to the dye liquid. The more soluble salt pushes/precipitates dye molecule out of this liquid to give dye in a suspended solid format. Alternatively a clear dye solution is put in a spray drier to get a dry dye powder evaporating the liquid.
The suspended dye particles are removed from the liquid by way of filtration and collected in a cake form
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The cake is put in to the driers to dry at a fixed temperature evaporating water/moisture
A dry raw dye substance is ground in pulverizes unit to give a fine dye powder and put to pre-quality analysis.
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The crude dye powder is mixed with other diluents to give a standardized product.
This standardized dye powder is packed in different forms of containers and stored in warehouse for removing to market.
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The process of Dyestuff manufacturing, in an overview form is presented as under:
Preparation of Raw Materials in Vessels
Coupling of Ready Raw Materials in vessels
Process completion and further quality processes
Salting out the Finished Product
OR
Spray Drying of Liquid formulated Dyestuff
Tray Drying of dyestuff in wet cake format
Grinding of Dry Dyestuff lumps
Quality Determination in Lab
Standardisation in Ball Mill or Blender
Quality Analysis of Final Marketable Product
Packaging in to desired format
Removal to Market
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4.2
Chemicals:
The process of chemical manufacturing, in pictorial form is presented as under:
Intermediates required are put in to vessels under process condition with the aid of necessary chemicals and prepared to bond with other intermediates
The ready intermediates are mixed under specific conditions to get a permanent structure.
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The ready compound in a liquid format is further treated for attaining quality parameters and a final compound is obtained
A final chemical compound is salted out by treatment with chemicals in a wet cake format Alternatively Spray dried to give a final dry chemical compound
The chemical compound is analysed for quality in lab.
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The finished marketable compound is packed in to desired packing
The packed chemical compound is removed to the warehouse for marketing.
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The process of chemical manufacturing, in an overview form is presented as under: Preparation of Raw Materials in Vessels Coupling of Ready Raw Materials in vessels Process completion and further quality processes
Salting out the Finished Product Using filter presses/nutch
OR
Spray Drying of Liquid formulated Chemical using spray drier
Quality Analysis of Final Marketable Product in Lab
Removal to the Market
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4.3
Plastic Packaging Materials:
The process of manufacturing plastic packaging materials, in pictorial form is presented as under:
Different grades of plastic grains, mostly HDPE/LDPE/LLDPE quality are melted, pre-mixed with certain chemicals to give specific gradation. +
The molten plastic compound is blown in to a bubble to give a mono or multi layer film. Alternatively
The compound is melted in specific moulds, by Injection molding under process conditions to give specific shaped container
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The film is cut to desired shapes to give a bag or finished with tools to give a drum/carboy/bottle
The ready packaging material is subjected to testing for quality
The ready packaging material is removed to the ware house for marketing.
32
The process of manufacturing plastic packaging materials, in an overview form is presented as under: Preparation of Raw Materials in feeding crates Blow Moulding/ Injection moulding Process completion and further quality processes
Quality Analysis of Final Marketable Product in Lab
Removal to the Market
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Chapter 5 History of the cluster

In this chapter, there is a reference to earlier activities of cluster development taken place in this cluster. Apart from this the various turning points and the progress of this cluster are briefed. 5.1 The beginning:
With the invention of Fabric, colouring matter is invented as a fashion definition. Indian climate, which is conditioned to tropical climatic changes have predominantly based on cotton fibre for weaving of the fabric and this is the matter widely used as clothing world over. 5.2 The foundation:
The innovative entrepreneurship of the Gujarati community led to establishment of composite textile mills in Ahmedabad for manufacture of cotton fabric in early forties. Almost the entire Indian sub-continent was being fed by cotton fabric produced in the western region of India, viz. Mumbai and Ahmedabad. This led to the setting up of units manufacturing dyestuff needed to colour the fabric. The dyestuff manufacturing was limited to Germany before the world war and controlled by the German trading community. Most of the innovations in the dyestuff industry have taken place in Germany. Primarily the dyestuff units were established in Mumbai and southern parts of Gujarat, owing to the proximity of textile industry as well as port of import. The visionary Gujarati leaders in the merchant community, established dyestuff manufacturing units in Ahmedabad about 40 years down the line. The names such as Shri Kasturbhai Lalbhai, who is a pioneer of Dyestuff Industry in Gujarat as well as the modern day entrepreneurs to name a few, Shri Jayendra Kharawala, Shri Gautam Jain, Shri Dinesh Shah are the key persons who have contributed to the development of the cluster of dyestuffs and chemicals in the map of cluster location. 5.3 Earlier cluster development projects in the cluster:
Earlier a study in the same cluster was undertaken by the Bureau of Energy Efficiency (BEE). The purpose of this study was to evaluate energy consumption and potential for energy management by SME units in Ahmedabad Dyes cluster.
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Some of the important findings of the study by BEE are as under. Ahmedabad plays a vital role in rendering the commercial resources and market access for the economies of neighboring cities. Some major industries of Ahmedabad are Textiles, Chemicals, and Pharmaceuticals & Petrochemicals. Major energy consuming equipments are Pressure vessel, Dryer, Boiler & mixer. Energy cost is 5 to 8% of the total production cost. The major cost is of the raw material, which is as high as 65 to 70%. The major concern / issue being the pollutants being created due to the chemical reactions as well as effluent being generated round the clock from over 300 units. The Green Environment Co-operative service which was formed wherein it collects the primarily treated liquid effluent and gives it the secondary treatment & proper disposal, a high tech internal collection system & an advanced treatment plant has been developed. At present, since last months the units have slowed down due to market conditions in global sector as well as Indian market, otherwise there is no other problem. Raw material. Energy/power & Labor are all available easily. The energy consumption as estimated by the findings of the report is as under for different sources of energy:
Our Diagnostic study reveals this as an unfinished agenda. The purpose of BEE study being devoid of any action plan, we have included his un-attended area in our action plan. We have however taken a basic data for the value chain analysis for further deciding the action plan. The findings of BEE reveal following data as tabulated and described below. Table - 7 Cumulative Fuel Usage Fuel Electricity Firewood / Husk LDO PNG Coal / Hard Coke Qty consumer per annum 6142878 Units 45534 Tonnes 299760 Liters 784200 Kg 3300 Tonnes Number of Units using the fuel 149 142 22 25 2
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While analyzing the pattern and consumption of energy in different sources on the percentage basis the findings are listed as under Table - 8 Usage of Electricity (In Units consumed per annum) Electricity consumption in number of units Upto 20000 Units 20000 to 40000 Units 30000 to 50000 Units 50000 to 100000 Units 100000 to 300000 Units Above 300000 Units Percentage factories in this bracket 28% 29% 14% 26% 2% 1%
The BEE report is basically for energy analysis and hence the findings carry importance as far as the energy consumption is concerned. Lessons learnt the impact and relevance to Industry. A previous study by BEE and our diagnostic study, though have a different outlook and objectives, reveal certain common apathy amongst the Industry units towards important issues, leading to betterment of operations, with the aid of Business Development Service providers. We have based our action plan largely and worked out the finer points subsequently on the lessons learnt as under. Sensitization Awareness is the main issue. Micro & Small units have almost no means to know, consider and implement, advantages available to them, due to lack of knowledge and absence of awareness about the availability of the expertise. Regulations The implementation of certain controlling regulations by the regulatory authorities, are either ignored off or shunted off by the units. An effort to make them aware of the acuteness of the problem is essential to the very existence of the units. Environmental compliance in cleaner production technology - A diagnostic study covering the technology related BDS providers, reveals availability of the solutions, with the technical experts to ensure cleaner production, which in turn will reduce the environmental load considerably. Energy audit The industry has a practice of installing machinery based on availability and marketed by the machinery manufacturers. A detailed study reveals a wider scope to audit the energy requirement and cut down the cost considerably making the equipments tailor made.
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Website Most of the units source for service providers on the basis of information available in a closed group. The days ahead are of extensive use of the internet, with an explosion of information availability. A portal or a website for a clear interaction of the benefiting units and BDS provider linkage, will work out to the betterment of both parties extensively. Directory - The print media is also not outdated, a soft copy and a printed version of Directory of Public and Private BDS providers, will greatly help enhancing the availability of services. Facilitating Co-operative market development Micro level units, mostly working either under the shadow of some large unit, has limitation and constrain of marketing their products. However, if a co-operative of such units is formed, they will have a better perspective of the market, with wider availability and negotiation power. Skill Up gradation Most units run by technocrats, with a forgone knowledge acquisition, brings about a hindrance to the exposure to the skills/technology up gradation. Lot is required to be done in this field by technical service providers, to ensure optimum unitisation and reduced cost. Quality certification, social compliance & testing facilities Those units desirous to open avenue in international market, do not have proximity to the internationally recognised standards. Hence, a service by BDS providers will greatly help attend this problem and open up industry to the international market. Management Development Programme A limitation arising out of scale and size of operations, limits the entrepreneurs from acquiring latest management skills. BDS providers have a wide scope of training up management to meet new challenges. Capacity Enhancement Stagnancy in industry brings about downward trend and a negative growth of operations. Enhancing the capacity will help create pathway to better growth perspective. Exposure visit While we make a statement that the cluster is biggest accumulation of dyes and chemical units, units need to interact with other centres, by visiting units who have moulded themselves in role models, by utilising the competence of BDS providers, resulting in a growth pattern of 80:20 OR by interacting with such units to exchange positive actions thought about.
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5.4
Turning point:
With the decline of textile weaving industry in Ahmedabad, the textile processing units, mainly catering to the ever increasing demand of cotton fabric, flourished in Ahmedabad. Hence the inseparable industry of Dyestuff manufacturing came in force and stayed. As the city rapidly grew, Gujarat Industrial Development Corporation established notified area around the then existing Municipal Corporation limits, to attract more and more industrious entrepreneurs. The Chemical and Dyestuff units, came to existence in these areas, and grew beyond. 5.5 Progressive march:
Opening up of world trade and the cost effectiveness of Indian manufacturing, attracted many large traders, involved in the marketing of dyestuff to the processing units world over. Thus a boom arrived in exports of Indian Dyestuffs since 1985, which helped many increase manufacturing manifolds to help meet the export demand. As of today more than 1200 units exist, in a fully operational condition, with in the municipal corporation city limits of Ahmedabad. 5.6 The packaging:
The modern day packaging is comprised of typically petroleum based packaging, viz. plastic. There are countless items produced from plastic, however, packaging constitute the most basic form of plastic industry in Ahmedabad. Drums, Bags made from plastic are used in packing the chemicals and dyestuff. This packaging material being very cheap in effective cost, in the packaging to end product, need a close proximity to the consuming market and hence manufacture of plastic packaging products, which is under the purview of this study, has growth assigned to the flourishing of this cluster. 5.7 The Road Ahead:
The dyes and chemical industry is facing a lot of challenges in the changing scenario of global economy. The extremely competitive market, reduced margin, lack of innovation, pressure from multinationals, global slow down and last but not the least, increasing pressure from regulatory and voluntary agencies for for maintaining environment free from pollutants, all are indicative of tough days for the cluster. A modern management study and skills, co-existence, utilizing skills from competent BDS, will help the cluster to overcome, the challenges it is facing today and will make it boom again with the turnaround of the economy. An early call for attacking the environmental aspects, in the changing socio economic structure of immediate neighbourhood has woken up the enterprises for a CLEANER AND GREENER manufacturing process.
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Chapter 6 Vital Statistics of the Cluster: Profile & Status

Majority of the units of the cluster are located in the largest of the then notified area of Industrial estate by the GIDC, called Vatwa, which is on the southern eastern outskirts of the industrial belt, the broad spectre of the colouring matters produced and the chemicals produced are linked to the range of products having a wide application of each individual products. 6.1 Area wise distribution of the units in the cluster:
While arriving at the eventual distribution set up of the cluster units, a study shows that the earliest industrial area developed by the Gujarat Industrial Development Corporation has most number of units, because of the land size of the estate. The units are thus distributed in the different areas, developed by the state government are best represented as in the table below. A co-relation of the inter-dependant units in the concentration is best represented in the table below. Table 9 Industrial estate wise distribution of units. Number of Units Dyes & Chemicals Packaging(Plastic) Micro Small Medi Total Micro Total 170 85 5 260 20 20 40 18 2 60 20 20 370 180 10 560 35 35 28 195 803 12 80 375 0 5 22 40 280 1200 0 15 90 0 15 90
Area G.I.D.C. Estate Naroda G.I.D.C. Estate Odhav G.I.D.C. Estate Vatwa G.I.D.C. Estate Narol / Behrampura Spread over other industrial areas not under the notified area Total
Dyes & Chemical Units
23% 3% 5% 22% Vatwa GIDC Odhav GIDC Others Naroda GIDC Narol / Behrampura GIDC 47%
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Industrial estate wise distribution of units

No. of Units
Plastic Packaging units Dyes & Chemical Units 0 100 200 300 400 500 600
Product Category Vatw a GIDC Odhav GIDC Others Naroda GIDC Narol / Behrampura GIDC
6.2
MSME distribution of the units in the cluster:
A study and the data received from the BMOs in the cluster area map further divides the cluster units in based on the scale of operations as in Table 10 (Illustrative) Distribution of Units on scale on investment, Turnover & Employment Sub Sector Dyes & Chemicals Size of Unit Micro Small Medium Micro No of Units 803 375 22 90 % of Units 65% 33% 2% 100% Turn over in Rs. Crores 3000 5500 1650 100 Employment Generation 13000 20000 5000 3000
Plastic Packaging Overall Export Figures of Dyes & Chemicals as per Customs Record Name of Commodity Apr-Feb 2006
Apr-Feb 2007 %Growth %Share
Export Value of Export Value Goods of Goods INR in Crores INR in Crores
INDIA EXPORT OF CHEMICALS & RELATED PRODUCTS INDIA EXPORT OF DYES/INTMDTES & COAR TAR CHEML
61,174.34
71,680.24
17.17
14.04
6,029.60
9,207.34
52.70
1.80
Export figures unit type wise are not available at this stage.
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The Participating units in the sample study are indicative of the turnover and employment pattern as under There are 900 micro units, generating direct employment of 13000 people There are 375 small units, generating direct employment of 20000 people There are 22 medium units generating direct employment of 5000 people
We can therefore use the data to indicative employment generations as illustrated above in table 8
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6.3
Sector wise classification of the SME units:
During the field study of the SMEs, we have visited about 33 units as per the following break-up. A detailed list and the nature of the information gathered are listed separately.
Type Dyes & Intermediates D Chemical C Packaging P Total
Units 19 9 5 33
Size of firm
No of Employees < 10 10 25. 25 50 > 50 Total
Units
No of Units
12 10 8 6 4 2 0 < 10 1
11
11
10
1 11 11 10 33
10 - 25. 25 - 50 No of Em ployees
> 50
Size of the Firm Turnover Basis

