Pakistan Cutlery Study

DIAGNOSTIC STUDY
CUTLERY CLUSTER WAZIRABAD – PAKISTAN
Conducted By
Mr. Ansir Mahmood – NCND UNIDO
Supervised By
Mr. Muhammad Ali Haroon – ANE UNIDO
June 2006
Developed under UNIDO Cluster Development Programme Pakistan
Partner Agencies
Focal Point UNIDO:

Mr. Anjum Fayyaz – NPC UNIDO
Mr. Sarwar O. H. Hobohm - Team Leader CDP UNIDO Vienna
All rights reserved. No part of this document may be reproduced or transmitted, in any forms or by any
means, without prior written permission from UNIDO
i
Table of Contents
Description Page No
1. Objectives
2. Description of the cluster
2.1 Definition of the products ----------------------------------------------------- 01

2.2 Usage of the products --------------------------------------------------------- 01
2.3 Geographical location --------------------------------------------------------- 01
2.4 History of the cluster ----------------------------------------------------------- 01
2.5 Current output ------------------------------------------------------------------- 02
2.6 Production process (Knives)------------------------------------------------- 02
2.7 Flow Chart (Knives) ------------------------------------------------------------ 04
2.8 Production process (Spoons)------------------------------------------------ 05
2.9 Flow Chart (Spoons)----------------------------------------------------------- 06
2.10 A snapshot of Kitchenware Cutlery--------------------------------------- 07
2.11 A snapshot of Non Kitchenware Cutlery -------------------------------- 07
2.12 Wazirabad Cutlery Cluster (National Scenario) ----------------------- 08
2.13 International Trade of Cutlery---------------------------------------------- 09
2.14 Cluster Actors------------------------------------------------------------------ 09
a. Core Cluster Actors------------------------------------------------------- 10

b. Other Cluster Actors------------------------------------------------------ 11
2.15 Supports Groups & Associations ----------------------------------------- 13

2.16 Cooperation Matrix ----------------------------------------------------------- 17
2.17 Current Cluster Map---------------------------------------------------------- 19
3. Social Dynamics of Cluster ----------------------------------------------------- 21
4. Value Chain Analysis ------------------------------------------------------------- 22
4.1 Value Chain Analysis (Knives) --------------------------------------------- 22

4.2 Value Chain Analysis (Spoons) -------------------------------------------- 23
4.3 Cost Analysis (Knife & Spoon) -------------------------------------------- 24
5. Analysis of Business Operations --------------------------------------------- 25
5.1 SWOT Analysis ---------------------------------------------------------------- 29
6. Porter’s Framework for the Cluster ------------------------------------------ 30
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7. Cluster Vision------------------------------------------------------------------------ 33
8. Strategy -------------------------------------------------------------------------------- 33
9. Future Cluster Map----------------------------------------------------------------- 35
9.1 Explanation of Future Cluster Map ---------------------------------------- 36
10. Action Plan-------------------------------------------------------------------------- 37
iii
Objectives
The report (Diagnostic Study) is an outcome of Cluster Development Programme

initiated in mid-2001 by United Nations Industrial Development Organization in
Pakistan; five pilot clusters were selected with partner agencies listed as Leather
and leather products in Korangi, Karachi; Gems and jewelry in Saddar, Karachi;
Ready-made garments in Lahore; Electric fans in Gujrat; and Cutlery in Wazirabad.
The programme is intended to enhance the productivity, competitiveness and
international market penetration of Pakistan’s SME clusters.
The study attempts to present and analyze the current position and also to
understand the functional dynamics of the cluster. The central concern, however,
relates to two important issues: a) the nature and strength of current stakeholder
linkages and b) areas of strategic interventions for development of cluster. The
study, in general, provides an insightful view of cluster turning points, nature of
organizations, business linkages, problems faced & perceived at both policy and
entrepreneurial level and, especially, deals with the potential areas of joint
cooperation for future individual & cluster growth.
Disclaimer
The purpose & scope of the study is to provide cluster level information to the
readers. All the material presented is based on primary/secondary data,
discussions/interviews with a number of individuals concerned, directly or indirectly,
to the cluster, and certain assumptions are also incorporated for the purpose. The
information compiled in the document may vary considerably due to any unforeseen
circumstances. Therefore, the authors make no warranty, expressed or implied;
concerning the accuracy of the information presented, and will not be liable for injury
claims pertaining to the use of this publication or the information contained therein.
Diagnostic Study on Cutlery Cluster Wazirabad
2. Description of Cutlery Cluster Wazirabad
2.1 Definition of Products
Cutlery products are defined as the cutting instruments and tools. The raw material
for cutlery manufacturing may include metal-ware, plastic-ware, glassware etc, but
Wazirabad is famous to produce ‘Stainless Steel’ Cutlery products. Cutlery is
classified into two broad categories: Kitchenware and Non-Kitchenware. The first
section includes cutting, serving & eating utensils such as spoons, table-knives,
forks, etc, while the latter includes blades, scissors, shears, daggers, swords, etc.
The cutlery is one of the important commodities of engineering group in Pakistan.
2.2 Usage of product
The kitchenware cutlery is mainly used as domestic utensil and also in hotels,
restaurants and houses for serving food and as an eating implement.
The non-kitchenware cutlery is totally export oriented and mainly used in sports,
hunting, household cutting tools and as gifts/collective items.
2.3 Geographical Location
Wazirabad is situated on left bank of the river Chenab at a distance of 3 km, 32 km

to the north east of Gujranwala, 45 km south west of Sialkot and 14 km south of
Gujrat. The industry is situated in the locality of Wazirabad, Nizamabad and
Allahabad in Gujranwala District. Wazirabad has been famous for its good quality
cutlery even before the independence.
2.4 History of Cluster
Cutlery is basically a cottage industry. The origin of cutlery industry can be traced to
the invasion of India by Alexander The Great. The legend goes that cutlery items
were repaired by local craftsmen and the magnificence of the repairs carried out
were much appreciated. In the pre-partition era, the Wazirabad Cutlery cluster had
been famous throughout India for its good quality cutlery and knives. During 1881-
82, the town produced arms and ammunition for the British army. It also produced
weapons such as knives, daggers, karpans, etc. for the Allied Forces during World
War-I and II. After the war, the skilled craftsmen of Wazirabad diversified their
product in different categories such as tools, utensils, table cutlery, door locks etc.
The British used to call Wazirabad as the ‘Sheffield of India’.
UNIDO Cluster Development Programme Pakistan 1

