Diagnostic Study Report: Draft

Diagnostic Survey Report
Engineering Cluster- Coimbatore {BDS}
DRAFT
DIAGNOSTIC STUDY REPORT
ENGINEERING CLUSTER
COIMBATORE, TAMILNADU
SUBMITTED TO
PROJECT MANAGEMENT DIVISION
JULY- 2009
BY
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INDEX
Chapter no. Contents Page no.
1.0 INTRODUCTION 4-6

Background
Methodology
2.0 Frame Work 7-26

2.1 The cluster 7
2.2 Production Process & Flow Charts 7-12
2.3 History of the Cluster 13-14
2.4 National, International Scenario and features of Benchmark 15-22
Cluster
2.5 Vital Statistics, BDS Providers, WDWP Matrix 22-26
3.0 Environment and Energy related issues 27-31

3.1 Impact of foundry units on Coimbatore environment 27-29
3.2 Impact of Pumps and Motors units on Coimbatore environment 29-31
4.0 Analysis 32-52

4.1 Value Chain Analysis 32-34
4.2 BDS Analysis 36-48
4.3 AOBO and Pressure points 49-56
5.0 Derivation 57-61

5.1 SWOT 57-58
5.2 Cluster Map 59-60
5.3 Vision for the Cluster 61
Annexure (s) 62-73
1. Location Map 62
2. List of Respondents 63-66
3. Questionnaires 67-70
4. First Year Action Plan 71-73
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Si NO Abbreviation Full Form
1. SIDBI Small Industries Development Bank of India
2. SIDBI-PMD SIDBI Project Management Division
3. KFW Kreditanstalt for Wiederaufbau
4. GTZ Deutsche Gesellschaft for Techhnische Zusammenarbeit
5. DFID Department for International Development
6. SPV Special Purpose Vehicle
7. FI Financial Institution
8. IIPM Indian Institute of Pumps Manufacturers
9. ISO International organization for Standards
10. M&E Monitoring and Evaluation
11. BDS Business Development Services
12. CFS Common Facility Centre
13. CGTMSC Credit Guarantee Fund Trust for Micro Small Enterprise
14. DI-MSME Micro Small and Medium Enterprise Development institute
15. DIC District industries Centre
16. SMERA Small and Medium Enterprises Rating Agency
17. ISI Indian statistical Institute
18. CII Confederation of Indian Industry
19. CODDISSIA Coimbatore Small Scale Industries association
20. SIEMA The southern India Engineering Manufacturers Association
21. COINDIA Coimbatore Industrial Infrastructure Association
22. TAPMA Tamilnadu Pumps and Motors Manufacturers Association
23. TACT Tamilnadu Tiny and Cottage Industries association
24. COSMOFAN Coimbatore Tiny and Small Foundry owners Association
25. CPC Coimbatore Productivity Council
26. CMA Coimbatore Management Association
27. SIDCO Small Industries Development Corporation
28. IIF The Institute of Indian Foundry men
29. ICICI Indian Chamber of Commerce and Industry
30. BII Buaero of Indian Standards
31. TCS TATA Consultancy Service
32. ITI Industrial Training Institute
33. PSU Public Sector Undertaking
34. R& E Research and development
35. NSIC National Small Industries Corporation
36. SITARC Small Industries Testing and Research centre
37. CNC Computer Numerical Control
38. ERP Enterprise Resource planning
39. VAT Value Added Tax
ABBREVIATIONS
Chapter - 1
3
INTRODUCTION
MSMEs play a vital role in the Indian economy. The sector has proved to be appropriate to
address the national priorities of employment, removing poverty and regional imbalances.
Government of India has been taking proactive steps in the direction of strengthening the
competency of Indian MSMEs. The Tenth Five-year plan of the Government placed heavy
reliance on the MSME sector for achieving various growth parameters. Recently notified MSME
Act 2006 has been another proactive step in the direction of creating enabling environment.
With intent to facilitate increased flow of credit to MSMEs and support other developmental
initiatives, SIDBI is implementing a multi-agency / multi-activity flagship Project on Financing
and Development of Small and Medium Enterprises in India. The World Bank, Department for
International Development (DFID), UK, KfW and GTZ, Germany are the major international
partners in the Project.
The promotion of market oriented BDS in selected MSME clusters is one of the components of
a project supported by DFID and GTZ. The purpose of the programme is to foster a
substantially improved enabling and support framework for the development of SMEs in both
rural and urban areas.
APITCO has emerged as preferred bidder for engineering sector by SIDBI PMD after assessing
the technical and financial bids submitted by various competitive agencies/ Organisations with
an objective to strengthen SMEs' access to BDS by designing & implement strategies to: -
 Foster ‘BDS market development’
 Strengthen the access of MSMEs to BDS
 Help make BDS providers in the clusters self- sustainable
 Develop the select clusters as “Role models” with a strong demonstration effect.
The total project period of 32 months is divided in to four phases which are :
Pre Implementation Phase
 Establishment of Project Office with necessary infrastructure

 Preparation of Diagnostic Survey Report
 Preparation of Action Plan
 MOUs with Network Partners
Implementation Phase
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 Implementation of the activities as per the action plan
Sustainability Phase
 Assuring sustainability of interventions

 Setting of International Best Practices
Exit Phase
 Formation and strengthening of Governance mechanisms for sustainability of
interventions
 Project Impact Assessment & Preparation of End of Project Report (EOR)
As a the part of the Pre Implementation Phase the Core Team of the engineering cluster of
Coimbatore with the support of HO team, has completed the Diagnostic Survey and prepared
the Diagnostic Survey Report as per the specifications given by the SIDBI and M&E Agency.
Methodology:
For preparation of the Diagnostic Survey Report the following methodology was followed:
a) Collection of secondary data
The secondary data was collected through related Government Institutions and line
departments like DIC, MSME-DI, and NSIC etc. Some of the data was also collected
through bulletins published by SIEMA, CODISSIA etc. The data was also collected through
related web sites like Ministry of MSME, State Government Portal, Portals maintained by
COINDIA, IIF, technology suppliers.
b) Collection of Primary Data
Primary data was collected through:
i) Questionnaires: With Manufacturing firms, Support Institutions, Job workers,
Backward Linkage providers, BDS providers, Office bearers of association, Financial
Institutions For this purpose a random sample of 140 units of various types,
representing different regions of the cluster i.e based on the size, Scale of
investments, Turnovers, product lines etc were contacted.
The details of the sample size for the questionnaire survey carried out are given as below:
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Table 1.1: Details of Sample size
S.NO Type of Firms Sample Size
1 Manufacturers/ Job Workers/Assemblers (Foundry, 140

Pumps & Motors & Light Engineering)
2 BDS Providers (Incl. Auditing Firms, Technical 60

Institutes, Training Institutes, Foundry Consultants,
Designers,Labour contractors, Rating agencies,Raw
material suppliers etc)
ii) Interviews: The Government Organizations and support institutions like DIC, NSIC, BIS,
FI/Banks,MSME-DI etc. were surveyed though detailed interviews.
iii) Focus Group Discussions : The core team comprising of Cluster Manager and Net Work
Expert and Project Manager have organized focus group discussions with association
members, manufacturers, job workers. The Energy and Environment Consultants from Winrock
International have also participated in some of the focus group discussions to elicit key issues
related to energy audit and pollution control.
Coimbatore is a multisectoral cluster having a large number of pumps & motors
manufacturing units and light engineering enterprises, in addition to the large number of
foundries. Since local pumps and motor industry is one of the main customers for local
foundries, one would expect stronger linkages across the supply chain resulting in
increased vertical cooperation. There is large number of light engineering units in the
micro enterprise category ancillary to small, medium enterprises undertaking precision
machining for auto component, textile machinery, garage equipments etc where there
exists good scope for BDS interventions. Considering these basic diversities and the
project duration, we decided that these two product lines and micro light engineering
enterprises would provide a more balanced perspective for our study.
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Chapter – 2
FRAME WORK
2.1 Coimbatore Engineering Cluster
Coimbatore is one of the few big industrial towns of the state. It is located at a distance of 500
kms. from the state capital Chennai. The city is traversed in the middle by the river Noyyal. It is
surrounded by the Nilgiris, a rich tea producing hinterland in the north, Pollachi, the receiving
centre for forest produce in the south and the Cochin harbour in the Southwest. The city is well
connected to its region by road, rail and air.
The thousands of small and tiny industries including ancillaries and jobbing units have helped
Coimbatore to be recognized as the cynosure of South India. Beside engineering cluster some
of the other popular industrial clusters of Coimbatore are: Power loom, Hosiery, Agricultural
implements, etc. The primary capital income of Tamil Nadu comes from the output of these
industries. The city is well connected with all major industrial towns in India especially with
Chennai and Bangalore. The industries in Coimbatore are producing a variety of engineering
products and components, accessories to cater to the needs of the country. Some of the main
industrial activities are foundry castings, machine tools, cutting tools, electric motors and
pumps, wet grinders, textile machinery and plastic spares & components, washing machines,
domestic vessels, domestic electrical appliances, transformers, illuminations, waste cotton units,
automobile spares etc.
It is important to point out here that the Coimbatore city has grown almost in the
absence of any external support and mineral resources. The success for the
development of industries could be attributed to the innovative and technical skills of
artisans, technocrats and industrialists.
2.2 Production Process:
a) Foundry:
Foundry deals with the process of making casting in moulds formed whether sand or some
other material. Casting process is basically one of introducing molted metal into a cavity in the
mold, previously shaped as desired and allowing it solidifies.
The whole process of producing castings may be classifies into six stages -
i) Designing system: Method and Gating: The design supplied by customer is further designed
to provide with necessary allowances and selection of parting line. Method and gating are the
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tools for achieving this process while methoding consists of feeders, which compensates the
shrinkage in the castings, the gating system consists of spruce and runner and in gates which
allows the molten metal into the mold.
ii) Pattern making: Replica of the castings is prepared on the basis of drawings given by the
customers. Patterns are made with wood and aluminum.
iii) Molding and Core making: Moulds are prepared in the sand with the help of patterns to get
the same shapes to pattern. Core making will be useful for getting hollowness in the casting.
iv) Melting and Casting: Metals will be melted in suitable furnaces to get the required
composition and molten metal will be poured into the molds.
v) Fettling: After solidification of castings, these will be removed from mold boxes and unwanted
metal attachments like runners and raisers will be removed and sand adhered to the castings
will be cleaned.
Later these castings will be sent for further operations like heat treatment and machining.
vi) Testing and Inspection: Before dispatching of the castings, visual and dimensional inspection
carried out. As per customer requirement non destructive test like ultrasonic radiography tests
are carried out to know the internal soundness of the castings.
Through the above process appears to be simple, the foundry men will have to take care of
about number of parameter, right from selection of raw materials to dispatch and demands
technical knowledge for obtaining better quality castings.
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Table 2.2.1: Unit operation of a Typical Foundry
Sr.No Name of Operation Process

01 Stores management Supply of material to the production unit, records are kept
for the supplied material and inventory control
02 Mould sand preparation Sand preparation for the mould making
03 Core preparation Sand preparation for core making
04 Melting Preparation of molten metal of the desired quality
05 Molding Making of the mould
06 Knockout/.Shakeout Eliminating sand from the casting
07 Tumbling and shot blasting Cleaning the surface of the casting
08 Inspection Inspection of the casting
09 Fettling Grinding for dimensioning and good finish of the product
10 Machining Preparation of the product
FIGURE 2.2.2 FLOW CHART OF FOUNDRY
SAND MIXING (PREPARATION)
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PATTERNS
MOULDING
CORE BOX
INDUCTION COUPOLA ELECTRIC F URNACE
MOLTEN METAL
POURING and COOLING
CASTING KNOCKOUT
SHOT BLASTING
HEAT TREATMENT
FETTLING
FINISHED PRODUCT
b) Pumps & Motors
i) Motor
An electric motor is a device which converts electrical energy into mechanical energy. When
electrical energy (Power) is applied to a motor, a magnetic field is created by the stator winding
and a torque is produced, so as to rotate the rotor. This energy is transferred to the shaft
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(mechanical energy). The mechanical energy produced can be used for driving a pump. Hence
it is termed as the main prime mover.
An electric motor comprises of the following parts:
 The body of the motor that is usually made up of CI or sheet metal or Aluminum
 The stator, which are electrical laminations that are pressed from Silicon steel sheets or
CRNO sheets to the specific design and stacked together to the required core length
and is inserted into the body of the motor where it gets itself seated.
 The rotor is also a lamination that is usually aluminum die casted against the size of the
rotor die by means of a hydraulic press.
 Copper wire of specific gauge according to the design is wound on the stator laminations
varnished (natural or else baked)
 Bearings are put on either side or the shaft and the cover is hastened. In case of 1
phase motor, capacitors are used. mainly used to store the electrical enery
ii) Pump
A pumping system consists of a pipe, a mover piping system and a foot valve. The pump is
driven by the prime mover. The commonly used movers are the electric motors. The pump
consists of a shaft, which is made to seat on the thrust pad and in between to create head, and
Impellers and diffusers made out of gunmetal or in plastic are housed in separate impeller
casing. More the impellers, the head tends to increase. A pump works on the principle of
centrifugal force. The water is sucked and is thrown outside from the center and it is guided to
the outside from the center to the next impeller by means of diffusers.
There are various types of pumps, namely
o Monobloc pumps - Domestic & agricultural (single phase, Three-Phase, priming and
self-priming) application
o Jet pumps - Domestic & agricultural (Single phase, Three -phase) application
o Submersible pumps - Bore well & open well pumps (single phase, - Three phase) mostly
agricultural and also for domestic user.
Industrial and high value pumps - Used mostly for industrial and special purpose applications
FIG 2.2.3: The process flow chart of monoblock pumps
STAMPING CASTING
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DIE CASTING CAST IRON
STATOR ROTOR
IMPELLERS & BODY
VARNISHIG MACHINING/ ROD

GRINDING
MACHINED
BUSHES, IMPELLERS, SHAFT, BODY
BROUGHOUT COMPONENTS
ASSEMBLY Bearings, Seals, Washers, Nuts & bolts,
Capacitors, Flange, Filters etc.
TESTING
DESPATCH
2.3 History of the Cluster

