Chapter 4 Sports Goods Industry in Meerut

4.1 Introduction
Meerut is an ancient city, located 56 km (34 miles) north-east of
New Delhi and the administrative headquarters of the Meerut Division
consisting of the districts of Meerut, Bulandshahar, Gautam Buddha Nagar,
Ghaziabad and Baghpat.

It is a city and a municipal corporation in the state of Uttar

Pradesh. It is not only the 16th largest metropolitan area but also the 25th largest
city in India, ranked 292 in 2006 and 242 in 2010 in the list of largest cities and
urban areas in the world. It is the fastest developing city of Uttar Pradesh after
Noida and Ghaziabad, spread about 172 square km area. The total metropolitan
area is 198 km which is third in Uttar Pradesh after Lucknow and Kanpur.
Meerut also has one of the major army garrisons.

Meerut district consists of 1,025 villages with a population of

around 3.44 million according to the 2011 census. Meerut has an average
literacy rate of 74.80 percent, marginally higher than the national average of
74.04 percent with male literacy at 82.91 percent and female literacy at 65.69
percent. Meerut has one of the largest Muslim populations among the major
cities of India (close to 45percent). There is also a significant Christian
population.

4.1.1 Climate
Meerut has very hot summers and very cold winters. Temperature
in summers reaches upto 48 degree celsius on contrary lowest temperature
78

recorded is 0.5 degrees. Rainfall is good and about 80 cm to 100 cm per annum,
which is suitable for growing crops.

4.1.2 Geography
Meerut lies between 28.2 latitudes and 77.7 longitudes in the
northern plains of India. The ground is not rocky and there are no mountains.
Land is suitable for growing crops. Meerut lies between plains of rivers Ganga
and Yamuna, there is no water scarcity as ground water is present.

4.1.3 Economy
Meerut is a famous industrial city. It has a rich agriculture area.
Being in the proximity of Delhi, it is ideal for industry. Existing industrial
clusters are textile, transformer, sugar, distillery, chemical, engineering, paper
and sports goods.

Uttar Pradesh State Industrial Development Corporation (UPSIDC)

has two industrial estates in Meerut, namely Partapur and Udyog Puram.
Mohkampur industrial area is a private initiative. Paschimanchal Vidyut Vitran
Nigam Ltd. (PVVNL) has unrestricted power at Partapur, Udyogpuram and
Mohkampur industrial areas.

Bhur Baral industrial area, at National Highway 58, is under

development. Another industrial area has been identified by UPSIDC at Gagol
Road adjacent to Delhi Road. 1200 hectares of land is available for industrial
development. Identified industrial areas are at Shatabdi Nagar, Delhi Road,
Baghpat Road, Roorkee Road, Mawana Road, Parikshitgarh (Kila) Road, Garh
Road and Hapur Road. Further 2000 hectares land is being proposed for

79

industrial development near Delhi-Meerut expressway. Investment from outside

Meerut has started pouring in as Delhi -Mumbai Freight Corridor (DMFC) and
East Freight Corridor (EFC) will be intersecting very near to Meerut making it a
cost effective destination for setting up industry.

The infrastructure segment of Meerut is currently going through a

boom phase with many new projects coming up in and around the city. There
are many new buildings, shopping complexes, malls, roads, flyovers and
apartments coming up.

The gold market of Meerut is one of Asias largest. It employs over

25,000 skilled craftsmen and around 60 kilograms of the precious metal is
processed here every day.

Meerut is the largest supplier of sports goods in domestic as well as

international market. Also has a big musical instrument industry. According to
the statistics compiled by the Income Tax Department, Meerut contributed a
handsome Rs.10, 089 crore to the national treasury in 2007-08, outperforming
Lucknow, Jaipur, Bhopal, Kochi and Bhubaneshwar like cities.

4.1.4 Transport
The nearest airport is the Indira Gandhi International (IGI) Airport
which is about 80 km away. An international airport is proposed by the state
government in the city to reduce pressure at Delhi airport.

By road Meerut is well-connected to major cities like Delhi, Noida,

Faridabad, Ghaziabad, Sonepat, Karnal, Moradabad and Haridwar etc. Two
national highway (NH-58 and NH-119) pass through Meerut. An expressway
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from Delhi to Meerut and Upper Ganga Canal Expressway which passes
through outskirts of the city are under development. There are two main bus
terminals and seven railway stations in Meerut.

4.1.5 Tourist destinations

Meerut, with its imminent history and luxuriant picturesque
backdrop, has a well-developed tourism sector. The notable tourist destinations
include Jain Temples (Hastinapur), St. Johns Church, Augarnath (Kali Paltan)
Temple, Jama Masjid, Martyrs Memorial (Shaheed Smarak), Gandhi Bagh
(Company Garden), Suraj Kund, Chandi Devi Temple and Bale Miyan ki
Dargah (both at Nauchandi Ground), Mansa Devi Temple, Shahpeer Sahab ki
Dargah, Basilica of Our Lady of Graces (Sardhana Church), Parikshitgarh,
Lakshagrah (Barnava) and Balmiki Ashram etc.

4.1.6 Sports arena

Meerut has given many international players to many sports.
Praveen Kumar (aka PK), Raman Lamba and Bhuvnesh Kumar the Indian
cricket team players, belong to Meerut. There are three sports stadiums in
Meerut namely Kailash Prakash Sports Stadium, Kulwant Singh Stadium
(Meerut Cantt.) and Victoria Park (Bhama Shah Park) Cricket Stadium. Kailash
Praksah Sports Stadium boasts of a national level synthetic basketball court and
swimming pool.

4.2 Evolution and status of sports goods industry

Meerut is known for many types of industries. It is the second
largest supplier of sports goods in India. Based on a recent Census of India2011, conducted by the District Industry Center (DIC) Meerut, there are about

81

1250 registered and 2100 unregistered big and small sports goods
manufacturing

units,

providing

direct

and

indirect

employment

to

approximately 1,70,000 persons. Supporting organizations have also grown to

supply adequate quantity of raw materials to the sports goods industry and also
provide training to the workers.
The sports goods manufacturing activity found in and around five
villages and five localities of Meerut city. About Eighty percent of the workers
belong to Scheduled Caste (SC) community.
As per the statistics, there are around 3350 sports goods
manufacturing units in Meerut city (Sports complex, Suraj Kund Road, Victoria
Park, Jail Chungi and Lal Kurti etc.) and the villages around it namely
Abdullahpur, Jangethi, Mohkampur, Nai Basti, Maliyana and Daurala etc. Three
kinds of establishments are usually found in the segment:
a. Big Establishments: They are generally geared to exports besides
catering to the domestic market and are registered as Medium or Small
Scale units (like SS Sports, SG Sports and BD Mahajan) in figure of
approximately 15 to 16 and employ around 15,000 to 20,000 artisans.
b. Small Establishments: They usually manufacture sports goods for the
domestic market. Both the big establishments as well as the small
establishments are registered either under the Factories Act, 1948, or
under the Shops and Establishment Act of the state of Uttar Pradesh. The
registered enterprises are around 1200 in figure.
c. The Unregistered Units: These units are found particularly in the urban
pockets of Meerut and are mostly small home-based, which are usually
run by the family members, but at times with the help of a couple of hired
employees. These units do not have a direct access to market. The official
data related to these enterprises is scare and unauthentic.
82

4.3 Sports goods cluster of Meerut

The Meerut district sports goods cluster is spread across a radius of
approximate 10 km. The cluster produces a large range of sports goods and
about 60 percent of the total production is being exported to Australia, South
Africa, England, America, West-Indies, New Zealand, Zimbabwe and
Bangladesh etc., and the remaining products are sold in the domestic market
across India.