2.5 Current Output
There were approximately 150 units in kitchenware cutlery segment, about 10-15 of
them were large units, while 100 to 130 units were sub-contractors for other
manufacturers. The total average production was 4000-5000 pieces per day.
Due to high prices of raw material and tough competition with China, the number of
units of swords, daggers, knives had decreased. Currently there were only 100-150
units out of which 15-20 were large. The average production capacity was 500
pieces per day.
There were about 7-8 razors manufacturing units in Wazirabad. The approximate
production of this category was 400 dozen pieces per day. These manufacturing
units were mainly subcontractors for Sialkot region.
The estimated consumption of steel in cutlery industry was 6000 tons per annum
and the average annual production in dozens of pieces was 1.65 million.
2.6 Production Process (Knives)
a) Cutting: In the first step the metal sheet was cut into different pieces
depending upon the sizes of knife blades.
b) Straightening: The blades were straightened manually during the process.
c) Hardness: The blades were hardened; an essential process required for the
sharpness of blades.
d) Surface Grinding: Surface grinding machines smoothed the surfaces of

blades on both sides.
e) Edging: The process was used to carry out both manually and through
machine work to develop the edges of knives.
f) Handle Making: Handle making was performed manually in two steps:

Handle making & Fixation.
g) Polishing: Semi-finished knives were then sent to the polish department.
h) Cleaning: After polishing process, knives were cleaned by kerosene oil and/or
wood brada.
i) Inspection: The products were then passed through the inspection phase;
products were checked according to the standards prescribed by the
customers.

j) Packaging: The knives were then packed into cartons and gift boxes of
different sizes.
2.7 Process flow chart of Knives
Cutting Straightening Hardness
Handle Edging Surface

Making Grinding
Polishing Cleaning Inspection
Packaging
2.8 Production Process (Spoon)
a) Sizing: Stainless Steel sheets were cut into the required sizes through Cutting
press.
b) Die Cutting: After sizing, the pieces were brought to the die section, where
according to the product requirements; the sheets were further cut and drawn
to give basic shape. Presses ranging from 30-100 tons were used in this
section according to the product specifications.
c) Grinding: After cutting & drawing, the items were brought into the grinding
section to smoothen the rough edges and remove any extra material, if
present.
d) Bending and Shaping: Small items as spoons, forks etc were brought into
this section where the final shape of products was achieved.
e) Straightening and Stamping: Handles of spoons were straightened and

shaped in this section. Stamps of brands were also fixed here.

f) Accessories Fixation: Plastic or steel accessories were fixed in this section

depending on the style/design.
g) Polishing: The product surface was smoothened and proper shine was given
in this process.
h) Final Inspection: Quality of the product was checked during the final
inspection phase in addition to any minor rework if required; failing with the
item was rejected and sent back for major rework.
i) Packing: The product was then packed according to the requirement of buyer.
2.9 Process flow Chart (Spoon)
Sizing Die Cutting Grinding
Polishing Stamping Bending &

Shaping
Inspection Packing

2.10 A snapshot of kitchenware Cutlery
Kitchenware industry got established in Wazirabad way back in 1930’s. 3-4 units
pioneered the work of kitchen cutlery before partition. The industry got momentum
after partition, the companies multiplied in late 1950’s and the cluster entered into a
new era of domestic and international market with quality products.
During 1970’s the tableware industry started declining due to various reasons, the
main reason being the introduction of the ‘Nationalization Scheme’ by the
Government. In 1990’s, the number of companies crossed over 100, the competition
became fierce with shortening of export margins. In late 1990’s, China entered the
cutlery market, displaced the competitors due to its “mass production/less price”
strategy and claimed a handsome market share in a short span of time.
The Harmonize Code (HS) of the Kitchenware Cutlery along with their description is
given as follows:
HS Codes Description
Spoons, Forks, Ladles, Skimmers, Cake Servers, Fish Knives,
8215
Butter Knives, Sugar Tongs, etc
8215.91 Plated with precious metal
Set of assorted articles containing at least one article plated
8215.10
with precious metal
8215.20 Other sets of assorted articles
2.11 A snapshot of non-kitchenware Cutlery
In 1947, around 40-50 knife manufacturing units used to produce knives for Hindu
businessmen. The Indian traders used to up-grade and export these semi-finished
products. The cutlery industry faced serious crisis after partition because the largest
home markets (i.e. Bombay, Calcutta and Delhi) got included in India. The Hindu
financiers migrated to India leaving behind the skilled and hard working craftsmen
who were able to recapture their fame within a very short span of time.
In 1950’s, the knife manufacturing business declined mainly due to natural

calamities primarily flood. In 1960’s, the knives of Wazirabad catered 90% of the
domestic market while 10% were used to export. About 10-15 knife manufacturing
units were operational at that time. In 1970’s, the business flourished and the
number of units increased to 100. During 1980’s, the knife manufacturing business
boomed and the units multiplied to 500; the knife products repositioned as 100%
export oriented. In 1990’s, new products were introduced and the manufacturing
businesses reached new heights until early millennium; China introduced low cost
products and displaced local exporters.

The Harmonize Code (HS) of the Non Kitchenware Cutlery along with description is
shown below:
HS Codes Description
Knives & Cutlery Blades for machines or for mechanical
8208
appliances.
8211 Knives with C. Blades, Serrated or not, of 8208.
8212 Razors and Razor. Blades, safety Razor Blade etc
8213 Scissors, Tailors Shears, etc.
Other articles of Cutlery (e.g. hair clippers, Butchers or Kitchen
8214 Cleavers, Chopping or mincing Knives), Manicure or Pedicure
sets etc.
2.12 Wazirabad Cutlery cluster (National Scenario)
Cutlery is one of the important commodities of engineering group in Pakistan. The

cutlery items includes both kitchenware and non-kitchenware cutlery. The first group
was mostly domestic oriented having an export presence of 11% while the 2nd group
was mainly export oriented contributing remaining 89% of exports in 2003. The
exports of Pakistan under the cutlery category in 2004-2005 were US$ 34 million
sharing 0.26% of the total export target.
Wazirabad is the main manufacturing area for the cutlery products in Pakistan,
whereas a limited manufacturing is also done in Sialkot and Dir (NWFP).
Kitchenware cutlery has experienced an increasing sales trend in the domestic

market, while the non-Kitchenware cutlery remained and has been mainly export
oriented; although the export volume had been continuously decreasing since the
last few years.

The export figure of cutlery from Pakistan is given as follows:
Cutlery Export (2000-2006)

34
33
35 29 29
30 26
24
25
20
Million $
15
10
5
0
2000- 2001- 2002- 2003- 2004- 2005-
2001 2002 2003 2004 2005 2006
Year
(Source: Export Promotion Bureau & FBS)
2.13 International Trade of Cutlery
World cutlery exports were USD 5.4 billion in the year 2003 showing a growth rate
of 12 % in comparison to 2002. China had a formidable position as a market leader
with an export figure of USD 1,174 million (growth rate 16.03 %), closely followed by
UK USD 892 million and Germany at USD 704 million.
Pakistan’s share in global export market had been meager but quite stable hovering
between 0.47-0.61 percent. Similarly, Pakistan exhibited an export ranking of 22-27
from 1998 to 2003. During 2002-03, exports to USA declined by 3.3 %, exports to
France increased by 21.7% and UAE declined by 15.8%. The main international
destinations for the Pakistani Cutlery products were USA, France, Dubai, Saudi
Arabia, Germany, Belgium etc.