Milestones/Turning Points:
The growth of the Motor and Pump industry started during the early 1920’s and has been quite
commendable since then. The first pump was developed in the year 1928 in Coimbatore. The
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PSG industrial estate and Dhandayudhapani foundry of Coimbatore were the pioneers in the
field of pump manufacturing and the first motor produced at Argus in 1937.
The stimulus for growth came mainly from the emphasis on development of agriculture sector
and the strengthening of the industrial sector during the successive 5 year plans.
Subsequent to the first five year plan period, a lot of emphasis was placed on agriculture and
rural electrification which led to a tremendous growth in the pumps industry. The 70’s can be
considered as the golden era as far as the Pump industry is concerned and particularly
Coimbatore.
From 1991-1992 to 1995-1996, the pump industry growth was driven mostly by the boom in
industries and urbanization due to the liberalization policy. In the same period there was a shift
observed in the proportion of pumps supplied to the different segments. The proportion of the
domestic user segment increased whereas the proportion of agricultural user segment
decreased.
Over the years, not only has the production base for pumps been broadened but also the
necessary expertise to undertake the manufacturing of sophisticated pumps. Today the Indian
pump industry in manufacturing various types of products like: Centrifugal pumps, Reciprocating
pumps , Jet pumps, Gear pumps , Process pumps, Submersible pumps etc. As a result the
industry today meets almost the entire domestic requirement of various types of pumps in
quantity as well as quality.
With the development of textile and pump-set industry a number of foundry units were
established in Coimbatore. By the year 1980, Coimbatore became one of the five major
foundry centers of the country with more than 500 foundries in the district ranking
second to Calcutta in the number of foundries and melting capacity.
Overview of Past & Ongoing Intervention
District Industries center under the support of UNIDO implemented pumps & motors cluster
development programme. This has resulted in initiating provisioning of Infrastructure for
relocation of small foundries to outskirts of Coimbatore and establishment of major common
facilities center required for pumps, motors and foundry cluster through formation of COINDIA
an SPV promoted by SIEMA under IIUS scheme of Govt. of India at a outlay of Rs. 67 crs
which comprises 25% of the contribution from the promoting industries. This initial cluster
initative triggered cluster based approach in other product segment i.e. wet grinders. MSME-DI
had implemented wet grinder cluster development programme under SICDP scheme during
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the period 2004-07 the interventions resulted in establishment of CFC at a total outlay of Rs.
115.54 lakhs which comprises of Rs. 16.54 lakhs GoTN contribution. The programme had
initiated pilot activities in MCGS through which 30 micro enterprises availed a loan between Rs.
0.50 –Rs.1 lakh.
The capacity building of the association was strengthened which resulted in
 Establishment of business information center

 Popularizing various schemes of MSMEs i.e. CGTSME,CLCSS,Credit rating
 MOUs with banks for adoption of product specific clusters
The learning’s from CDP interventions are
 Pubic Private partnership resulted in two fold impact local employment generation as well as
creating skilled workforce.
 Replication of collaborative approach to address the opportunities and threats is clearly
visible in other product line.
 Smaller BMOs have become proactive in and there is visible strong linkage between the
BMOs and other support institutions.
 Banks have the first hand feel of MCGS, which can be easily upscaled.
2.4 International & National Scenario:
Engineering is a diverse industry with a number of segments, and can be broadly categorized
into two segments, namely, heavy engineering and light engineering.
The heavy engineering sector can be classified into two broad segments – capital
goods/machinery and equipment segments. A company from this sector can be a metallurgical
and power equipment manufacturer (like steel plants and boilers), execution specialist or a
niche player (like providing environment friendly solutions). It can be a non-electrical machinery
and static equipment manufacturer too.
Light engineering industry is one of the largest segments of the overall industrial growth of a
nation. It is an intermediate unit whose demand depends on a variety of end-user industries
such as power, mining, oil and gas, consumer goods, automotive and the general
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manufacturing sector. In other words, the products covered under this industry are largely used
as inputs to the capital goods / heavy engineering industries.
The global engineering industry stands as the key to world economic well being. This evolving
industry stands at a worth of $6 trillion presently. The global engineering sector is experiencing
a phase where demand is outstripping the supply hence the engineering companies world over
are embracing global sourcing. More than 80% fortune 500 companies are already pulling the
services of off shore service providers.
In the light of the modern state of the art technology the engineering sector forms a crucial
sector for the fast developing economies. Apart from experience and technical skills,
enthusiasm and innovation is what the present day engineering industry yearns for.
The global heavy engineering projects, including light engineering industry, was expected to
touch $1.9 trillion by 2015, of which around 40% ($700 billion) was potentially expected to be
sourced from low cost countries like India. Of the total global trade of $185 billion, India’s share
is merely 0.4% while China accounts for 1.2% and Mexico 5.9%. It is expected that the present
sourcing of Engineering projects and components from low cost countries (LCCs) worth $65
billion may actually reach $375 billion by 2015.
2.4.1 Global scenario of Foundry Sector
There are around 50,000 operating metal casting units around the world which account for
nearly 90 million tones of casting. The global production peaked at 95 million tones in 2007, but
due to recent recession and shortage in scrap and pig iron there has been a slight dip in
production, the trend is expected to continue until the end of 2010.
Table 2.4.2 :Top 10 - Casting Producers
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1. China 6. Germany
31.3 million tons 5.8 million tons
Gray iron 15.5 million tons Gray iron 2.7 million tons
Ductile iron 7.7 million tons Ductile iron 1.8 million tons
Steel 4 million tons Steel 210,000 tons
Nonferrous 3.5 million tons Nonferrous 1.1 million tons
2. U.S. 7. Brazil
Gray iron 3.9 million tons Gray iron 2.7 million tons
Ductile iron 3.9 million tons Ductile iron Included with gray iron
Steel 1.2 million tons Steel 300,000 tons
Nonferrous 2.6 million tons Nonferrous 230,000 tons
3. Russia 8. Italy
Gray iron 3.3 million tons Gray iron 1 million tons
Ductile iron 1.8 million tons Ductile iron 670,000 tons
Steel 1.3 million tons Steel 90,000 tons
Nonferrous 1.2 million tons Nonferrous 1.1 million tons
4. India 9. France
Gray iron 5.3 million tons Gray iron 940,000 tons
Ductile iron 800,000 tons Ductile iron 1 million tons
Steel 1 million tons Steel 110,000 tons
Nonferrous 610,000 tons Nonferrous 350,000 tons
5. Japan 10. Korea
7 million tons 2 million tons
Gray iron 2.9 million tons Gray iron 1 million tons
Ductile iron 2 million tons Ductile iron 590,000 tons
Steel 300,000 tons Steel 150,000 tons
Nonferrous 1.7 million tons Nonferrous 240,000 tons
Productivity wise Germany tops the list with production close to 10,000 tons of casting per metal
casting facility. Austria, with 357,000 tons produced, makes 7,000 tons per metal casting facility.
U.S. productivity continues to be one of the highest of all the nations at 5,434 tons per plant.
Gray iron casting dominates the production of castings with 47% share followed by ductile iron
with 23 % and non ferrous casting accounts for nearly 15%.
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The world is recovering from the recession and the production is expected to increase by the
end of the year.
2.4.3 Global Scenario of Pumps & Motors Sector
The global market for liquid pumps will increase from $21.5 billion to $28.3 billion in 2015, with
an average annual compound annual growth rate of 2.8 percent. Looking out ten years from
now, the global pump industry through 2015 is on an upswing – but only in specific market
segments. The pump industry will continue to undergo deep structural changes.
The most important factor in the growth of the pump industry will be the increasing demand for
decreasing supplies of uncontaminated water. Remediation of contaminated ground water,
desalination of seawater, and other treatment processes will increasingly be needed to make
use of this finite resource. Asia has less available water per capita than other continents and will
also have a more rapidly increasing demand for delivery and treatment of that water. Therefore,
almost half the investment in pumps for water-related applications will come from Asia.
The urbanization of Asia involves the relocation of more than one billion people from the farms
to the cities. This will create a huge need for infrastructure including delivery of drinking water
and removal and treatment of wastewater. Rapid growth of the pump market in Asia will also be
aided by large investments in pulp and paper, chemical, steel, and other basic industries.
Pumps play an important role in oil and gas production, refining, and power generation, as well.
The scarcity of oil and gas is leading to immense investments in substitute fuels. The use of
liquefied natural gas to replace conventional gas will result in significant pump investments at
the liquefaction sites, on the tankers delivering the liquefied gas, and at the degasification
terminals. There is a boom in the construction of coal-fired power plants and along with it a
variety of pumps including those for high pressure services in the steam cycle, water and
wastewater, and for the big scrubbers required to capture the SO2. China and the US will be the
biggest purchasers. Ethanol facilities require fuel. Hundreds of these plants will be built in the
next decade.
By 2015, centrifugals will drop to 58.9 percent of market share. By contrast, displacement
pumps will significantly increase in market shares, with reciprocating pumps increasing their
share from 17.2 percent to 20.9 percent, with an average annual growth rate of 4.8 percent to
4.9 percent. One example of the overall shift of pump market potential from the west to the east
is in the chemical industry. Nevertheless, in absolute figures the market potential of the
chemical industry will increase by $490 million.
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In the Near East, for instance, massive petrochemical manufacturing capacities are currently
extended. Ethylene capacity, which has been 7 million tons per year in 2005, is projected to
grow to 25 million tons in 2010, whereas in Western Europe the capacity will stagnate to about
25 millions tons per year. This means the buying criteria of plant suppliers will change and will
effect the selection of pump manufacturers.
2.4.4 National scenario

The engineering sector is the largest segment of the overall Indian industrial sector. India has a
strong engineering and capital goods base. The important groups within the engineering
industry include machinery & instruments, primary and semi finished iron & steel, steel bars &
rods, non-ferrous metals, electronic goods. The engineering sector employs over 4 million
skilled and semi-skilled workers (direct and indirect).
The sector can be categorized into heavy engineering and light engineering segments. Heavy
engineering segment forms the majority of the engineering sector in India. The heavy
engineering market contributed over 80 per cent with the light engineering segment accounting
for the remaining. India has a well-developed and diversified industrial machinery/ capital base
capable of manufacturing the entire range of industrial machinery. The industry has also
managed to successfully develop advanced manufacturing technology over the years. Among
the developing countries, India is a major exporter of heavy and light engineering goods,
producing a wide range of items. The bulk of capital goods required for power projects, fertilizer,
cement, steel and petrochemical plants and mining equipment are made in India. The country
also makes construction machinery, equipment for irrigation projects, diesel engines, tractors,
transport vehicles, cotton textile and sugar mill machinery.
From a meager US$ 10 million in 1956-57, the engineering goods exports reached US$ 25.34
billion in 2007-08. The share of engineering goods in the total merchandise exports from India
has also gone up from mere 0.5% to 25% during this period which is also the largest among all
product groups.
The national scenario of the product lines which are relevant to our BDS programme is briefed
below:
2.4.5 Foundry sector

There are approx 4500 units out of which 80% can be classified as Small Scale units & 10%
each as Medium & Large Scale units. Approx 500 units are having International Quality
Accreditation. The large foundries are modern & globally competitive & are working at nearly full
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capacity. Most foundries use cupolas using Low Ash Metallurgical Coke (LAM Coke).There is
growing awareness about environment & many foundries are switching over to induction
furnaces & some units in Agra are changing over to coke less cupolas.
The Exports are showing Healthy trends approx 25-30% YOY as can be seen from the charts
below. The current exports for FY 2005-06 are approx USD 800 Million.
The industry directly employs about 5, 00,000 people & indirectly about 1, 50,000 people & is
labor intensive. The small units are mainly dependant on manual labor However, the medium &
large units are semi/ largely mechanized & some of the large units are world class.
There are several foundry clusters .Some of the major clusters are as below. Each cluster is
known for its type of products
Batala Jalandhar Ludhiana

Belgaum Chennai Kholapur
Rajkot Coimbatore Howrah
Agra Pune Rajkot
Grey iron is the major component of production followed by steel, ductile iron & non ferrous
The Indian Foundry Industry is trying to focus on higher value added castings to beat the
competition.
Pumps & Motors

The Indian pump industry is poised to register a faster growth rate than global average. The
industry is set to grow at approximately increasing its share of global market form US$ 0.625
billion in 2005 (2.9 percent of global market share to US$ 1.25 billion in 2015 (4.4 percent of
global market share}.
According to industry estimates, India produces 1.2 million pumps of various kinds. There are
around 800 large, medium and small units producing pumps for sectors from agriculture to
nuclear power generation Indian pump manufacturers are able to meet most of the domestic
market demand. Exports have registered an 11 percent growth in the last two years.
India has today become a reliable, technically competent, competitive, and enterprising
outsourcing option for many western pump manufacturers who will continue to buy more low-
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cost pump parts, or sell 'private-label' complimentary pumps of other manufacturers, instead
manufacturing their own.
The demand in the domestic market is so huge that the industries have never really explored
the possibility of exports of this product due to which the Indian pumps & motors industry was
not very conscious about modernisation and upgradation and was quite satisfied with its ‘casual’
approach. Globalisation, which has opened the doors of India to multinationals, coupled with
growing concerns of pollution control, water and waste –water treatment, and demand for
energy –efficient systems is changing the scenario of the Industry.
Pump manufactures in India continuously need to improve to enhance productivity, quality and
service to customer. What seems today to be stable product lines with an indefinite future stand
a good chance of being superseded and phased out. Good business planning therefore must
include the engineering expertise that has made such business possible in the past and will
without doubt continue to do so in the future.
The Indian pumps and motor industry is in the order of Rs.3500 crores which makes it to be
about 2.5 % of world market. Indian Pumps &motors are now being exported to more than 70
countries both developed and developing countries. This can be expected to happen
increasingly and across many more countries around the world through proper interventions.
2.4.6 Description of bench mark Cluster:

Pumps and Motors: Coimbatore is synonymous with pumps and motor products at the
National level, though there are other cluster manufacturing this product in India i.e.
Ahemedabad, Kolkatta, Hyderabad etc, the standards and specification of this cluster product is
above par compared to other manufacturing clusters in India. In terms of efficiency of motor
pumps, Coimbatore pumps are 15-20% higher than the competing clusters. Hence we have
studied the parameters in terms of manufacturing process, technology, Raw material inputs,
marketing systems and supply chain with respect to a leading firm motor pump manufacturing
unit M/s. Texmo Industries, Coimbatore and other firms located in the cluster.
Founded in 1956 Texmo Industries has been at the forefront and pace setters in the electric
motor and agricultural pump IndustryTexmo, today has an annual turnover of over three billion
INR, making it the market leader in India, employing over 1200 people.
20
Texmo has installed flexible manufacturing systems and a wide variety of configurations and
design platforms that can be shared by a family of products. Modern CNC machines and the
Statomat automatic coil winding and Insertion machines are a few of the most modern
productions systems, which match those in international manufacturing facilities installed in this
plant. These are absent in many of the MSME motor pumps units.
Precision is built into every process and the products pass through stringent quality control
procedures. The products are designed for easy installation, low running costs, improved
efficiency and minimal maintenance. Rigorous testing of products at every stage of manufacture
ensures high efficiency and enhanced life.
The organized pump motor manufacturers are mostly members of SIEMA and CODISSIA, while
majority of members in TAPMA represent from unorganized manufacturers, there exists strong
linkages with these BMOs and SIEMA and CODISSIA are creating awareness for the need to
produce energy efficient pump motors and benefits of certification to unorganised pump
manufactureres.
Foundry:The foundry product line of Coimbatore cluster is mainly catering to motor

pumps,machineries and is slowly emerging to cater to valves and auto componets sector from
South India There are no foundry clusters near to Coimbatore. In comparison, Belgaum cluster
has to compete with nearby Kholapur foundry cluster which is only 103 kms away. The products
manufacture in Belgaum clusters is mainly to large Automobile and power generating sector.
Most importantly these large firms regularly assist small firms through detailed discussions and
feedback on manufacturing processes, quality and production organization. There are frequent
meetings between Belgaum foundry firms and their customers to ensure that all problems are
resolved and, quality control and time schedules are met. One can expect this association to be
a long-term one and long-term contacts with large firms provide an element of security. Strong
ties with suppliers of machines and equipments are believed to result in spillover of
technological information. Suppliers are in close personal contact with the industry in general
and could provide useful information about new technologies being explored by the leaders in
the industry. They also provide links with the outside world and enable the firms to look beyond
the cluster for technical know-how. On the flip side of the coin, it is also possible that these
foundry firms are at the mercy of their large customers who dictate the transactional standards
and technology interface requirements. The need for a collective response to the competitive
21
pressures posed by the Kohlapur cluster and necessity for technological upgradation has been
the prime movers for the development of Belgaum cluster.
Foundry units in Coimbatore have strong vertical linkages with suppliers, subcontractors and
customers leading. The local pump industry and textile industry are the main customers for the
foundry units in Coimbatore. Hence, coexistence of producer and buyer in close proximity has
added an extra dimension to the advantages attributable to the external economy.
Formal technical education of owner/manager in Belgaum foundry has a significant influence,
whereas the passive advantages derived from ‘learning-by-doing’ helps the firms in Coimbatore
foundry units to acquire a firsthand experience of managing technological change gradually but
steadily. In Belgaum cluster the members of IIF Belgaum chapter have formed an SPV by name
and style Belguam foundry cluster in the year 2004 and established common facilities By
availaing grant of Rs. 27 Crs received under IIUS. In Coimbatore the SPV, COINDIA is
promoted by SIEMA by the major shareholders are members of COSMOFAN, COFIA, and
institution IIF and SIRUTHULI. The project cost is approx. 67 Crs. The BMOs of foundry are
proactive and the SPV is catering the interest of both Foundry and Pump motors.
2.5 Vital Statistics:
The Pumps & Motor cluster
The motor & pumps cluster in Coimbatore accounts for around Rs2000 crores i.e. 40% to 50%
of the value produced in the country
The pump and motor industry can be divided into three broad categories:
Category 1: Medium scale industries (Composite)
Category 2: Small Composite / Sub contracting
Category 3: Micro Assemblers
Out of the total export of 400 Crs from Coimbatore the pumps & motors export is approx. 30 cr.
The pumps & motor units are spread across Pappanaickenpalayam, Ganapathy, Peelamedu
and scattered all over the city. The average investment in plant & machinery of pumps & motors
units is between. Rs.15- 25 lakhs/unit
Table 2.5.1: The estimated share of categories of units:
Category No. of firms in Value of Employment Area wise Distribution

the cluster production (Note: Have to mention the no:
22
Approx.in of firms in each area in
(Approx.)
Crores brackets)
Mettupalayam Road -02 nos
Medium
04 450 4500 Saravanpatty -01 nos
(Composite)
Kallapatty – 01 nos
Pappanaickenpalayam - 50
Small Ganapathy - 150
composite/ Sub 500 1600 50000 Peelamedu - 150
Contracting Velandipalayam - 100
Avinashi – 50
Pappanaickenpalayam - 50
Ganapathy - 250
Micro
600 100 50000 Peelamedu -100
Assemblers
Velandipalayam - 150
Avinashi – 50
Table 2.5.2 The existing Micro Enterprises (Light engineering)
No. of firms in Value of

Area wise Distribution
Category the cluster production Employment
(Approx.) Approx.in Crs
Pappanaickenpalayam -2000
Ganapathy - 4000
Peelamedu - 5000
Velandipalayam - 6000
Micro Enterprises
25000 600 75000 Avinashi – 2000
(Light engineering)
Thadagam – 1500
Pothanur - 1000
Singanallur – 1000
Sundarapuram - 2000
The foundry cluster of Coimbatore has an installed capacity of 30,000 tonnes per month. A
small percentage (about 10%) of the foundry units are also exporting castings to western
countries and have made a mark in the export of top quality special steel alloy castings and
valve castings for the chemical industries. Apart from the local pump industry, the major
customers are the textile and automobile industries.
23
The fortunes of small-scale foundries in Coimbatore fluctuate with that of the pump industry,
since the latter is the major customer of the former. Even though many of the pump
manufacturing units have their own captive foundry, there are an estimated 600 small-scale
foundries in and around the city of Coimbatore alone (Source: DIC, Coimbatore).
The foundry units are spread across, Peelamedu (100 nos), Thanneerpandal (60 nos),
Ganapathy (small & medium foundries 75 nos), Neelambur (Modern advanced large foundries
05 nos)
New foundry parks have come up at 3 places Arasur, Manickampalayam and Sathy road
under IIUS scheme.
60% of the units are propertiory concern, the remaining partnership and Pvt. Limited units are all
closely held family concerns.
Table 2.5.3 The distribution of the foundry units by end-use markets
Pumps/valves 46 %
Food processing industry 7%
Textile machinery 6%
Electric motors 6%
Automotive 4%
Others 31 %
Cupola is the predominant melting furnace employed by the foundry units. Majority (about 70%)
of the cupolas in the cluster are of conventional designs. Electric induction furnaces are used by
just 10% of the foundry units, mainly to manufacture graded castings and for duplexing
operation.
24
The average investment in plant & machinery in cupola based foundry is Rs. 15-30 lakh/units
based on the capacity of the melt per day and for induction furnace units its between Rs. 40
lakh – Rs. 1 Cr per unit..
2.5.4 Business Development Service Providers (BDSPs)
Number of BDS Providers for Foundry, pumps & motors,

S.No BDS Areas
Public Private Organized Private Unorganized
1 Raw Material 03 100 50
30
2 Technology 04 30
(Freelancers)
3 HRD 05 80 10
4 Marketing - 50 90
20
5 Quality 5 25
(Free lancers)
6 Logistics 2 100 60
7 Finance 200 80 200
Table 2.5.5 Who Does, Who Pays Matrix

BDS Who Does Who Pays Remarks
Fee are subsidized(Only
Govt. testing lab 100% Users charging maintenance and
Testing operational expenses)
Private testing lab/Not for
100% User
Profit lab
25
Participation expenses born by

50% User user, Promotional,
Market access NSIC
50% grant coordination, stall , etc borne
by NSIC
Trade fair 100% user
Exports 100% User -Organizing trade fairs

BMOs
- buyers-sellers meet
Access to
CAs 100% User
Finance
DI-MSME 50% trainees Govt. of India subsidy
50% grant
Govt.Tech institutes
Training /Skill 50% Trainee
Development
Pvt.Technical Institute 100% trainees
CAs 100% User
Access to NSIC gets fee for apprising the

finance NSIC 100% bank vailable proposals and
recommending to bank for loan
Equipment
Pvt.BDS 100% User
Service
ICT Private BDS 100% User
A significant part of expenditure

Infrastructure IDCO/COINDIA 100% User
is met by govt.
Govt. Institutions (NSIC) some

Tech. assistance Pvt.BDS 100% User times provide support for
advisory services
Chapter 3
Environment and Energy related Issues
3.1) Impact of Foundry units on Coimbatore environment
Most of the foundries in and around Coimbatore are in the SSI sector and equipped with cupola
furnaces with the melting capacities ranging from 1-6 tons per hour. In cupola furnaces, the
coke is employed as the main source of energy to melt down the mat allies. The air blast, ash
from the coke, dust from the scrap and reaction product results in emissions from the cupola
stacks. On the other hand another 5% have resorted to other types of furnaces for melting, such
26
as Induction furnaces. As per the details gathered, the value of various items produced by the
foundries amounts to around45 crores per month generating employment both directly and
indirectly to more than about one lakh persons in and around Coimbatore.
The standard value specified by Tamilnadu Pollution Control Board and the average value of
atmospheric concentration of SPM, SO2 and NOx in various foundry locations of Coimbatore
city are given in Table a & b respectively. Air quality monitoring of SPM in foundry locations
reveals that SPM are not exceeding the permissible value at all the monitoring locations. Stack
level monitoring of different units infers that the cupola emissions are found to be well within the
limits prescribed by the Central Pollution Control Board (CPCB). In almost all the units a spark
arrester cum dry dust collector has been used to control the particulate emission of the cupola
furnace.
Table 3.1.2: Tamilnadu Pollution Control Board Air Quality Standards
Table (a)
Area SPM µg/m3 NOx µg/m3 SO2 µg/m3
Industrial 500 120 120
Residential 200 80 80
Sensitive 100 30 30
Table (b)
Average value of atmospheric pollutants in and around the foundry units.
S. No Location of Foundry Pollution concentration in µg/m3
SPM NOx SO2
01 Vilankurichi Village 63 4.6 3.7
02 Ganapathy 82 3.8 1.1
03 Thaneerpandal 75 7.2 2.4
04 Avaram Palayam 98 8.1 7.9
05 Peelamedu 101 3.4 5.7
06 Eachanari 73 3.5 2.4
07 Papammpati Rd 57 6.3 3.5
08 Upplipalayam 73 8.0 3.1
09 R.G.Pudur 74 7.2 2.4
Table 3.1.2: Emission standards for foundry cupola
Type Pollutant Concentration

in mg/Nm3
Cupola capacity less than 3MT/Hr Particulate matter 450
3MT/Hr and above -do- 150
Arc foundry capacity -do- 150
All sink induction furnace -do- 150
27
Atmospheric concentration data of the gaseous pollutants (NOx and SO2) are well within the
limits prescribed by the CPCB.
There is no wastewater from foundry process even though a small quantity of water is used for
the processing. The solid waste coming out of the casting process may be reused in the
consecutive melting and cupola charging along with pig iron and coke. The only non-recyclable
solid waste that comes out from the cupola process is the furnace slag
Even though the air pollutant released from the foundries are within the permissible limits, the
industrial location and increase in number of units in Coimbatore increases the load of pollution
to the environment and remains a major issue.
With increasingly stringent enforcement of pollution control norms in recent years, many of
these units are planning to switch over to electrical melting technologies, mainly the induction
furnace. Recently, however, the state power utilities have imposed severe restrictions on the
use of electric power by the industrial sector. Industries now face load shedding of up to 40% of
their maximum demand. The government has also imposed strict time limits on the use of
electricity by the industrial units. With these restrictions on power usage and operational time, a
majority of the foundries in Coimbatore have been forced to cut down production drastically—for
instance, one unit operates its induction furnace for only 18 days in a month. At the same time,
the foundry units are under enormous pressure to meet their market commitments.
Under these circumstances, the foundry entrepreneurs are continuing with coke-based melting
technology as an option.
The entrepreneurs are also keen to identify and adopt pollution control technologies that will
enable them to operate coke-based cupolas while meeting required environmental norms. In
effect, the current scenario presents a major opportunity for promoting the divided blast
cupola,DBC (to improve energy efficiency) and venturi scrubber (to reduce emissions) among
Coimbatore foundry units.
3.2 Pumps & motors:

Agriculture sector consumes about 35% of the total power generated is consumed in running
of electrically operated pump sets in the agriculture sector. Most farmers use inefficient non
ISI marked pump sets which consume more electricity and deliver less output. There is a
potential of about 25% to 35% improvement in the efficiency of these pump sets by affecting
minor/major rectification and shifting to ISI marked pumps
28
The Bureau of Energy Efficiency (BEE) has unveiled improved energy efficiency norms for the
electric motor and pump industry, annueure 4. It may put energy efficiency standards higher
than the Bureau of Indian Standards (BIS) norms for the pump industry.
The motors manufactured by unorganized units do not have ISI standards and is less efficient
due to non use of higher quality material resulting in iron loss and copper loss. The no load
power factor is above 0.2 which is increasing the no load power consumption. There exists a
mismatch in supply of pumps and motors by the unorganized sector as per operating load
required by the client. Scope for energy conservation in agricultural pumping is vast since
nearly 50% of connected load on the National grid comprises of Agricultural Pumps. Meaningful
results in this sector can be achieved only by providing adequate checks and balances. Self
certification will result in many unorganized manufacturers like KIT assemblers to wrongly
declare their product as FIVE STAR rated products even if it does not meet the parameters of
five stars. This will keep the quality conscious organized manufacturers away from the whole
process because these KIT sectors can offer such wrongly declared FIVE STAR products at a
price much cheaper than quality branded products since they don't pay any Excise Duty, Sales
Tax etc. A check on this will really encourage quality manufacturers to enroll themselves in the
scheme. Major portion of the connected load on the National grid is for Agricultural Pumps but
the farmers have no motivation to conserve energy whereas buyers of refrigerators or air
conditioners would themselves be concerned for the energy bills to be paid for. So it is essential
that BEE should insist for a certificate from NABL approved lab for the products registered for
star ratings.
The star rating plan for pump set specifies the requirements for participating in the energy
labeling scheme for pump sets covering Electric mono set pumps, submersible pump sets and
open well submersible pump sets. The referred Indian Standard are IS 9079 : 2002 for Electric
Mono set pumps for clear, cold water and water supply purposes, IS 8034: 2002 for
Submersible pump sets, IS 14220: 1994 Open well submersible pump sets and IS 11346:2004
for testing purposes of the above mentioned pump sets.
Table 3.2.1 the standard ratings covered under the energy labeling scheme
SI. Product detail Range Kw No. of Applicable IS