Apart from the Small Manufacturing Units (SMUs), there are

approximately equal numbers of semi finishing units in the cluster, which are
serving the industry with their skills to produce good quality products to
compete in the national and international markets. These semi finishing units
are producing sports goods only for SMEs and they are not getting the normal
profit because they do not have proper way to use their skills and about 80
percent work is executed manually and only about 20 percent work is
mechanically done.

The study has been carried out in Meerut and its suburban areas to
analyze the different operating and performance parameters in sports goods
cluster. Approximately 64 industrial entrepreneurs (as a sample size), dealing in
sports goods were randomly selected from the list available from concerned
local associations, internet, government departments and other resources as
telephone directory and yellow pages etc. With the help of structured interview
schedules, industrial entrepreneurs were surveyed while pertinent literature and
information were collected and compiled. An attempt has been made to analyze
the Indian sports goods sector with the help of Strength, Weaknesses,
Opportunities and Threats (SWOT) analysis as mentioned under:

83

4.4 Strength
This part of the chapter states the strength factors of the industry,
which are also the drivers to carry the business on. The government has taken
major steps to help the industry financially as well as technically. In order to
serve the purpose government has established different institutes to fulfill the
financial and entrepreneurial requirements of the micro, small and medium scale
enterprises (MSMEs).

4.4.1 Location
Meerut is a city having abundant history, limited present but
potentially prosperous future. The historical background of the city has always
been its Unique Selling Proposition (USP). However, a clear understanding of
urban growth, clarifies that it is not the city that made history but history that
made the city gain importance.

Due to its geographic location and nearness to the National Capital

Delhi, with incredible sports goods quality marks it as one of the Vibrant city
in India. A latest report by a renowned financial services firm Morgan Stanley
(USA), Alpha wise City Vibrancy Index: A Guide to Indias Urbanization,
lists Indias top 200 cities according to their vibrancy level which is done by
measuring things like infrastructure, job opportunities, modern consumer
services and the citys ability to mobilize savings - all seen as key drivers of
urbanization and economic growth, reports that Meerut is a city of around 3.4
million people in Indias state of Uttar Pradesh, classified as a vibrant city,
Mumbai is rather lagging behind. The locations (intra city) of different sports
goods industry are as per table 4.1, mentioned under:

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Table 4.1: Location of sampling units

S. No.

Location

No. of units

% of units

Urban

53

82.5

Semi- urban

12.5

Rural

64

100

Total number of units surveyed

Source: Field Survey

Table 4.1 clarifies that most of the sports goods industry found
located in urban areas (87.5 percent) and enjoys the better communication,
marketing and transportation facilities etc. Only 12.5 percent units are located in
semi- urban areas. This also highlights the migration of labour from rural to
urban area.

4.4.2 Infrastructure
According to Jawahar Lal Nehru Urban Renuality MissionJNURM (2006), Meerut is a major city of National Capital Region (NCR) on
the basis of its industrial and geographic location. NCR Board is playing a
major role in strengthening the financial aspect by proving funds and loans for
the development of the city. The main emphasis by the board is on the proposal
of Ghaziabad - Meerut Express way for improving the road connectivity.
Further consideration of proposing Inter State Bus Terminus (ISBT) and Rapid
Rail Transport System (RRTS) is also under process for improving the
connectivity and accessibility of Meerut city.

The NCR in its Regional Plan- 2021 has recommended the

construction of following projects with regards to Meerut:
Four laneing of Meerut- Ghaziabad- Delhi segment of NH-58 (Phase I)
85

 Rapid Rail Transit System for Ghazaibad- Merut segment (Phase II)
Upgradation of Meerut Hapur Grid Road (Phase II)

Proximity to National capital Delhi, efficient road and rail network,

rich tourism and cultural heritage, linkages of the surrounding areas and large
number of active NGOs are some of the prime core strengths of the city, which
directly or indirectly affects the working culture of sports goods cluster.

All these factors indicated the strong infrastructure, facilities and

work environment in the sports city of Meerut including its nearby areas. As a
result of these factors different sub- clusters have developed over the period of
time as under:

Table 4.2: Sports items manufactured by sub-clusters /pockets

S.
No

Sub- Clusters/
Pockets

.
1

Surajkund and around

Sports Items Manufacture

Shuttle- Cock, Tennis Ball, Racquet, FootBall, Carom- Board etc.

Phool Bagh Colony Shuttle- Cock, Tennis Ball, Racquet, Footand around
Victoria

Ball, Carom- Board, Hockey Stick etc.

Park

around
Abdullahpur
around
Jangeti

and Shuttle- Cock, Cricket Ball, Other Balls,

Carom Board, Track Suit etc.
and Batting Gloves, Keeping Gloves, Helmet,
Wickets etc.
Batting Gloves, Keeping Gloves, Helmet,
Athletics and all types of nets etc.

86

Shobhapur

Maliana

Sports Complex

Batting Gloves, Keeping Gloves, helmet,

Wickets etc.
Leather work, Foot Kits, Boxing Gloves
and other protective equipments
About 45 units are manufacturing all type
of sports goods and other accessories

Source: Field Survey

4.4.3Government initiative
The government has taken considerable initiatives to promote
sports goods cluster of Meerut as under:

4.4.3.1

Institutional setups
In order to assist the sports goods cluster of Meerut, government

has established certain institutional setup as under:

a. Directorate of Industries, Uttar Pradesh
The Directorate of Industries is a state government department
dealing with administration and policy related matters of small scale industries
(SSI), having both technical and administrative officials. This government body
supports the cluster in every respect by providing training and technical support
etc.
b. Process cum Product Development Centre (PPDC)
PPDC is an autonomous organization under Ministry of Micro
Small and Medium Enterprises (MSME), registered under societys registration
act 1860. It provides R&D (Research & Development) support to the sports
goods industry and implements central schemes. It also conducts training
program in coordination with the state government. New designs are being
developed and supplied on nominal rates to the industry.

87

c.