2.14 Cluster Actors
a. Core Cluster Actors
i. Large Manufacturers
There were approximately 300 units of Kitchenware and non-Kitchenware cutlery.

The large manufacturers of Kitchenware & non-Kitchenware cutlery were
approximately 25-35. Larger units outsource work-jobs from Common Facility
Centre and SMEs.
ii. Medium & Small Manufacturers
Around 89% of the manufacturing concerns comprised of medium & small

enterprises. Most of the small manufacturers are subcontractors of large
manufacturers.
Parameters Large Medium Small

Export
50-70 lakh 25 lakh or less
Performance I Crore annually
annually annually
(PKR)
Labour 100-150 12-20 5 or less
Machines (Nos.) 25 10 3-4
Int’l Brands (5%) Indirect (mostly
Target Market Wholesalers or Warehouses (70%) through large
(Tearing) Retail chains Traders (25%) manufactures or
(90%) Sialkot region )
Sub –Contracting In-house
In-house (90%) In-house (60%)
activities (30% - 40%)

b. Other Cluster Actors
i. Die manufacturers
Die manufacturers are the backbone of cutlery industry. There were about 100-150
die manufacturers which served the demand of the industry. Both kitchenware &
non-kitchenware products directly depend on the die manufacturers.
Die Manufacturing services utilization is given as under:
Kitchenware 25-30 (%)

Non-kitchenware 10 (%)
Others (Textile,
60-65 (%)
Sanitary, Fan, Shoe etc)
Die manufacturing was started way back in 1960’s and the first organized Die
manufacturing process was started by Punjab Small Industries Small Tool Service
Center in 1962.
The die manufacturers had relatively weaker relations with the cluster owing to the
fact that the production of new designs; a pure investment case was mostly
performed one-sidedly, as the manufacturers had virtually no design department
resulting in the reliance on the previous designs with a little bit alterations.
Delayed/Non payment of outstanding dues was another problematic area requiring
immediate attention. Die manufacturers demanded profit/loss partnership in cutlery-
selling business; the incentive would incite them to invest in designing field. The
decline in exports (mainly non-kitchenware items) had direct implications on the
business; while seasonal variations in trade were also observed.
The average number of employees in the die manufacturing units were between 5-
10. They required up-graded machinery to match the quality requirements of
International buyers including
• Computer Numerical Control (CNC) Layth machine

• Computer Numerical Control (CNC) Milling machine
• Computer Numerical Control (CNC) Wire Cutters
ii. Raw Material providers: (Manufacturers & Traders)
The basic raw material used for the tableware cutlery manufacturing is non-
magnetic Stainless Steel sheets, while in non-kitchenware cutlery manufacturing,
magnetic Stainless Steel sheets /Flats, Brass rods, Steel Wire etc are used as the
basic ingredients. In the tableware units, both indigenous and imported raw
materials were used in the production processes. As per the American Iron & Steel
Institute (AISI), the standards 420, 430 & 302, 304 series are prescribed as steel for

tableware cutlery & surgical instruments. While series 302 and 304 were typically
used for the production of non-kitchenware items.
The material procurement model followed in the industry is as follows, direct

dealings with mills (mostly in case of large entrepreneurs), and, purchase through
dealers/traders were the two commonly used methods through local steel
manufacturing companies. Similarly, investors/traders used to import steel to fulfil
the steel needs of the cluster both on cash as well as credit basis.
The composition of raw material usage is given as under:
Stainless Steel Sheets Source % Usage

Local Gujranwala 40%
Local (Better Quality) Lahore, Gujranwala 45%
Imported 15%
The increasing trend of raw material prices from 2004-2006 is given as under:
Year Magnetic steel Non-Magnetic Brass (per kg)

(Rs. per kg) steel (Rs. per kg)
2004 80 65-75 90-135
2005 100-110 78-107 150-175
2006 125 107 200-270
There were about 20-25 raw material suppliers in Gujranwala and around 3-5 in
Wazirabad.
iii. Machinery Suppliers
There were about 10-15 traders of machinery suppliers in Gujranwala and 10-20 in
Daska which catered the demand of cutlery Industry. Only few traders of imported
machinery operated from Lahore. The consumption chart of local & imported
machinery in Cutlery cluster is as follows:
• Local machinery--------------------90%
• Imported machinery---------------10%
The local machinery used is as follows:
• Cutting Press
• Grinding Machine
• Polishing Machine
• Rolling Machine

The imported machinery used is as follows:
• Surface Grinding
• Edge Making
• Cleaning Machine
The main consumption of the machinery is the cutting press mostly used by
kitchenware producers.
2.15 Supports groups & Associations
i. Cutlery Institute of Pakistan (CIP)
Trade Development Authority of Pakistan in collaboration with Pakistan Cutlery &

Stainless Utensils Manufacturers & Exporters Association (PCSUMA) Wazirabad
has setup this institute. The objective of the establishment of Cutlery Institute of
Pakistan was to provide skilled labour and common manufacturing facilities to the
cutlery cluster. The general supervision, administration and control of the affairs of
the institute and the power to lay down the policies of the institute were vested in the
Management Committee.
A strategic plan was developed by SMEDA for the revival of CIP to play its due role
as a Trained labour production centre. The plan indicated that training would be
imparted at two levels i.e. technical and managerial. As a Common Facility Center,
the institute would also provide business development service (BDS) such as
consultancy to produce market and product profiles, trade show participation,
pricing strategies, identification of new trade opportunities and certifications.
So far, the cluster has not been benefited from the institute to a greater extent.
Cutlery Institute of Pakistan since its inception has trained 77 persons in two
batches and carried out 850 jobs mainly for non-kitchenware cutlery manufacturers.
The institute had been closed since July 2005. The reasons for the closure are as
under:
• The machinery installed in the CIP catered only the needs of non-kitchenware
cutlery manufacturers.
• Due to the slump in the exports of non-kitchenware cutlery products and less
orders, most of the SMEs did not get much benefit from the CIP.
• A feasibility report had been formulated by SMEDA for running of the institute,
but the project was not funded by TDAP for the realization.

ii. Pakistan Cutlery & Stainless Utensils Manufacturers & Exporters

Association (PCSUMA)
Pakistan Cutlery & Stainless Utensils Manufacturers & Exporters Association