Sales Turnover in Rs. Crores <2 2 10. 10 25. >25 Total Units
No of Units 15 10 5 0 <2 2 - 10. 10 - 25. >25 Turnover in Rs. Crores 4 12 10 7 Units
4 12 10 7 33
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6.4
Distribution of BDS providers:
Our study is for the scope of development of BDS market, to provide need based services to SMEs engaged in the manufacture of products mentioned above. We have identified considerable scope for various services required, utilized and ignored by the SMEs. The services ignored by them are of great importance for the healthy conditioning; however they are not sought after due to certain compulsions on the part of member units of the cluster. A Study of BDS market in the cluster of dyes, chemicals and plastic packaging materials manufacturers in Ahmedabad, reveals following beneficiaries. Beneficiaries: SME units of Dyes/Chemicals and Plastic (packaging material) situated in the municipal corporation limits of Ahmedabad, BDS providers, in the TECHNICAL and NON-TECHNICAL sectors. Other Stakeholders: Business Management Organisations, Regulatory Authorities. We have classified the BDS providers on the basis of the type of service they are providing as well as depending upon the industry sector or the product, the service find need to be catered to. 6.4.1 Distribution Based on Area of Service: Table11 (Illustrative) Service Area wise distribution of BDS providers Technical Sector Specific field knowledge Product Development Process Control Quality Analysis Environment Related Service Technology related Research & Development Environmental / Energy Audits Non Technical Sector Focused Specialized Non-focused Generalized Product Marketing Taxation Trade fare Sector related benefits Procurement of utilities Procurement of Raw Training/safety materials Quality registration such Patents Related activity as REACH, ISO Designing/Developing Marketing
Our study does not consider parties/units engaged in actual material transaction as SERVICE PROVIDERS. The basic definition of Business Development Service Providers is that the units or bodies who supply services, based on knowledge acquired, and are not engaged in material transaction are Service Providers for the enhancement of Business.
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The type of services offered and availed by SMEs are numerous and the number of BDSP available are also comparatively too large to list. However we have made a study of the existing BDSPs, whose services are taken by the sample units and those who have responded to our basic survey during the field work. An illustrative break up of the services and pricing patterns are listed as under.
6.4.2 Distribution Industry Sector wise (Product Based): The product in our study viz. dyes and chemicals as well as plastic packaging material are manufactured by largely units falling under MSME. Their existence in the sector depends largely on the services provided by BDS. The size of units not allowing them to avail the paid services of experts in the speciality fields, as a result of prohibitive recurring costs, directs them to the BDS. The employment is thus generated in the other operations in these units, other than speciality fields. Our study identifies presence and requirement of BDS starting from establishment to smoother operations for these units as under Table 12 BDS For Dyes & Chemicals Sr. No Type of BDS Service Rendered Approx charges Willing ness to Pay by Units 1.5 2 % on YES value Depends on the manhours spends Aprx 1000 per hour YES Approx Nos in Cluster Numerous
Financial Service Providers
Technical Service Providers Quality Certification and Registration
- Project study and presentation to financial institutes, - Different modes of business transactions on instruments negotiated in banks, such as establishing L.C., export documentation, packing credits etc Project Implementation and product manufacturing For establishing product under international norms and getting quality
On Ad-hoc basis depending on product Rs. 5000 & above
YES
Numerous
YES
8 10
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Services providers
Environment & Energy Related Service Providers
Administrative & Regulatory Services
Procurement service providers
Marketing Service Providers
Equipment Servicing Providers
certification universally, internationally established. E. g. REACH, OKETEX, ISO registration etc. Erection of Environment Treatment Plant and avail clearances from regulators, followed by regular operations, energy audits etc. Clearances for other regulators in non technical segments such as taxation, followed by regular operations, factories act, energy clearance, industrial registration etc and a regular follow up For the speciality purchasing of raw material in form of imports and clearances associated with the same For speciality markets such as exports and bulk buying, For availing export benefits declared under the Import Export codes by the government of India Such as regular and preventive maintenance of the plant/ machinery
Rs. 10000/-
YES
35 40
Rs.1500 to Rs. 5000
YES
Numerous
1.5 2% on value
Partially
15 20
1.5 2% on value
Partially
15 20
5 10 % on equipment value
Partially
8 10
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Testing Laboratories
10
Research and Development
11
12
Providing Logistics for local and international Providing Technical Training to plant operators
and instruments Testing and analysis of raw materials and finished products For the establishment of product line for cost effectiveness and new product development For the movement of material locally as well as internationally For the equipment handling and other production aspects for labour as well as staff up the order For establishment of Industrial Relations and improvement of work environment.
Depends on specific product & test Based on product
YES
28 30
NO
5 10
Based on distance & load Depends on the manhours spends Aprx 1000 per hour Rs. 5000 Rs. 10000
YES
Numerous
YES
10-15
13
Industrial Relations training providers
Partially
10-15
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Our study in manufacturing of plastic including packaging material identifies the presence of following BDS providers listed as above from establishment to smoother operations as under. Table 13 BDS For Plastics (Including packaging materials): Sr. No 1 Type of BDS Service Rendered Project study and presentation to financial institutes, different modes of business transactions on instruments negotiated in banks, such as establishing L.C., export documentation, packing credits etc Project Implementation and product manufacturing Such as obtaining quality Registration for the operation e.g. ISO registration & Patents Clearances for other regulators in non technical segments such as taxation, followed by regular operations, factories act, energy clearance, industrial registration etc and a regular follow up Such as regular Approx charges 1.5 2 % on value Depends on the manhours spends Aprx 1000 per hour Willingne ss to Pay by Units YES Approx Nos in Cluster Numerous
Financial Service Providers
YES
Technical Service Providers Quality Certification and Registration Services providers Administrative & Regulatory Services
On Ad-hoc basis depending on product Rs. 5000 & above
YES
Numerous
YES
8 10
Rs.1500 to Rs. 5000
YES
Numerous
Equipment
5 10 % on
Partially
8 10
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Servicing Providers
10
and preventive maintenance of the plant/ machinery and instruments Testing Testing and Laboratories analysis of raw materials and finished products Research and For the Development establishment of product line for cost effectiveness and new product development Providing For the movement Logistics for of material locally local and as well as international internationally Providing For the equipment Technical handling and other Training to production aspects plant operators for labour as well as staff up the order Industrial For establishment Relations of Industrial training Relations and providers improvement of work environment.
equipment value
Depends on specific product & test Based on product
YES
10-15
NO
3-5
Based on distance & load Depends on the manhours spends Aprx 1000 per hour Rs. 5000 Rs. 10000
YES
Numerous
YES
10-15
Partially
10-15
The simplicity of product, limitations of markets and ease in operations has put a limit on the requirement of BDS for the product, plastics (including packaging material) than the dyes and chemicals.
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6.5 Nature of Services sampled and surveyed: Nature of service Product/process related technology ,environment audit, effluent management Laboratory & Lab Equip, R&D , all types of testing ISO, Patents & Regulations Tax, excise, custom & Accounts Finance, EXIM & Marketing Total
**Three
BDSs
10
6 5 3 5 **29
BDS in the sample are providing multiple services
6.6 Ownership Profile of the BDSP Constitution Proprietor 1 Private 2 Public 3 Partnership 4 MNC Group 5 Total BDSs 13 5 5 0 3 26
Most number of BDSP in private sector are proprietary units and are commonly used by SMEs, compared to the other groups. The reasons for such active core belonging to the proprietary BDS units are listed in 5.7 below.
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6.7 Comparative advantage of Private BDS over Public BDS:
Services of Govt Org. Cumbersome Corruption Inefficient High Cost Total
BDSs 13 2 8 1 24
The majority units participating in field study had an important observation to make for not being attracted to obtain services of public BDS is the cumbersome nature of procedures, causing delays not tolerable to the small size units. Inefficiency part is however due to the apathy of personnel involved in the interaction and has got nothing to do with the knowledge. 6.8 The pricing criteria used by the BDS:
Pricing Criteria of Service Sales Turnover 1 Severity of Challenge 2 Monopoly 3 Time 4 Others 5 Total
Pricing criteria
3%
BDSs 1 18 3 14 0 36
39%
50% 8%
Sales Turnover - 1 Monopoly - 3
Severity of Challenge - 2 Time - 4
BDS units have in general discussed about the pricing by the time devoted in fulfilling the task on hand. More a challenging job, more the time and vice versa.
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No one in particular associated with the volume of business of client, which is a positive note in such transactions. 6.9 Willingness to meet full cost of BDS by SME: Most of the service providers are keen on charging to their clients on the basis of the time consumed as well as for the severity of the challenge in the service, whereas the willingness of the SME to pay for the services is as listed under.
Willing to meet full cost of BDS
Units
Yes Y No N Total
30 3 33
Apart from the apprehensions regarding capability and transparency of the BDS provider, the SME clients are in general ready to pay to the optimum capacity of the task assigned to the BDS provider.
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Chapter 7 Comparative Value Chain Analysis

To arrive at an optimum concept in the cluster co-operation, specifically for arriving at a role model in the value chain utilization, a study broadly indicative of the Schematic Diagram, giving an idea of the generic presentation of the value chain is arrived at. This is indicative in few areas of operation. Process flow chart (Generic) Raw Materials Other Chemicals and Process Control additives Energy such as Power &
Manpower Utilization
Packaging
Cost of Goods
7.1
Typical comparative Value Chain addition for Dyestuff/Chemicals (illustrative) Constituting on the basis of 100% of the product sale price. Ideal by a Role Model in the Industry 55%
Particulars
Current Scenario
Raw Materials used Other Chemicals and Process Control additives Energy such as Power & Fuel, Environments treatment Manpower Utilization Packaging Total Cost of Goods
65%
7%
5%
8% 5% 1% 86%
6% 3% 1% 70%
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To specify the generic representation of value chain, a study in few major products in the cluster gives a following presentation. 7.2 A typical comparative Value Chain for Reactive Yellow FG For 1000 kg finished product with a sale out put at Rs. 85000/-
Particulars Raw Materials used Vinyl Sulfone 4-Sulfo-Phenyl 3Carboxy Pyrazolon Chemicals Used Caustic Soda Hydrochloric Acid Sodium Nitrite Allied Value Load Ice Salt Additive Overheads Electricity Fuel Material Handling Pre-packing Final packing Manpower utilized Packaging Total Cost of Goods
Current Scenario
Ideal by a Role Model in the Industry
55250/-
65%
46750/-
55%
3400/-
4%
2550/-
3%
2550/-
3%
1700/-
2%
6800/-
8%
5100/-
6%
4250/850/73100/-
5% 1% 86%
2550/850/59500/-
3% 1% 70%
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7.3
A typical comparative Value Chain of Acid Black 210 For 1000 kg finished product with a sale output at Rs.170000/-
Particulars Raw Materials used D.A.S.A P.N.A H Acid MPD Chemicals Used Caustic Soda Hydrochloric Acid Sodium Nitrite Allied Value Load Ice Salt Additive Overheads Electricity Fuel Material Handling Pre-packing Final packing Manpower utilized Packaging Total cost of goods
Current Scenario
Ideal by a Role Model in the Industry
112200/-
66%
98600/-
58%
8500/-
5%
5100/-
3%
5100/-
3%
3400/-
2%
13600/-
8%
10200/-
6%
8500/1700/149600/-
5% 1% 88%
5100/1700/124100/-
3% 1% 73%
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7.4
A typical comparative value chain of a plastic bag (Liner) For 1000 kg finished product with a sale output at Rs.80000/-
Particulars Raw Materials used LDPE/LLDPE Granules Chemicals Used Titanium Dioxide Additive Overheads Electricity Material Handling Pre-packing Manpower utilized Packaging Total Cost of Goods
Current Scenario
Ideal by a Role Model in the Industry 60000/75%
60000/-
75%
2400/-
3%
2400/-
3%
6400/-
8%
4000/-
5%
1600/800/71200/-
2% 1% 89 %
800/800/68000/-
1% 1% 85%
A study based on focussed group discussion and one to one interaction with the participant sample units reveals that, the possibilities of achieving of ideal value chain depends on the following factors.
A corporate or Co-operative body of cluster units will effectively form a common purchase platform ensuring timely and competitive pricing of Raw Materials. The effective cost cutting could go down to 3-4% A study and guidance from technical BDS providers will ensure optimum consumption of raw materials, reducing wastage and excess consumption with better yield and ensure cost effectiveness by about 5-7%. This will further reduce the effluent load of the units.
An optimum input will lead to better process control ensuring optimum yield.
A better process control will reduce excessive use of additive chemicals use by at least 1-2%, reducing load on the value chain.
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The process control factors such as Ice, Salt etc will reduce by at least 1-2% A planned process will reduce the load on energy utilisation and controlling steps such as ENERGY AUDITS will help get better result which may reduce the load on value chain by at least 3% Automation and man power planning, will reduce the manpower utility load on value chain by at least 1%
The cluster predominantly produces dyes, which is a colouring matter. The cluster also manufactures various chemicals, which yield a lot of wastage. These are by-products used in other industries in one way or the other. A study and positive effort will create a secondary market, affecting a load on the value chain.
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Chapter 8 BDS Linkage Matrix