No electric pumps Poles
1 3 Phase open well 0.37KW,0.55KW,0.75KW,1.1kW, 2 Pole IS
submersible pump 1.5kW, 2.2 kW, 3.7 kW & 5.5 14220:1994
sets kW, 7.5kW, 9.3kW, 11kW, 15kW
29
2 3 Phase 1.1kW, 1.5kW, 2.2 kW, 3.0kW, 2 Pole IS 8034:2002
submersible pump 3.7 kW ,4.5KW & 5.5 kW,
sets 7.5kW, 9.3kW, 11kW,
3 3 Phase Mono-set 0.37kW, 0.55KW,0.75kW,1.1kW, 2 Pole IS 9079:2002

pumps 1.5kW, 2.2 kW, 3.7 kW & 5.5
kW, 7.5kW, 9.3kW, 11kW, 15kW
Table 3.2.2: Star Rating Plan : The star rating plan for pump sets
Star Rating Overall Efficiency of the Pump Set*
1 Star >=1.00 & <1.05
2 Star >=1.05 & <1.10
3 Star >=1.10 & <1.15
4 Star >=1.15 & <1.20
5 Star >=1.20
*Overall efficiency of the pump set is including the efficiency factor for induction motors. The
overall efficiency is calculated as per IS 14220:1998, IS 8340:2002 and IS 9079: 2002 for pump
sets and IS 12615: 2004, IS: 4029 – 1967, IS 325: 1996 for induction motors.
The energy efficiency of the pumps would be addressed through improvements in winding
design, drive control, reducing flow resistance and efficient design of impellers. Most pumps
tend to run at constant speed, even though the flow they’re required to deliver may vary. This
means they are running too fast and using too much electricity most of the time. Big savings are
possible because reducing the flow by 50 per cent will reduce the power required by around 85
per cent. Variable speed can be achieved with a so-called variable-speed drive (VSD), an
electrical device which controls power to the motor. Other advantages of a VSD include:
o it acts as a ‘soft starter’ which prevents the electrical system overloading (which can
drop the voltage and affect other equipment) and avoids the cost of other starter
controllers;
o the ability to control the speed often results in a higher quality of service (for example,.
better comfort or process control);
o the ability to control speed allows the motor size to be matched more closely to the
actual load, as the VSD can operate the motor at full or higher speed for short periods
It is estimated that a copper (instead of aluminum) rotor can reduce losses of a motor by 10-
15%,
30
Chapter– 4
ANALYSIS
This rapid market assessment based on quick diagnostic study gives a snapshot and broad
contours of BDS market in the cluster. It covers i) assessment of present demand & supply of
both low end and strategic services; ii) identification of needed strategic services and profiling of
existing BDS providers and the nature of services being provided by them and iii) finding critical
gaps in respect of certain services and range of possible interventions .
31
In order to ensure continued interest of stakeholders in the project an incremental approach to
detailed market assessment has been proposed along with implementation of pilot activities.
Strategic activities which are high in demand, easy to deliver and for which services are not
availed in the cluster along with sensitization and awareness building will be piloted. The
findings of detailed market assessment conducted during 1 st year will be factored in operational
plans for subsequent years.
4.1 Overview of BDS market
BDS market is fairly good in the cluster for transactional services. Both demand side and supply
sides are good. But demand and supply sides for strategic services are weak and fragmented.
As regards demand of services are concerned, there is lack of awareness among majority of
MSMEs about efficacy of availing BDS. Majority of Micro enterprises have never used fee based
services and many do not have access to institutional finance. Services to a limited extend in
the areas of technical inputs and certifications are availed by SMEs. At the supply end, there is
plethora of public support institutions providing services. Suppliers of chemicals for foundry,
machinery and buyers are providing embedded services to MSMEs.
32
FIG 4.2: VALUE CHAIN ANALYSIS OF CUPOLA BASED FOUNDRY
Based on selling price of cast component: Rs. 46/kg
Profit Margin
Selling price Approx.10.5% Cost per Ton:
Rs.4600/- Rs.41640/-
Labour charges: Rs.130600/Melt Maintenance

3.45Ton/Melt Rs.2000/Ton x 3.45Ton 3.45Ton/Melt &Admin.expenses 10%
= Rs.6900 i.e:Rs.13060/-
Rework & Rejection
7%
Less 12% Slag & Ash CUPOLA OUTPUT
3.73 Ton/Melt 4.4 Ton/Melt 5 Ton/Melt
Pouring & runner loss
Rs.123700/Melt Approx:15% Rs.123700
Rs.123700
1 Ton coke + 2.5 Ton Pig Iron + 3.5 Ton Scrap + 0.2
Ton Limestone/Additives charged in the ration of 1:6
(Coke: Iron)
COKE PIG IRON METAL SCRAP LIMESTONE & ADDITIVES COAL

Rs.8000/ton Rs.21000/Kg Rs.18000/Ton Rs.1000/Ton Rs.3000/Ton
33
4. 2. Value Chain Analysis:
4.2.1 Value Chain analysis of Cupola based Foundry

From the above analysis the constrains are
 Raw material (Pig iron, coke, scrap) constitutes the major cost of the final product.
Since the smaller foundry units are unable to procure in bulk it is affecting there
profitability.
 Efficiency of the cupola being used is below benchmark standards of 1:9 (Coke: metal
ratio).
 Operating and maintenance practices can be improved to benchmark levels
 Labor charges higher than industry norms
 No Waste minimization and energy and environmental management practices
resulting high administrative expenses
4.2.2 Value Chain analysis of motor pump
The value chain analysis of 5hp monoblock motor, Rating 2880 r.p.m is tabulated below
Component Unorganized firm Organized firm

Casting body including 52 kgs x Rs.46 : Rs.2392=00 45kgs x Rs.44 : Rs.1980=00
base frame and Volute
Aluminum stampings 20kgs x Rs.95 : Rs.1900=00 18kgs x Rs.90 : Rs. 1620=00
Al. Rotor die casting 1 no x Rs.250 : Rs. 250=00 1 no xRs. 215 : Rs. 215=00
Copper wire 4.4 kgs X Rs.375 :Rs.1650=00 5kgs x 350 : Rs.1750=00
Bearings 4 nos x Rs.140 : Rs. 560=00 4nos x Rs.200 : Rs.800=00
MS Rod, EN:8 6kgs X Rs.44 : Rs.260=00 6KGS X Rs.42 : Rs.252=00
Water seal 1 no x Rs.90 : Rs.90=00 1 no x Rs.75 :Rs.75=00
Terminal board 1 no x Rs. 40 : Rs.40=00 1no x Rs.35 :Rs35=00
Cooling fan 1no x Rs. 40 : Rs. 40=00 1 no x Rs.35 : Rs.35=00
Cooling Cover 1 no X Rs.65 : Rs.65=00 1 no x Rs.60 :Rs.60=00
Thermal box 1 no x Rs.25 : Rs.25=00 1no X Rs.20 :Rs.20=00
Bolts &nuts 1 no x Rs.55 :Rs.55=00 1no xRs.50 :Rs.50=00
Paint 1 no x Rs.75 : Rs.75=00 1 no x Rs.70 :Rs.70=00
Name plat 1 no xRs.10 :Rs.10=00 1no X Rs.10 :Rs.10=00
Impeller: Gun metal: Rs. 1 no x Rs. 30 :Rs.30=00 1 no x Rs. 250 :Rs.250=00
250/each;CI:Rs.30 each
Material Cost Rs.7442=00 Rs.7222=00
Machining and assembly Rs.475=00 Rs. 400=00
Packaging Rs.400=00 Rs. 375=00
Overhead expenses Rs.150=00 Rs. 800=00
34
20
Add duties & Tax Rs.339=00 Rs. 716=00
Cost price Rs.8806=00 Rs.9513=00
Selling price Rs.9500=00 Rs. 11000=00
Profit Rs.694=00 Rs.1487=00
Constraints:
1. Cost of procurement by unorganized players higher compared to organized players due to lack of
credit from financial institutions hence needs to depend on retail traders.
2. Machining and assembly cost of unorganized players are higher compared to organized players
due to improved production practices and better supervision practiced by organized players.
2. The profitability of organized player are higher than unorganized players even though the
unorganized players sell at a lower price, this is due to the fact that the market is positive to quality
product and branded products, therefore the analysis infers to the fact that the lack of testing
systems, certifications like ISI,S&L by unorganized players affects there profitability (Due to there
inability to invest in initial capital expenditure)
4.2.3 Analysis of Micro enterprises

They for the major subcontractors for small and medium engineering enterprises in the cluster, during
our survey and interaction we have observed that these units are wholly dependent of local
engineering units. The fortunes of these units depend on the growth of small and medium enterprises
to which they are subcontractors. These micro enterprises lack access to formal finance due to poor
book keeping and compliance practices. Further they lack awareness on technical access and market
information for manufacturing engineering products having demand in building and food processing
equipments and components with they can produce with the existing machineries.
4.3 BDS Analysis

Current BDS Matrix
The current BDS matrix depicts the relationship amongst the various institutions operating in the
cluster. The following table presents institutional matrix of the Coimbatore engineering cluster. (1 is
poor usage, 5 is high usage)
BDS Raw Techn - Marketing HRD Quality Finance Logistics
Provider Material ology
Public BDSP
35
DIC 0 1 0 0 0 1 2
MSME DI 2 2 2 2 3 2 0
NSIC 2 1 1 0 0 1 1
BIS 0 0 0 0 3 0 0
EEPC 0 1 2 0 1 0 1
TIIC 0 0 0 0 0 2 0
TANSIDCO 1 1 2 0 0 1 0
Banks 2 1 1 1 2 3 1
SMERA 1 2 1 0 2 2 1
Private Organized
CA’ s 2 0 2 1 2 2 0
EXPORT & 0 2 2 0 2 2 1
IMPORT
CONSULTANTS
CAD\CAM 0 2 0 0 3 0 0
TESTING LAB 1 2 1 0 3 0 0
DESIGNERS 0 2 2 1 2 2 1
MARKETING 2 0 3 1 2 2 2
TECHNOLOGY 0 3 2 0 2 1 2
LOGISTICS 2 1 2 1 2 0 0
CPC 1 1 2 3 3 1 2
EDUCATONAL 2 2 3 2 2 0 1
INSTITUTES
BMO’ s
ICCI 1 2 2 1 2 1 1
CII 1 2 3 2 2 1 2
SIEMA 2 2 2 3 2 1 1
CODISSIA 2 2 3 3 2 1 1
COSMAFAN 1 1 2 2 1 1 1
COFIA 2 3 2 2 1 1 1
TACT 0 0 1 0 1 1 0
TAPMA 1 0 1 0 0 1 0
SIDCOMA 1 1 2 1 2 0 0
COINDIA 2 3 2 2 3 1 2
IIF 0 1 2 1 1 0 1
Supply side assessment

BDS in the cluster are provided by i) government support institution ii) Industries association iii)
Private agencies/individuals
4.3.1 Government support institutions
i) District Industries Center: The main functions of District Industries Centre are:
• Issue of EM1 AND EMII certificates.
• Conducting motivation and dissemination meets on industrial growth subjects.
36
• Conducting of entrepreneurship development programme.
• Helping MSMEs to collect default payment from industries through the regional
Facilitation councils.
• Motivate industries by giving them awards in various areas.
• Providing loan for educated unemployed through the PMEGP scheme.
ii) MSME development Institute (MSME-DI): It is a Government of India concern, which provides
technical assistance in identifying suitable products. It also conducts technical training programmes
and offers consultancy service in the area of ISO 9000. It has a well-facilitated laboratory for testing of
motors and pumps as per the BIS standards.
iii) National Small Industries Corporation (NSIC): The NSIC provides diversified support through its
wide spectrum of programme of SME’s to cater to their different needs related to multi-products and
multi-location markets. NSIC has signed an agreement with the Coimbatore Wet Grinder and
Accessories Manufacturers' Association here to work jointly on technology improvement and market
expansion for the wet grinder units.
NSIC is also focusing on MSMEs that need financial assistance to buy new machines or expand. It
has especially helped many units going in for Computerized Numerically Controlled machinery. NSIC
has entered into tie up with the Oriental Bank of Commerce, the United Bank of India and United
Commercial Bank. It is aimed at equipment financing and working capital support (high value, long
term loans) to MSMEs recommended by the NSIC. NSIC is also providing mentoring service to pumps
and motor cluster.
iv) Bureau of Indian Standards (BIS): In 1947, an organization by name Indian Standards Institution
was set up which was later made a statutory body and christened as Bureau of Indian Standards (BIS)
in 1986. The important activities of BIS include formulation of standards, product and quality system
certification, training, information service etc.
v) Export Promotion Council-Engineering (EEPC): EEPC has an office for the Coimbatore export
firms at one of the local industrial areas. However, most of the activities regarding export of
engineering have to pass through their head office at Chennai.
vi) Tamilnadu Industrial investment Corporation(TIIC): TIIC is one of the premier state
government financial institutions incorporated in 1949 to foster industrial development in the state of
Tamilnadu. It provides financial assistance catering to the needs of micro, small and medium
enterprises for acquisition of fixed assets. TIIC grants financial assistance to set up new industries for
expansion, diversification, modernization, and renovation or purchase of generators etc.
vii) Tamilnadu Small Industries Development Corporation Limited (TANSIDCO):