(PCSUMA) was established in 1967. There were approximately 108 registered
members with the association.
PCSUMA served as a negotiation platform between the members of cutlery cluster

and the Government, Semi Government and other autonomous bodies. It worked
for the export promotion of the cluster in collaboration with TDAP through various
seminars, exhibitions and trade delegations. The association also used to provide
support for export refunds and rebate cases. The following services were provided
by the cutlery association:
• Information about exports/meetings through circulars;

• Booking of stalls in exhibitions/fairs;
• Trade body meetings; representation of cluster;
• Police protection.
Only 04 trade delegations had been organized since 1988. The entrepreneurs used
to attend 3-4 exhibitions annually from association’s platform. The current problems
associated with the association are listed below:
• Association is greatly monopolized & controlled by a minority group; the business
information is usually filtered and passed only to selective entrepreneurs
belonging to the elite group;
• Primarily engaged in lobbying activities with the government/other agencies; no
real-time business development services are provided to attract people;
• Members occasionally gather to solve some specific problem rather than
meeting regularly to align the services of PCSUMA with the cluster requirements;
• Rely heavily on membership dues; no income generating strategy in place;
• No method/strategy to ensure the gradual progress for the achievement of
common goal/growth;
• Lack of a common vision.
iii. Government Small Tool Centre (GST)
The Institute, situated in the middle of manufacturing area, catering the needs of
kitchenware and non-kitchenware production units got established in 1962. The
institute was established not only as a common facility centre for the cluster but also
used to provide training to the labour force.
The following common facilities were offered by the centre:
• Polishing facility

• Rolling facility
• Cutting facility
• Forging facility
• Hardware testing facility
The machinery used in the center was mostly outdated and needed immediate up-
gradation.
iv. Trade Development Authority of Pakistan (TDAP)
TDAP is the primary agency of the Government of Pakistan, an attached

department of the Ministry of Commerce, engaged in the promotion and boosting of
country's exports. Since its inception in 1963, TDAP has continued to facilitate the
exporters in overcoming difficulties faced by them on the supply and demand side of
exports. It had 04 regional and 09 sub regional offices.
Sialkot office-TDAP had arranged about 3-4 trade delegations for the cutlery cluster
in collaboration with the cutlery association. An exposure visit to China including 12
manufacturers was conducted in April 2005 to expose the cluster entrepreneurs to
Chinese technological advancements. Similarly, the Sialkot office also arranged
participation in trade exhibitions in connivance with the association.
v. Small & Medium Enterprise Development Authority (SMEDA)
SMEDA was established in October 1998 to take on the challenge of developing

Small & Medium Enterprises (SMEs) in Pakistan. It is an autonomous body working
under the umbrella of the Ministry of Industries & Production. SMEDA is an SME
policy-advisory body for the government of Pakistan and also acts as a one-stop-
shop for its SME clients.
It is the flagship organization of Pakistan providing necessary services to help SMEs

overcome the weaknesses endogenous to their very nature, and has contributed
towards the growth and development of SMEs in Pakistan through:
• Business plan development services

• Training services
• Technical services
• Legal services etc
SMEDA Sialkot office got incepted in January 2002. The number of average
meetings conducted per year with Wazirabad cutlery entrepreneurs were around
15-20. The following services had been provided to the cluster so far:
• Strategic plan for Cutlery Institute of Pakistan;

• Financing facility (a package was developed for SME’s with The Bank of Punjab,
7-8 companies availed the scheme);

• Training needs assessment (door-to-door interview);

• Arranged a training exercise in partnership with M/s Pakistan Steel Mill;
• Website development for Cutlery association; under process.
vi. United Nations Industrial Development Organization (UNIDO)
The United Nations Industrial Development Organization (UNIDO) is the specialized

agency of the United Nations dedicated to promoting Sustainable Industrial
Development in developing economies. UNIDO acts as a catalyst to help generate
national economic wealth and raise industrial capacity through our roles as a
worldwide forum for industrial development and as a provider of technical
cooperation services. Established in 1968 and located in the capital city, Islamabad,
the UNIDO Representative office in Pakistan has extensive and successful
experience in industrial development cooperation.
In recognition of the relevance of Cluster Development to Pakistan, a programme

US/PAK/01/099 was included as the centerpiece of Institutional Capacity building
for SME development in the UNIDO Integrated Programme (IP) Pakistan. Initiated in
mid-2001, the programme covered five pilot clusters: Leather & leather products,
Gems & Jewelry, Readymade Garments, Fans and Cutlery.
The diagnostic study report was an outcome of CDA training initiated by UNIDO in
Pakistan from July-September 2005. In the cluster, UNIDO had already undertaken
a series of meetings with the Cutlery association and the entrepreneurs. Individual &
joint visioning exercises had also been conducted in the cluster. Wazirabad
Greenways Network (the first export consortium), was the outcome of the
programme in cluster, whereas the members had planned to undertake joint actions
for their individual and collective growth. Similarly, other networks such as: Pak
Cutlery Consortium (PCC), Evercon, Global Cutlery Consortium (GCC), White Gold
Cutlery Consortium (WGCC), Wazirabad Cutlery Network (WCN) had also been
established to replicate the UNIDO methodology for cluster development. Moreover,
UNIDO also sponsored ‘Cluster Development Agent’ in the cluster to undertake and
sustain the ‘Change Management’ initiative.
v. Financial Institutes (FIs)
Almost all registered commercial and industrial development banks of Pakistan had
their branches in the cluster. They had however exhibited a very weak link with the
SME’s.
The main reasons for this weaker linkage (entrepreneurial point of view) are
elaborated as the ‘Interest-based’ banking system, lengthy loan processing periods
and collateral requirements for loaning purposes.
Although nearly all the enterprises enjoyed the leverage of having their accounts in
more than one bank, the bank-customer relationship was however on the weaker
side. The banks were more interested in financing the consumer products rather

than issuing business loans. They blamed the SME’s for the weaker linkages,
whereas the SME’s blamed the banks for the same.
vi. The Sialkot Chamber of Commerce & Industry (SCCI)
SCCI is a trade body, which was established in 1982. Late Mr. A.D. Bhutta was the
founder President of this esteemed organization. It comprised of industrialists,
importers and exporters belonging to various fields.
There were approximately 6000 members of SCCI in the year 2004-2005. Most of
them were connected with sport goods, surgical, leather garments, and some
members were cutlery producers.
SCCI had a strong relationship with Cutlery Association as many members of the
association were also members of SCCI. SCCI used to send 2-3 weekly invitations
and a fortnightly newsletter regularly to PCSUMA. Similarly, SCCI used to involve
members of the Cutlery Association in the formulation of Government polices
regarding exports of cutlery, rebate issues etc. R&D centre for cutlery products and
markets was also operational in SCCI.
2.16 Cooperation Matrix
CIP TEVTA SMEDA SCCI PCSUMEA EPB F.I

CIP * 0 1 0 2 2 0
GST 0 * 0 0 0 0 0
SMEDA 1 0 * 1 1 1 1
SCCI 0 0 2 * 2 2 0
PCSUMEA 2 0 1 2 * 1 1
TDAP 2 0 1 2 1 * 0
FIs 0 0 1 0 1 0 *
Explanation of defined Parameters:
On the basis of the feedback from the cutlery association these parameters can be
explained as follows;
Not possible (*):
‘*’ donates that relation is not possible.
No relation (0):
‘0’ signifies that the relation is non-existent.