8.1 Overview of the BDS Market
All business enterprise need assistance to improve functioning and grow such services known as Business Development Services (BDS).The vision of developing markets for BDS has grown out of an emerging new paradigm in the field of MSME promotion. There is growing emphasis on sustainable market development and to attain this BDS market development is the right way. BDS market development leads to employment generation, poverty alleviation and ultimately leads to Local Economy Development (LED). MSMEs can be benefited by BDS in the form of cost reduction, improved efficiency, Market, development, increased sales and better productivity. There are three types of BDS namely: Generic These services are available easily and also availed in large numbers. services like that of CAs and tax consultants that are transactional in nature fall under this category. Strategic Services that are strategic in nature like marketing, testing, financial linkage, project preparation fall in this category. Embedded Such services come bundled with some products or services. Services like maintenance of machines, technical support etc. for which the user does not have to pay anything extra come in this category. Characteristics of BDS market development Focus on markets View clients as customers Market transaction relationship Greater potential for sustain ability more limited use of subsidies Goal of sustainable markets Work with many preferably private providers Roles: distinction between market facilitator and BDS providers Clear exit strategy Interventions focus on addressing market constraint Source: Jeanne Downing The underpinning rationale for BDS market development is self sustainability and a clear exit strategy. Therefore the development process must have a clear focus on the BDS market. The interventions should be such that a fee based transaction mechanism develops between the stakeholders. This helps in reduction of use of subsidies and thus develops a framework that has more
57
capability to sustain on its own. The difference between market facilitation and BDS provisioning is that the donor / implementing agencies do not directly provide services to the market but rather facilitate the provisioning of services through BDS providers. 8.2 BDS Market structure
The BDS market predominantly consists of three segments, Public BDS, Private BDS and Business management organizations. Apart from these there also exist an informal BDS which is offered by the peer group of the entrepreneurs without any fee and is not accounted for. 8.2.1 Public BDS: These are Government organizations or organizations supported by the Government that provide free or subsidized services. Ahmedabad Textile Industry's Research Association (ATIRA) ATIRA is an autonomous non-profit association for textile research. It is the largest of its kind in India for textile and allied industries. It has a membership base of 101 units spread all over India and abroad. Amongst this, 64 units are involved in Ginning, Spinning, Weaving and Processing, 37 units are engaged in manufacturing fibres, dyes, chemicals, instruments, equipments and machinery. Type of Services: The ATIRA provides the following services:

Process optimization for improved process control leading to better quality, cost reduction and export promotion. Development of New Products, Processes for textiles, dyes and chemicals Design of New Instruments, Equipments and Machinery for manufacturing quality dyes & chemical and textile Conducting studies on Environmental Pollution, Management, Human Relations and Policy Aspects
Quality of services: So far quality of their services is concerned one could assume that they provide services as per the requirement of the customers. While interacting with the beneficiaries we could assess that their services were judged to be satisfactory. They have one of the best R&D facilities and trained professionals who could cater to the requirement of the Dyes and Chemical cluster, Ahmedabad. It is worth mentioning here that ATIRA is able to customise their services as per the requirement of the cluster firms.
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Status of Utilisation: The services of ATIRA is being properly utilised by the local firms. Since they are located in an approachable distance they are being contacted by the cluster firms for getting value added services. However, being a Public Organisation their response time is slightly prolonged which discourages many local firms for availing their services in times of exigency. It is also important to mention here that the, services of ATIRA are not being properly promoted for increasing awareness amongst local firms. Therefore, units which are utilising their services for a long period are approaching them repeatedly which is not happening with new firms. Being a public institution they adopt a top-down approach in deciding the pricing pattern (charges for providing different services). They charge relatively high price compared to private BDS and there is no flexibility in their pricing mechanism. Demand-Supply situation: While analysing the supply side perspective one could conclude that their services are being utilised by the local firms (which are utilising their services for a relatively long period of time). However there is scope to improve the demand situation considering the fact that only 8-9% of the cluster firms are utilising their services. The reasons for non-utilisation can be attributed to the following; response time lack of promotion cost factor non flexible pricing structure (charges for services)
What should be done? Considering the above analysis the following things could be proposed for improving efficacy of ATIRAs services and making it accessible to the masses. Efforts should be made to create awareness amongst local firms about the services provided by ATIRA. BDS-MSME meet could be organised not only to promote ATIRAs services but also to create awareness amongst concerned officials in ATIRA about the time pressure of the MSMEs so that the response time could be reduced in future. In the context of the cost factor it is recommended that the service requirements of the local firms can be bundled together for utilising ATIRAs services.
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Central Institute of Plastics Engineering & Technology (CIPET) Technology Support Services (TSS) is an integral part of the activities of CIPET. Project consultancy, technology consulting and assessment in the field of Plastics are the important service portfolio of TSS. CIPET has successfully accomplished consulting assignments in India and abroad. CIPET has created complete infrastructure under one roof from testing stage to validation through testing. It offers TSS in the following fields Type of Services:

Design CAD/ CAM/ CAE services Tooling and Mould manufacturing for Plastics Plastic product manufacturing Plastic Testing and Quality Control Calibration Pre-delivery Inspection Consultancy on Plastic projects
Quality of services: So far quality of their services is concerned one could assume that they provide services as per the requirement of the customers. While interacting with the beneficiaries we could assess that their services were judged to be satisfactory. They have one of the best R&D facilities, training centre and trained professionals who could cater to the requirement of the plastic packaging material cluster, Ahmedabad. It is worth mentioning here that CIPET is able to customise their services as per the requirement of the cluster firms. Status of Utilisation: The services of CIPET is being properly utilised by the local firms. Since they are located in an approachable distance they are being contacted by the cluster firms for getting value added services. However, services of CIPET are not being properly promoted for increasing awareness amongst local firms. Regardless of this since there is a strong presence of CIPET with all technological instruments and knowledge their services are being extensively utilised. Being a public institution they adopt a topdown approach in deciding the pricing pattern (charges for providing different services). They charge relatively high price compared to private BDS and there is no flexibility in their pricing mechanism. Demand-Supply situation:
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While analysing the supply side perspective one could conclude that their services are being utilised by the local firms. However there is scope to improve the demand situation, with more units coming to get the services offered by CIPET. The reasons for few instances of non-utilisation can be attributed to the following; lack of promotion cost factor non flexible pricing structure (charges for services)
What should be done? Considering the above analysis the following things could be proposed for improving efficacy of CIPETs services and making it accessible to the masses. Efforts should be made to create awareness amongst local firms about the services provided by CIPET In the context of the cost factor it is recommended that the service requirements of the local firms can be bundled together for utilising CIPETs services. Indo German Tool Room (IGTR) IGTR-Ahmedabad is equipped with state of the art machinery & imported equipments from Europe. The Machines are made by trained manpower developed by German experts. The Tool room is ISO 9001:2000 certified organization & working with sound system and is managed professionally. Type of Services:

Design and manufacture of Tools & Dies Moulds, Jigs & Fixtures, Gauges etc and their appropriate use and maintenance. Modern production technology. Tool-related innovations for improved product design. Training and up gradation in Tool & Die Technology. Productivity improvement
Quality of services: So far quality of their services is concerned one could assume that they provide services as per the requirement of the customers. While interacting with the beneficiaries we could assess that their services were judged to be satisfactory. They have one of the best R&D facilities, training centre and trained professionals who could cater to the requirement of the plastic packaging
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material cluster, Ahmedabad. It is worth mentioning here that IGTR is able to customise their services as per the requirement of the cluster firms. Status of Utilisation: The services of IGTR is being properly utilised by the local firms. Since they are located in an approachable distance they are being contacted by the cluster firms for getting value added services. However, services of IGTR are not being properly promoted for increasing awareness amongst local firms. Regardless of this since there is a strong presence of IGTR with all technological instruments and knowledge their services are being extensively utilised. Being a public institution they adopt a top-down approach in deciding the pricing pattern (charges for providing different services). They charge relatively high price compared to private BDS and there is no flexibility in their pricing mechanism. Demand-Supply situation: While analysing the supply side perspective one could conclude that their services are being utilised by the local firms. However there is scope to improve the demand situation, with more units coming to get the services offered by IGTR. The reasons for few instances of non-utilisation can be attributed to the following; lack of promotion cost factor non flexible pricing structure (charges for services)
What should be done? Considering the above analysis the following things could be proposed for improving efficacy of IGTRs services and making it accessible to the masses. Efforts should be made to create awareness amongst local firms about the services provided by IGTR In the context of the cost factor it is recommended that the service requirements of the local firms can be bundled together for utilising IGTRs services.
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Gujarat Industrial Limited (GITCO)
&
Technical
Consultancy
Organization
GITCO a premier Technical Consultancy Organization (TCO) - provides consulting services to accelerate the growth of industrial and services economy of Gujarat. Currently they offer services for generic as well as niche areas aimed to ensure balanced growth and development. Type of Services:

Project Opportunity Identification Service Techno-economic Feasibility Reports Project Appraisal Service Environment Management Services Comprehensive Market Surveys Loan Syndication Technology Search and Tie-up Environment Consultancy Services Detailed Energy Audit Technology Evaluation Studies Infrastructure Development Projects Training Programmes / Seminars / Trade Fairs Organization Development and Management Consultancy Patent Assistance
Quality of services: The services of GITCO are in general opined to be at the best by cluster units availing these. Being a unit promoted by the state Government in close association with financial institutes and close proximity to the growth of Industrial Areas, the services of GITCO are utilised to the best of availability Status of Utilisation: A situation making this as mandatory auditor and past history of cleaner records makes GITCO one of desirable service provider in their speciality field. A lack of desire to promote the activity and scope of increasing the scale, however deters many units approaching GITCO. Demand-Supply situation: While analysing the supply side perspective one could conclude that their services are being utilised by the local firms. However there is scope to improve the demand situation, The reasons for few instances of non-utilisation can be attributed to the following; lack of desire to promote the activity
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lack of interest for increasing the scale
What should be done? Considering the above analysis the following things could be proposed for improving efficacy of GITCOs services and making it accessible to the masses. Efforts should be made to create awareness amongst GITCO officials for demand side A regular meet between the BDS and MSME will ease operational issues Industrial Training Institute (ITI) The Institute imparts training in 31 National level courses under the aegis of National Council Of Vocational Training (NCVT). The total sanctioned seats in these trades are 2504. Institute has 10 State Level Courses with seating capacity of 352 under Gujarat Council Of Vocational Training (GCVT). Mainly to meet local demand., apart from regular courses the Institute conducts the short term courses for weaker section of society, School drop outs, for informal sector and tailor made courses as per requirement of industry. Institute conducts such training in more than 60 different trades. Type of Services: Technical Training Quality of Service: Institutes run by State Government in the interest of fulfilling social obligations. The scheme is pushed to promote placement of students and training skilled personnel for technical operations. These services provided by this institute is found to be satisfactory by units availing them. Status of Utilisation: Units aware of the services provided by ITI are availing them. The only short fall is a lack of promotion amongst the beneficiary units by institutional promoters. Demand-Supply situation: While analysing the supply side perspective one could conclude that their services are being utilised by the local firms. However there is scope to improve the demand situation, The reasons for few instances of non-utilisation can be attributed to the following;
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lack of desire to promote the activity
What should be done? Considering the above analysis the following things could be proposed for improving efficacy of ITIs services and making it accessible to the masses. Efforts should be made to create awareness amongst ITI administrators for demand side A regular meet between the BDS and MSME for creating awareness of the availability of services Bureau of Indian Standards (BIS) The Indian Standards Institution gave the nation the standards it needed for nationalization, orderly industrial and commercial growth, quality production and competitive efficiency. However, in 1986 the government recognized the need for strengthening this National Standards Body due to fast changing socio-economic scenario and according it a statutory status. Thus came the Bureau of Indian Standards Act 1986 and on 1 April 1987, newly formed BIS took over staff assets, liabilities and functions of erstwhile ISI. Through this change over, the Government envisaged building of the climate of quality culture and consciousness and greater participation of consumers in formulation and implementation of National Standards. Type of Services:

Harmonious development of standardization, marking and quality certification To provide new thrust to standardization and quality control To evolve a national strategy for according recognition to standards and integrating them with growth and development of production and exports
Quality of services: The BIS services in general are at their peak in the vicinity of the cluster. From the supply side there is not much to analyse Status of Utilisation: Being the only institute certifying quality standards they are fully utilised and nothing can be commented on the supply side of this aspect too. A non flexible attitude in the field of documentation and interference of Bureaucracy in the over all operations prevents MSME units from availing their services.
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Demand-Supply situation: While analysing the supply side perspective one could conclude that their services are being utilised by the local firms. However there is scope to improve the demand situation, The reasons for few instances of non-utilisation can be attributed to the following; non flexible in the field of documentation Bureaucracy in the over all operations
What should be done? Considering the above analysis the following things could be proposed for improving efficacy of Banks services and making it accessible to the masses. Efforts should be made to create awareness amongst local firms about the importance of registering their standards A regular meet between the BDS and MSME will ease operational hazards. Commercial Banks: All types of banking services present in the cluster area. Type of Services: General banking services Quality of services: The Banking services in general are at their peak in the vicinity of the cluster. From the supply side there is not much to analyse Status of Utilisation: Being the only institute financing industrial activity they are fully utilised and nothing can be commented on the supply side of this aspect too. Demand-Supply situation: While analysing the supply side perspective one could conclude that their services are being utilised by the local firms. However there is scope to improve the demand situation, The reasons for few instances of non-utilisation can be attributed to the following;
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non flexible in the field of documentation Bureaucracy in the over all operations
What should be done? Considering the above analysis the following things could be proposed for improving efficacy of Banks services and making it accessible to the masses. Efforts should be made to create awareness amongst local firms about the different easy schemes. A regular meet between the BDS and MSME will ease operational hazards. 8.2.2 Private BDS Organised: A major player as a support unit for the clusters, the Business Management Organisations (BMO) has a greater role to play in the betterment of member units in the cluster. A critical analysis of the performance of the body of associations however is indicative of many more functions that the member units expect from them.
These are associations formed within a sub-sector for joint development and advocacy. Such associations are mostly membership based. There are different associations
formed by the cluster members, based on the location, activity and utility of the functions. Though all the associations have different bodies and activities, the base function is that of imparting a fundamental useful services to the member units. Much is expected from these associations, by participating members, other than the laid down conditions in the memorandum of associations. Since the associations are run by elected body comprising of the members coming from the units, the activities some times tend to get bogged up by the lack of time available to the functionaries. There are insignificant differences in the nature of services provided by BMOs. The majority of associations are mostly limiting their activities to; Arranging seminars for some knowledge imparting sessions Arranging meetings with the regulatory Arranging recreational activities for representatives of member units Representation of grievances of the member units with the regulatory Arranging a data base of the member units Looking in to the infrastructural requirements of the member units.
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Arranging Environmental treatment of smaller units in the common effluent treatment plants. Few CETPs & their capacity is mentioned in Annexure VIII. Arranging social activities such as Blood Donation Camps and funding for noble acts, study scholarships etc.
However considering the requirements of MSMEs & their growth potential, it is important that these local BMOs become more proactive and cater to the changing requirements of the MSME sector. Some of the areas where associations can play significant role are: Arranging a buyer seller meet. Arranging extensive study tours Arranging and managing a canalising agency BDS for the procurement of Raw Materials at the best price and shared financial cost. Making SPV to act as an order exchange in case of a bulk demand Arranging data bank for process control Arranging the facility of R & D Arranging the induction of process control with interaction with the technical BDS. Arrange Energy Audits as a primary functional eligibility Providing utility centre for the member units, where a one to one meet is made possible with the representative of BDS Help formation of BDS cluster with in the location Arrange for HRD activities by interacting with private BDS
Therefore, as part of this project we intend to ensure capacity building of the local BMOs and customise their services as per the requirements of MSMEs. In the
following section we discussed activities of the important BMOs operating in the cluster. Gujarat Dyestuff Manufacturers' Association (GDMA) An Apex organization of Dyestuff Industry of Gujarat Consisting of about 80% of the total units and contributing to 60% of the total export of dyestuff from the country. The activities of GDMA are protects and promotes member units interest Assist in voicing the legitimate feeling Organize seminar and workshops on the subjects of pollution control, exports, quality control energy conservation and such other related subjects. Recognizing and rewarding exporters for their excellence in the field.
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Gujarat Chemical Association (GCA) Gujarat Chemical Association, established in 1947, is now on the threshold of a new era in growth aided by six decades of experience and led by a new vision under current dynamic leadership ably supported by a visionary team. It has been playing a proactive role in leading the Chemical Industry in Gujarat over the last six decades. Over the years GCA has emerged as an apex organization voicing the concerns of the Chemical and Allied Products manufacturers and Traders. GCAs philosophy is encompassed in its missionary statement To promote and foster the Development of the Chemical Industry for the betterment of the society and ensure a perfect synergy between various forces of Research, Technology, Commerce and Government. Gujarat State Plastic Manufacturers' Association (GSPMA) Established in 1970, the Gujarat State Plastic Manufacturers' Association (GSPMA) is one of the leading plastic manufacturers associations in the country, representing Plastic Industry at State as well as Central level. Promotion of image of Gujarat based units in the country and has been functioning as a major link between the Industry & the Government. organizing technical seminars/ workshops on various subjects from time to time to update the knowledge of the members
Vatva Industrial Association - VIA Vatva Industrial Estate, Ahmedabad, was set-up in the year 1968, when GIDC initialized the industrial Revolution of young Gujarat State. It is one of the oldest and largest estates in the state Representation & Liaison