Uttar Pradesh State Industrial Development Corporation (UPSIDC)

UPSIDC is a statutory body under State Government of Uttar

Pradesh. It works for the development of the industry by providing necessary

infrastructure to the new units.

d. Other Financial Institutes

The government supports the small and micro level industries
through institutions other then the mentioned in previous sections. It can be
classified as:

i. Government of Uttar Pradesh wholly owned Financial Institutes

Uttar Pradesh Finance Corporation (UPFC)
Uttar Pradesh Power Finance Corporation (UPPFC)
State Financial Corporation (SFC)
State Industrial Development Corporation (SIDC)
ii. Government of Uttar Pradesh and Government of India Collaborated
Financial Institutes
Export- Import Bank (EXIM Bank)
Industrial Credit and Investment Cooperation of India (ICICI)
Industrial Development Bank of India (IDBI)
Industrial Finance Corporation of India
Industrial Investment Bank of India
Infrastructure Development Finance Cooperation (IDFC)
National Small Industries Corporation
Small Industries Development Bank of India (SIDBI)
Investment by Insurance Companies
Unit Trust of India
88

Financial Institutes/ Banks

Local Market

Local Panchayat
Chemical & raw
material Traders

Agent/ Exporters

Sports Goods
Manufacturers
helping agency

Colours, Paints,
Packaging Suppliers

Directorate of
Industries
E.P.B

Wood, Leather and

Plastic Unit

Local Traders

Parts & Accessories

AISGMF

UPEPC

AISGEA

SGEPC

DIC

UPSIDC

PPDC

Figure 4.1: Financial Institutions

e. All India Sports Goods Manufacturers Federation (AISGMF)

AISGMF is an organization Registered under society registration
Act 1860. It serves and represents the sports goods industry, since 1950, by
supplying the information, technology and technical training to the industries. It
also arranges the raw material for the industries. Apart from the supply of the
raw material, training cum workshops on the technical and managerial issues
related to the sports goods industry is organized for effective linkages.

f. Financial incentives
Some of the financial incentives provided by the government, for
the promotion of small and micro level industries are as under:
Exemption from stamp duty as 100 percent on purchase or lease of the
land for the establishment of the projects;

89

 Interest free loan for pioneer units up to 15 years;

Capital subsidy to small industrial units;
Interest free loan to new large industrial undertakings;
Unlimited power supply to 100 percent export oriented units.
Some of the commodities for which the government assists the
industry are mentioned in table 4.3.
Table 4.3: Financial Assistance from Government Institutions
S. No.

Heads under which finance has been released

Percent units

Raw Material

57

Machinery and Equipment

39

Marketing and Sales

Source: Field survey

Marketing and
Sales
4%

Machinery and
Equipment
39%
Raw Material
57%

Figure 4.2: Financial assistance under different heads

4.4.3.2 Schemes and Policies

The schemes and policies designed by the state government for the
up gradation of sports goods cluster of Meerut are as follows:

90

a. Exemption in stamp duty

Exemption in stamp duty up to 50 percent, while purchasing land
to establish a manufacturing unit is declared by the government under new
Industrial Development Strategy (2004) to promote the industrialization in the
MSME sector.
b. Transportation and Distribution Facility
It facilitates the entrepreneurs while participating in the exhibition
with in or outside state as it bears 50 percent of the total expenditure or
maximum Rs. 5000/- (once in a financial year) made by the enterprise in
account of transportation and logistic charges.
c.

Financial Assistance for Technology Up gradation Scheme

Micro and Small Enterprises (SMEs) are facilitated with financial

assistance by the government as under:

SMEs can be funded under this scheme, for upgradation and
improvement in existing technology, for the purchase of latest
technological facilities from the government recognised agencies or the
research centers at 50 percent of the total cost or Rs. 2.5 Lakh (which
ever is maximum).
Subsidy on bank loan is granted if it is purchased for the improvement in
existing technology and thereby increasing the productivity to compete in
the international market with the global giants.
50 percent of the total expenditure or maximum Rs. 2 Lakh is granted for
ISI (Indian Standards Institute) or ISO (International Organisation for
Standardization) accreditation of an enterprise.
SMEs can avail 90 percent of the total expenditure or maximum Rs.
50,000/- against the productivity skill and/or marketing skill refinement
consultancies from the government recognised agencies.
91

Table 4.4: Incentive schemes availed by manufacturing units

Categories

Scheme availed by the industry

(percent)

Duty Drawbacks

76

Duty Entitlement Passbook (DEPB)

Advance License

Export Promotion Capital Goods

Service tax refund

11

Export Credit

Others

Total

100

Source: Field Survey

Others
6%
Export Credit
2%
Service tax refund
11%
Export Promotion
Capital Goods
1%
Advance License
2%

Duty Drawbacks
76%

Duty Entitlement
Passbook (DEPB)
2%

Figure 4.3: Incentive schemes availed by manufacturing units

d. Honour to corporate houses encouraging sports
Rashtriya Khel Protsahan Puruskar was introduced from 2009,
awarded by the President along with the National Sports Awards, with a view to

92

encourage the contribution made for the sports development by entities other
than sportspersons. The award is in the form of trophy (designed as a torch),
which is a celebration of life and continuous human endeavor for high
achievements in sports.

4.4.4Employment generation
The cluster provides employment to the weaker section of the
society; particularly the craftsmen belong to schedule cast community. The
segment is highly labour intensive, due to low mechanization; hence there is a
vast scope of handmade articles, which could be prepared easily in any
household or cottage industry. It is beneficial to the physically constrained
people as well as female workers. Low investment is also a point of attraction to
the Below Poverty Line (BPL) families. It has become a good source of income
and they can smoothly run their living hood.
Table 4.5: Area wise employment generation
S.

Areas

No
1
2

Surajkund
Phool

Bagh

Colony

Distance

No. of

from

units

Meerut

working

Nil

350

SMEs

6000

Nil

200

SMEs

4500

Nature of unit

People
Employed

Victoria Park

Nil

30

SMEs

700

Sports Complex

Nil

50

SMEs

2300

Lal kurti

Nil

75

Abdullahpur

10 KM

125

93

Micro and Semi

finishing
Micro and Semi
finishing

1000

500

Jangethi

09 KM

130

Shobhapur

09 KM

140

Maliana

10 KM

150

Micro and Semi

finishing
Micro and Semi
finishing
Micro and Semi
finishing

Source: District Industries Centre, Meerut (2011)

Figure 4.4: Employment generation

Figure 4.5: Area wise units

94

700

650

560

4.4.5 Imparts quality within limited resources

According to field survey, cricket accessories manufacturing units
in Meerut are relatively better organized and give more attention to quality with
in the confined and constrained resources. Quite a few industry export
substantial volume to all over cricket playing countries in the world and have
established their brands such as SS, SG, SF and BDM etc. Meerut is not only
well known for its cricket sports gears but also hockey sticks, tennis and
badminton racquets etc. Some units produce latex based football bladder,
equipments for gymnastic and athletic sports in an organized way and produces
standard quality goods in large quantity using continuous/ semi-automatic
process.

4.4.6 Foreign currency generation

Different entrepreneurs on this issue viewed that the sports goods
industry of India generates the foreign currency of approximately Rs. 125
Crores from the different countries of the world. Year wise trend can be better
understood by table 4.6.

Table 4.6: Year wise foreign currency generation

S. No.

Financial Year

Export (Crore Rs.)