An undertaking of Government of Tamilnadu, functions with the specific objective of playing catalytic
role in the promotion and development of Small Scale Industries and hastening the industrial dispersal
37
throughout Tamilnadu.The key areas of TANSIDCO’s activities are a) development of industrial
estates with infrastructure facilities and provision of work sheds & developed plots b)Raw Materials
Supply Scheme c)Marketing Assistance Scheme d) Export Assistance Scheme e)Guidance to
Entrepreneurs
4.3.2 Business member Organization
a) Indian Chamber and Commerce of India (ICCI): looks after the welfare and interest of the
industrial sector in the Coimbatore region. Most of its functions are lobbying with Government
departments and representing on policy matters with the Government. Conducting meetings and
seminars on various scenarios of industrial concerns are also part of its activities..
b) Confederation of Indian Industry (CII):The main activities of the confederation are
lobbying with Government (State and Central) for the welfare of the industry. It also conducts
meetings and seminars on various scenarios in the context of industrial growth of the country.
c) South India Engineering Manufacturing association (SIEMA):SIEMA was founded in
1952, with a sole aim of representing and protecting the interest of small, medium and large scale
engineering industries of this region. SIEMA was founded in the year 1952, with only 20 members but
now its strength is more than 500. Most of its members are engaged in the manufacture of electric
motors, Pumps, Other engineering products. The main objective of the association is to inculcate
awareness amongst the members. Significant achievement of SIEMA is the awareness created
amongst its members regarding Quality Control. The association has close relationship with Bureau of
Indian Standards in connection with the formulation of Indian Standards connected with the
agricultural pump sets and motors. Considering this BIS, New Delhi has given representations in the
Section Committees. SIEMA is having representation in most of the local bodies. The association has
contributed a land measuring about 2 acres to SITARC in which the testing centre is now functioning.
It has also promoted COINDIA an SPV for establishment of common infrastructure under IIUS.
d) CODISSIA (Coimbatore District Small Industries Association): CODISSIA started functioning in

the year 1969 with 40 members and now the membership strength is around 5000. The association
serves for growth and prosperity of industries and it has made a significant contribution towards
building a strong and stable industrial city of Coimbatore. The association besides functioning as a
development oriented association conducting series of seminars, training programmes, study tours,
exhibitions, industrial trade fairs, industrial visits, etc. so as to develop and create awareness among
industrial entrepreneurs. CODISSIA represents in all advisory and grievance redressal forums for the
small-scale industries. The association along with SIEMA was very much instrumental for SITARC to
be established in the year 1986 with financial assistance of IDBI, It is recognized as one of the best
testing centers for various activities. The association is publishing its fortnightly journal (CODISSIA
bulletin) from 1973 to disseminate valuable information relating to industries to the members.
38
CODISSIA has set up a permanent trade fair complex at Coimbatore not only to conduct INTEC trade
fairs comfortably but also to help other trade fair organizers to use the infrastructural facilities for the
betterment of the trade and industry in Coimbatore. The association, by mobilizing funds from
CODISSIA and getting loan from SIDBI has constructed a special building in a plinth area of 1,60,000
square feet at a total cost of Rs. 11 corers.
e) The Coimbatore Tiny & Small Foundry Owners Association (COSMAFAN): About 500 units
are members of the association, After 1984, the quality of Coke , which was earlier supplied by
SIDCO, deteriorated and COSMAFAN felt it necessary to start its own purchasing division,
COSMAFAN MARKETING SOCIETY, in 1985. The COSMAFAN Marketing Society's main
responsibility was to purchase and supply the raw materials required by the Foundries. During its
tenure of 19 years, the COSMAFAN marketing society, has never once failed with their supplies and is
still continuing to support the foundry members to their maximum extent. It is one of the main
stakeholders in COINDIA.
f) The Coimbatore Foundry & Industry Owners Association (COFIA): About 300 units are member
of COFIA, They majority of the members have acquired land for relocation to foundry park .COFIA is
one of the major stakeholder in COINDIA.
g) Tamilnadu association of Cottage and Micro Enterprises (TACT): It represents the interest of
the micro enterprises. The Coimbatore district association has 2000 members and advocates issues
related to micro enterprises. It was instrumental in reducing the load shedding problems faced by
micro enterprises.
h)Tamilnadu Pumps and Motor spares manufacturers association (TAPMA) Around 200 units are
members of the association which was started in 2000. The association mainly takes up issues related
to on excise and sales tax
i) Coimbatore SIDCO industrial estate manufacturers association (SIDCOMA): The members
are the entrepreneurs from SIDCO industrial estate at Karachi . Most of the members of the
SIDCOMA are members of CODDISIA. The association strives for the overall development of
infrastructure of the SIDCO industrial estate.
j) Coimbatore Industrial Infrastructure Association (COINDIA): COINDIA was primarily promoted

by the SIEMA and the following organizations are the joint promoters of the project:
COINDIA is registered under Tamil Nadu Societies Registration Act 1975. The activities of COINDIA
are being governed by the elected members of COINDIA and industrial experts as directed by IIUS,
Government of India
Activities of COINDIA:
 Infrastructural development in 180 acres at three foundry complexes to facilitate shifting of
around 200 foundries.
39
 To establish a technology centre for Sand Mould Rapid Prototyping for 5 different metal
parts to help the Small and Medium Enterprises to reduce their product development time
especially for foundry industries. With this facility a sand mould can be developed with in
24 hours from CAD details.
 To Establish two Common Modern Tool Room (CMTR) in two locations for the benefit of
Pump, Motor, Foundry and General engineering industries.
 Establish a training centre for up-gradation of the technical know how and training of the
workers, students and engineers.
 install new machineries, equipments and construction of buildings for testing the end
products manufactured by member industries at Si’Tarc and to support Micro, Small and
Medium Enterprises to get International Certifications.
 To facilitate technology transfer and marketing of the products and to provide information
about international Standards.
j) Institute of Indian Foundry men (Coimbatore Chapter) : It has its own office cum lecture hall in
Coimbatore, it provides technical service to the member companies, coordinate research and
development work on foundry related subject, organize training and development of shop floor
personnel, conduct technical meetings, seminars and workshop. And other related activities
concerned with foundry industry.
k)Small Industries’ Testing And Research Centre (Si’Tarc): Si'Tarc is a not-for-profit registered
society, for serving engineering industry and its industry membership is from all over India. It is
promoted by the Southern India Engineering Manufacturer's Association (SIEMA) and Coimbatore
District Small Industries Association (CODISSIA).Si'Tarc is recognized as a Scientific and Industrial
Research Organization (SIRO) by Govt. Of India.
The main activities are:

1 • Testing of motors and pumps as per ISI standard (unit is recognized by BIS).
• Testing of raw materials.
• Provides quality awareness training and technical training.
• Research & development in the area of energy efficient pumps.
2
Status of existing BMOs with respect to their capacity for service provisioning is shown in table 4.3
40
Table 4.3.3 Status of existing BMOs with respect to their capacity for service provisioning
Joint
News Separate Professional activities
BMO Membership
letter/Website Office Secretariat other than
advocacy
ICCI 800 YES YES YES NO
CII 600 YES YES YES NO
SIEMA 600 YES YES YES YES
CODISSIA 2500 YES YES YES YES
COSMAFAN 500 NO YES YES YES
COFIA 200 NO YES YES YES
TACT 2000 NO YES NO NO
TAPMA 300 NO YES YES NO
SIDCOMA 150 NO NO N0 NO
COINDIA 500 YES YES YES YES
IIF 500 YES YES YES YES
4.3.4 Private BDS providers

In Coimbatore there are about 400 charted accountants providing limited range of services to SMEs in
the area of audit , tax and loan syndication. The charges by CAs around Rs.1000 to Rs.100000 it
varies depends on the task given by the enterprise.
 SME rating agency of India limited (SMERA) has its office at Coimbatore and
provides provide ratings that are comprehensive, transparent and reliable. This would facilitate
greater and easier flow of credit from the banking sector to SMEs charges starts from Rs.4000 to
Rs.25000
 There are about 20 import and export consultants starts with Rs.50000 depends on
the turnover
 There are about 12 CAD/CAM service center who provide design development
services charges from Rs.5000 to 20000
41
 There are about 5 consulting firms who provide business advisory services
charges from Rs.5000 to Rs.100000
 There are about 16 Consultants in IS0 certifications who provide training and
consultancy in quality management systems charges from Rs.25000 to Rs.50000
 There are about 26 consultants in human resource development and 35
employment agencies who provide technical and non-technical manpower to the industry Rs.10000
to Rs.50000
 There are about 40 foundry consultants and around 80 electrical consultants in the
cluster who provide consultancy to foundry and pumps and motor industry charges from Rs.50000
to Rs.200000
 There are approx. 80 pattern makers charges from Rs.5000 to Rs.50000
 Large and Medium enterprises that off load there work to Micro, small and medium
enterprises provide embedded services to their vendors.
4.3.5 Demand Side assessment
The assessment of demand of services has been made in respect of each product line in the cluster
and is shown in Table 4.3.6
Table 4.3.6: Demand assessment and also level of usage of different services
Product Nature of services Usage Services in demand
Line being availed level
Foundry o ISO Certification L o Training of operators/ supervisors
o Tax & Audit H o Energy & Environmental management
o Testing H o Productivity improvements & waste
o Pattern making H recycling
o Charge o Sourcing alternative fuel through PPP.
composition M o New geographical market penetration
o Credit Rating L o Management consultancy.
M
o Lean o Facilitation for financial support
L
42
manufacturing H
oManpower
sourcing
Pumps & o Tax & Audit H o Product development
Motors o Testing H o Energy efficiency
o Winding design M o Certification
o Credit Rating L o Costing & Estimation
o Methods L o Value added pumps (Industrial &
improvement process)
o Packaging M o Export facilitation
H
o After sales o Productivity improvements
service o Business management advisory
M
o Product
development H
o Financial
facilitation H
Manpower sourcing
Category
Micro o Credit from private H o Financial facilitation

Enterprises financers o Manpower sourcing & training
o Taxation M o Facilitation for availing Govt. schemes
o Technical advise from H o Productivity improvement
principal firm o Product development
o Technical support M o BDS for Market access
from machinery
supplier
o Testing M
H: High; M: Medium; L: Low
4.3.7 Demand and supply Analysis

The generic problem affecting development of a market oriented BDS are summarized in table
4.3.8 Problem affecting development of BDS market
Demand side problems Supply side problems Transactional problems
43
o Inability to identify their  Lack of market  Cost of BDS high.
business problem especially in information  Micro enterprises
micro enterprises  Few strategic BDS isolated from service
o They lack information about servicing large clients market
services  Scale of assignments
o MSMEs don’t see value of are not attractive for
strategic services the strategic BDS
o Reluctance of MSMEs to  Prefer to work in
network to collectively avail informal manner
strategic services o BDS Services not
o Expect quick returns for the tailored to cater to
service availed. MSMEs
ANALYSIS OF BUSINESS OPERATIONS DESCRIPTION:

Raw material procurement system:
Foundry: Major raw material required by foundry units are pig Iron, steel scrap, coke, sand and
foundry chemicals like Betonies powder, Graphite powder, Coal dust powder, Lime stone, Ferro
manganese etc. There are around 30 dealers who procure raw material from Goa, Hospet,
Kuderemikh and supply to the foundry units. Raw material cost constitutes major part of the castings
M/s. Seas a Goa is catering most of the Pig Iron requirement as the quality of the pig Iron is better
than other companies.
It has monopolized raw material market and dictating the terms of price and supply. Once the foundry
units were getting pig iron and coke on credit basis but at present due to change in demand and
supply condition they have to make advance payment and make bulk purchase. The small foundries
with turnover of Rs. 25 to 30 lakh are finding it difficult to buy in bulk due to lack of funds.
Coke is another major raw material for foundry Industry most of the foundries are using imported coke
as the percentage of ash is very less as compared; to the coke coming from Bihar. But the price of
imported coke is very high.
The prices trend of raw material mainly Pig Iron, Scrap and Coke is volatile hence the foundry units
are hesitant to buy in bulk, the prices of casting have not increased proportionately. As such at
44
present the foundry unit’s in particular small foundries are facing the hardship & there is threat of
closure. The payment period for the casting supplied has gone up from 90 days to 120 days.
Process material like sand, sodium silicate, coal dust, Co2 gas and other chemicals used in the
casting industry are made available from local dealers. There is a material testing lab in Coimbatore
for testing raw material and foundry chemicals but most of the small foundry units procure by either
relying on visual inspection or by a test certificate provided by the suppliers, or sometimes on oral
assurances by the traders. In-house testing facilities are not available with the small foundry units and
if the material is sent for testing in labs, their cost will go up significantly.
After 1984, the quality of Coke , which was earlier supplied by SIDCO, deteriorated and COSMAFAN
felt it necessary to start its own purchasing division, COSMAFAN MARKETING SOCIETY, in 1985.
The COSMAFAN Marketing Society's main responsibility was to purchase and supply the raw
materials required by the Foundries. During its tenure of 19 years, the COSMAFAN marketing society,
has never once failed with their supplies and is still continuing to support the foundry members to their
maximum extent.
Pumps & Motors: The major suppliers to the motor pump Industry are the foundry and the
engineering industries which are involved in the various manufacturing / job works of motors and
pumps spares. The different types of vendors and sub contractors in this category are given below:
Table 4.3.10: Vendors and sub-contractors
Sub Category Estimated Number
of Firms
Machinery Components(Including machining of CI rough castings 10000
motor body, motor spares and pump spares)
Casting (Motor Body) 600
Copper wire 01
Rotor Die Casting 40
Stator 30
Others 30
Since the stator laminations and rotor die casting producing firms require a good technical support for
the dies involved in the process, there are only around 70 units (both put together) contributing to less
than 10% of the total demand of the motor and pump cluster at Coimbatore. The remaining quantity
required by the cluster is mostly outsourced from the Peenya industrial estate, Bangalore, where there
are many such units.
Quantitatively the most important raw material used for the manufacture of motors and pumps is cast
iron, which is available locally form the foundry cluster situated in Coimbatore. As there is only one
unit in the cluster, which is supplying the copper wire that is used for winding over the stator
45
laminations so the rest is obtained from the traders in the local market. Other components such as
stator and rotor die - castings are also readily available in the market in standard designs.
The Ready-made components required for the motors and pumps are obtained from traders having
their shops and offices in the local commercial markets of Coimbatore. The traders mostly outsource
parts such as stator, rotor die castings, copper wire, motor & pump bodies, impellers, diffusers etc.,
partially from the local market and the rest from Delhi and other parts of India.
Micro Enterprises: These units get their materials and drawings for processing into further stages
from small and medium enterprises, it is observed during the study that there are 2 classes of micro
enterprises, the class 1 enterprise gets major job orders from medium and small enterprises and
offloads to his group of micro enterprises i.e. class 2. These class 2 entrepreneurs do not move out for
marketing and depend on class 1.The raw material and drawings are supplied by medium and small
enterprises.
Component suppliers: Specialized suppliers have emerged in Coimbatore who are supplying to
manufacturers. Some large manufacturers have developed their own suppliers who are supplying
exclusively to them by using the raw material supplied by the manufacturer. Many traders are
available in Coimbatore who are procuring raw materials and components from North India and
supplying exclusively to this industry. A cordial relationship exists between the suppliers and the
manufacturers.
Machinery Suppliers: The machinery requirement for the cluster comprises of the lathes, hydraulic
pressing machine, drilling machine, slotting machine, cylindrical grinding machine, shaping machine,
copper wire winding machine (manual/automatic) and motor & pump testing equipments. All the
machines are general purpose in nature and are provided by several individual suppliers and
manufacturers. The more specialized machineries are CNC lathe machine and the automatic winding
machine. The CNC lathe machine is used to produce precision quality components and high-volume
output. The Automatic winding machine does the operation of winding copper wire on stator
laminations with a high-level of accuracy and speed. All these machineries are available indigenously.
Present Marketing System
Each unit in the pumps& motor product line has developed its own marketing channel. There are no
common marketing channels available for the cluster. Few medium scales are also exporting their
products to other countries. These marketing channels had been developed over a period by the
respective units. Most of the units are supplying directly to the showrooms. Others are supplying
through agents who are selling through dealers. The products are transported through various means
such as train, lorries, couriers, buses, etc. to various cities in India. Some agents come to Coimbatore
46
to place orders and take the product on their own. These traders develop a severe price competition
among the manufacturers.
The following are some common distribution channels.
1) Manufacturer Branch Distributors Retailer
2) Manufacturer Distributors Showroom Retailer
3) Manufacturer Retailer
4) Manufacturer Agent Export
There are manufacturers who manufacture as per the clients specification.
Major chunk of the demand for the castings for the foundry industry is from pump units in Coimbatore
and the textile machinery industry. Other customers included the automobile and machine tool
industries. The orders are placed directly by the end user, in some cases where critical composition is
involved especially in steel and non-ferrous castings, the orders are placed by the consultants
providing BDS service to the end user.
The export from Coimbatore is only approx. Rs. 100 Cr. may be due to major competition from
Turkey, which has a short shipping time to anywhere in Europe. China may also be a threat in exports,
because the cost of its finished product was equal to the cost of the raw material of Indian companies.
In the micro enterprises segment it is observed during the study that there are 2 classes of micro
enterprises, the class 1 enterprise scout for job orders from medium and small enterprises and
offloads to his group of micro enterprises i.e. class 2. These class 2 entrepreneurs do not move out for
marketing and depend on class 1.
Financial Aspect
Canara bank is the lead bank of Coimbatore and SIDBI is the major financial institution. Most of the
nationalized bank in Coimbatore have specialized SSI branches. Some of the banks like Oriental bank
of commerce, United bank of India, United commercial bank, etc have tie up with NSIC for equipment
finance and high value long term working capital support, wherein NSIC recommends these units to
the bank.
Banks/FIs are proactive to finance bankable proposals. They also support the sub-sector by financing
for common facility centers and common infrastructure up gradation. Each bank depend on its own
rating system.
Micro enterprises find it difficult in getting loans from financial institutions/ banks and source loan from
private sources at higher interest rate. They are also not aware govt. schemes such as CGTMSE,
CLCSS etc.
The foundry units have acquired land at Foundry Park but due to high relocation cost, i.e. relocation of
machinery and equipments, up gradation to machinery for which no financial support is provisioned in
the banking scheme the units are hesitant to relocate.
47
Due to present production cuts because of slowdown and reduced off take from the principal client the
MSMEs find it difficult to pay the installments and service the loan. Though banks have adopted
certain product lines for financing (Ex: Bank of Baroda provides loan at 1% less than the PLR for wet
grinder cluster), there is need to develop cluster specific financial model.
Manpower and Employment

The productivity of Coimbatore worker is 15% higher than the Tamilnadu state average but there
exists acute shortage of manpower both skilled and unskilled. The Engineering sub-sector provider’s
direct employment to about 2.5 lakh people. The pumps, motor and foundry, product line employees
approx. 1. lakh people and the 25000 micro enterprise units in the cluster employ approx. 1 lakh
people. There is fair representation of female workers in the sub-sector, especially in the assembly,
testing and packing area. The foundry industry is sourcing manpower from Bihar, Orissa and other
eastern regions for shop floor operations. There is acute shortage of technical manpower in the
foundry cluster probably due to the new generation opting for cleaner technology employment. Skilled
manpower shortage also exists in CNC machining operations.
Information and Communication Technology (ICT): It is observed during the study that micro
enterprises do not have information on new geographical markets and developments in there area of
activity (new machinery, new tools, trade fairs etc). Even the financial transactions related for
clearance of financial instruments is checked by frequent visits to banks. Hence promotion of usage of
internet and computer s would enhance their productivity.
The pumps motor segment procures number of components and parts in from different sources, the
material management is controlled by the shop floor supervisor and there is frequent mismatch
between the order level and the quantity on hand, resulting in huge inventory cost. Hence if
technology is used in supply chain management it would result in identification of dead stock and
reduce the procurement cost.
4.4 Analysis of Business Operation (AOBO) & Pressure Points

BDS Area Key Issues Suggested Required BDS
Issues Type of firms solutions providers/Facilitators
Raw Lack of Foundry, Pump motors Establishing Associations/Support
Material common common raw Institutions
procurement Micro enterprises material bank (NSIC,SIDCO)
initiative Banks, fIs
Frequent bankers
48
Lack of credit meet
to procure raw
material
Shortage of Foundry, Pump motors Developing cluster Associations/Technical
skilled and Micro enterprises specific training institutes
manpower module
Large firms under
Training to trainers ESR/Retd.technicians/Extern
al training institutes
Exploring
Skill franchisee network Associations/Employment
developmen with employment Exchange
t guarantee with
technical institutes Associations/Institutions
in other states
Sandwich courses
with on the job
training
Finance Absence of Micro enterprises Developing TACT/FIs/Banks

financial specific financial
linkages to models for micro
Micro enterprises
enterprises through linkage
with MFIs and FIs
FIs/Association
Promotion of
MCGS(Mutual
Absence of credit guarantee
credit for Foundry schemes)
relocation to FIs/Association
foundry park,
Foundry,Pumpsmotors Credit facilitation
Lack of credit through Bankers Association/TCS center of
ICT excellence for SMEs/Banks
applications, Organize periodic
and meets between
certifications MSMEs and
Micro enterprises Bankers to
Absence of sensitize the
bookkeeping advantage of use
and accounting of ICT tools, Externat BDS/Freelance
practices by certifications financial consultants/
micro fis/ICWA
enterprises Sensitization of
Lack of micro enterprises
awareness on about the benefits
job costing of book keeping
Unorganised Pumps and costing and
motors, Small Foundry deployment part
Difficulty in time of
access to credit accountants and
49
for energy costing
efficiency Medium Pump motor & professionals fis/Associations
improvements Foundry
and emission Develop cluster
control specific financial
models.
Low
awareness on Awarness creation fis/Association
equity finance and capacity
for SMEs building
of financial BDS
for
facilitating in equity
financing
Market Lack of orders Micro enterprises Promote micro DIC/NSIC/TACT
Access for micro enterprise
enterprises consortiums and
with the support of
DIC and NSIC
participate in PSU
tender
Promotion of
marketing BDS for
micro enterprises
Building linkages
with marketing
BDS in other
geographical area.
Participation in
trade fairs
Small & Medium Pump
motor & Medium Invite
Low exports foundry buyers/importers Associations/Export house
from SMEs and showcase
engineering cluster
products,
production and
quality systems
Safety and Frequent Foundry Awareness IIF/Association/NSC
Occupationa accidents and programme on
l Health absenteeism in safety and
foundry occupational
industry health through
National safety
council
Training to local
BDS to carry out
Monotonous period safety
routine work in Pump motors audits CPC/Mgmt institutes
pumps and
motor Improving the work
assembly place atmosphere
and methods
50
improvement
through BDS
linkage
Technology Low Linkage with Tech.Institutions/

awareness on Foundry,Pumpmotors technical BDS for TCSSME centre
manufacturing manufacturing
niche products niche products
Low awareness Pump motor, Foundry,

about usage of Micro enterprises Awareness creation Association
BDS for and demonstration
technological on BDS usage
improvements FOUNDRY,Pumpmotor
s Create awareness
High on value Association/CPC/
production cost engineering (VE) Consortiums
due to high and introduce VE
cost of labour, concepts
power,
processes Foundry, pumps
motors.
Energy Linkage with BDS
efficiency and technical BEE/Tech.Institute
improvements institutes for energy
efficiency
Foundry improvements
Efficiency of Linkage with energy

cupola and and environment IIF/Association/SPV/
emissions in BDS providers and Tech.institute
foundry
demonstrate green
industry
technologies.
Promotion of DBC
& Venturi scrubber
Create awareness
on carbon credits
and linkage of
consultant with
BMOs for availing
credit through
bundling of SME
credits.
ICT Low use of Micro enterprise Training on Govt. ITIs and private BDS
ICT tools by computers and providers
micro use of internet
enterprises
Piling of Training to private NIC/TCSSME center

inventory and BDS in developing
bill follow up SME ERP
51
due to poor modules
tracking
systems
BMOs Association/EEPC/NSIC
Weak Associations Network with
promotion of National and
BDS providers international
agencies
BDS Area Key Issues Suggested Required BDS
Issues Type of firms solutions providers/Facilitators
Lack of Foundry, Pump motors Establishing Associations/Support
common common raw Institutions
procurement Micro enterprises material bank (NSIC,SIDCO)
Raw
initiative Banks,FIs
Material
Lack of credit Frequent bankers
to procure raw meet
material
Shortage of Foundry, Pump motors Developing cluster Associations/Technical
skilled and Micro enterprises specific training institutes
manpower module
Large firms under
Training to trainers ESR/Retd.technicians/Extern
al training institutes
Exploring
Skill franchisee network Associations/Employment
developmen with employment Exchange
t guarantee with
technical institutes Associations/Institutions
in other states
Sandwich courses
with on the job
training
Finance Absence of Micro enterprises Developing TACT/FIs/Banks

financial specific financial
linkages to models for micro
Micro enterprises
enterprises through linkage
with MFIs and FIs
FIs/Association
Promotion of
MCGS(Mutual
Absence of credit guarantee
credit for Foundry schemes)
relocation to FIs/Association
foundry park,
Foundry,Pumpsmotors Credit facilitation
Lack of credit through Bankers Association/TCS center of
ICT excellence for SMEs/Banks
applications, Organize periodic
and meets between
52
certifications MSMEs and
Micro enterprises Bankers to
Absence of sensitize the
bookkeeping advantage of use
and accounting of ICT tools, External BDS/Freelance
practices by certifications financial consultants/
micro FIs/ICWA
enterprises Sensitization of
Lack of micro enterprises
awareness on about the benefits
job costing of book keeping
Unorganised Pumps and costing and
motors, Small Foundry deployment part
Difficulty in time of
access to credit accountants and
for energy costing
efficiency Medium Pump motor & professionals FIs/Associations
improvements Foundry
and emission Develop cluster
control specific financial
models.
Low
awareness on Awarness creation FIs/Association
equity finance and capacity
for SMEs building
of financial BDS
for
facilitating in equity
financing
Market Lack of orders Micro enterprises Promote micro DIC/NSIC/TACT
Access for micro enterprise
enterprises consortiums and
with the support of
DIC and NSIC
participate in PSU
tender
Promotion of
marketing BDS for
micro enterprises
Building linkages
with marketing
BDS in other
geographical area.
Participation in
trade fairs
Small & Medium Pump
motor & Medium Invite
Low exports foundry buyers/importers Associations/Export house
from SMEs and showcase
engineering cluster
products,
production and
quality systems
53
Safety and Frequent Foundry Awareness IIF/Association/NSC
Occupationa accidents and programme on
l Health absenteeism in safety and
foundry occupational
industry health through
National safety
council
Training to local
BDS to carry out
Monotonous period safety
routine work in Pump motors audits CPC/Mgmt institutes
pumps and
motor Improving the work
assembly place atmosphere
and methods
improvement
through BDS
linkage
Technology Low Linkage with Tech.Institutions/ TCSSME

awareness on Foundry,Pumpmotors technical BDS centre
manufacturing for manufacturing
niche products niche products
Low awareness Pump motor, Foundry,

about usage of Micro enterprises Awareness Association
BDS for creation and
technological demonstration on
improvements FOUNDRY,Pumpmotor BDS usage
s
High Create Association/CPC/
production cost awareness on Consortiums
due to high value engineering
cost of labour, (VE) and
power, introduce VE
processes Foundry, pumps motors.
concepts
Energy
efficiency BEE/Tech.Institute
improvements Linkage with
Foundry BDS and
technical
institutes for
Efficiency of energy efficiency
cupola and improvements IIF/Association/SPV/
emissions in Tech.institute
foundry Linkage with
industry
energy and
environment
BDS providers
and demonstrate
54
green
technologies.
Promotion of
DBC & Venturi
scrubber
Create
awareness on
carbon credits
and linkage of
consultant with
BMOs for
availing credit
through bundling
of SME credits.
ICT Low use of Micro enterprise Training on Govt. ITIs and private BDS
ICT tools by computers and providers
micro use of internet
enterprises
Piling of Training to private NIC/TCSSME center

inventory and BDS in developing
bill follow up SME ERP
due to poor modules
tracking
systems
BMOs Association/EEPC/NSIC
Weak Associations Network with
promotion of National and
BDS providers international
agencies
4.4.1 PRESSURE POINTS TO BE ADDRESSED
Foundry
Improved foundry practices
 In plant training programme to improve the productivity, reduce wastage and conservation
of Energy.
 Introduction of divided blast cupola to improve energy efficiency and Venturi scrubber to
reduce emissions
 Tapping effectively domestic and export market
 Involving technical institutes to address the manpower constrains
 Develop financial models for establishing energy efficiency and environmental friendly
technologies
Pumps & Motors
 Improving the energy efficiency of pumps & motors
 Upgrading the standards of unorganized manufacturers through certifications and labeling
55
 Demonstration of cost benefit analysis of using high quality components
 Systemized factory layout & works improvement and
 Develop financial models for establishing standards and labeling for energy efficiency
 BDS linkage for product development for manufacturing light weight high quality pumps
using alternative materials
 Capacity building of institutions to promote design innovations and address manpower
shortage.
Micro enterprises
 BDS linkage for sensitization on book keeping and financial discipline
 Access to credit
 Exploring new geographical reach to expand the market reach
 Technical consultancy for product development
 Cost estimation of work order
BDS linkage for preparation of bankable proposals