With AMC for basic infrastructure facilities With State / Central govt. for administrative changes in govt. departments & procedures and in re-construction of industrial policies. For better facilities at Tel. Exchange, Police Station, Post Office etc. to benefit consumers & industries.
Lectures & Seminars

Industrial Safety Engineering Drawing Reading Taxes Budget Energy Conservation Training for Gardeners & Eco Awareness Packaging Procedure
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First Aid Computers & Internet Environment Protection Recycling concept and many more
Activity forums

Participation & active involvement in meetings & committees at EDI, Viksat, Nehru Foundation, PCRA, GCCI, FIA, GSSIF, AMC etc. Tree Plantations. Vatva Young Entrepreneurs Forum Common Effluent Treatment Plant Annual Get together Charitable Trust run poly Clinic
Naroda Industries Association NIA Naroda Industries Association (NIA) was incorporated during the year 1968, to provide a wide range of community and support services to its 600 members i.e. mainly the Industries located in the Naroda Industries Estate. The Association since its inception has continued to play a pivotal role in addressing the needs of its Members. Odhav Industries Association - OIA Odhav Industries Association (OIA) is one of the oldest & highly recognized Industrial Association among the Govt. Organization & industries. OIA was established in 16-01-1981 by Late Shree Nanubhai Patel and many other renowned industrialist of Odhav with the prime objective of encouraging & spreading entrepreneurship attitude among the manufacturing sector, especially SSI. 8.2.3 Private BDS Un-organized: These are private service providers specializing in different fields by virtue of their knowledge and experience. They are catering to the requirements of the MSME sector in different areas. In the following section an attempt was made to assess the quality of private BDS based on specified service areas as indicated in Table No 12.
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Procurement service providers Quality of services: There is a wide scope of demand for the service, however there are not many providers in this segment. Not much can be therefore said about the quality of services in this segment. Status of Utilisation: Absence of a consortia or a co-operative, prevents service providers attacking this segment, due to a small market. This has however a wider scope in operations. Awareness of the benefits of collective buying needs to be addressed amongst the beneficiary units. Demand-Supply situation: Our study reveals overall pathetic situation in this segment of service, due to; Lack of awareness of the benefits of collective buying
What should be done? We need to address this segment by arranging Workshops for creating awareness Formation of clusters with in the cluster for easy operations Creation of a leadership in the cluster Technical Service Providers Quality of services: The ease of availability of this segment in service providers has brought about a boost in the industrial growth since 1980s in the cluster. Overall we can assume that the services are satisfactorily available. Status of Utilisation: In the instances where the promoters are non technical, a mutual trust between the technical supporter and the promoter has brought about a wide scope of availability of the segment of project implementation and production in the manufacturing units. . It is however seen during our interaction with the promoters that, a situation demanding specific technical know how, puts a limitation of ease in the operational aspects of the services. Demand-Supply situation:
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Promoting business activity and growth requirement has created a steady pressure over the supply side for the segment of service providers. However there are certain areas where more efforts need due to; a situation demanding specific technical know how
What should be done? In order to improve situation of irrationality, efforts such as; A technical bank, or interaction with the association of technical service providers and MSME units to better understanding of demand. Quality Certification and Registration Service providers Quality of services: This is one area where the supply side is stronger than the demand. MSME units engaged in the activity of production of all three products are not aware of the ease and quality of the services available. The overall situation in the service providers segment for these services is very good. Status of Utilisation: Units either engaged in exports or catering to the quality requirement of their product, avail frequently these services depending on the demand from their market. Over all availability of these services is in ease compared to other fields of manufacturing, since the service providers are in ample supply. There is however a wider perspective in creation of demand side amongst units of cluster. Demand-Supply situation: A easy supply side of the segment of service in this area of demand has however the following short falls due to; perspective in creation of demand
What should be done? In order to bring about a change in the situation for creating a steady and increasing demand we can
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create awareness amongst the beneficiaries for the international and upcoming domestic requirements of this kind of certification for their products. Equipment Servicing Providers/ Testing Laboratories Quality of services: There is an ample supply and ample demand for this type of service. Not much can be said and done for this segment. Status of Utilisation: The services are amply utilised and provided with ease. Demand-Supply situation: A balanced demand and supply situation leaves a very limited scope except for the awareness of the requirement of quality parameters in beneficiary units. What should be done? In order to ease out the growth of this segment, we need to; Workshop for the requirement of standard quality parameters. Research and Development Quality of services: A total bleak situation amongst the micro and small segment of MSME units, has put a question mark on the growth of supply side for this service. The service is available with a good quality frame work, from amongst the technical service providers. Status of Utilisation: Except for few medium units, no one seems to be interested in the availing of this segment of service. Demand-Supply situation: A lack of demand has negated the scope of expansion of this segment of service. The reason associated is mainly, apprehension amongst the beneficiaries about the secrecy and transparency. The same comment can be made for the supply side. What should be done? 73
Involvement of neutral BMO or Public institute for Interacting with both sides easing out the apprehensions Analysing and imparting knowledge about the importance of this service segment for reduction of pollution load to the units Environment & Energy Related Service Providers Quality of services: The supply side has to make a lot of breakthrough in the offering of this service amongst the ignorant and reluctant beneficiaries. The quality of services available is excellent keeping with the situation enforced by regulators, Status of Utilisation: The services of this segment come as a situation made compulsory by regulators. The matter of survival forces units to avail the services. There is however a common apprehension amongst the units availing this service about the effectiveness, causing overall misunderstanding between the service providers and the beneficiaries. A better understanding about the technical implications of the regulation and the best availability of technology for reducing the pollution load may effectively reduce the apprehensions and improve upon interaction between the BDS and MSMEs. Demand-Supply situation: The ignorance of demand, results in the ineffective supply side in this segment. The reasons are mainly due to; technical implications of the regulation ignorance about availability of technology for reducing the pollution load What should be done? In order to improve the supply demand adverse gap from the demand side, we can stabilise the situation here by Conducting regular workshops in small section of the cluster Organising seminars with the help of regulators and BMOs and the BDS to impart correct knowledge of ease of technology Financial Service Providers
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Quality of services: More and more MSME units depend on the services of this type of providers, speaking for the competency and ease of the supply side. There is however an apprehension amongst the beneficiaries about the competency of service providers due to the presence of a factor of in-consistency. Status of Utilisation: The ease and cost effective nature of this segment of service providers make them accessible to the units. The apprehensive caution on the beneficiary side is the only limitation for the segment. Demand-Supply situation: Increase in the business segment of dyes, chemicals and plastics with the steady rate of industrial growth, has exerted pressure over this segment of service providers. There is ample supply of the providers in the segment. The reasons for a lack of confidence amongst beneficiary units is however due to, apprehensive caution on the beneficiary side
What should be done? More can be done to improve situation such as;
A rationalised approach from BDS-MSME interaction by providing a

localised centre for availability of the service, with a clear understanding of requirements. Administrative & Regulatory Services Quality of services: The service providers are in plenty and not under pressure to create a demand for them. However the overall service quality is satisfactory reported from the one to one interaction with the units. Status of Utilisation: A regulatory demand has automatically generated a supply-demand chain for the service. The utilisation is therefore optimum
Demand-Supply situation:
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The service providers are in plenty and effectively cater to the wider spectra of market,. This is not a speciality field and hence the supply side matches with the demand side. What should be done? We have not a scope to act in this segment except Making locational availability for the beneficiaries to ease the efforts for implementation, Marketing Service Providers Quality of services: There is a wide scope of demand for the service, however there are not many providers in this segment. Not much can be therefore said about the quality of services in this segment. Status of Utilisation: Absence of a consortia or a co-operative, prevents service providers attacking this segment, due to a small market. This has however a wider scope in operations. Awareness of the benefits of collective buying needs to be addressed amongst the beneficiary units. Demand-Supply situation: Our study reveals overall pathetic situation in this segment of service, due to; Lack of awareness of the benefits of collective selling
What should be done? We need to address this segment by arranging Workshops for creating awareness Formation of clusters with in the cluster for easy operations Creation of a leadership in the cluster Providing Logistics for local and international Quality of services:
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There is an ample supply and ample demand for this type of service. Not much can be said and done for this segment. Status of Utilisation: The services are amply utilised and provided with ease. Demand-Supply situation: A balanced demand and supply situation leaves a very limited What should be done? Not much is left to do in this segment. Industrial Relations training providers Quality of services: There is a wide scope of demand for the service, however there are not many providers in this segment. Not much can be therefore said about the quality of services in this segment. Status of Utilisation: Absence of a consortia or a co-operative, prevents service providers attacking this segment, due to a small market. This has however a wider scope in operations. Awareness of the benefits of human relations effecting operational ease needs to be addressed amongst the beneficiary units. Demand-Supply situation: Our study reveals overall pathetic situation in this segment of service, due to; Lack of awareness of the benefits of Industrial Practices
What should be done? We need to address this segment by arranging Workshops for creating awareness Formation of clusters with in the cluster for easy operations
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In the following section an attempt was made to assess the (business development) service market from the demand and supply perspective and they have been evaluated as high, medium, and low.
Table - 14 Demand Supply Status

Sr. No 1 2 3 Services Financial Service Providers Technical Service Providers Quality Certification and Registration Services providers Environment & Energy Related Service Providers Administrative & Regulatory Services Procurement service providers Marketing Service Providers Equipment Servicing Providers Testing Laboratories Research and Development Providing Logistics for local and international Providing Technical Training to plant operators Industrial Relations training providers Supply Level High Low Low Demand Level High High Medium Demand Supply In-equilibrium
Medium
High
5 6 7 8 9 10 11 12
High Low Low Medium High High High Low
High High High Medium High Low High High
13
Low
High
N.B.: indicates existence of in-equilibrium, -indicates equilibrium situation Based on the above-mentioned demand-supply matrix the pressure points of the cluster were derived as mentioned below;
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Pressure Points (corroborating high demand & low supply situation): Up-grade knowledge and tools for process and product technology for cleaner production Environmental issue as Increase pressure from regulators on effluent treatment with stringent norms Quality registration such as REACH, to compete globally and enhance export Reduction in value chain by energy saving Raw Material procurement Marketing of the products Training to workers and supervisors to improve productivity
Managing Low Demand High Supply situation: Cluster MSMEs are not aware about new product and process development though there is predominance of such services in the cluster; thereby indicting low demand high supply situation (please refer Sr. No. 10 in the above table). Status in MSME
8.3
The manufacturing units under this project are largely in Micro and Small sector, and only few have grown into Medium scale of manufacturing. The limitations owing to the size restrict the entrepreneurs from hiring personnel for different specialized services, which are otherwise very crucial for the formation, running and progress of the unit. The entrepreneur is bound to seek the help from external professional agencies, called Business Development Services (BDS) providers. A study in the related fields of operations reveals a deep vacuum in the services normally required by such SMEs. To illustrate some following table formulates the FOCUS required in the services rendered by BDSPs. The nature of problems faced by micro, small and medium enterprises in the cluster is more or less same. However, the approach to address the problems would ob will obviously vary due to the cost, capability and other factors. The interventionary approach of addressing these problems (Pressure Points) have been discussed below;
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Table 15 BDS Linkage Matrix
Area of Services
Status
Micro Unit
Small Unit
Medium Unit
Production: New technology research Procurement Process Related Testing Raw Material In Process Finished Mould Making (for Plastics) Marketing: Trade fair logistics
Non Existent * Non Existent Non Existent
Limited utilization * Non Existent Limited utilization Limited Utilization Limited utilization Utilized Utilized
Limited Utilization Not Utilized * Limited Utilization In house * In house In house Utilized
Limited Utilization Non Existent Limited utilization Utilized *
Limited utilization Exports Non Existent Indigenous Non Existent Access to Export Non Existent Markets Organizational & Technical Patenting Non Existent Registrations Limited utilization Consent for Utilized Regulatory Procuring Quota Limited utilization Energy Audits Limited Utilized Environment Audit Quality Registrations e.g. as (REACH, OKETEX etc) Utilized Non Existent
Limited utilization Non Existent Non Existent Limited utilization
Utilized Limited utilization In house Utilized
Limited utilization Limited utilization Utilized Utilized
Utilized Utilized Utilized Utilized Utilized
Limited utilization Utilized Limited utilization
Utilized Utilized
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Organization: Skilled/Supervisory Manpower Sourcing Training Counselling Safety
Non Existent
Non Existent
In house
Non Existent Non Existent Utilized
Limited utilization Non Existent Utilized Utilized Utilized
Limited utilization Non Existent Utilized Utilized Utilized
Finance: Business plan Utilized Development Advocacy Related Limited Matters such as utilization Taxations
* Non Utilized Indicative of availability of this service amongst the BDS providers, however the units not utilizing this service. * Utilized Indicates that the units make full use of these services * Limited Utilization Indicates that the service is utilised only by units who are aware of the benefits * Non-existent Indicates that there is an absence of service providers for this skill, despite of demand from units. This may be due to a lack of awareness on part of BDS providers, or the potentiality is not being considered. * In House Medium Enterprises by their scale of operations, are able to make use of employed personnel for the utilisation of these services which otherwise are required to be hired on as and when require basis.
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Chapter 9 Analysis of Business Operations