2005-06

76.55

2006-07

92.37

2007-08

115.23

2008-09

115.09

2009-10

120.43

2010-11

122.85

Source: National Productivity Council (2010) and Field Survey

95

Figure 4.6: Year wise foreign currency generation

4.4.7 Substantial turn over

All the units of the cluster fall under the category of Micro and
Small manufacturing units and imparts the annual turnover as under:
Table 4.7: Segment wise turnover
Annual Turn Over Segments

Total Enterprises (%)

Less than 10 Lakhs

30.0

10 - 30 Lakhs

37.5

30 - 50 Lakhs

25.0

50 - 70 Lakhs

5.0

70 Lakhs to above

1.0

Source: Field survey

70 Lakhs to above
1%

50 - 70 Lakhs
5%

30 - 50 Lakhs
25%

Less than 10 Lakhs

30%

10 - 30 Lakhs
39%

Figure 4.7: Segment wise annual turnover

96

4.4.8 High workmanship

The field survey estimates that 80 percent of the industry depends
on labour and rest on the machines. Hence the sports goods cluster of Meerut is
found to be highly labour intensive. The bifurcation of skilled and unskilled
work force can be represented by table 4.8, as mentioned under:

Table 4.8: Skilled and unskilled labour across the cluster

Years

Skilled labour (Percent)

Unskilled labour (Percent)

2004-05

60

40

2005-06

58

42

2006-07

59

41

2007-08

58

42

2008-09

59

41

2009-10

59

41

2010-11

60

40

Source: National Productivity Council (2010) and Field Survey

Figure 4.8: Skilled and unskilled labour

97

4.4.9Awards and Honours

According to the news reported by Hindi Daily Dainik Jagran (9th
April 2012), Meerut based sports goods companies have been honored by the
Sports Minister Mr. Ajay Makan with three Brand Promotion Awards out of
five in the award ceremony organized by Sports Goods Export Promotion
Council (SGEPC) in New Delhi on 8th April 2012. The sports city has proven its
determination for excellence again, in the field of cricket sporting goods, table
tennis and athletics products etc.

Meerut sports goods cluster has won total of 21 awards out of 81 in

different segments. In the ceremony Meerut based Stag International has won 4
awards, SG and Bhalla International 3 each, Nelco India and K. L. Mahajan and
Sons, one each, in track and field segment.

The promoter of Stag International, Mr.Rakesh Kohli viewed that

their company is winning Best Exporter Award continuously for last ten years;
it is a matter of great pride for whole of the Meerut sports goods cluster. It will
motivate the other members to perform at their best.

4.4.10

Other factors
As per field survey, some of the Other Factors that strengthen the

cluster are:
Innovation in the present products with in the available resources
Linkages with traders of nearby markets or middleman of exporter
Cohesiveness among manufacturers is visible
Handmade products
Easy availability of skilled labour in and around the cluster

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 A ready-to-use sports goods complex equipped with all facilities.

Strong presence in the local market.

4.5 Weaknesses
The sports goods cluster of Meerut reflects the following
weaknesses:

4.5.1 Scarcity of raw material

According to a report published by Hindi Daily Dainik Jagran
(19th April 2011), that it is expected to have a rise in demand up to 40 percent of
Indian sports goods, in consecutive quarters of financial years 2011-12,
specially for cricket bat, as Indian Cricket Team has won the Cricket World
Cup- 2011 after 28 years but improper supply and low quality Kashmir Willow
is the cause of anxiety for Meerut based cricket gear manufacturers. The valley
is suffered from heavy rainfalls, almost daily, which cause moisture contents in
the raw material (Willow wood). According to an estimate, 181 countries of the
world are playing cricket, out of which 53 countries are affiliated with
International Cricket Council (ICC). Meerut supplies approximately 25 percent
of the total demand. The market is expending to the countries like Hong Kong,
USA, China, Thailand, Brazil and Afghanistan etc. at a pace but according to
Mr. Anil Sareen, CEO of SF The Meerut based manufacturers are facing lot of
problems in procuring raw material required for bat manufacturing, as J&K
Government has banned the export of willow as a raw material but it can be
imported in semi- finished form, which unnecessary increase the cost of the
product. The problem has risen to the Ministry of Commerce and Industries but
nothing has been done in this issue except assurance.

During field survey it has also been identified that cluster faces
99

many hurdles in procuring some of the other essential raw materials such as
rubber, cane, threads and steel etc., for manufacturing of various sports
equipments. Though raw materials are available within the country, due to
interstate restrictions in goods movement, it cant be easily transported from one
state to another.

There has been a decrease in availability of many of the materials

needed for craft manufacture and a decline in quality in many of the still
available materials. The sports goods industry facing the most severe shortage
today is wood, cane, scrap and virgin metal. The costs of some of these are
rising at a pace.

Small enterprises usually face problems due to allocation system

for scarce raw materials and imported components. In village industries, raw
material accounts for more than 60 percent of the total cost of the products. New
enterprises face problems in obtaining raw material in the absence of a proper
and equitable policy of raw material distribution.

Table 4.9: Shortcomings in raw material availability

S. No.

Shortcomings

Factors

(Percent)

Inadequacy in availability of raw material

Untimely availability of raw material

To cover long distance

47.37

High prices of raw material

13.61

Fluctuation in quality

5.26

Others

2.63

Source: Field Survey

100

23.68
7.90

Others
3%

Fluctuation in
quality
5%

Inadequacy in
availability of raw
material
24%

High prices of raw

material
14%

To cover long
distance
46%

Untimely availability
of raw material
8%

Figure 4.9: Shortcomings in raw material availability

4.5.2 Labour laws and regulations

According to the Department of Industrial Policy and Promotion
Report (2011), the labour laws are also creating problems for small and medium
enterprises. Since the manufacturing units require employment of casual
workers for short periods, depending on orders/demand. The labour laws need
to be made more flexible for undertaking such engagements.

4.5.3 Low automation

Dubey and Singh (2011), taken the reference of International Trade
Centre (ITC) Report regarding Indias share in world market of sporting goods.
It viewed that it is marginal up to 0.4 per cent, placing it at 33rd position
globally. Only a handful of enterprises in the cluster are able to tape
international brands while most enterprises cater to the less sophisticated
domestic market or the low-end export market. The major reason identified
behind this weakness is technological stagnation, which is responsible for
optimum performance of Indian exports in International market. The industrial
mechanization can be better understood by table 4.10.
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Table 4.10: Segment wise automation of the cluster

S.
No.

Product/ Equipments

No. of units engaged

Machinery used
(percent)

Cricket bats

750

30

Foot Ball

175

None

Cricket Ball

900

20

Athletics Equipments

375

40

Nets

400

15

Volley Ball

325

None

Health Equipments

150

30

Sports wears

275

40

Source: District Industries Centre, Meerut (2011)

Figure 4.10: Segment wise automation

4.5.4 Lack of product development

With the evolution of many sporting events and their
commercialization such as Indian Premier League, Big Bash League of
Australia and English Premier League of England etc., the demand of
102

sophisticated and users friendly sporting goods have increased rapidly. Most of
the old school sporting goods have now in the category of obsolete. Majority of
the sportsmen are of the opinion that the sporting gazettes should have great
strength but light weight.

Graphite shafts in golf sticks, fiber glass in skis, different types of

polymers in basketball shoes, PU (Poly Urethane) in inflatable balls, Kevlar in
sail boats and hockey sticks, etc. are some of the examples of latest material
used in western countries. Research on some of the other alternate materials is
under progress.