Normal Relation (1):
Normal relation is defined on the basis of correspondence and personal visits of

these institutions in a month with the Cutlery Association.
Correspondence in a month = 1-10
Personal Visits = 1
Good Relation (2):
Good relation can be defined on the basis of correspondence and personal visits of
these institutions in a month with the Cutlery Association.
Correspondence in a month = 10-15

Personal Visits = 2-4

2.17 Current Cluster Map
Small Tool Center

[TEVTA]
Domestic Mkt
Large Manufacturers of
Kitchenware Cutlery (10-15)
R.M
Medium & Small (100-130) (20-25)
USA, Europe
Direct
Large Manufacturers of
D. M
Non Kitchenware Cutlery (15-20)
(100-150)
Medium & Small (100-150)
Through Sialkot Razors (8-10)
TDAP SMEDA Banks PCSUMEA
Cluster Map Abbreviations:
CIP (Cutlery Institute of Pakistan)

GST (Govt. Small Service & Tool Center)
SMEDA (Small & Medium Enterprise Development Authority)
D.M (Die Manufacturing)
R.M (Raw Material Suppliers)
TDAP (Trade Development Authority of Pakistan)
PCSUMEA (Pakistan Cutlery & Stainless Utensils Manufacturers & Exporters
Association)

Notations Description
Group of stakeholders
Square representing all
Principal firms
A well functioning network of a
group of stakeholders
An underdeveloped linkage
A well developed linkage
Number of stakeholders in a ()
group

3. Social Dynamics of the cluster
The Cutlery cluster Wazirabad has a rich history, and has evolved over a long span
of time. The traditional knowledge has trickled down, and passed from generation to
generation, and has developed into the distinct art of cutlery craftsmanship.
The manufacturers are closely knitted with each other in a strong ‘Beradari system’.
Mughal, Bhutta, Lohar are the major castes involved in the cutlery manufacturing
business. Although they are close relatives but the overall business environment
depicts a sense of jealousy and leg-pulling. Cut-throat price competition amongst
the manufacturers has resulted in compromise on quality and reduction in the value
of the product. Unorganized business practices such as non-adherence to delivery
schedules, non-existing inventory control systems, variant receivables/payables,
unprofessional product pricing methods have played a vital role in establishing the
overall cluster atmosphere. All these factors have collectively served as a barrier to
the growth of cluster.
Education levels are quite low amongst the present generation of entrepreneurs.
However, their children are going to schools and pursuing technical studies; some
boys are also undertaking higher education from nearby cities. Entrepreneurs have
somehow realized the importance of technical education especially knowledge of
computers and Information Technology, and are generally more inclined to favour
I.T studies for their upcoming generation.
Lack of professional management at almost all levels has resulted in poor shop-floor
organization and labour handling. Most of the units were either managed by
entrepreneurs themselves or by a ‘Munshi (a lower level manager/supervisor)’ hired
to run the business operations and day to day handling of business operations. The
entrepreneurs considered the placement of a professional or a business graduate
as a waste of money. Moreover, the professionals are misconceived as another
exploitation tool who might steal their business secrets.
Labour is employed mostly from nearby villages. The skills are transferred to new
comers through the conventional system of ‘Ustad/Shagird’. All the training is
provided practically on the shop floor.
In short, weak business management, non-professional marketing, poor record-

keeping, lack of professionalism, poor human resource management, and lack of
trustworthy relationship were some of the main reasons for the slow growth of the
cluster and overall lesser exports.

4. Value Chain Analysis
4.1 Value Chain Analysis (Knives)
Raw Materials for 1 Dozen Knife

(SCHRADE 5”) Gauge (18 * 9 * 8)
Brass Bolster = 8 Gauge
Steel Blade = 9 Gauge
Brass Lining = 18 Gauge
S. Rate Cost
No Name of Material Unit Qty (Rs) (Rs)
1 BRASS KG. 3.50 225.00 787.50
2 STEEL KG. 1.50 60.00 90.00
3 WOOD HANDLE NO. 12.00 0.50 6.00
NAIL (BRASS+
4 STEEL) NO. 12.00 1.66 20.00
Total of Material Cost 903.50
903.5 915.5 918.5 923.5
MATERIAL CUTTING STRAIGHTENI TEMPERING

COST 12.00 NG 5.00
935.5 985.5 1030. 1055.
EDGE MAKING ASSEMBLING POLISHING REFINISHING

12.00 50.00 45.00 25.00
1070.
PACKING
15.00

4.2 value Chain Analysis of Spoons
Raw Materials for 1 Dozen Spoon

Gauge 16
Rate Cost
S. No. Name of Material Unit Qty (Rs) (Rs)
1 Non Magnet Steel KG. 1.00 90.00 90.00
Total Material Cost 90.00
90.00 92.00 97.00 98.00
MATERIAL COST CUTTING GRINDING BENDING

90.00 2.00 5.00 1.00
99.50 114.5 119.5
STAMPING POLISHING PACKAGING

1.50 15.00 5.00
Note: All costing is given in PKR

4.3 Cost Analysis
Activity/Material Knife Spoon

Material 72% 76%
Cutting 01% 2.5%
Embossing ------ 1.7%
Polishing + Bending 5.05% 15.25%
Cleaning & packing 10.1% 4.24%
Hardness 2.5% ------
Straightening 0.6% ------
Surface Grinding 4.9% ------
Handle & Blade Fixing 4.04% ------

5. Analysis of Business Operations
1. The SME’s in the area faced several problems such as decreased export orders,
lack of finance, scarcity of skilled labor, unavailability of modern technology and
production in-efficiencies. Most of the non-kitchenware manufacturers were
expanding their facilities and even kept switching the product-line to tap the
tableware market at both domestic and export levels.
2. Marketing was one of the major issues being highlighted by the SME’s of the
cluster. The SME’s lacked awareness, knowledge of markets & marketing
intelligence, and techniques to retain the existing markets. Moreover, entrepreneurs
have started focusing more on other markets rather than the regular ones due to the
lack of awareness, inability to compete and retain the customer.
Usually two ways were adopted to attract the buyers
• Participation in trade fairs/exhibitions through TDAP/personally
• Individual foreign visits
Another reason for the decline of exports from the cluster was non-compliance with
Intellectual Property Rights (IPR) requirements1.
3. The tableware manufacturers were mostly targeting the domestic market. They
were also present in the export market indirectly through exporters from Sialkot. The
manufacturers stressed for a more effective marketing strategy of TDAP. The
tableware manufactures requested TDAP for participation in relevant trade
fairs/exhibitions and organization of trade delegations to tap the unexplored
tableware markets. A detail of largely untapped European market is given as under:
Harmonized Code Import-2003 (USD Largest exporter

(HS) million) (2003)-Exports (USD)
8215 616 China
821510 50 China (22 million)
821591 13
Pakistan tableware exports to Europe in the same year in the category 8215 was
USD 0.65 million only.
1
As an example, a number of non tableware manufactures exported copied products of M/s United Steel, one
of the leading American Cutlery traders. When the original company checked the piracy act, the company not
only black-listed the manufacturers but also imposed a ban on cutlery imports from Pakistan.