CHAPTER - 5
DERIVATION
5.1 SWOT ANYLYSIS

Product Strengths Weakness Opportunity Threats
Line
Foundry -Strong presence in domestic - 80% of the units -Good scope -Growing
market using old cupola for export to environmental
-Quality of casting is good system European concern
hence capable of entering -Little attention to countries regarding
export market energy efficiency and -Scope for pollution may
-Units flexible to adopt latest emission norms common bring legal
foundry practices -Low level of value brand complications
-Availability of testing lab, BDS engineering marketing -Strong
-Established technical -Inability to procure -Small size competition
institutions raw material at sand from China of
competitive price. reclamation technology,
-People prefer to can be quality and
work in other sectors installed. price front.
-Lack of awareness -Continuation
on export of prolong
opportunities. power cuts will
force the units
to relocate to
neighboring
states
56
Pumps & -Inborn entrepreneurship - Non-employment of - Scope to -Due to
qualities (leadership, quality professional/ manufacture liberalized
Motors conscious & good planners) technical experts in economic
non-
and dedication of production. Small agricultural policy, there is
Coimbatore people industries are mostly pumps. a high
-Locally developed indigenous being family - To enter the possibility of
technology. managed. global market imported
- Best of image for Coimbatore - Absence of by exports, motor and
motor and pump-sets industry innovative approach this is pump-sets
throughout the country to improve the presently an from cheaper
- Specialization of sub- existing processes. untapped manufacturing
contractors to meet out the - Usage of low-grade geographical base like
local demands. raw materials so as area. China.
- Presence of renowned R&D to produce cheaper -.Competition
and technical educational products that are not from other
institution like SITARC, PSG efficient by developing
engineering colleges unorganized sector cluster i.e
Govt.support institution - Non-availability of Ahmadabad,
- Proximity of raw materials proper technology to Hyderabad.
like castings from the foundry manufacture high -Continuation
cluster. value products of prolonged
-Proactive association - Absence of power cut
organized marketing would affect
efforts/strategy. the micro
- Absence of initiative enterprises,
to export as
- Absence of linkage components
with BDS for will be
marketing, sourced from
technology, other states.
certifications
57
Automotives
Manufacturers
Testing Lab - Sitarc / Pvt. TestingLab
Exports
National Market
Rapid Prototype
Food Processing Industry
Textile Machinery Valves
Others (Grills, Gears, etc)

Domestic Pumps & Motor
Banks/FI’s
TCS Centre of excellance
CPC
DIC
Foundry Consultants (20) QMS

5.2 FOUNDRY CLUSTER
NSIC
Financial Consultants
DI-MSME
Labour Contractors
IIF
Training Institutes
Technical Institutes
Software Services ITI/Engg. College
FOUNDRY UNITS = 600
Annual TO : Rs.1200 Crores
Equipment/ Machinery nufacturers

ASSOCIATIONS / SPV
SIEMA,
CODISSIA, COSMAFAN,
Energy Environ- mental Consultants COFIA, COINDIA
Business Advisory Consultants

COAL
COKE
SAND
PIG IRON
Additives
SUPPLIER
Export Consultants
Chemicals /
Melting Scrap
RAW MATERIAL
58
Market Consultants
Market
Exports
National
Distributers
Local Dealers /
Testing Lab
Sitarc / Pvt. Testing Lab BIS
CPC & Pvt. Lab

Banks/FI’s
Logistics
DIC
Electrical Engineers
DI-MSME
Metrology & QMS
Financial Consultants NSIC

SMERA
crores
Software Services
Annual T O
Registered
ASSOCIATIONS / SPV
Equipment / Machinery SMERA, COINDIA,
Principal Firms
Manufacturers TAPMA, CODISSIA
Unregistered : 500 Firms

: 300Firms
: Rs.2000 cr
Technical Institutes
Energy Consultants ITI/Engg. College
5.2.1PUMPS & MOTOR CLUSTER
Export Consultants
EPC
Casters
Supplier
Foundry
Supplier
Rotor Die
Stampings
Assembling
Copper wire
Component
Machinining
59
5.3 CLUSTER VISION
COIMBATORE ENGINEERING CLUSTER WILL BE MADE A PREFERRED GLOBAL

SOURCING CENTER FOR ENGINEERING PRODUCTS BY ADOPTING BEST PRACTICES IN
TECHNOLOGY, MARKETING, AND PRODUCTION SYSTEMS FOLLOWING ENERGY AND
ENVIRONMENTAL STANDARDS BY AVAILING AN EFFICIENT, COST EFFECTIVE
DELIVERY OF SERVICES BY THE YEAR 2011.
Objective
 Improve the energy efficiency standards of pumps and motors manufactured
in the cluster
 Improve the cupola efficiency and reduce emission of foundry cluster
 Strengthening credit linkage of micro enterprises with financial institutions
 Product development through linkages with technical institutes and
Research institutes
 Promotion of ICT for effective supply chain management
 Increase the outreach of existing BDS providers
 Capacity building of BMOs to facilitate business growth through use of BDS by
their members.
60
 PPP for addressing manpower constrains
Annexure - I
Geographical Location of cluster
Coimbatore is one of the few big industrial towns of the state. It is located at a distance of 500 kms.
from the state capital Chennai. The city is traversed in the middle by the river Noyyal. It is surrounded
by the Nilgiris, a rich tea producing hinterland in the north, Poll chi, the receiving centre for forest
produce in the south and the Cochin harbor in the Southwest. The city is well connected to its region
by road, rail and air.
61
Annexure – II
List of Respondents
Sl.No. Foundry Units Contact Person Contact No.

Category:
1 Agni Castings Mr. Balraj 99439 25266, 2512658
2 Best Aluminium Casterss Mr. S.A. Pillay 0422-2511049
3 Nithya Industries Mr. D. Leelakrishnan 98430 10108, 2513421
4 G.P.S. Castings 94872 19641, 2513251
5 Deivam Foundry Mr. R. Jaganathan 098431 91404, 93642
44404, 2512404
6 Bright Castings Mr. J. Balraj 099444 73654,
2512754, 29005544
7 Sri Meenachi Castings Mr. T. Ponraj 94433 74103, 2513103,
2513694
8 Allied Castings Mr. D. Rajendran 94422 12376, 2512374
9 Vasanthi Foundry Mr. V. Prakash 94430 52979, 2513931
10 A.K. Castings MR. A. Kandasamy 93800 50744, 98422
60470, 2512858
11 Ammarun Foundries Mr. N. Viswanathan, 2666611, Extn.121,
Managing Partner & 98422 86661
CEO
Sl.No. Motor / Pump Units Contact Person Contact No.

Category :
1 RVT Industries Mr. K. Thirumalai 98422 38570, 2570763
2 Sree Andavar Pumps Mr. Shiva 98427 53578, 04296
273579
3 Cosmic Pumps (P) Ltd Mr. Karuppusamy 98946 39592
4 Sri Raghavendra Enterprises Mr. R. Jayaraman 98434 20979, 2249024
5 Coimbatore Compressor Engg. Mr. Ebinesar, Manager 94430 26609 (Prop)
Co. P. Ltd
62
6 Avinashi Engineering Company Mr. Kasiappan 98427 82427, 04296-
273390
7 Om Sakthi Engg Works Mr. Ramasamy 98422 54075, 04296-
273835
8 Andavar Engg Works Mr. S. Palaniswamy 04296-274776
9 Sri Palaniandavar Industries MR. N. Sureshkumar 04296-272379
10 Ajantha Industries Mr. Ponnusamy 98422 22976
11 Aquasub Engineering Aqua Mr. V. Krishnakumar, 2642484
Pump Industries GM – Marketing
Sl.No. General Engineering Units Contact Person Contact No.

Category :
1 J.J. Engineering Works Mr. J. James 9360087140
2 Sri Raghavendra Metal’s Mr. N. Srinivasan 9363106931
3 Sri Magha Ganapathy Pumps Mr. Rajan 9443044729
4 S.V. Industries Mr. Senthilkumar 2573624
5 Sri Ayyappa Engineering Works Ms. Visalakshi 9842231781
6 Devi Industries Mr. Pitchaiyappan 2573624
7 New Saibaba Machine Works Mr. A. Arun 2538794
8 Hi-Tech Fab Equipments Co. Mr. M. Leelakrishnan 2438963
9 Super Finish Mr. Kumaresan 98422 30402
10 Super Finish Auto Tex Mr. R. Mathialagan 2533244
11 Sri Vinayaga Industries Mr. Vimal Chandran 2530794
12 Kiruthiga Industries Mr. G. Pradap Sekar 9363123545
13 Vee Tech Engineering Mr. S. Ganasekaran 9363115738
14 Vee Tech Mr. R. Sekar 9363115738
15 P.V.R. Industries Mr. P. Ramesh 9944446633
16 Rig Fabrication Ms. R. Rama 2542879
17 K.J. Industries Mr. C. Balasubramanian 9843121009
Mr. K.V. Jayapal
18 Mag Engineers Anbalagan 9365212345
19 Kumar Engineering Works Sukumar 9312365489
20 Bee Vee Engg works Joy varghese 9884529632
21 Best Heat Treatment Services Soman 9369312458
22 Balaji Paper Product Balaji 9365412365
23 United Enterprises Rajendra 9312345698
24 J M Engineering Company Mahesh 9321456987
25 Nippon Kuhlers Rajan 9321456987
26 Perfect Machine & Auto Ramu 2672013
Components
27 Nithya Industries Viveditha 9888865478
63
28 Raveendra Pneumatic Raj Kumar 9882569321
Equipments
29 Ponmani Mahendra Industries Mahendra 9885632223
30 R.G. Industries Mr. R. Ranganathan 98947 70563
31 Himalaya Pumps Mr. E. Alagupandian 98656 29277, 93616
33788
32 Sri Sivasakthi Engg Mr. J.M. Gunasekaran 98431 84850 93644
69779
33 Best Electrical Services Mr. M. Sakthivel 98422 64510
34 Engineering Equipment Mr. A. 98422 91769
Industries Shanmugasundaram
35 Mathi Industries Mr. Mathivannan 98424 26564
36 Southern Sky Industries 9948525636
37 Sri Hari Engineering Mr. D. Kulanthaivelu 99431 55999
38 S.K.P. Engineering Mr. Mohanraj 98947 55852
39 R.S.R. Industries Mr. Ramakrishnan 99528 33553
40 Rajalakshmi Engineering Mr. S. Ravichandran 93606 13977
41 Sri Ram Industry Mr. Ramasamy 98420 42130
42 Amutham Engineering Mr. P. Manikkam 98422 12619
43 Rohini Industries Mr. Manokar 9985823525
44 Sri Balamurugan Industries Mr. Dulasirajan 93603 37613
45 Sri Bhagavathi Thread Rolling Mr. R. Sivathanupillai 98431 93783
46 Nandhini Engineering Company Mr. Lingappan 99524 24176
47 J.D’s Enterprises Mr Jagdish 9945826531
48 Sennar Engg. Company Mr Sarvana Kumar 9958625648
49 Ponmani Industries Mr. Kumerasan 9952626535
Sl.No. Name of the Institution Contact Person Contact No.

Support Institutions
1 National Small Industries Mr. R. Saravanakumar 0422-2247757
Corporation Ltd
2 MSME Development Institute Mr. R. Palanivel 94872 84665, 2233956,
2230426
3 District Industries Centre Mr. G. Asokan 2397311, 2390190
4 Coimbatore Productive Council N.Settu 0422-2215727
5 SMERA B.Gokul Kannan 0422-3204909
6 SIDBI General Manager 0422-2243896
7 Indian Statistical Institute A.RajGopal, Head 0422-2452197
8. Canara Bank Suresh Kumar, AGM 0422-2542359
Sl.No. Association Name Contact Person Contact No.
1 Tamilnadu Small and Tiny President 044-22501302,

Industries Association ,Chennai 22500939
(TANSTIA)
2 TANSTIA – FNF Service Centre, President 044-43534040,
Chennai 22501451
64
3 Indian Chamber of Commerce & President 2214000, 001
Industry (ICCIC)
4 The Coimbatore District Small Mr. K. Ilango, President 2221582, 2222409
Industries Association
(CODISSIA)
5 Southern India Engineering President 2220014
Manufacturers Association
(SIEMA)
6 Confederation of Indian Industry President 2247456, 2248410
7 Confederation of Indian Industry, President 044-42444555
Chennai
8 Coimbatore Industrial President 4394128, 4394227
Infrastructure Association
(COINDIA)
9 The Institute of Indian Foundry President 2675115
men
12 Cbe. Sidco Indl. Estate President 2673941, 9362673941
Manufacturers’ Welfare
Association (COSIEMWA)
13 Coimbatore Industries & Foundry President 2572864
Owners Association (COIFOA)
14 Coimbatore Management President 4204131
Association
15 Coimbatore Productivity Council President 2215727
16 Coimbatore Tiny & small Foundry President 2561819, 2562863
Owners Association
(COSMAFAN)
17 Coimbatore Stock Exchange President 2315100, 101
18 Institute of Engineers President 2580733
19 South India Textile Research President 2754367, 2574368
Association (SITRA)
20 Small Industries Testing & President 2562612
Research Centre (SITARC)
21 SITARC Testing & Training President 2675636
Institute
22 Builders Association of India President 2599959, 69
(BAI)
23 Electrical and Electronics President 2628222, 94433 89602
Industrial Estate Entrepreneurers
Association
24 Coimbatore Wet Grinders President 6544018
Accessories Manufacturers
Association (COWMA)
25 Tamilnadu Pump and Industrial President 2243393
Association (TAPMAA)
26 Coimbatore District Electroplaters President 2577845
Association (CODEA)
28 Kovai Power Driven Pumps and Mr. Karuppusamy, 2575289
Spares Manufacturers President
Association (KOPMA)
29 Tamilnadu Association of Cottage Mr. J. James, 2403031
and Tiny Enterprises (TACT) President
65
30 Association of Consulting Civil President 2200350
Engineers (India) (ACCE)
66
ANNEXURE-IV
Business Development Services market development to MSMEs
Questions for interviewing individual Enterprises
A. Basic Information about the enterprise and its functions
 Name of the Enterprise