Small and Medium enterprises are the back bone of sports goods
cluster of Meerut. These units can not invest in the development of alternate
materials in such a fashion that the international giants can. Poor initiation of
government in Research and Development of such a material and equipment
designing are also one of the major drawbacks.

4.5.5 Lack of indigenous brands and marketing strategies

Different surveys reported that the sporting goods market is
relatively small and split into several layers. The organized segment of the
market is confined to the limited companies such as BDM, SG, SS, SF, Nelco
and National Sports etc. These companies have been stepped up their
investments in the equipment segment in the last years but most of the
enterprise faces several problems including the market risk bearing capacity.
That is why these small players focus their production either for international
brands or for the low- end domestic market, rather than establishing their own
brand.

103

4.5.6 Dependence on import of quality Raw Material

Raw materials like wood, cork, cane willow, fine grade plastic and
leather form the basic inputs to production of sport goods. Sports goods cluster
heavily depends on import either due to non-availability of the raw material or
low quality of available materials. Changing consumers requirements and
demand for sophisticated equipments is catered only by the imported raw
material. This raw material is imported in India through different channels as
under:

Table 4.11: Channels of raw material import

Categories

Occurrence Percentage

Direct import from foreign sellers

29

Through buying house in India

Through agents in India

12

Others

56

Source: Field Survey

Direct import from

foreign sellers
29%
Others
56%

Through buying
house in India
3%
Through agents in
India
12%

Figure 4.11: Channels of raw material import

104

4.5.7 Involvement of child labour

The exposure of child labour, engaged in sports industry of Meerut
city and its surrounding regions, was highlighted by an Indian NGO, Bachpan
Bachao Andolan- BBA (2009).
Kailash Satyarthi, Chairperson of BBA viewed that big branded
companies outsource work to small contractors, who take unfair advantage of
the poor in villages and small towns like those around Meerut, who then employ
little children to churn out footballs and other sports gears at the cost of their
health and education. Children as young as six are employed in the footballmanufacturing industry right across Meerut city and adjacent villages. The
gender wise status of child labour can be presented by the table 4.12, as
mentioned under:
Table 4.12: Gender wise status of child labour
Children
Village

(6- 17 age
group)

Both
working

School

and school

going (%)

Only
working
(%)

going (%)

Boys

Girls Boys

Girls Boys

Girls Boys

Girls

Kamalpur

43

44

44

57

86

68

23

Buddh Vihar

21

24

52

62

86

63

17

Dabathua

21

23

48

61

81

65

17

Siwal Khas

14

13

21

38

86

71

All

19

104

43

57

84

67

18

Source: Bachpan Bachao Andolan (2009)

105

According to Bachpan Bachao Andolan (2009), even after a full

day's work the children can only produce a maximum of two footballs and earn
at best Rs. 3-5 per football, which is 40 times less than its retail price. They are
paid a pittance for their labour. If a stitch comes undone, the contractors deduct
the repair cost from the laborers wages.

4.5.8 Disparity in sponsorship

It is the social responsibility of indigenous corporate houses to
come forward to support the young and evolving talent in sports. It not only
enhances the sports culture in the country but also encourage the budding sports
persons to perform at their best at national and international level as well.
But these houses show more affinity towards foreign players. Stag
International, a pioneer corporate house in the field of sports goods, is
sponsoring Peter Calson, the Table Tennis ace of Sweden and the world
champion for last twenty years. Not only this, Pakistani player Saleem Abbas is
also being endorsed by the same company since 2004. Nelco is associated
with Thrower World Champion John Badina and Gert Canter.
If to emphasis on Indian players endorsement, Meerut based
companies are relying only on the star players. Discuss thrower Krishna Poonia,
Vikas Gowda and Thrower Digvijay Singh are being sponsored by Anand Track
and Field Company. SG is sponsoring cricket stars Virendra Sehwag, Suresh
Raina and Rahul Dravid where as SS and SF has number of West Indian,
Bangladeshi and Sri Lankan players. Khanna Sports is relying on Indian
Football star Bychung Bhutia.
According to Alka Tomar, the only Women Wrestler in Olympic
2012 represented India Meerut has evolved the number of promising talent in
106

sports to the international level but the matter of disappointment is that no

Meerut based company has initiated to sponsor either of them.

According to a report published in a pioneer Hindi Daily Dainik

Jagran (26th June 2010), localite sports person Garima Chaudhary is one of the
evolving star at martial arts arena, who has proven her identity by qualifying for
Olympic 2012 at Asia level, still looking for sponsorship.

At this disparity, Lokesh Vats, Director of Vats Sportswear said

Glamour of cricket has snatched the right of several evolving players of other
fields. We are working out a scheme, so that it could be equally beneficial to
all. Puneet Khanna, an entrepreneur, associated with a football manufacturing
company said It would happen till the glamour of cricket retains.

4.5.9 Unsatisfactory financial assistance

The road to success seems to be comparatively tough for small
scale or rather house hold unit owners. If rely on some reports, it could be
expected that some segments of sports goods would perform well in the near
future. These segments include fitness products, athletic products, table tennis,
health equipments and cricket goods etc. But to cater this high demand the
cluster should be well prepared with its all the recourses. Capital is one of the
major issue for small scale industries. The small unit holders complained that
they dont have sufficient funds to fulfill even a fraction of demand created in
the market. They are manufacturing goods for big brands. Banks and other
financial agencies do not look at them but always ready to finance the big
enterprises.

107

Table 4.13: Shortcomings in financial assistance

S.
No.
1

Faced by industry

Factors
Lack

of

awareness

(percent)
of

financial

assistance schemes
Difficulties faced in getting financial
assistance
Corruption

involved

in

getting

assistance

8.45

38.03

39.44

Requirement of personal approach

12.68

Any other

1.41

Source: Field survey

4.5.10 Other factors

Some of the issues related to the weaknesses of sports goods
cluster can be list as under:
Highly fragmented cluster
Lack of availability of funds at low interest rates and formalities
Very little or rather no market research
No space or vision to organize cluster oriented trade fairs
Red- tapism and slow working in government departments
Unexpected inspections by government officials
Fixed mindset to sell only in the domestic market
Erratic power supply
Weak association and union
Poor working conditions

108

4.6 Opportunities
The sports goods cluster of Meerut has the opportunities as under:

4.6.1 Increasing demand of sports goods

The demand of sports goods in India is expected to be increased in
the consecutive years. The market magnitude of different sporting goods, such
as athletic goods, hammer, discuss and javelin etc are expected to be increased
by 15 percent where as foot ball, ruby ball, soccer ball, table tennis related
equipments by 20 percent and cricket related equipments and accessories by 40
percent. The experts estimate this boom in cricket due to the outstanding
performance of Indian Cricket team in ICC Cricket World Cup- 2011 and
different Indian Premier League (IPL) teams.
Table 4.14: Extant of demand for sports goods
Characteristic

Demand (percent)

Increase

42.50

Decrease

7.50

Stagnating

20.00

Constant

30.00

Source: Field Survey

Constant
30%

Increase
42%

Stagnating
20%

Decrease
8%

Figure 4.12: Demand of sports goods

109

4.6.2 Productivity improvement

Productivity improvement in sports goods cluster has a vast scope.
There are many areas and avenues which can be improved by providing
required assistance. Many new sports goods can be added to the current basket.
It will not only increase the magnitude of industry in this segment but also the
employment opportunity to many local people. The cluster can be benefited
immensely if a proper technical up gradation of machines and equipments etc. is
done.