The exporters required TDAP to organize and formulate professional trade

delegations with the active participation and consultation of manufacturers and
exporters.
4. Introduction of new designs (Design of the month or design on special occasions)

is necessary to remain competitive in the global competitive market. But in cutlery
cluster, lack of proper designing mechanism/facilities was observed as a weakness;
entrepreneurs usually perceive it as an expense rather than investment.
Entrepreneurs required professional’s induction, AutoCAD facility and CAD/CAM
machinery as a Common Facility Centre in the cluster2.
5. Lack of consumer profiling and market research has limited the creative potential
of the cluster. Entrepreneurs usually produced according to the samples provided
by the buyers.
6. Shortage of raw material was one of the major hiccups in the export of cutlery
products. There was no mechanism to purchase the raw material from a common
source. The individual purchasing of local and imported material has resulted in the
increased bargaining power of traders and manufacturers of raw material.
7. The availability and performance of Stainless Steel sheets, the basic raw
material, according to the required specifications was an issue in the cluster. There
were two main campuses of Stainless Steel production, in Karachi (M/s Steel Mill &
Peoples Steel Mill) and one in Lahore (M/s Mughal Steel). The mentioned steel mills
were not willing to undertake a smaller manufacturing order as their minimum order
size is 10 tons. In addition, lack of modern technology in these mills required for the
fulfillment of metallurgical needs of the cluster has also effected the exports.
Moreover, the steel mills located in Karachi were assigned to undertake more
orders from the Pakistan Army.
8. Most of the SME’s were using Conventional methods in production requiring an

immediate exposure and introduction of latest technology3.
9. Primitive style of production process has led to very low capacity utilization. The
scarcity of skilled labour (less that 200) was another major obstacle leading to the
higher costs and ineffective production system.
10. CIP and Small Tool Center, located in Wazirabad as the Common Facility
centers were established to provide skilled manpower to the cluster. Both the
institutions lacked modern machinery and facilities to produce skilled labour. The
2
Majority of the entrepreneurs in the cluster used to introduce only 2 or 3 designs per annum while
on the other hand, China use to introduce thousands of new designs every year.
3
Tableware manufacturers are in dire need of semi automatic/machinery (rolling mill, polishing,
grinding, molding, stamp pressing, kining machine, heat treatment, tampering and cutting press).

industry was getting benefit only from Small Tool Center, whereas CIP was no more
operational. According to the entrepreneurs, the institutions required good Trainers
both in Production and Metallurgical processes. The gap in skilled labour was to be
filled by the institutions as the total labour in the cluster was approx. 15000 whereas
the skilled labour was less than 200.
11. Around 6-7 financial institutions/banks were present in Wazirabad. Collateral

requirement, lack of awareness about loaning schemes, high markup rates were
some of the major issues confronted by SME’s. SMEDA arranged the “Program
Lending Scheme” in collaboration with The Punjab Bank a few years back. Only 7-8
SME’s availed the opportunity as yet. ‘Cash Online’ scheme was launched by
United Bank Limited in the recent past; but the scheme outreach was limited.
12. Lack of Inventory/Material management systems, poor line-balancing,

production & labor inefficiencies, lack of modern machinery and skilled labour were
some of the problems being faced by Cutlery cluster. Most of the firms did not follow
any quality standards such as ISO9000/ISO14000. There was an urgent need to
improve the working conditions of the labour and introduce the safety related
measures.
13. There was least focus on product differentiation, the entrepreneurs exhibited
inflexibility to change the product line i.e. Handmade vs. Machine Intensive
products. On top of that, entrepreneurs required new markets & product
development techniques in addition to the understanding of product positioning.
14. There was an excessive involvement of different Government departments like

Sales Tax, Income Tax and Social Security etc. One window tax collection facility
was required to be provided to SME’s of the cluster. Similarly issues relating to
public utilities needed an immediate addresser by the Government agencies.

Issues Observed
1. The problem of the scarcity of export orders could be linked to a number of
variables. Exceptionally high prices of raw materials have hindered the SMEs to
realize previous export orders and even to secure new ones. On the other hand,
usuage of non-standardized raw materials had led to non-compliance with the
product specifications. Similarly, untimely delivery of products had resulted in even
greater losses in the form of individual damage claims or cancellation of orders, and
poor branding of the cluster. Moreover, poor International Branding of Pakistan was
also a major reason contributing to the downward trend of exports.
2. Lack of awareness regarding the demands of customers & reliance on traditional

market approaches has also resulted in the shift of customer to other markets such
as China, India etc.
3. There were more than 300 cutlery units in Wazirabad and hardly 10-12 units had
their own websites, which were not even properly & regularly maintained. There is
an urgent need to increase the IT focus in all aspects to promote and enhance sale
of cutlery products in International markets.
4. Less than 10 units were ISO 9000 certified. International market practices of the
business have now changed; importers are more interested in companies which
have some kind of certification.
5. Most of the entrepreneurs were uneducated, and employed poor business

management practices. Furthermore, no business record-keeping had resulted in
the non-professional handling of customers.
6. Consistent product quality during manufacturing was also a pressure point. While
processing bulk orders, the quality of the products usually decreases within the
manufacturing cycle.
7. The entrepreneurs had the tendency to hire lower-waged unskilled staff, although
skilled and trained machine operators could have been hired from nearby
towns/cities but at higher salaries.
8. Non-compliance with social standards, poor house-keeping, hazardous work

environment & child labour had also contributed towards the downward trend of
exports.

