SURVEY REPORT
ON
EXPORT CAPABILITY ASSESSMENT OF INDIAN TOOLING INDUSTRY
For Department of Scientific & Industrial Research (DSIR)
(Ministry of Science & Technology, Govt. of India) Technology Bhawan, New Mehrauli Road
New Delhi - 110019
Technology Management Group
NATIONAL PRODUCTIVITY COUNCIL Lodi Road, New Delhi – 110 003
Phone: 011-24607334, 24690331-3, Fax: 011-24698138, 24615002 Email: [email protected] Website: www.npcindia.org
INDEX
Sr. No.
Chapters Page No.
Executive Summary 1
1. Introduction 4
2. General Status of Indian Tooling Industry 7
3. International Scenario 27
4. Survey Analysis and Profiles of Govt. Tool Rooms & Units
37
5. Recommendations 50
Fig No.
Figures Page No.
1. Imports of various Tools by European Union 28
2. % Distribution based on Nature of Tool Rooms
40
3. % Distribution based on Legal Status of Units
41
4. % Distribution based on Small v/s Medium & Large Tool Rooms
41
5. % Distribution based on Foreign Technical Collabouration
42
6. % Distribution based on Employee Strength 43
7. % Distribution based on Types of Tools Produced
43
Anx No.
Annexure Page No.
1. Questionnaire 56
2. List of Units under TAGMA 62
3. Tool Exports of various Countries 2001-05 109 4. Tool Imports of various Countries 2001-05 113 5. Profile of Govt. Tool Rooms & respondent
units 117
1
Executive Summary
1. The total value of export business for the Indian Tool
Industry as a whole, comprising of all types of tools was
Rs. 262746.06 Lakhs1 for the 2005–06 fiscal which is 0.58% of India’s total exports. The percentage growth for the
subsequent year was over 15%. With this trend the expected
exports in 2008–09 would be of the order of Rs.399603.91
Lakhs. This trend offers more challenges and Indian
Industries would have to gear up to their best in terms of
flexible manufacturing methods, high end tool design,
quality management systems, development of better tool
steels, tool testing facilities, delivery schedules and
the corresponding infrastructure.
2. The corresponding import for the Indian Tool Industry in
the year 2005–06 was recorded as Rs.431421.06 Lakhs which
is 0.65% of India’s total imports. The percentage growth
for subsequent year was 21.52%. Going by these figures the
imports for 2008–09 would stand at Rs.774184.77 Lakhs. In
other words there would be an excess import of
Rs.374580.86 Lakhs in 2008-09 not withstanding the
specific requirements; the Indian industries would have to
make up.
3. India is on the path of progress as far as tool
manufacturing is concerned however the progress is slow
when we compare our export and import figures and also our
standing vis–a-vis big players. As we know that all
products owe their shape & size to one or the other tool
and hence tooling industry is aptly called the mother
industry. Any unbalanced growth in this sector can
critically cripple the growth of the manufacturing sector
in India.
4. Sustainable technology development is an important area
for maintaining competitive advantage. Hence efforts need 1-Deptt.of Commerce, Min. of Commerce & Industry, GOI
2
to be made to have a proper linkage at the level of
University and/or Research Institutions for meeting the
technology development requirements of the industry. More
project/schemes need to be evolved with proper funding in
co-ordination with S&T departments like DSIR, CSIR, DRDO,
etc.
5. At present the manufacturing industries are members of one
or the other industry association which number in
hundreds, including state level and district level
associations. This scenario impedes in assessing our
collective strengths and capabilities in Tooling and
Tooling technologies. Under these conditions the
Governmental intervention seems necessary. This may be
done by developing a portal fully devoted towards Tooling
& Tooling Technologies of India by DSIR for showcasing our
strengths and attracting foreign markets. This portal
should be accessible to all types of Tool manufacturers
for enhancing our export capability.