Ministry of Micro Small and Medium Enterprises (MSME) in

order to enhance productivity of Indian industries, particularly Foundry industry
of Agra and Sports Goods Industry of Meerut, promoted Lean Manufacturing
Competitiveness Technology with the help of Government of Japan. Only 20
percent of the total expenditure would have to be borne by the enterprise and
rest by the government.

Upgradation in the skills of workers is another area of

improvement. Proper training can help in improving the productivity of the
workers, thus improves the productivity of the industry as a whole. Greater
scope lies in diversifying to newer sports segments, thus there is huge scope for
promotion of productivity in this cluster.
Table 4.15: Capital and Labour Productivity
Capital Productivity

Labour Productivity

(Earnings Per Re. Invested)

(Rs. Per Person Employed)

1995-96

1.51

28853

1996-97

1.09

27850

Year

110

1997-98

0.95

18624

1998-99

1.07

25399

1999-2000

1.14

31631

2000-01

0.52

26670

2001- 02

0.62

27070

2002-03

1.21

18871

2003-04

1.26

21724

2004-05

1.78

20412

2005-06

2.47

19307

2006-07

1.42

15380

2007-08

1.26

16987

2008-09

1.07

20156

2009-10

1.10

17825

2010-11

1.15

21010

Source: National Production Council Report (2010) and Field Survey

Figure 4.13: Capital Productivity

111

Figure 4.14: Labour Productivity

4.6.3

Commonwealth Games- 2010

According to the Institute of International Trade (2010), Common

Wealth Games- 2010 (CWG-2012) are expected to result in an overall economic

impact of US$ 4.9 billion on Indias GDP during a period of four years (200812) and create an employment opportunity for approximately 2.5 million
people. This figure is almost three times the economic impact the Common
Wealth Games- 2006, Melbourne, had on the Australias GDP, Meerut is not an
exceptional. Some of the other opportunities that sports goods manufacturing
segment of Meerut could avail by CWG-2010 are as under:
Attract Foreign Direct Investment (FDI);
Development of sporting culture;

4.6.4 Cricket World Cup and other mega events

Other than Commonwealth Games- 2010, different mega events
have also been organized by the different sports associations/ boards in the

112

country. ICC Cricket World Cup- 2011, Chennai Open Tennis and Formula- 1
Race etc. are some of the most adorable sporting events. The development of
new sports infrastructure across the country has also sparked off renewed
interest among the youth to play the games with greater intensity. Alongside,
there is a mushrooming of sports clinics and coaching camps that draw a very
large number of players to hone their skills. All these factors can contribute to a
rapid increase in the demand for Meerut based but high quality sports gears in
the country.
According to the Hindi Newspaper Dainik Jagran (2nd February
2011) several Indian and foreign players could be seen playing with Meerut
sports goods, particularly bats. According to Jatin Sareen, the owner of Sareen
Industries, Company is sponsoring different players of Sri Lanka, Bangladesh,
Zimbabwe and Netherlands. Sri Lankan skipper Sangakkara and West Indian
player Kerron Pollard are some of the big names among them. The Stanford
Company (SF) has sponsored the whole Canada team and some of the Kenyan
players. Companys Business Executive Vyapak Mehra said We have endorsed
big West Indian players like Ram Naresh Sarwan and run factory Kris Gayle.
It was expected that during and after this mega event the demand of cricket
goods would rise by 20 percent but according to the different sources it has
tremendously raised up to 40 percent.

Indian Premier League (IPL) is another avenue of interest for

cricket fans. Mumbai Indians star player and God of cricket Sachin Tendulkar
played with Meerut based Premier Companies bat. The company owner Sunesh
Agarwal said It was a great moment for us by seeing our bat hold by Sachin.
Divvy Jacob, the opener of the same team, also used our bat. It reflects the faith
of these players in our products. It definitely boosts up our confidence.

113

4.6.5 London Olympics- 2012

Meerut based companies are few of the handful companies across
the world that provide sports equipments like shot put and javelins etc. that
confirms to the guidelines set by The International Governing Body for Athletes
Federations (or IAAF).
According to the report published by The Economic Times (16th
January 2012), city based companies- Nelco sports, Bhalla International and
Anand Track and Field Equipment Private Limited- are going hammer and
tongs to supply equipment of international standard at the mega sporting event.
They are providing shot puts, discus, hurdles and hammers for the track and
field events. These companies provide a variety of implements in the mega
event which is expected to be Rs. 3, 64,000.

4.6.6 Growing employability

Coming five years would be remarkable for the employability of
sports goods sector particularly in retail said Stag Internationals chief Rakesh
Kohli. Stag International is one of the pioneer companies manufacturing and
exporting various sports goods, now diversifying the segment as the retail
outlets chain. The company has collaborated with world leaders- Milan
(Germany), Tunturi (Finland), Victor (Germany) and Skills Training Equipment
(USA). The company has planned to invest Rs. 100 Crores and expecting a
handsome annual turn in the consecutive years. In its initial phase the company
has opened its retail outlets- one each in Meerut, Indore, Chandigarh and
Dehradun and two in Banguluru.
According to The Economic Times (22nd August 2012), The latest
report of ASSOCHAM (2012) has shown better job index for Meerut as
114

compare to Kanpur, the pioneer industrial city of Uttar Pradesh. The

employability in Meerut has increased by 38.5 percent, in the recent years, as
compare to 23 percent in the same tier cities. The report also highlighted that
the job market is expected to be boomed by 50 percent in the coming years as
large number of retail outlets including sports goods would register their
presence. But the picture unveiled during the field survey is as under:

Table 4.16: Employment contribution

Years

Artisans Employed

2004-05

67187

2005-06

67260

2006-07

67260

2007-08

67020

2008-09

67050

2009-10

67188

2010-11

67320

Source: Laghu Udyog Samachar (2010) and Field Survey

Figure 4.15: Employment growth

115

4.6.7 New innovations and upgraded technological input

The new innovations and advancements through research are keen
to change the shape and nature of different sports goods and accessories. Cricket
bat is one of the highest selling products of Meerut Sports Goods Cluster
(MSGC) to the world, which usually made up of English willow or Kashmir
willow. According to M.K. Sareen, the member of Melbourne Cricket Council
(Dainik Jagran, 1st February 2011), the willow is a natural product and is
depleting fast because the demand of cricket bats are increasing continuously.
Hence in order to maintain the ecological balance and fulfill the market demand
the search of alternate material becomes inevitable.
Anil Sareen, CEO of SS, a pioneer cricket gear manufacturing
company on this issue said The extensive research work is being carried out in
The Netherlands and New Zealand to find out the alternate material for cricket
bats and hockey sticks. Graphite has been evolved as a new material which can
replace willow and we are ready to make changes as soon as ICC approves it.
According to the report of Hindi Newspaper Dainik Jagran (1st
February 2011), in 1980 the famous Australian cricketer Dennis Lilly played by
aluminum bat, which had created a debate. Later his countryman Ricky Ponting
experimented with some metallic bat in the first class cricket and indicated his
support towards alternate material.
It is expected that the cricket bats and the hockey sticks so
manufactured would be more durable. In this sequence Meerut based Stag
International has developed bullet- proof TT table top with the help of German
Technology, by virtue of which this game could change its nature from indoor.
This table can now be used at sea beaches as well. Stag Internationals Vice
President Vivek Kohli said This bullet- proof table is made up of multi layered
116