5.1 SWOT ANALYSIS
Strengths
• Competitive prices (especially in Handmade products);

• History of manufacturing (inherited skills), good-will of Wazirabad;
• Presence of Cutlery & Small Tools Service Centre in Wazirabad.
Weaknesses
• Lack of market awareness; marketing tools and techniques; poor end-product

packaging;
• Primitive style of manufacturing; low level of technology (Manual/semi manual);
• Monopoly of raw material providers; shortage & fluctuating raw material prices;
• Lack of skilled labour;
• Poor quality; lack of standardized systems;
• Less production & more wastage;
• Non-cooperation/mistrust among SME’s, lack of coordinated efforts;
• Un-ethical business practices leading to price-cut competition;
• Weak SME representation in cutlery association & poor flow of information;
• Comparatively less services provided by the technical institutes;
• Least focus on On-line marketing techniques;
• Unwillingness to systemize production processes, the major hurdle in ISO &
other certifications;
• Highly rated utility bills;
• Tax issues.
Opportunities
• Unexplored Tableware export markets such as Africa, Australia, Russia etc;

• Import of raw materials at controlled prices;
• Introduction of Automatic machinery as a Common Facility;
• Social standards implementation & ISO certifications;
• Possibility of product diversification; low end to high end (need product & market
segmentation)
Threats
• Proliferation of less-priced Chinese products in the market (especially

Tableware);
• Regulations in USA After 9/11; conflicting laws and definitions of terrorism;
• Cutlery smuggling from France, Germany, China etc

6. Porter’s Framework for the Cluster

Porter’s Framework for Non Tableware Cutlery
Porter’s determinants Score Remarks and Status

Factor conditions:
1 Raw material availability 2 Shortage of Raw Material due to non availability of
scrap from the neighboring countries
2 Quality of raw material 2 Quality of raw material is inconsistent due to non
purification in production process of steel
3 Human resource and skill 2 Human resource available & skills are traditionally
availability inherited
4 Capital availability 2 Lack of working capital due to weak linkages with
financial institutions
5 Availability of infrastructure 3 Road connectivity is satisfactory, other modern
communication resources are available, consistent
power supply & space
Demand conditions:
1 Size of domestic market 5 All over the world
2 Number of buyers 3 No. of buyers are decreasing due to presence of
Chinese products with least prices
3 Growth rate of domestic 3 Domestic market size is the same
demand
Size and structure of firms:
1 Number of firms 4 Decreasing due to presence of Chinese products and
lesser prices (Weak players are out or switching their
business lines while survivals are realigning &
repositioning)
2 Size / efficiency of the firm 2 Small units, efficiency limited by management,
technology & capital
3 Existence of rivalry (among 2 Intense rivalry among the firms, unorganized & internal
firms) price war
Related and supporting

industries:
1 Design / product development 1 No design development due to high cost and non-
functional copyright act
2 Marketing & Advertising 2 A few big players are using marketing and
advertisement tactics
3 Market research 1 No market research for product diversification (Only
through personal visits or trade delegations or
marketing tours through EPB or UNIDO)

4 Training 2 No training institutions geared to the demands of the

cluster
5 Research & development 1 No R & D undertaken for product development &
increased productivity
6 Component & machinery 1 Imported machinery is very expansive, while local
suppliers machinery lack precision
7 Existence of promotional 2 UNIDO, PSIC, SMEDA, EPB, TEVTA, NPO, PNAC,
institutions PITAC, PCSIR, Banks, etc. need to be linked
8 Establishment of Focus 5 Wazirabad Pakistan Cutlery Network (WPCN),
groups Wazirabad Greenways Network (WGN), EverCon and
Wazirabad Cutlery Network (WCN) has been
established to undertake UNIDO Networking
methodology
9 Existence of producer’s 2 Cutlery association was relatively ineffective, needed
associations to be repositioned & revived
Code: (1- highly unfavorable, 2- unfavorable, 3- neutral, 4- favorable, 5- highly
favorable)
Porter’s Framework for Tableware Cutlery
Porter’s determinants Score Remarks and Status

Factor conditions:
1 Raw material availability 2 Shortage of Raw Material due to non availability of
scrap from the neighboring countries
2 Quality of raw material 2 Inconsistent quality of raw material due to non
purification in production process of steel
3 Human resource and skill 2 Human resource available & skills are traditionally
availability inherited
4 Capital availability 2 Lack of working capital due to weak linkages with
financial institutions
5 Availability of infrastructure 3 Road connectivity is satisfactory, other modern
communication resources are available, consistent
power supply & space
Demand conditions:
1 Size of domestic market 5 Sold all over the country
2 Number of buyers 4 No. of buyers are increasing
3 Growth rate of domestic 2 Growth rate is also increasing

demand
4 Quality producers 2 Few quality producers linked with superstores and

hotels
Size and structure of firms:

1 Number of firms 4 Increasing due to increase in local demand (Even

SMEs in Non-tableware product manufacturing are
expanding the facilties)
2 Size / efficiency of the firm 2 Small units, efficiency limited by management,
technology & capital
3 Existence of rivalry (among 2 Intense rivalry among the firms, unorganized & internal
firms) price war
Related and supporting

industries:
1 Design / product development 1 No design development due to high cost and non-
functional copyright act.
2 Marketing & Advertising 2 Sub-contracting system with market-led production, No
marketing and advertising
3 Market research 1 No market research for product diversification or better
margins
4 Training 2 Less customized training courses geared to the
demands of the cluster
5 Research & development 1 No R & D for product development & increased
productivity
6 Component & machinery 1 imported machinery is very expansive, while local
suppliers machinery lack precision
7 Establishment of Focus 5 Pak Cutlery Consortium (PCC) has been established
groups and has already undertaken a number of joint
initiatives
8 Existence of promotional 2 UNIDO, PSIC, SMEDA, EPB, TEVTA, NPO, PNAC,
institutions PITAC, PCSIR, Banks, etc. need to be linked
9 Existence of producer’s 2 Need to redefine role of cutlery association (as the
associations association is ruled by large Non-tableware
manufacturers)
Code: (1- highly unfavorable, 2- unfavorable, 3- neutral, 4- favorable, 5- highly
favorable)

7. Cluster Vision
‘Cutlery cluster Wazirabad would be widely recognized and regarded as the
premiere producer of quality cutlery products, infuse the latest modern technologies
(for mass-production) and transmit the sense of responsibility/responsiveness
adopting best manufacturing practices in the next five years’
8. Strategy
Cutlery cluster Wazirabad needs to be strengthened at both supply and demand-
sides. A careful strategy needs to be drawn to fulfill the requirements at both ends
simultaneously.
Initially the efforts must be made on the Export Marketing front, export orders are
to be generated to plan and stimulate any kind of intervention on the supply and
demand sides.
i- Export Marketing End:
The cluster requires both short and long-term strategies; short-term may include
direct marketing exercises through export consultants at network level, while the
long-term strategies may be evolved at the association level. An action plan should
be drafted to sustain the business activities by focusing on the consumer rather than
niche markets only.
Due to the exposure of tableware manufacturers to the international market, they

should be facilitated to participate in trade fairs/exhibitions. Furthermore TDAP
should concentrate on both traditional as well as untapped markets having scope of
Pakistani Cutlery products.
ii- Technology End:
The Cutlery Cluster can be revived through the introduction of modern machinery.
The manufacturing in the cluster is either accomplished manually or at the most by
semi-automatic machines. Hence, there is a great need to incorporate latest
automatic machines in the cluster by involving technical institutes.
iii. Human Resource End:
To limit the human resource problems following areas are needed to be addressed:
• Devising of real-time training programmes

• Hiring of trained machinery operators by the networks

• Maintenance of healthy & hygienic work conditions
• Incorporating employee retention mechanisms
iv. Quality End:
• Training of labour on quality systems

• Line balancing of machines
• Wastage reduction through modern machinery and training
v. Raw Material Purchases:
• Joint purchase of raw material

• Bulk purchase of raw material by involving banks.
The smaller joint activities should be continued to achieve short-term wins

consequently preparing the networks for bigger initiatives.