 Location
 Age of the entrepreneur
 Year in operation
 Details of different activities and operations/functions related to the enterprise
o Kind of products you make
o Kind of raw materials and consumables that you buy for making products; method of
procuring raw materials. Frequency of buying raw materials?
o Markets where you sell your products-sale price; methods of marketing; Do you market
your product on your own or through any distribution channels? (Understanding all the
market channels the enterprise use for the sale of product and which one he uses
regularly and why?)
o Kindly of machinery/tools/equipments you use for the production? If you do not have a
particular equipment/tool/machinery how will you get the work done?
o Other equipments/tools/machinery related to the production process they have seen

elsewhere & not in use in the enterprise and in the cluster.
o From where do you obtain equipment/tools/machinery? Do these

Equipment/tool/machinery requires servicing of any type? Where do
you get the servicing done?
 Scale of Operation
o Monthly sales turnover:
o Monthly production capacity
o No. of workers employed if any
o Investment in fixed and working capital
 Seasonality in sales, if any. How does it affect employment and sales turnover?
 Alternative source available for the procurement of raw
material/consumables/tools/equipmentsComparison of regular and alternative source on the
following parameters
Regular Source Alternative source(1) Alternative source(2)
Cost
Quality
 Any other qualitative benefits offered by the alternative sources (Credit sales, relationship with
enterprise, payment as per enterprise convenience, etc)
67
 An estimate of the number of suppliers working as regular and alternate sources
 Is the enterprise satisfied with the quality/type of raw materials/consumables supplied to them?
if not, then why?
 Is the enterprise satisfied with the existing modes of raw material supply? If yes, why? If no,
then reason for dissatisfaction. Suggestions if any about the alternative mode of supply.
 Understanding the reasons behind their inability to access quality raw

material/consumables/tools/equipments as per their requirements.(Inability could be lack of
awareness of the source, high cost, etc)
B. Identification of relations ships the enterprise has with all the persons he interacts with the
business purpose
You have business relationships with a number of people such as raw material suppliers, buyers and
consumable suppliers. Now we would like you to identify other such relationships”. This would help
enterprise to focus and explore relationship with other people.
 Kind of expert services that enterprise obtains from these business relationship
 Is payment is made by enterprises to expert services
 Are your buyers of final products providing some inputs on improving designs and making
some changes in earlier designs?
Identify all such expert services in the form of guidance, information, business development inputs or
help that the enterprise obtains from
Buyers:
Suppliers:
Financers:
 Service other than the one listed that he would like to obtain in order to develop his business or
increase the income level from the enterprise.
 What expert services demanded by the enterprise are available/not available to the
enterprise).
 Modes of expert service delivery and service transactions: For examples, are they delivered at
the cluster or other place, individually or on a group basis
 Information on how the enterprise feels about the quality of expert services by the: Is the
enterprise satisfied with the service currently available to him? (Perception of the enterprise
sought on aspects like frequency, appropriateness, adequacy and delivery of the services)
 What improvements could be made in terms of quality and delivery mechanisms of the
services?
 Willingness to pay fees for expert services: How much if he can tell?
 Awareness about other alternative sources for expert services
68
Questions for
BDS (government/non-government)
A Basic information
1 • Name
2 • Type of enterprise: private, government, NGO and technical institute
3 • Working for profit or non-profit
4 • Main sources of income – fees, grants from governments and other sources
B Types of services offered in general and to the cluster in particular

 What services does your organisation offer?
 What specific services/products do you offer to the sub-sector in general and to the cluster
enterprises in particular?
 Are services to the sub-sector your main activity or supplementary/complementary

activities? If supplementary, then what are your main activities?
 How do you offer these services
 Do you seek involvement of other persons/organizations in the process of delivering

services?
 What has been the outreach of various services provided by you?
 Are you satisfied with the outreach? If yes or no, why?
 What do you feel about the impact created by the provision of various services by your
organisation for enterprise?
 How many enterprises visit you (daily, weekly, monthly or yearly for availing your
services)?
 Do you charge fees for these services?
 What are the fees for different services?
 What are the payment options available for these services?
1 • According to you, which service is more in demand? Why?
2 • Is subsidisation of services important or could these services be offered on a commercial

basis. If yes, why? If no, why?
3 • Why do a majority of enterprises fail to use the services provided by you?
4 • Do you see the role of commercial service provider for these enterprises? If yes, what are the
services that have potential to be commercialized?
5
6
 What suggestions would you make to commercialize these services?
69
 In your opinion, what are the constraints in the providing expert services to MSMEs in general
and enterprises in the cluster in particular?
1 • In your view what are the problems/factors that might hamper the development of a vibrant
expert service market for MSMEs in general and cluster in particular? What needs to done to
remove those problems?
2 • What changes in terms of features and delivery is needed to make the services more
effective?
1 • What kind of technical support do you obtain from other sources to serve MSMEs in general
and this cluster enterprises in particular?
2 • Are there any systems in your organisation by which you obtain feedback from enterprises
about the services you offer? If yes, how do you use these information and for what purposes?
3 • Do you undertake some market surveys and market research to improve the quality of
service and to develop new products? If yes, how frequently?
4 • Do you have any future plans to provide other services to the cluster enterprises? What are
they?
5 • Number of staff members involved with respective services
70
Action Plan for August 2009 – March 2010 for the Engineering Cluster of Coimbatore
Major Activity Area/Sub-Activity Budget (Rs ‘000) Basis for Costing No. and Expected
type of Output/Outcome
Bene
ficiary
M1-M2 M3-M4 M5-M6 M7-M8 M9-M10 M11- Proje Beneficiary Contribution Total
M12 ct Stakeholder by others
Fundi Contribution
ng
1.Improving the energy efficiency of pump motors
1.1 ISI Certification from BIS
Organising -Introduction - MoU -Testing by 600 100 - 700 -Organising 30 -4 private BDSP
workshop on of BDS for between BIS NABL center workshop,meets unorganised introduced and linked
ISI certification &NABL and and introduction of pumpmotor with associaiton in the
certification and preparing accredited compliance BDSP @ Rs.40 units cluster for ISI
TOR testing by units per event x certification
-Capacity center for 5 events=200 -30 unorganised units
building of franchisee -Capacity building ISI certified resulting in
BDS through -BDS of BDSP @ 40 per spinn off for certification
BIS registered BDSP x 4 in another 100 units
- Bankers with BIS and Providers=160 during the 1st year
meet for association - One meeting -Financial model for loan
financing for betweening for certification
certification to BMO/SIDBI-PMD introduced.
unorganised & BIS at Delhi =
players Rs.40
-Introduction - Voucher scheme
of BDS for for 30 pilot
preparing certifications for
financial unorganised
proposal for players @ Rs.10
loans for =Rs.300
certifications
1.2 S&L of pumpmotors
Organising -MoU between -Formation of - Technical -Bankers - 600 100 100 800 -Organising, 100 firms -Atleast 60 models of
workshop on BEE & BMO Committee BDS meet to Testin workshops,meets star rated pumpmotors star rated.
S&L by BEE for S&L for expidition introduced in provide g with & formation of under S&L -Spin off of S&L in
-Technical support of S&L the cluster financial NABL committee programme another 100 units
workshop on -Capacity programme for support accred @Rs.40x4
improving building of technological for ited events=160
energy BDS for S&L facilitation to technical center - Training of BDS
efficiency compliance unorganised upgradati and & Technical
audit players on under compli institute by BEE @
71
- CGTMSE ance Rs.50 x
-Training 6BDPS=300
to -Voucher scheme
Technical for 100 S&L
institution compliance firms
s for @ Rs.20 =200-
facilitatin Development of all
g in the weather tamper
cluster proof labels and
technology
dissimination to
4BDSP =@Rs.140
2.Improve efficiency of foundry operation and reduce emmission
2.1 Establishment of Raw material bank
-Organising - Identification Registratio -Presentation 200 100 100 400 -Organising 500 small Raw material bank in
meet on of Consultant n to MoMSME & Procur workshop on RM foundry place
Common for preparing complete approval. ement bank, @Rs.40 x units
procurement proposal and Submissio Identification of 1event=40
finalising TOR n of and finalization inputs Training on MM @
-Mobilization proposal of and Rs.100 x 1batch:
of memebrs to DC- warehouse operati Rs.100
through MSME for -Submission of on -Preparation of
associaiton grant bankable proposal for
-Applying for -Bankers proposal and availing MoMSME
registration of meet for sanction of scheme and
society loan for loan bankable
RM -Training on proposal: Rs. 160
Procurem Materials - Preparing
ent management common purchase
- and negotiation and sales
to Society staff manual:Rs.100
2.2 Technology improvements

-Organising -Technological -Identification - Training - - 600 200 100 900 - -Demonstration of
workshop on seminars and of technical and Submi Installatio Seminars,worksho 12 foundry reduction in emmission
Japan Line of demonstration BDS for franchisee of ssion n of ps,meets @Rs.40 units install -Development of local
Credit for of emmission retrofitting local BDS of equipme x 5=200 advance BDSP for propagation
technological control emmission with banka nts and - Technical emmission resulting in spin off
improvement equipments control equipment ble dissimina exposure control benitis in another 30
s -Visits to equipments supplier for propos tion of @Rs.300 x1=300 equipments units.
- Workshop industry using in exisiting servicing als of benefits -Training to BDS under the
on green facility. and atleast for preparation of 1st pilot
72
CGTSME/CL technology -Identification maintenance 12 proposals @Rs.50 project
CSS. and training -Workshop small x 4BDSP=200
of BDS on on cost foundr -Technical training
preparation benefit y units to BDSP
of proposals analysis of under @Rs.50 X 4=200
for availing technological CGTS -
credit under investment ME/CL
JLIC. CSS
3. Access to finance to micro enterprises
3.1 Systemization of records
-One day Finalising -Conducting -Training to -- 800 100 - 900 -Workshop, meets 100 micro -100 units practice
workshop on TOR with BDS 5 day IYB BDS on Format @Rs.50 x 2 event enterprises bookkeeping and get
micro finance for organing 5 programme preparation ion of =Rs.100 statutory clearances for
-One day day IYB by ILO of proposals sub- -Preparation of availing MSME schemes
workshop on programme. trainer for 20 for availing commit IYB training - Escort BDS introduced
Banking -Preparation micro loan from tee to manual in in cluster for micro
norms for of training enterpurners MFIs/Banks recom vernacular enterprises.
availing manul in in each batch - Organising med language:Rs.150 - Access to credit
credit vernacular (2 meets with viable -5 day training leading to direct
-Identification language. programmes) DIC,DI- propos programme(2 procurement of raw
of External -Identifying MSME. als batchs) on IYB for material and strengthen
BDS for BDS and 40 enterpruners confidence to avail the
organising finalising @ Rs.60 per day x service of BDS for
training TOR for 5 days 2 product development
programmme escort batches=600 and marketing
on IYB. service to -Voucher scheme
Micro for escort service
enterprises. @Rs.500 per
micro enterprises
x 100
enterprises=Rs.50
TOTAL 2800 600 300 37000
73
74

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Diagnostic Survey Report

Engineering Cluster- Coimbatore {BDS}

DIAGNOSTIC STUDY REPORT

PROJECT MANAGEMENT DIVISION

1.0 INTRODUCTION 4-6

2.0 Frame Work 7-26

3.0 Environment and Energy related issues 27-31

4.0 Analysis 32-52

5.0 Derivation 57-61

 Establishment of Project Office with necessary infrastructure

 Implementation of the activities as per the action plan

 Assuring sustainability of interventions

Table 1.1: Details of Sample size

S.NO Type of Firms Sample Size

1 Manufacturers/ Job Workers/Assemblers (Foundry, 140

2 BDS Providers (Incl. Auditing Firms, Technical 60

Table 2.2.1: Unit operation of a Typical Foundry

Sr.No Name of Operation Process

FIGURE 2.2.2 FLOW CHART OF FOUNDRY

SAND MIXING (PREPARATION)

INDUCTION COUPOLA ELECTRIC F URNACE

POURING and COOLING

b) Pumps & Motors

FIG 2.2.3: The process flow chart of monoblock pumps

DIE CASTING CAST IRON

VARNISHIG MACHINING/ ROD

2.3 History of the Cluster

Overview of Past & Ongoing Intervention

The capacity building of the association was strengthened which resulted in

 Establishment of business information center

The learning’s from CDP interventions are

2.4.1 Global scenario of Foundry Sector

Table 2.4.2 :Top 10 - Casting Producers

2.4.4 National scenario

2.4.5 Foundry sector

Batala Jalandhar Ludhiana

Pumps & Motors

2.4.6 Description of bench mark Cluster:

Foundry:The foundry product line of Coimbatore cluster is mainly catering to motor

2.5 Vital Statistics:

The Pumps & Motor cluster

Table 2.5.1: The estimated share of categories of units:

Category No. of firms in Value of Employment Area wise Distribution

Table 2.5.2 The existing Micro Enterprises (Light engineering)

No. of firms in Value of

Table 2.5.3 The distribution of the foundry units by end-use markets

2.5.4 Business Development Service Providers (BDSPs)

Number of BDS Providers for Foundry, pumps & motors,

Table 2.5.5 Who Does, Who Pays Matrix

Participation expenses born by

Trade fair 100% user

Exports 100% User -Organizing trade fairs

CAs 100% User

Access to NSIC gets fee for apprising the

A significant part of expenditure

Govt. Institutions (NSIC) some

Table 3.1.2: Emission standards for foundry cupola

Type Pollutant Concentration

3.2 Pumps & motors:

SI. Product detail Range Kw No. of Applicable IS

3 3 Phase Mono-set 0.37kW, 0.55KW,0.75kW,1.1kW, 2 Pole IS 9079:2002

Based on selling price of cast component: Rs. 46/kg

Labour charges: Rs.130600/Melt Maintenance