special wood top called comprez, by virtue of which it could withstand up to

4000 kg of weight. This table top incorporates the strength of steel, quality of
wood and durability of plastic. This material is frequently used in public
transport system of Germany. This table is also admired by different countries
including USA, UK and France and so far more than 5000 table tops have been
exported to these countries. Latin American countries are also demanding for it.
Transparent arena is also a new innovation in Beach Table Tennis. It is a thin
wall made up of transparent plastic foil and can be rolled and ported when
desired. However the material comprez is not so easily available still the
research on the cheap and easily available alternate material is carried out.
Fitness equipments are another avenue of high- tech sports goods
segment. A reliable source by taking the reference of Edelweiss (2012), a
prominent economic survey company, said that by 2020 the fitness market of
India would be of 30,000 crores and people would spend on it about 35 times as
today. Hindi daily Dainik Jagran (17th February 2011) reported this figure as Rs.
73000 crores per annum. There are number of big and small companies in
Meerut, manufacturing fitness equipments. Stag International is one of the
pioneer company dealing in various sports goods including fitness equipments.
According to the report published in Hindi News paper Dainik Jagran (2012),
Stag International in collaboration with German counterpart Milan, has
developed an automated gym which is operated by smart card. This machine
resets according to the length and weight of the person while applying smart
card. According to the officials of Stag International this gym is also admired by
different Bollywood film stars in an exhibition in Mumbai and Pune and it is
expected that this gym would be exhibited in a large budget film in the near
future. According to Dainik Jagran (6th January 2012), the same gym is used by
famous film star Karina Kapoor in her film Bodyguard.

117

If to switch towards Discuss, the different companies of the world

manufacturing the discuss of 85- 90 percent ring weight by steel and brass.
Meerut based Nelco International has developed new discuss which contains
95 percent ring weight, made up of poly carbonate. Being aerodynamic in shape
this discuss would retain in air for more time and can be projected for larger
span. The change in metal ratio is so designed that imparts better weight to
balance relationship. This discuss has been appreciated by the American World
Champion Discuss Thrower Nick Petrecy and Indian athlete star Vikas Gowda.
The company has applied for its patent and would start its regular production as
soon as they get approval from International Athletics Federation (IAF). The
company claims that this discuss would improve the performance of players.

4.6.8 Initial investment sources

According to the field survey findings, most of the investment is
managed through availing credit from banks, government subsidy and
government loans while significant proportion of investment is mobilized by the
entrepreneurs themselves. The table mentioned below can better explain the fact
as:

Table 4.17: Average Initial Investment

Sources of Finance for Initial Investment

Percent

Self

5.38

Friends

16.15

Government Subsidy

26.15

Government Loans

24.62

Banks

27.69

Source: Field Survey

118

Self
5%
Frie nds
16%

Banks
28%

Gove rnment
Subsidy
26%

Gov ernme nt
Loans
25%

Figure 4.16: Average initial investment

4.6.9 Other factors

Field survey highlighted other opportunities too, in their studies
that MSGC can avail as under:
Vast scope for skill up gradation
With the advent of information technology and communication
technology new products and designs can be made available easily
New machines and tools are now available to financially sound units
New products for higher income groups can help in creating new market
Some of the Indian brands may expand the market horizontally and
vertically
Huge untapped domestic and international markets
Potential for product diversification
Global trend can usher tremendous market potential for the units who will
go for ISO-9000

4.7 Threats
The sports goods cluster of Meerut is encountered with following
threats:

119

4.7.1 Trade competitiveness

As Jalandhar and Meerut are the major sports goods clusters in
India. Jalandhar contributes approximately 75 percent where as rest is
contributed by Meerut. Due to confined proportion, MSGC is more threatened
by Asian counterparts like Japan, China, Taiwan and Pakistan etc. It pays
comparatively high tariffs as compare to Pakistani city, but with moderate
productivity. Chinese and Japanese companies are more technologically
advanced as compare to traditional Meerut cluster. It can be better understood
by the following table:

Table 4.18: Trade competitiveness

S. No.

Factors that appeal retailers

Percent retailers

Price

45

Quality

55

Quantity

Others

Source: Field Survey

Price
45%
Quality
55%

Figure 4.17: Market appealing factors

120

According to the report published in Hindi Daily Dainik Jagran

(4th March 2011), the government, in addition, is making the way more
complicated by imposing Goods and Service Tax (GST) for sports goods
industry. An excise duty of 1 percent is expected to be imposed soon by the
government. According to the manufacturers it would unnecessarily increase the
cost of sports goods and cheap Pakistani as well Chinese products may acquire
their segment.

4.7.2 Entry of global brands

According to Mukherjee (2010), with the growth of modern
retailing, foreign brands have entered the Indian market. The proliferation of
brands has increased brand-consciousness and Indian consumers are now more
inclined to buy branded products.
The growing Indian retail market, consistently high GDP, rising
per capita income, large consumer base among others has also attracted foreign
retailers to India, especially retailers from developed countries who are facing a
saturated market at home. For three consecutive years, (2005 to 2007), India
ranked first among 30 emerging markets for foreign retailers. In 2008, it was
ranked second after Vietnam but in 2009 it again regained the first position in
the AT Kearney Retail Development Index.
Both traditional and modern retailers have pointed out that the
Indian manufacturing sector has not focused on strong brand development.
There are only a few strong Indian brands and hence they have no options but to
market foreign brands.
Different surveys found that foreign brands have entered the Indian
market through multiple routes. For instance, Nike initially entered the market
121

in 1995 under a seven year exclusive licensing agreement with Sierra Trading
Enterprise (STE) and in 2003 established its wholly-owned subsidiary. Brands
such as Reebok, Puma and Adidas have wholly-owned subsidiaries in India.
They source products from India both for domestic and foreign markets and
have an integrated operation encompassing sourcing, distribution and retailing.
Since they are incorporated in India they are considered as Indian companies.

Other like Technogym has entered through a distribution

agreement, whereas Lotto entered through a licensing agreement, which gives it
the right to manufacture, source locally and distribute products. Some retailers
are entering through joint ventures- for instance; Dama Paul and Shark has a 5050 joint venture with Reliance Brand, where as Canadian brand Trio Sports
Wear (P) Ltd. have entered through the single-brand retail route. Others like
Lacoste enter through franchisee agreements.

Some have a mixed model of licensing and distribution agreement

or franchising and distribution agreement.