In this chapter we will be discussing broadly, limitations of the existing BDS firms and Major issues & likely BDS led strategic solutions. 9.1 Limitations of existing BDS firms:
In this chapter we have extensively studied the existing status on factual grounds revealed by the participating sample units for the limitations on availing the services of the BDS units, existing in numerous capacities in existing market. Most of the units falling under Micro section of enterprises are not even aware of the existence of such services, nor is there enough effort to bring these services in to the vicinity of their operations. The broad aspects studied by us pertaining to Market, HRD, Raw Material, Technology, Infrastructure reveal that the units have an apathy to availing these services with a general conception that these exists only for the benefit of large units. The underutilized BDS market owes to the following limitations 1. Ignorance by beneficiary units 2. Uncertain Costs 3. No direct fiscal benefits visible 4. Apprehensions about the reliability of BDSP 5. Distance from units 6. Willingness on part of enterprises The apathy of BDSP to the potential market may be associated to, 1. Apathy to growth owing apprehensions of competition 2. Lack of foresight 3. Undue contentment 4. Apprehensions about the reliability of client 5. Un-prepared to be customer friendly 6. Large vacuum leading to wariness In the backdrop of availability and limitations in scale of operations the BDSPs are sectored in to two major groups Private BDS Providers Public BDS Providers The Private BDS providers are imparting and marketing their specialized knowledge, actively to the direct beneficiaries, which is SMEs. The Public BDS providers mainly provide specialized services to the SMEs, in somewhat passive mode. The interlinking of these beneficiaries to the SMEs is limited to the utility value.
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9.2
Major issues and BDS embedded strategic solutions:
In this section we have presented service area wise current status and likely developments along with BDS and pressure points. A detailed study indicative of the strengths, weaknesses in operations, opportunities available and threats to counter act are tabulated for a detailed explanatory analysis as under. The present study primarily caters to the requirements of the (business development) service market in the dyes and chemical sector, as plastic packaging has a very limited scope of cost reduction and profit maximisation due to the following facts; i. Majority of the cost is associated with raw materials, the pricing of which is based on very big players in the national and international market. In India pricing is controlled by almost a couple of units. The units have a micro level activity and hence most of the add on cost that may be saved comes from optimum utilisation of energy. Our study reveals that though the margin of profits are low as compared to the other types of units covering different range of products, the ample size market and a regular flow of increasing business, prevent any serious impact on the SME units in this sector.
ii. iii.
While we look at the segment of dyes & chemicals over the international scenario, it reveals that the operating and utilisation size of the units in this segment is very small in comparison with their Chinese counterpart. With the help of BDS providers there is a wide scope to reduce the cost of value addition. There is no significant difference in the service requirements of Dyes and Chemical units and their problems are more or less similar. Thus the analysis of business operation has been discussed taking a homogeneous standpoint for the Dyes & Chemical sector. Another point that highlights the outcome of study is in order to counter the difference in the scale of operations, the cluster needs to put up combined marketing platform to strengthen unit cost by removing duplication of operational cost in the value chain and quote suitably to win large international orders. A formation of consortia without disturbing the individual identity of the units, will lead to a combined effort in the marketing and overcome hurdles of smaller size for units. A guidance from BDS providers in this segment, will help decide the cluster members further outlay of such consortia.
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Delineating AOBO of the cluster; In the following section a detailed analysis of business operation has been done. Each functional area has been discussed from the point of view of MSME followed by applicability of BDS perspective in those functional areas. Moreover, each functional area has been sub-categorised and their present status, likely developments, likely BDS involvement has been worked out keeping the pressure points as the prime focus. This has been presented in a tabular form below; 9.2.1 Procurement Raw material related: Limitations arising about due to sheer size/scale of operations of MSME units, put a limit to the capacity of buying raw materials as the most economic price structure. Absence of big quantum of business, prevent these units from effective negotiation of terms and price. Our study reveals a desire by beneficiary units for the formation of a canalising agency, utilising a common roof, with a common funding and secured data. BDS perception: An active role is sought by BDS provider in helping formation of such canalising agency, with a broad outlook for capacity building of MSME units. Public institutes like GITCO, financial supporters like SIDBI, banks and BMOs will play a very important and active role here. Area of Service Competitive Pricing Policy Current Status Non existent Likely Developments to be worked upon Formation of Canalising Agency Likely BDS Supportiv e Role Player BMOs GITCO SIDBI and other Bankers Financial Institutions Pressure points Commitment from participating units Creation of data base Security
BMOs Public BDS like GITCO
Ware housing
Nonexistent
Financial Transactions with member units
Formation of facility to store under common secure roof Proposed Arrangement of to be common funding, formulated with secured data
BMOs Canalising Agency Canalising Agency
Financial Institutions
Rating of participating units
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9.2.2 Production Technology Related: When we refer to the technology, we always look in the product research for taking up the manufacturing activity. For a product where technology is already available and easily made into the practice, there is nothing to search about. However, for a new product research, MSME units have no easy resource available. There another aspect of modification of technology for effectively reduction in the cost. A third angle related to effective process control, which helps optimum utilisation of raw materials and skills. In order to have advantage of technological development and enhanced margin, industries need this service. Our findings are indicative of an absence of such exchange of technology between the BDS and MSME units. There are various reasons associated for this vacuum, the most important being absence to fair fare knowledge sharing between the technical support service providers and MSME units. BDS perception: Our findings point us to the institutions engaged in research activities for new products viz. academicians and professional research institutes. An active participation by the ministry of industry to help creation of cluster of such BDS provider and active involvement of public institutes such as GITCO and related BMOs, will help locate such services. A public private participation will help formation of such a cluster and remove apprehensions regarding transparency, information sharing, up-keeping secrecy and safety of payment to the BDS. Area of Service New Product Research Current Status Non Existent Likely Developments to be worked upon Finding of New Products Likely BDS Science Institution s such as colleges Supportive Role Player Department of Industry By way of Active Public Private Participation by funding institutes BMOs Public BDS providers like GITCO with a funding from Industries Department, Government of Gujarat BMOs Public BDS Pressure points Transpare ncy of the findings
New Technology
Very limited almost non existent
A continual process of development on existing product
Associati on of technical BDS
Apprehensi on about reliability in terms of result orientation and payment Information sharing
Environment Friendly
Very Limited
Enacting GOOD Associati MANUFACTRING on of
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Process & Process Control
following
PRACTICE in general and controls in specific
technical BDS
providers like GITCO
and secrecy by participatin g units
9.2.3 Quality Analysis Industry needs a lot of support role while establishing the standards of the product manufactured. It needs establishing quality approvals. A quality certification for the raw material used and finished product offered for marketing, is very important and so is monitoring of process controls. There is a vacuum from supply side, in majority of the issues except for quality testing. BDS perception: We find requirement of institutes like ATIRA, GITCO and a host of private BDS, with a strong support role of canalising agency sought above and BMOs. Area of Service Current Status Likely Likely BDS Developments to be worked upon Quality ATIRA, certification GITCO, Private BDS Establishing ATIRA, Process control GITCO, points Technical BDS Association Quality certification by SPV like BDS SPV or BMOs Supportiv e Role Player BMOs, Canalising Agency Canalising Agency Pressure points Proper Sampling Extensive follow up by units
Raw Material Exists in all units In Process Limited Existence
Finished Goods
Utilised by all functional Units
ATIRA, GITCO
Recognition of Authorisation and Sampling
9.2.4 Marketing Individual units do have own sourcing skills and market developed for finding outlets for their product. However there is a large area un-covered, with a potential market for BDS providers. When we talk about a strong presence of a canalising agency, we also look forward to locate BDS providers to bring the units and buyers together. A regular domestic buyer-seller meet, trade fairs inviting foreign buyers and a direct interaction of the units with the consuming units is essential to be provided in form of a service.
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BDS perception: We identify a very effective role of MSME and Ministry of commerce, with an active participation of the BMOs. The public particiapation in terms of funding such marketing events will boost up desire by participating units. Area of Service Trade fair Logistics Current Status Limited Utilization Likely Likely BDS Developments to be worked upon Buyer Seller Meet BMOs Locally Canalising Agency SPV Supportiv e Role Player BMOs Ministry of Commerce Ministry of MSME (Market Developme nt Scheme) Ministry level Organisati ons for sharing funding BMOs Pressure points Active Participation And knowledge distribution to Units
Export
Limited Utilization
Local meets with foreign buyers
SPV BMO
Active Participation by Units and awareness programs
Domestic Marketing
Under proposal
Interaction with Consumers clusters like leather cluster in Chennai/Kolkata require dyes for leather
SPV BMOs
Logistics
9.2.5 Certification and Registration: In case success is sought after by successfully administering the services as mentioned in section IV, this will automatically create a demand for the support of the product manufactured and the units identity to fairly compete against large players. There is a wider recognition required for the product by way of registration of features, constitution, and patenting process. It also needs to address issues like obtaining consents from different regulators, international quality approvers, seeking availing fuels at a cheaper rates by way of obtaining registration under government quota as also energy audits for effectively reducing cost. These are provided by BDS engaged in speciality technical matters. A mixed presence in these segments need a lot of attention.
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BDS perception: Public and private BDS providers need a better interaction by awareness programs under the strong influence of BMOs and ancillary institutes like EDI. Area of Service Current Status Likely Developments to be worked upon Creation of awareness amongst stakeholders Likely BDS Supportiv e Role Player BMOs Ancilliary institutes like EDI Pressure points Imparting acceptance level in benefiting units.
Product Limited Registrations Utilisation
Patents
Limited Utilisation
Creation of awareness amongst stakeholders
Technical Public BDS like GITCO Private BDS specialised in the field of Registration Technical Public BDS like GITCO Private BDS specialised in the field of Patents
BMOs Ancilliary institutes like EDI
Different Consents /approvals
Utilised by Technical data all development to concerned match the needs of manufacturing
Environment related Public BDS/ Private BDS
GITCO BMOs ATIRA
Procurement of Quota of Fuels/ Raw Materials
Limited Utilisation
Quality Limited Registrations Utilisation Like REACH, OKETEX ISO
Creating awareness amongst stake holders by continuous interaction through seminars/worksho ps Study grouping of relevance in world trade
Private BDS specialized in the field of liaison
BMOs
Very limited scope in the area of this cluster and the cost effectiveness will be prohibitive some times Arriving at the optimum level of production which will help attain logistics Working out details of cost effectiveness with the beneficiary units.
Private BDS specialized in quality registration required foreign trade
BMOs Ministry of Industry and commerce by way of
Liaison with the ministry for creating understandin g of the need for
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Etc
Public BDS like BIS
Energy Audits
Rarely Utilised
Making this a fundamental qualification for availing memberships of BMO,Creation of awareness amongst stakeholders
GEDA GITCO ATIRA
funding and subsidising aspiring units in foreign trade BMOs Minisry of Energy by way of funding and subsidies
enhancemen t of foreign trade
Imparting transparency amongst stakeholders
9.2.6 HR and Training: Industry can not survive with the mechanised set procedures alone. There is a lot to be recognised in non-technical aspects such as HRD, training skilled/nonskilled personnel, a humanitarian approach in dealing with the problems related to counselling with labour, certain advocacy related matters involved in to the day to day matters. These constitute a large part of administration of unit. Our findings reveal mixed presence of BDS providers in this segment. An exposure visit by the cluster members to other identified clusters located in distant places, will also impart a lot of knowledge sharing. BDS perception: Private and public BDS, Ministry of labour welfare and BMOs will have a larger share in providing adequate services in this segment under the strong supervision of BMOs for monitoring large scale funding activity in PPP. Area of Service Current Status Likely Developments to be worked upon Direct interaction with the educational institutes and sourcing agencies Creating speciality portals in the field Creation of onsite Likely BDS Supportiv e Role Player BMOs Pressure points Arrangement of creation of data base of aspiring service providers
Human Very rare Resources Development
Institutes Private BDS engaged in the field of placements
Training of
Limited
Private BDS
BMOs
Creation of
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skilled/non skilled personnel
Utilisation
training groups with in the BDS for direct interaction with stakeholders
providers Public Institutes Ministry of Labour welfare
Counselling To implement worker friendly schemes
Not Utilised
Creation of a cell in the cluster, where counselling for the problems can be sought, to reduce apprehensive reactions Creation of a cell for interaction with regulatory bodies for submission of documentation Creation of a cell where in the private BDS providers interact with the stakeholder units, nearer to the cluster units A visit to other centres manufacturing similar products, to interact discussing common issues and positive goals achieved
Ministry of Health Ministry of Labour Welfare
Advocacy Related matters
Limited Utilisation
Regulatory Authorities controlling activities of units Private BDS
Ministry of labour welfare by way of subsidising and funding the activity Ministry of Health Ministry of Labour Welfare By way of allocation and funding BMOs
training groups and planning for the activity in different locations
Creation of cell with the BMO or Industrial Area network
Exposure Visits
Non Utilised
Private/Publi c BDS engaged in the field of technical services
BMO
Interacting with the concerned ministry for creation of such cells within the BMOs premises Inviting private BDSP to extend area of operation. Interaction with successful units from other centres for sharing
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9.3
Areas for deciding advantages and limitations of the Public/Private BDS:
A detailed study mapped above brings out certain comparison between the public and private Business Development Services Providers. While undertaking the enhancement of the BDS market for better interaction and availing services, these must be taken in to consideration, while we plan to assign different actions. Table 16 Public v/s Private BDS Private BDS Provider Advantages Limitations Creation out Limitations of of acquisition skilled of knowledge personnel Direct Limitations of interaction investment in with the equipments SMEs on Apprehension one to one interlinked to basis client Recognition May get acquired by actively providing involved in services over client business time scale Public BDS Provider Advantages Limitations Creation out of the Area of social obligations operations are of Regulatory restricted due bodies / Industrial to location Departments Specific Unlimited skilled allocation of personnel personnel to Unlimited budget interact on investment in restricts long technical term equipments relationships Recognition acquired with the enactment of services Will not voluntarily be a part of clients business activity More trustworthy on basis of track record
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9.4
Who Does Who Pays Matrix:
On the basis of our study, we have identified a crucial linkage of the cluster stakeholders and the presentations is made as under Table 17 WDWP Matrix BDS Function Production: New technology Research Procurement Process Testing - Raw Material Private BDS None None Public BDS (e.g. ATIRA) Private BDS Public BDS (e.g. ATIRA) Private BDS Public BDS (e.g. ATIRA) Private BDS Public BDS (e.g. CIPET) Private BDS SMEs N/A N/A SMEs SMEs SMEs SMEs SMEs SMEs SMEs SMEs Direct N/A N/A Direct Direct Direct Direct Direct Direct Direct Direct Who does? Who pays? Payment mechanism
- In Process
- Finished
- Mould Making (for Plastics)
Marketing: Trade fair logistics Exports Indigenous Access to Export Markets Private BDS (e.g. B2B portals) Public BDS (e.g.Chemexil etc) Private BDS None Private BDS SMEs SMEs SMEs N/A SMEs Direct Subsidy Direct Direct N/A Direct
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BDS Function Organizational & Technical : Patenting
Who does?
Who pays?
Payment mechanism
Registrations Consent for Regulatory Procuring Quota Energy Audits
Environment Audit
Quality Registrations such as (REACH, OKETEX etc)
Private BDS Public BDS (e.g. GITCO) Private BDS Tech Private BDS Private BDS Private BDS Public BDS (e.g. GEDA) Private BDS Public BDS (e.g. GITCO) Private BDS
SMEs SMEs SMEs SMEs SMEs SMEs SMEs SMEs SMEs SMEs
Direct Direct Direct Direct Direct Direct Direct Subsidy Direct Direct Direct
Organization: Skilled/Supervisory Manpower Sourcing Training Counseling Safety Private BDS Public BDS (e.g.CIPET) None BMOs SMEs SMEs N/A SMEs /BMOs Direct Direct N/A Direct
Finance: Business plan Development Advocacy Related Matters such as Taxations Private BDS Private BDS SMEs SMEs Direct Direct
The Direct mode of payment in indicative of that of the payment of benefiting unit is going directly to the BDS provider and not through any nodal agency.
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9.5
Focused Group Discussion:
Our Focused Group Discussions revealed all the above SWOT characteristics and helped identifying CORE areas where an upwards availability of opportunity manifolds exists in the required interlinking of the Clusters. The participating units both from SMEs and BDS listed out the specific areas of concentration as listed in Annexure III Major outcome from the FGD is as under, however this is not listed in order of weight age but as per the points raised by participants during discussion. This will be utilised for coming up with current pressure points mentioned in Section 9.6 1. Create awareness amongst the enterprises. 2. Environment related issues for the ETPs and correlation with regulators. 3. Obtain quality registrations such as REACH to compete in the international Markets 4. Need education for cleaner production amongst SMEs. 5. Ensuring cost reduction in achieving model value chain by energy savings. 6. Automation to be in Industry to avoid human errors 7. Affordability of services need lot of education/persuasion 8. A detailed study on man-power management, 9. Creation of a raw material bank, 10. Creation of a co-operative society for marketing, 11. Incorporation of a separate company for marketing the products, 12. Creation of Bi-product chain and marketing there of 13. A Single Window service should be availed
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9.6
Current Pressure Points:
Based on the FOCUSSED GROUP DISCUSSION and ONE TO ONE interaction of the sample units, we have arrived at the following pressure points. 9.6.1 Environmental issue: The primary treatment has to be carried out by the units in order to meet inlet norms describe by the CETPs and CETPs have to meet the norms set up by GPCB. Majority of the units are not matching these CETPs Inlet norms or units outlet norms. Their primary treatment is not up to the mark to attain these CETPs norms and also their production process is faulty. Due to this , CETPs are also unable to attain norms of GPCB and now GPCB has pressurised to attain these norms or close down the units which are more polluting the environment. By providing knowledge about better production processes and good primary treatment process, this environmental issue can be reduce and solve in near future. 9.6.2 Cleaner Production: Most of the units are not getting proper yield out of their processes and thee is high wastage of raw material. This is because lack of technical speciality, experts and knowledge for the production process. Cleaner Production is an overall approach to business management. It involves changing attitudes and rethinking products and process. However cleaner production is not only about manufacturing and production. It covers all processes, products, services and their impacts including planning and design. It has been proven that organisations can actually protect the environment and save money. By applying cleaner production approaches they can discover how to increase efficiency and reduce waste and pollution. One of the main drivers for improving environmental performance has been that organisations can no longer afford to simply treat and disposes off their waste; the focus has shifted to reducing waste at source. Cleaner production often focuses on raw material, waste and energy but it is not just an environmental imitative it is a combined environmental and business strategy. One of its
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basic promise is that it improves efficiency and productivity. It enhances community and employee heath and safty. 9.6.3 Energy Utilisation: It has been studied by the BEE, most of the units are consuming extra energy and there is lot of scope to reduce energy utilization. About 60 % of the organisations in this cluster are consuming 40000 units per annum. There is wastage of energy both at works and at offices. This high energy utilisation can be reduced by Energy Audits and consultation in energy areas. As per value chain analysis, energy consumption is around 8 % of the cost of Material. 9.6.4 Raw Material Procurement: There is stiff competition in the domestic as well as International market. To compete in the market, all have to be cost effective. In dyes and chemicals, 7580% cost is of Raw material and plays a significant role for the final costing. Quality raw material at cheaper price will help to compete in the market and reduce effluent load. For solution of this issue, one consortia or society has to be formed under which bulk buying facility is provide. 9.6.5 Quality Registration: European Regulation introduces REACH to ensure a high level of protection from the risks that chemical may pose to human health and the environment, through the generation and dissemination of information on chemicals, in particular safety information. Ideals with the Registration, Evaluation, Authorisation and Restriction of Chemical substances. Majority of the Export is to the European Market and to send the material, organisation has to be REACH compliance. Most of the firms are not aware about the procedure and norms for the REACH. To compete in the European market they have to be REACH compliance.
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9.6.6 Training to workers and supervisors Productivity and Quality improvement can reduce the cost effectively. By providing proper training to the workers and supervisors can improve the process. Also there should be adoption of best practices to improve efficiency and effectiveness. 9.6.7 Marketing All micro and small companies are facing difficulty in direct marketing; they are doing indirect export through traders. Also they have problem of Bulk order, they can not provide the demand in bulk. This can be solved by forming and all cluster members can sell together in bulk and get proper price for their material.
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Chapter 10 SWOT Analysis of the Cluster