9. Future Cluster Map
CIP TEVTA
Domestic Mkt
Large Manufacturers T/W (25-50)
Consortiums = 5
R.M
Medium & Small T/W (100-200) (20-25)
Consortiums = 2
USA, Europe
Direct
Large Manufacturers NT/W (50-70)
Consortiums = 5 D. M
(100-150)
Medium & Small NT/W (150-200)

Consortiums = 8
Association of
Die Manufacturer
Razors (8-10)
EPB SMEDA Banks PCSUMEA All Pakistan

Tableware Association

Notations Description
A Two-way fully developed

linkage
T/W Tableware
NT/W Non-tableware
9.1 Explanation of Future Cluster Map
• All Pakistan Cutlery Association has strong relations with non-kitchenware as

compared to kitchenware, so in future cluster map, there would be separate
Association for kitchenware manufacturers because of minimum presence and
participation in association affairs.
• In current cluster map, banks have a weak relationship with the entrepreneurs
but it would be much more strengthen in future. Relations would be improved
with the introduction of customized product/service packages to the cluster and
by reducing other concerns.
• Currently, there is no association of die manufacturers but it is proposed that in

the future there would be one to serve as a platform from where they would be
able to exercise/demand their rights.
• In the current cluster map, there is negligible direct export of kitchenware but in
the future map, it would be possible to export directly in international markets
through export consortia.
• In the current cluster map, relationship of SMEDA and TDAP is weak. It would be
strengthened by the CDA by developing direct linkage of networks with the
agencies.
• CIP would be revived and in future it would develop a strong mutual relationship
with all the entrepreneurs.
• Relationship with the association will be strengthened by the provision of more

valuable services to the cluster as has already been discussed.

10. Action Plan
Year 2007
Sr. # Activity Finish date TDAP SMEDA UNIDO Net/Assn Implementer
Cutlery Association CDA,
1 strengthening Q2-Q4 Networks,
activities PCSUMEA
1-day workshop on ‘E-
UNIDO,
based marketing
2 Q3 70% 30% Networks,
through Networking
PCSUMEA
approach’
1-day workshop on
‘Quality certification UNIDO, CDA
3 Q3
through Networking PCSUMEA
approach’
Marketing events
(networks): Export UNIDO,
4 Q4 70% 30%
delegation through Networks
consultant
70% TDAP,
Participation in trade
5 Q1-Q4 (participation 30% Networks,
fairs through TDAP
in trade fairs) CDA
Launch of ‘NDA tr’g
prog.’ at the platform UNIDO, CDA
6 Q4 100%
of Gujranwala Networks
Chamber

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DIAGNOSTIC STUDY

CUTLERY CLUSTER WAZIRABAD – PAKISTAN

Developed under UNIDO Cluster Development Programme Pakistan

Focal Point UNIDO:

2. Description of the cluster

2.1 Definition of the products ----------------------------------------------------- 01

a. Core Cluster Actors------------------------------------------------------- 10

2.15 Supports Groups & Associations ----------------------------------------- 13

3. Social Dynamics of Cluster ----------------------------------------------------- 21

4. Value Chain Analysis ------------------------------------------------------------- 22

4.1 Value Chain Analysis (Knives) --------------------------------------------- 22

5. Analysis of Business Operations --------------------------------------------- 25

5.1 SWOT Analysis ---------------------------------------------------------------- 29

6. Porter’s Framework for the Cluster ------------------------------------------ 30

9. Future Cluster Map----------------------------------------------------------------- 35

9.1 Explanation of Future Cluster Map ---------------------------------------- 36

10. Action Plan-------------------------------------------------------------------------- 37

The report (Diagnostic Study) is an outcome of Cluster Development Programme

2. Description of Cutlery Cluster Wazirabad

2.1 Definition of Products

2.2 Usage of product

2.3 Geographical Location

Wazirabad is situated on left bank of the river Chenab at a distance of 3 km, 32 km

2.4 History of Cluster

UNIDO Cluster Development Programme Pakistan 1

2.5 Current Output

2.6 Production Process (Knives)

b) Straightening: The blades were straightened manually during the process.

d) Surface Grinding: Surface grinding machines smoothed the surfaces of

f) Handle Making: Handle making was performed manually in two steps:

g) Polishing: Semi-finished knives were then sent to the polish department.

UNIDO Cluster Development Programme Pakistan 2

2.7 Process flow chart of Knives

Cutting Straightening Hardness

Handle Edging Surface

Polishing Cleaning Inspection

2.8 Production Process (Spoon)

e) Straightening and Stamping: Handles of spoons were straightened and

UNIDO Cluster Development Programme Pakistan 3

f) Accessories Fixation: Plastic or steel accessories were fixed in this section

2.9 Process flow Chart (Spoon)

Sizing Die Cutting Grinding

Polishing Stamping Bending &

UNIDO Cluster Development Programme Pakistan 4

2.10 A snapshot of kitchenware Cutlery

2.11 A snapshot of non-kitchenware Cutlery

In 1950’s, the knife manufacturing business declined mainly due to natural

UNIDO Cluster Development Programme Pakistan 5

2.12 Wazirabad Cutlery cluster (National Scenario)

Cutlery is one of the important commodities of engineering group in Pakistan. The

Kitchenware cutlery has experienced an increasing sales trend in the domestic

UNIDO Cluster Development Programme Pakistan 6

The export figure of cutlery from Pakistan is given as follows:

Cutlery Export (2000-2006)

(Source: Export Promotion Bureau & FBS)

2.13 International Trade of Cutlery

UNIDO Cluster Development Programme Pakistan 7

2.14 Cluster Actors

a. Core Cluster Actors

There were approximately 300 units of Kitchenware and non-Kitchenware cutlery.

ii. Medium & Small Manufacturers

Around 89% of the manufacturing concerns comprised of medium & small

Parameters Large Medium Small

UNIDO Cluster Development Programme Pakistan 8