Table 4.19: Most demanded brands

Sports apparel: Adidas, Reebok, Nike, Puma and Nivia
Sports footwear and shoes: Adidas, Nike, Reebok, Puma, Lotto and Ace
Sports goods: Reebok, Yonex, Cosco, Adidas, Nike, Wilson and Puma,
Fitness goods: Aerofit and Telebrand
Source: Market survey

122

This situation not only affects the economy of the country but also
that of Meerut as it is one of the major stack holder of sports goods industry in
India.

4.7.3 Coping/ piracy of brands

It is a known fact that very few entrepreneurs have strived towards
branding of their products like BDM, SS, SG, HRS, Nelco, Anand Track and
Field Equipments and Bhalla International etc. and some others among the
global giants. Still many small and medium manufacturing units market their
sub standard products with big names and earn the handsome profit. During
field survey almost all the local giants complaint that it is due to the poor
government regulations of duplicacy/ piracy and bureaucratic practices.

4.7.4 Price hike in industrial land

According to the prominent English daily- The Times of India (24th
March 2011), the escalating land prices have frozen the plans of expansion of
many small scale industries in Meerut and nearby districts like Ghaziabad and
Noida. It has affected the chances of many companies who are doing reasonably
well at their units but the revenues they generate are not sufficient enough to
purchase the land and expand their operations.

Industries in Meerut are suffering immensely because of this

problem. According to some sources the government has not developed any
industrial area after Udyog Nagar that was 15- 20 years back which has
aggravated the problem. The player has to pay a hefty price to buy a land
elsewhere.

123

4.7.5 Compromised quality and price tag

Retailers are said to be the first customers. Field survey identifies
that quality and price are not the only factors that could attract majority of
retailers. Very few retailers show cases the original and branded products as
barely professional and elite class customers demand for it where as majority is
least concern about it. The Other Factors that retailers usually desired from a
product are as under:
Table 4.20: Factors that customer demands
S. No.

Factors

Percentage

Quality

Price

Packaging

11

Branding

Availability

Choice/ variety

13

Credit

18

Advertising Effect

Long shelf life/ durability

15

10

Rebate

16

Source: Field Survey

Price
2%
Qua lity
4%
Pa ckaging
11%
Re ba te
16%
Bra nding
5%
Long she lf life /
dura bility
15%
Availability
9%
Advertising Effe ct
7%
Choice / variety
13%

Credit
18%

Figure 4.18: Factors as per customer demand

124

4.7.6 Impact of recession

Global recession strikes the world and impact adversely in 200708. No segment left untouched and so the sports goods cluster of Meerut. The
cluster faced a remarkable melt down of the market from compound annual
growth rate of 23 percent (2006-07) to 10 percent at the end of the financial year
(2008-09), refer table 4.21.

To overcome this melt down the sports goods manufacturers found

the new avenues in exports. Being good availability of skilled men force,
Meerut based sports goods cluster could be in the position to supply fit-inpocket sports gear to the global brands like Puma, Kookaburra, Slazenger, Gunn
& Moore, Mitter, Reebok, Nike and Adidas etc. Recession has had a significant
impact on the manufacturing facilities due to high overheads, high labour cost
etc. of these brands and, therefore, Meerut has become their cost-effective
manufacturing stop.
Table 4.21: Impact of recession on turnover (Crore Rs.)
Year

Total

CAGR (Percent)

2004-05

111.38

2005-06

124.77

0.12

2006-07

153.80

0.23

2007-08

179.87

0.17

2008-09

198.60

0.10

2009-10

209.10

0.05

2010-11

228.77

0.09

Source: National Productivity Council (2010) and Field

Survey

125

Figure 4.19: Impact of global recession on annual turnover

Figure 4.20: Impact of global recession on CAGR of annual turnover

Table 4.22: Foreign currency earning
S. No.

Financial Year

Export (Crores)

2005-06

76.55

2006-07

92.37

2007-08

115.23

2008-09

115.09

2009-10

120.43

2010-11

122.85

Source: National Productivity Council (2010), Dainik Jagran (2010) and Field
Survey
126

Figure 4.21: Impact of global recession on export

Rather, Meerut Sports Goods Cluster has found a way to overcome
the effect of global melt down still it can not be assumed as a final avenue as
sub- contractorship is not the optimal option. As soon as big brands found the
alternate sources they will switch to them and leave Meerut based companies
abundant.

4.7.7 No Meerut product in Common Wealth Games- 2010

Rather, Meerut has lot of credentials in its pocket like Export of sports goods to approximately 143 countries due to superior
quality.
According to the report published by The Economic Times (16th January
2012), city based companies- Nelco Sports, Bhalla International and
Anand Track and Field Equipment Private Limited- are going hammer
and tongs to supply equipment of international standard at the London
Olympic- 2012.
Other companies such as Vinex and Stag International supplied their
products to various mega events including Mens and Womens Table

127

Tennis World Championship, Euro- Asia Cup, Youth Olympic and

European Youth Championship etc.

Yet the organizing committee of Common Wealth Games- 2010,

New Delhi, has not asked even a single product from the Meerut based
companies. Rakesh Kohli the chief of Stag International claimed that they had
offered their services for the mega event by supplying table tennis products free
of cost but no attention had been drawn on their proposal. They further added
that it could cut down some of the cost in organizing such a big event and the
Indian sports goods clusters could be promoted at international level. In brief,
Meerut sports goods cluster in particular has missed a lot as this event could
have a lot of impact on its economy being closer to Delhi.

4.7.8 Poor quality system

Perhaps the most neglected area of the industry is this. Having
laboratory and carrying out quality control check is exception (very few units
have) in this industry. Practically, there is no check for incoming raw material
and some cursory check is with finished product is carried out- mostly visual,
weight and sometime hardness. Infrequently some tests are carried out at PPDC
Lab by some of the units and not pay much attention to understand significance
and importance of such tests.

4.7.9 Technical Manpower

Equally neglected area is recruitment of qualified technical
manpower. There is hardly qualified Polymer Technologist (PT) in the industry,
especially in the middle level like supervisor and lab chemist etc., who could
follow proper processing and technology required for the manufacture of the
product.
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4.7.10 Declination in growth of units

Despite the growth potential, entrepreneurs could not plan to
expand their businesses due to bottleneck in industrial growth. The basic
problem and factors for unsuccessful growth of the industry is shown in Table
4.24. Low returns, market competition, low investment, lack of finance, limited
demand and inferior quality of products etc. are some of the important factors
for unsuccessful growth of industry.

Table 4.23: Factors that lead to declination in growth

S. No.

Industrys Perception

Factors

(Percent)

Lack of finance

44.62

Limited demand of products

13.08

Low returns

56.92

Inferior quality of products

6.92

5
6

Competition in marketing due to low

cost Chinese products
Any other

100.00
85.38

Source: Field Survey

4.7.11 Other factors

Different findings report that there are some other factors that
threaten the sports goods industry are:
Reluctance of artisans towards learning of new skills and group activities
Highly dynamic business environment
Low literacy level of few artisans to use the latest gazettes of information
technology and communication

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 High cost and scarce availability of latest technology and tools.

Costly transportation
Low pace of quality upgradation programmes
Fixed mindset and inability to innovate as required in every process
No linkages with the large buyers
Slow or zero adaptation to the international standards
Increasing global competition

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