Based on the interaction with the cluster stakeholders including BDS and findings of the study, a detailed SWOT analysis of the cluster has been done as under; Table 18 SWOT Analysis Stakehol ders SMEs Strength Low operational cost Direct access to the opportunities Ease of operations Excellence in crisis management at micro level Strong base for producing various categories of dyes for different end use applications (Acid, Direct disperse, Azoic, Reactive and VAT dyes etc.) Major raw material component sources within the country Weaknesses Lack of innovation in product and process up gradation (cleaner production) No technical Solution to Environment Pollution problem Low productivity due to non skill base worker The industry on account of its small size, finds it tough to compete in high margin products with global players Apathy to growth Unwillingness to market services Opportunities Consortia formation for Raw Material procureme nt Energy conservati on Cooperating with the Public BDS Formation of consortium for marketing in cluster due to a sheer controlled size Threats Imparting training International Quality norms i.e. REACH, ISO Extinction in case of failures of Upgrading, Automation
BDSP (Private)
Ease in communicating Direct access to the market Comparatively higher flexibility in business terms
Awareness to MSMEs about different services will increase BDS
Lack of credibility from SMEs due to non confidence Presence of BDS from
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providers business
BDSP (Public)
Availability of personnel and equipments Recognition by the regulatory bodies for reliability Comparatively higher credibility than private BDS for certain areas of services
BMO
Strong presence in the cluster area. Better organising capacity Better interaction with the regulators in presentation of problems of member units Visionary leadership Good infrastructural and financial resources
Delay in imparting services tendency to ignore specific problems unable to access clients lack of willingness to market services Lack of flexibility in business terms Preoccupancy of leadership brings about limitation of attending to core issues. Lack of attention distances leadership and BMO from real needy units Internal dynamics of key functionaries
Act as a bridge between stakeholder s Act as counsellors for specific cluster Obtain a recognition from overseas regulatory
outside the cluster with higher competence in future Aversion by SMEs due to red-tapes Loosing battle with the agile private BDS Higher degree of flexibility and dynamism in private BDS for business terms
Invite expertise to attend to the core issues Share acquired knowledge with the member units Availability of funds and tech support from Govt/Multila teral Organisatio ns for industry level action
Aversion of member units out of lack of interaction
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Chapter 11 Cluster Map

There are various stages and agencies involved in the manufacturing of cluster items. A simple unit manufacturing either dyes/chemicals (including packaging material) of the cluster is aided and effectively controlled by many players actively or passively involved in the business transacted during the tenure of operations. The dyes/chemicals manufacturers are of various types, like only manufacturers, manufacturers and exporters, job workers who convert the raw material to semi finished/finished as per the requirement of big units, some times specialist dryers involved only in few intermediate stages of production. These are aided by various passive units, which have indirect interest in the operation of the SME in cluster. They are the suppliers link in raw materials and marketing links in the sales of products. Apart from these, make their presence felt silently and effectively are the SERVICE PROVIDERS for the aid of BUSINESS. The linkages provided by them, to preview few are, product development, environmental, advocacy related etc. The public units in BDS are listed in Annexure VII of the report, which explains the role of units like Indo German Tool Room, providing services for tools development to plastic manufacturers, CIPET which provides technology, ATIRA which takes up comprehensive study of the effluents and finished product as well as units like GITCO who have an entire package in financial services to offer besides environmental audit.
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CLUSTER MAP
Private organise BDS (BMOs)

GDMA GCA GSPMA VIA OIA NIA ACTI CETPs
Private Un-organise BDS

Environment & Energy Related Quality Regn. REACH / ISO Financial / Legal Technical Consultant
Public BDS
GITCO ACTI
Testing Laboratory
Export Consultant
ATIRA
CIPET IGTR
Raw Material Suppliers
Marketing Agents
Suppliers of Accessories Retailers Machine Suppliers
Dyestuff Firms
Chemical Firms
Plastic Packaging Firms
Traders
Packaging Material Suppliers Exporters
BIS
GPCB
ITI
Institutions
NSIC
Sales Tax
Central Excise
GEDA
A thin border rectangular box for a group of stake holders A dotted border rectangular box for showing a poorly functioning Stake holder A thick Arrow shows a well developed linkage A dotted Arrow shows a poor developed Linkage
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Chapter 12 Cluster Vision

Vision: To enhance the networking among the MSMEs & BDS in the cluster to boost the business potential of all stake holders sustainably The long run objectives of the project would be; To help the Dyes & Chemicals Cluster particularly MSME in achieving enhanced 3600 performance both in terms of technical and commercial functions. Specifically, for attending to the reduction in environmental issues and a reduction in the value chain. To help develop a healthy BDS market, to attain an increase in the BDS Market @ 15%, particularly by creating platforms to promote BDS in the areas, which are currently not provided by existing BDS providers. This would enable the sector to have access to such services. To bring about a sustainable common platform for MSME and BDS to work more closely and on a mutually affordable commercial platform. To create a sustainable and stand- alone viable mechanism through the participation of all clusters actors namely, MSME units, BDS Providers and facilitating agencies like ours.
The one on one and FGD have led to the tremendous opportunity for the implementing agency for creating small cluster groups with in the specified clusters. There are endless tasks ahead. With a specific focus on such small clusters, identified with the help of benefiting BMOs, various programs can be undertaken with the clusters and regrouping them to yield specific growth. Strategies: Cleaner production First there should be awareness to the manufacturers about the cleaner production and its advantages to the firm. Experts from the industry will guide to firms about their process improvement and get best yield. Also there will be some 3-5 implementation of cleaner production and make a role model.
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Environmental Issue: Make awareness about the best practices to reduce environmental pollution. Also there will be ole model development in the cluster. 2-3 workshops will help cluster to improve their treatment plant efficiency. Quality Registration: Seminar on REACH and 2-5 REACH registration in the cluster will help to increase BDS growth with MSMEs export growth. Energy Saving: Energy conservation seminar and 3-5 energy Audits will certainly improve the energy utilisation properly. Raw Material: To compete in the International and domestic market, planning is to form a consortia of some cluster member and procure material in a bulk at cheaper rate. They have the negotiation power due to bulk buying. Training to workers and supervisors: On job training and seminar requires improving the productivity and quality. Marketing: Formation of consortium and some joint development for marketing will help to the cluster members.
Managing Low Demand High Supply: Awareness about R & D: Industry experts and technocrats will guide these firms to improvement in process and also suggest for the new product development. Workshops on new product and process development will improve the R&D in cluster.
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Chapter 13 Short term Goals

SMEs under the purview of the cluster study are eventually finding them under the pressure to impart immediate attention to the following points for the survival and betterment. There is already an overrated production capacity with an under current for price competition and tremendous pressure on profitability. These apart, the MSME units face various challenges in basic three sectors. Following are the short term goals for the first year in the order of importance, looking to the pressure points and FGD: 1. Creation of Awareness: This is the basic area of concentration for the implementation of this project. Unless the units benefiting from the implementation of the project as well those who will provide these services for a smoother implementation of the project viz. BDS providers are made aware of their factual requirements and shortfall, the project can not lead to success. Hence it is our foremost priority to create awareness amongst the players, by establishing linkage through, print material, seminar and workshops. 2. Environment issues: This is the most critical target area, which has effect of deciding about the existence of unit members of the cluster. With more and more stringent action plans, units who have already registered with the common effluent treatment plants, find it increasingly difficult to give an input meeting the norms. An immediate action is therefore required to train, and execute treatment procedure by help of technical consultants. 3. Cleaner Production: A process by which most PHARMA units are put on the road of improvement and global competency is GMP. A similar situation has arrived in dyes/chemical sector. The units need to observe now a cleaner production norm, which will not only help in reducing the load on value chain but help reduce the pollution load.
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4. Energy Conservation: Most units falling under Micro and Small segment need immediate attention to the Energy Audits. This has to reduce the load on their value chain in the competitive market, making their products viable for the operations of the units. 5. Quality Registration: Another priority area where the units seek to achieve solution is regarding quality registrations for upcoming restrictive action by the European Union member countries. REACH which is a registration procedure; making every unit's product, registered with all technical information, for the sale through European Port is to be taken up by all exporting units. The future is bleak if other markets decide to follow such norms. 6. Formation of Raw Materials Data Bank: In order to acquire ability to compete larger players, small enterprises find it difficult to procure raw materials at a competitive rate. Deficiency in bulk purchasing prevents these from availing higher discounts and credits. Formation of a raw material data bank will help these units to procure material at a rate equivalent to the bigger players and bring about cost effectiveness.
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Annexure: I List of stakeholders interacted during the Diagnostic Study Phase:

(a) List of Firms
Sr. No 1 2 3 4 5 6 7 7 9 10 11 12 13 14 15 16 17 18
Name of the Firm Mahak Dye Chem Industries Alfa Industries Jemby Chem Limited Amar Dyes J Dye Chem Ind. Rasayanam Industrial Product Amardeep Dyes & Intermediates Ltd Bharat Dye chem Vaibhav Dyestuff Industries Sudeep Industries Overseas Enterprise Monica Industries Aeromax Synthetic industries S K Containers Shreeji Polymers Balaji Plastic Industries Aico Laboratories India Ltd Atlas Dyechem I Pvt Ltd
Products Reactive Dyes Dyes and Pigment Powder & Paste Dyes and Dyes Intermediates Acid & Reactive Dyes Reactive Dyes Reactive Dyes Reactive Dyes Acid / Direct Dyes Reactive Dyes Reactive Dyes Reactive Dyes Reactive Dyes Reactive Dyes & Intermediates Metal Containers HDPE Carboys & Drums HDPE Bags & LDPE Liners Textile Chemicals, Paper Chemicals Dyes & Chemicals
Point of Contact Mr. Ashish Gandhi, 9426085221 Mr. Anil Agrawal, 0795831496 Mr. Bhupendra Patel, 98250 64400 Mr. Nikunj Parsana, 07925890005 Mr. Nikhil Gandhi, 07925891668 Mr. Sanjay Padia, 9825083046 Mr. Mehul Patel, 07925831114 Mr. Ramesh Patel, 07925891336 Mr. Jasmin P Shah, 07922871259 Mr. Bharat Patel, 07922875566 Mr. Mr. Shailesh Gandhi, 07925833511 Mr. Ravi Bajaj. 07922821846 Mr. Shailesh Patel, 98250 82271 Mr. Shailesh Patel, 07925892271 Mr. Anil Agrawal, 9825043039 Mr. S.D.Wadekar, 9328001246 Mr. Keyur Sheth, 079-
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19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
Gaurav Industries Pvt Ltd Adeshwar Moulds Parikh Enterprises P. Ltd Indo Colchem Ltd Parag Dyestuff Neochem Industries Asiatic Colour-Chem Ind Ltd Gunjan Paints Limited Chemclone industries Blowplast Polymers Shree Ram Chemical Industries Harsh Organo Chem I Pvt Ltd Worldtex R. K. Industries Prashant Industries
Reactive, Acid & Direct Dyes Plastic Injection Moulds & Dies Copper Chemicals Dyes & Intermediates Direct TURQ Blue 86 & CPC Blue Dyes & Chemicals Leather Dyes, Acid Black and Brown Paints Chemicals Chemicals Plastic Containers Resist Salt & Metanilic Acid Dyes & Intermediates Special Chemicals OPSA Dyes & Pigment Intermediates
26769712 Mr. Prashant Gupta, 9824038433 Mr. Jaysukh Mistry, 98250 63393 Mr. Paresh Parikh, 9825027626 Mr. Satish Shah, 9825006900 Mr. Mahesh Desai, 9825005160 Mr. Harshad Shah, 07925830444 Mr. Mahesh Agrawal, 07966305941 Mr. G. D. Barot, 9725011021 Mr. Chhaganbhai Lakhani, 9825050735 Mr. Bharat Patel, 9824069196 Mr. Ravi Saxena, 9825355857 Mr. Chandrakant Patel, 07925841426 Mr. Saurabh Garg, 98250 23357 Mr. Karsanbhai Patel Mr. Karsanbhai Patel, 9825095197
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(b) List of Private BDS : Sr. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Name of the Firm Chemical Research & Development Centre Navayug Analytical Laboratory SAN Envirotech Pvt Ltd European Reach Centre Spectro Colour Lab Parag A Shah & Co V Gajjar Accounting Services R. N. Mohil & Company S. V. Modi Import Export Consulting Engineers Prism Pharmatech Solutions H.K.Acharya & Company Domino Cargos Chokhavatia Associates Anand Consultants Intertek Project Force Environmental Project Pvt ltd HDFC Bank Ltd - Vatva Branch OASIS Test House SGS India Pvt Ltd Services Laboratory Laboratory Environmental Services REACH Consultancy Laboratory Chartered Accountancy Accounting Solutions Chartered Accountancy Business Consultancy Technical Consultant Calibration & Automation Patent & Trademark Custom and Forwarding Environmental Services Environmental Services ISO Certification Environmental Services Environment Audit Banking Services Laboratory Laboratory Point of Contact Mr. Naresh Tanwar, 93271 65055 Mr. B.V.Shah, 9228121142 Mr. Mahendra Sadaria, 9327637201 Mr. Jastin Sardhara, 07940241999 Mr. Hemant Agarkar, 9825413457 Mr. Parag Shah, 07926850978 Mr. Vinod Gajjar, 9426322368 Mr. R. N. Mohil, 9825864621 Mr. S.V. Modi, 9825014191 Mr. Parag Sheth, 98250 25953 Mr. Parthiv Kinariwala, 9824526444 Ms. Nilam Gadani, 07926425258 Mr. Chintan Kothari, 9825075482 Mr. Chokhavatiya Mr. Rakesh Shah, 9825011748 Mr. Devang Shah, 9426305162 Mr. Sandeep Dave, 9825065825 Mr. Sandeep Dave, 9825065825 Mr. Nikunj Jain, 07965100596 Mr. Ashok Thakkar Mr. , 079-26854360
108
(c) List of Public BDS Providers: Sr. No 1 Name of the Firm Ahmedabad Textile Industry's Research Association (ATIRA) Central Institute of Plastics Engineering & Technology (CIPET) Indo German Tool Room (IGTR) Bank Of Baroda - Vatva Branch Gujarat Industrial & Technical Consultancy Organization Limited (GITCO) ITI Kubernagar Bureau of Indian Standards (BIS) Services Point of Contact Mr. A. K.Sharma, 07926307921
Laboratory
Plastic Testing Laboratory Design and Tool Room
Mr. P. K. Sahoo, 9974339404
3 4
6 7
Mr. Vinesh Swadia, 07925841960 Mr. Virendra Singh, 079Banking Services 25890014 Project Consultancy, Environmental Mr. Padmin Buch, 026569617 Services, Patent Cell Institute for ITI Mr. P.A. Mistry Standard Mr.Sharma Providers
(d) List of BMOs: Sr. No Name of the Firm Gujarat Dyestuff Manufacturers' 1 Association (GDMA) 2 Gujarat Chemical Association, GCA Gujarat State Plastic Manufacturers' 3 Association (GSPMA) 4 Vatva Industrial Association - VIA The Green Environment Service 5 Co op. Soc Ltd. - Vatva Green 6 Naroda Industries Association - NIA 7 Naroda Enviro Projects Ltd 8 Odhav Industries Association - OIA 9 Odhav Enviro Projects Ltd Association of Chemical 10 Technologist India (ACTI) Point of Contact Mr. Bhrambhatt, Secretory Mr. Jaimin Vasava, President Mr. Navin Trambadia, President Mr. Kirit Patel, President Mr. Bipinbhai Patel, Chairman Mr. Shailesh patwari, President Mr. Shailesh Patwari, Chaiman Mr. Mansukh Kothia, President Mr. Mansukh Kothia , Director Mr. Sharma, President
109
Annexure: II List of participants in GCA presentation

On 23rd March 2009, EDI had organized Project Presentation and discussion about the participation from Gujarat Chemical Association (GCA). Below list shows participants detail: Sr No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Name of Participant Mr. Jaimin Vasa Mr. Ramesh Patel Mr. Sidharth Merchant Mr. Kanu Chokshi Mr. Bhupendra Botadra Mr. Maunag Amin Mr. Hiren Shah Mr. Nehal Shah Mr. Pravin Mehta Mr. Sujal Zaveri Mr. Bimal Parikh Mr. Ajay Thakkar Mr. Mahesh Thakkar Mr. Ravi Thakkar Mr. K.J.Dave Mr. Bipin Shah Mr. Saumil Dave Represent President, GCA Vice President, GCA Hon. Secretary, GCA Tresurer, GCA Executive Member, GCA Executive Member, GCA Executive Member, GCA Executive Member, GCA Executive Member, GCA Executive Member, GCA Executive Member, GCA Executive Member, GCA Executive Member, GCA Executive Member, GCA Office Secretary, GCA Project Head, EDI Cluster Manager, EDI
110
Annexure: III A. List of participant in two FGD
FGD Participant List - Date 22 & 25th May 2009 Sr. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 BDS Prism Pharmatech Solutions Project Force Anand Consultant ACTI GITCO Intertech V Gajjar CRDC Neochem Industries Mahak Dychem GCA Gunjan Paints Limited EDI - Senior Faculty EDI - Subject Expert EDI - Cluster Manager EDI - Networking Expert Person Mr. Parthiv Kinariwala Mr. Sandeep Dave Mr. Rakesh Shah Mr. Sharma Mr. Padmin Buch Mr. Nilesh Gajjar Mr. Devang Shah Mr. Ajit Aacharya Mr. Vinod Gajjar Mr. Naresh Tanwar Mr. Harshad Shah Mr. Ashish gandhi Mr. H Vyas Mr. G.D.Barot Mr. Bipin Shah Mr. Hemant Agarkar Mr. Saumil Dave Mr. Riken Shah
111
B. Photographs of FGD at EDI, Ahmedabad
112
Annexure: IV Location map of Dyes/ Chemicals Clusters in Gujarat:
113
Annexure: V Location map of Cluster in Ahmedabad
114
Annexure VI Consumption Pattern of Dyestuff

Dyestuff is a broad term which includes dyes and pigments. A dye is a coloured substance or an organic compound, which when applied in a solution to a fabric, imparts a colour resistant to washing. They are largely used by the textiles, paper and leather industry, with textiles accounting for over 80% in India. This links the dyestuff industrys fortunes to that of the textile industry. Dyes are classified according to various systems. The most commonly used one is the one used by the US International Trade Commission. According to this system, there are 12 types of dyes, as detailed in the following table: Types of Dyes based on their applications. Group Acid Azoic Basic Direct Disperse dyes Reactive Organic pigments Sulphur Vat dyes Application Wool, silk, paper, synthetic fibres, leather Printing Inks and Pigments Silk, wool, cotton Cotton, cellulose and blended fibres Synthetic fibbers Cellulose fibre and fabric Cotton, cellulose, blended fabric, paper Cotton, cellulose fibre Cotton, cellulose and blended fibre
With the change in the product profile of the textile industry from the high-cost cotton textiles to the highly durable and versatile synthetic fibbers, the consumption pattern of dyes has also been changing. Polyesters are projected to account for a large part of dye consumption in the country. Accordingly, disperse dyes, which find application in polyesters, are projected to grow faster. In addition to textiles, dyestuffs are also used in industries like plastic, paints, printing inks, paper and leather. While these industries account for a very small part of domestic consumption, globally these account for a substantial part of total consumption.
115
Annexure VII Sub-sector of Chemicals

1 Inorganic Chemicals:
Inorganic chemical is any substance that contains two or more chemical compounds nearly in definite proportions other than carbon and some other compounds containing carbon but lacking carbon-carbon bonds. In simple words it is the compound which lack hydrocarbon group. But many compounds which have the element of carbon are also inorganic like carbonates, carbon-dioxide, cyanides, carbon monoxides, etc. Inorganic chemicals/compound can be grouped by the elements that they consist. But the main classes of organic chemicals are silanes, silicones, cuprous chloride, ferrous sulphate, borates and silicates. An important sub category of organic compound is coordination compounds also known as complexes that contain central metal atoms together with one or more non-metallic elements. In traditional terms, organic chemicals are considered as minerals and not biologically originated. 2 Textile Chemicals:
There are many chemicals which are used in textile mills processing which are divided in two categories like chemicals which are intended to remain on fibre or chemicals which are intended to clean the fibbers. Even though many textile products reach the ultimate user in natural colour but with the rise in demand these mills also started to use different chemical dyes and pigments. Dyeing is a process usually conducted in the textile mills. Today, textile materials are either collared by dyeing (immersing the fabric in solutions) or printing, apart from colouring solutions. Softeners are used in treatment of textiles.
Organic Chemicals:
Organic chemicals/compounds constitute a part of wide range of chemical compounds whose molecules consists of carbon. The science of organic chemistry is concerned with the entire concept of organic compound. The history of organic compound dated back 19th century when research believe that organic compounds could only be synthesized in living organisms with the support of lifeforce. All living organisms consist of water and organic chemicals: carbohydrates, fats, nucleic, proteins, hormones, proteins, etc. In physics, organic chemical is the material which contains hydrogen and carbon and elements such as sulphur, nitrogen and oxygen. Almost all types of polymers, including all plastics are organic compound. Earlier organic compound were extracted naturally as it would be too expensive to produce it artificially. Today with advancement of science and technology, most of the organic chemicals are produced artificially although they are too expensive.
116
Pesticides & Agrochemicals:
India is currently the largest manufacturer of Pesticides in Asia, second only to Japan. The pesticides demand from the agriculture sector is expected to go up to 97,000 tonnes by the year 2000. More than 60 technical grade pesticides are manufactured indigenously. Some 125 units are engaged in the manufacture of the above and over 500 units are making pesticide formulations In agrochemical, units manufacture significant quantities of synthetic pyrethroids, such as fenvalerate and cypermethrin, endosulphane, and organophosphate range of agrochemicals, including monocrotophos. India is also a dominant producer of isoproturon, a weedicide accounting for nearly 25% of the world-wide production. 5 Fine & Speciality Chemicals:
70% of the Fine Chemicals produced in India find their way into the Pharmaceutical and Agrochemical sectors. Performance chemicals geared to customer need are being developed locally particularly since there is growing demand for Speciality chemicals like Sunscreens, Antioxidants, Biocides, etc. Manufacturers of Fine Chemicals and specialities have major strengths in basic research facilities available with CSIR laboratories such as NCL, IICT & RRls as also corporate R & D centres. This ensures that development of process knowhow; plant process design and engineers, detailed engineering design, commissioning assistance and even consultancy for re-engineering are available at low cost.
117
Annexure: VIII
Common Effluent Treatment Plants at Gujarat:

NAME OF SR. THE CETP NO AND . ADDRESS 1 M/S The Green Environment Services CoOperative Society Limited, Plot No. 244-251, Phase-II, GIDC Estate, Vatwa, Ahmedabad382 445 M/S Odhav Enviro Projects Limited, Plot No. 25, GIDCOdhav, Ahmedabad 382415, M/S Naroda Enviro Projects Limited, Plot No.512-515, Phase-I, GIDC, Naroda, Ahmedabad M/S GVMSAV Limited, Plot No. 181, GVMM Industrial Estate, Odhav, Ahmedabad Numb Capacity er of of CETPs Memb 1M=1000 er Litre Units
NAME OF THE SITE, IF M/S The Green Environment Services CoOperative Society Limited, Plot No. 244251, Phase-II, GIDC Estate, Vatwa, Ahmedabad-382 445 M/S Odhav Enviro Projects Limited, Plot No. 25, GIDC-Odhav, Ahmedabad 382415,
NAME OF THE CONTACT PERSON
Mr. Bipinbhai 16000 M/ 580 Patel, Chairman, Day (O)-079-5892283, 5832449, 5832520 (Fax)-0795893614
Shri Mansukh Kothia, Director Tel 079-2891277, 2892224
1200 M / Day
60
M/S Naroda Enviro Projects Limited, Plot No.512-515, Phase-I, GIDC, Naroda, Ahmedabad M/S GVMSAV Limited, Plot No. 181, GVMM Industrial Estate, Odhav, Ahmedabad
Shri Shailesh 3000 M / Patwari, Chairman, Day O-079-2816311, Fax: 079-2823299
242
Shree Lalbhai 100 M / Shah, Managing Day Director, O2901331/2902810
357
118
M/S Narol Dyestuff Enviro Society, Narol, DistAhmedabad M/S Nandesari Industries Association Plot No. 134/1, Opp-Shopping Centre, Nandesari-391 340, DistBaroda Phone: 0265 840390/840341 M/S Enviro Technology Limited, Plot No. 2413/14, GIDC Industrial Estate, Ankleshwar393 002, DistBharuch M/S Panoli Enviro Technology Limited, Plot No.619, GIDC Estate, Panoli, Dist-Bharuch394116 M/S Verawal Industries Association, C/O HMG Limited, 5-6 GIDC Estate, Verawal-362 269
M/S Narol Dyestuff Enviro Society, Narol, Dist-Ahmedabad
M/S Nandesari Industries Association, Secondary Treatment Plant, Plot No. 153/A, GIDC, Nandesari Vadodara
Shree Babubhai C. 5500 M / Patel Day Chairman (O)-0265-2841016 Fax: 02652841017
167
M/S Enviro Technology Limited, Plot No. 2413/14, GIDC Industrial Estate, Ankleshwar-393 002, DistBharuch M/S Panoli Enviro Technology Limited, Plot No.619, GIDC Estate, Panoli, Dist-Bharuch394116 M/S Verawal Industries Association, C/O HMG Limited, 5-6 GIDC Estate, Verawal-362 269
Shri Ashok 1000 M / Panjwani, Director, Day and Shri B.D. Dalwadi, Dy. General Manager (Works) Tel: O02646-252768,
225
Shree B.S. Patel, 1 MLD President and Shri Pankaj A Bharwada, Hon Secretary, O02646272022,272275, Mob: 98244-76297 and 9824476291
104
Shri K.P. Thomas, 5 M / Day 42 Chairman, O02876-231686, 231339, Fax: 231785, Shri R.P. Chopadkar, Director, Tel: 02876-231914, Fax: 231785,
119
231787 10 Globe Enviro Care Limited, Plot No. PP/1, Off-Road No2, B/H-KayTex Mills, GIDCEstate, Sachin, Dist-Surat M/S Palsana Enviro Protection Limited, 301302-Dhanlaxmi Complex, Kadodara Char Rasta, Kadodara, Dist-Surat M/S Perfect Enviro Control System Limited, Plot NO. 731/2, GIDC, Sarigam, DistValsad-396155 M/S Vapi Waste & Effluent Management Company Limited, VIA House, Plot No. 135, GIDCVapi M/S Jetpur Dyeing & Printing Association, Kankia Plot, Jetpur-360 370 Globe Enviro Care Limited, Plot No. PP/1, Off-Road No2, B/H-KayTex Mills, GIDCEstate, Sachin, Dist-Surat M/S Palsana Enviro Protection Limited, Block No. 527& 528, Vill-Umbhel, TalKamrej, DistSurat Shree Vatsal 500 M / Nayak, Managing Day Director, Tal-02618876635, Fax: 8872289 35
11
Shree Ravindra Arya, Chairman, O-0261-2350769, 2341909, 2339948,
100 MLD
96
12
M/S Perfect Shri S.V. Rao, Enviro Control Manager System Limited, Plot NO. 731/2, GIDC, Sarigam, Dist-Valsad396155
400 M / Day
06
13
National Shree Manoj Oza, 55 MLD Highway No.8, Managing Director Nr. Damanganga O-0260-2428950, River, GIDC, Vapi-396 195
743
14
M/S Jetpur Dyeing & Printing Association, Kankia Plot, Jetpur-360 370
Shri Rajubhai Patel, President O-02823220308/223181
20000 M / 869 Day
15
M/S Enviro M/S Enviro Infrastructure Infrastructure
Shri Atul Patel, Chairman, Tel:
2250 M / Day
33
120
Co-Limited, ECP Canal Road, AtUmaraya, DistVadodara 16 M/S Shree Dhareshwar GIDC Vistar Association, Near Dhareshwar temple, National Highway, Navagadh, Dist-Rajkot M/S Sanand Eco Project Limited, 3, Samast Brahmkshtriya Society, Narayan Nagar Road, Shantivan, Paldi, Ahmedabad M/S Kalol Industrial Association, GIDC-Kalol, DistGandhinagar
Co-Limited, ECP Canal Road, AtUmaraya, TalPadra, DistVadodara M/S Shree Dhareshwar GIDC Vistar Association, Near Dhareshwar temple, National Highway, Navagadh, DistRajkot M/S Sanand Eco Project Limited Survey No. 172, Ajanta Industrial Estate, Iyava-Vasna, TaSanand Dist-Ahmedabad
0265358283/334805 Fax: 324847
Shri Harshadbhai Bhuva, President O-02823220308/223181
150 M / Day
20
17
Shree Deepak R. 200 M / Babaria, Chairman Day Tel: 079-6641725 Fax: 079-6632259
27
18
M/S Kalol Industrial Association, GIDC-Kalol, DistGandhinagar
121
Details of CETP at Cluster:
GENERAL INFORMATION The Vatva Industrial Estate was established by Gujarat Industrial Development Corporation in the year 1960 in the south east direction of Ahmedabad City on Ahmedabad - Mehmadabad state highway to accommodate small and medium scale industrial units. There are approximately 1800 units in this industrial Estate, out of which approximately 680 generate wastewater and have potential to cause water pollution. These include units manufacturing Pharmaceutical Products, Dyes, Dye-Intermediates, Pigments, Fine Chemicals and other organics. They also include Textile Process Houses, Rolling Mills and other Non Chemical Process Industries.
122
The important aspects of CETP Project are briefly outlined below Location: The CETP Site is located at Plot Nos.: 244-251 , Phase: II, GIDC Estate, Vatva, Ahmedabad. Land Area: The CETP and associated facilities are set up on the land area admeasuring 28000sq m. Treatment Technology: M/s Advent Corporation, USA gave the process design based on the ability to treat study, carried out by Sudarshan Chemical Industries Ltd., Pune. The detailed engineering was provided by M/s Sudarshan Chemical Industries Ltd., Pun. Project Cost: Initially the common facilities for the collection, treatment (CETP) and conveyance of treated effluent were set up at the cost of Rs. 33.28 crores. The break-up of this cost is as under: Internal Collection Systems Treatment units (CETP) Conveyance line up to AMC Pirana Plant Sabarmati Rs. 10.17 crore. Rs. 18.00 crore Rs. 05.11 crore. Total Rs. 33.28 crore.
Later the CETP was upgraded by installing new units and systems at the additional cost of Rs. 11.74 crore. Thus the total Project Cost became Rs. 45.02 crore. Salient Features of the CETP:
The CETP was designed making use of new technology known as AIS (Advent Integral System) which consists of Aeration Basin surrounded by Integrated Peripheral Secondary Clarifier. Later during the up-gradation programme this Integral Clarifier was converted into Aeration Zone and two separate Secondary Clarifiers were provided.
Charging Basis: The treatment charges are levied from the member units at the rate of Rs. 20 per kg of TOC in the effluent. Inlet Norms: The CETP inlet norms applicable to the member units in respect of the quality of the effluent are as under: BOD 1200 mg/l COD 3000 mg/l TSS 600 mg/l The upper limits for the heavy metals and other pollutants have also been specified.
123
The member units are required to adhere to the inlet norms. The quality of the effluent received at CETP is monitored and extra penal charges are levied from the member units violating these norms. CETP DESIGN CRITERIA The industrial units in the Vatva estate include manufacturers of dyes and dyeintermediates, bulk drugs and pharmaceuticals, fine chemicals and also textile process houses etc. and therefore the wastewater generated by these units is of complex nature and contain great variety of pollutants. The characteristics of the combined effluent and its ability to treat were carried out by M/s Sudarshan Chemical Industries Limited, Pune. The design of CETP was based on this study and the main parameters considered were flow, total suspended solids, chemical oxygen demand (COD) and biological oxygen demand (BOD). All the member units were required to treat the effluent to render its quality to a level which could be taken as the basis for the design of CETP. Thus the CETP inlet norms were fixed as under: Parameter Flow pH TSS COD BOD Influent 16000 m3/day 6.5 8.5 600 mg/l 3000 mg/l 1200 mg/l
Based on the above parameters M/s Advent Corporation USA provided design of CETP. The process of treatment involved biological treatment technology in extended aeration mode. The detailed engineering and construction / installation of CETP were carried out by M/s Sudarshan Chemical Industries Limited. The commissioning and initial operations of the plant were performed under the supervision of and in consultation with M/s Advent's Indian collaborator, namely Advent Envirocare Technology Pvt. Ltd., Ahmedabad. ACHIEVEMENTS The major achievement due to the implementation of the environmental infrastructure projects namely CETP and common SLF in the estate of Vatva is stoppage of discharge of Industrial wastewater on land and open drains and prevention of water pollution in this area. This also gave clean and aesthetic look to the estate
124
The other achievements of GESCLS associated with the establishment and operation to these projects are as under:
CETP is certificated for ISO 9001:2000, ISO 14001:2004 and ISO 18001:1999 for provisions of services for effluent collection, treatment and discharge Secured Landfill Facility is certificated for ISO 9001:2000, ISO 14001:2004 and ISO 18001:1999 for provisions of services for collection and storage of solid waste.
Vatva CETP
125
Naroda Enviro Projects Ltd. Naroda, Ahmedabad. Design Engineer and Consultant for Common effluent treatment plant with state of art primary and secondary treatment facilities having capacity of 3 MLD (3,000 KL/d), with an aim to treat the effluent generated by the member units of the Naroda Industrial Estate, Ahmedabad, and Gujarat, India.
Naroda CETP
126
Odhav Enviro Projects Ltd

OEPL is a CETP set up by the Industrial units of GIDC Odhav having trade effluent. It was commissioned in Jan 1998 and since then: it is running continuously without a single shut down. The main functions of OEPL are to collect, convey, treat and dispose off the effluent generated by the member units.
Odhav CETP
127

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Implementation of Business Implementation of Business Development Services (BDS) for SMEs: Development Services (BDS) for SMEs: Dyes/

A Diagnostic Study of the Cluster

Submitted to: SIDBI New Delhi

By: Entrepreneurship Development Institute of India Ahmedabad

30th June 2009

The main objectives of the Project is to

Chapter 2 Global and National Scenario of Dyes and Chemicals Industry

2003 10500 2665 1890 4370 1575

2008 13400 2890 2140 6390 2010

2013 16200 3215 2360 8150 2475

Basic Chemicals Specialty Chemicals High End / Knowledge 6 Segment Total 35

Chapter 3 The Ahmedabad Dyes/Chemicals (including packaging material) Cluster

Product categories of the cluster:

Basic Dyes Napthol and Bases Disperse Dyes Pigment Dyes

(b) Chemical sector:

Chapter 4 Production Process of the Cluster

The process of Dyestuff manufacturing, in pictorial form is presented as under

The process of Dyestuff manufacturing, in an overview form is presented as under:

Preparation of Raw Materials in Vessels

Coupling of Ready Raw Materials in vessels

Process completion and further quality processes

Salting out the Finished Product

Spray Drying of Liquid formulated Dyestuff

Tray Drying of dyestuff in wet cake format

Grinding of Dry Dyestuff lumps

Quality Determination in Lab

Standardisation in Ball Mill or Blender

Quality Analysis of Final Marketable Product

Packaging in to desired format

The process of chemical manufacturing, in pictorial form is presented as under:

The chemical compound is analysed for quality in lab.

The finished marketable compound is packed in to desired packing

The packed chemical compound is removed to the warehouse for marketing.

Salting out the Finished Product Using filter presses/nutch

Spray Drying of Liquid formulated Chemical using spray drier

Quality Analysis of Final Marketable Product in Lab

Packaging in to desired format

Removal to the Market

Plastic Packaging Materials:

The ready packaging material is subjected to testing for quality

Quality Analysis of Final Marketable Product in Lab

Packaging in to desired format

Removal to the Market

Chapter 5 History of the cluster

Chapter 6 Vital Statistics of the Cluster: Profile & Status

Dyes & Chemical Units

Industrial estate wise distribution of units

MSME distribution of the units in the cluster:

Apr-Feb 2007 %Growth %Share

Sector wise classification of the SME units:

Type Dyes & Intermediates D Chemical C Packaging P Total

No of Employees < 10 10 25. 25 50 > 50 Total

Size of the Firm Turnover Basis

Distribution of BDS providers:

Financial Service Providers

Technical Service Providers Quality Certification and Registration

On Ad-hoc basis depending on product Rs. 5000 & above

Environment & Energy Related Service Providers

Administrative & Regulatory Services

Procurement service providers

Marketing Service Providers

Equipment Servicing Providers

Rs.1500 to Rs. 5000