6. India's mould, die & tool industry association - TAGMA
(Tool & Gauge Manufacturers Association) with a membership
of 415 firms needs to play a pivotal role in bringing all
types & classes of tool manufacturers under one umbrella
to have larger stake in helping India become a tooling
destination of world. In turn the association would have a
larger say in voicing concern of the tooling fraternity as
a whole.
7. In the prevailing competitive environment the industry
association TAGMA with the help of exporters association
should formulate institutional arrangements for market
development programs with the help of engineering export
promotion council (EEPC) to reach overseas markets by
arranging shows abroad and providing details to its
members regarding import regulations in various potential
markets.
3
8. In the long term i.e. by 2012, for India to be a global
player the Indian tooling industry needs to thoroughly
change its production and business strategy by focussing
on innovative tool design and project management for
tooling through conceptualisation to commercialisation
approach. This approach involves getting maximum returns
with short tool life cycles.
4
1. Introduction
The advent of human civilisation started with the use of stone
tools, which helped the early man to fulfil the basic
requirements of food, clothing and shelter. The modern day
scenario is a million fold developments over the crude tooling
of past which has made our lives comfortable and improved the
quality of our lives. This is why the tooling is considered as
the mother of all industries. Tooling is a common terminology
used for all types of tools and a Tool Room is defined as the
place where a tool takes its shape right from conception,
design, drawing, prototyping, to its actual manufacture,
inspection, testing, commercialisation and use. A broad
spectrum of tooling is
1.Dies •Dies for Pressing, Stamping, Punching •Dies for Forming •Dies for Forging •Dies for Extruding •Dies for Wire Drawing •Dies for Powder
2.Moulds •Moulds for Mineral Materials • Moulds for Plastics •Moulds for Rubber •Moulds for Casting •Moulds for other Materials
3.Patterns 4.Jigs & Fixtures 5.Standard Parts 6.Precision Machining 7.Special Purpose Machines
As per Department of Commerce, Ministry of Commerce &
Industry, Govt of India the tools have been classified in
about 90 groups.
1.1 Background
1. Globalisation has brought in fierce competition in all the
sectors of national economy. The impact is extreme in the
manufacturing sector owing to developments in the tooling
technology. Building a product whose dimensions are precise to
1/100th of a millimetre requires a mould whose dimensions are
precise to 1/1,000th of a millimetre. The Indian scenario is
the same in view of the growth of the market potential both
domestic as well as international.
5
2. The import for all types of tooling in 2005-06 was
Rs.431421.06 Lakhs and the corresponding exports were of the
order of Rs.262746.06 Lakhs, which is expected to touch
Rs.774184.77 Lakhs and Rs.399603.91 Lakhs respectively in
2008–09.
3. With advancing technologies, demand for more designs and
sophisticated products in the areas of Automobiles,
Electronics, Heavy Engineering, Telecom, Audio & Video
Systems, Consumer durables, Aerospace, Medical Products,
Computers & Peripherals etc. has led to simultaneous demand
for more precision and sophisticated dies, moulds and tooling.
4. With this scenario in mind a Workshop on “India – The
Tooling Destination” was organised by Department of Scientific
& Industrial Research (DSIR) in Mumbai in association with
Technology Exports and Development Organisation (TEDO),
Confederation of Indian Industries (CII) Tool & Gauge
Manufacturers Association (TAGMA) and National Productivity
Council (NPC) in 2005. As an offshoot of that workshop the
present survey was taken up.
1.2 Objective
1. To assess current status of the Indian Tooling Industry vis-
a–vis International scenario.
2. To identify remedial/up gradation measures for giving boost
to this sector.
1.3 Scope
The scope of the study involves Indian Tooling Industry other
than machine tools and hand tools including Commercial and
Captive Tool Rooms.
1.4 Terms of Reference
1. Preparation of status report of Indian Tooling industry.
2. Suggest future strategies and policy measures
3. Compilation of profiles of about 80 tooling units.
6
1.5 Methodology
The following methodology was adopted:
1. Project initiation discussions with the executives of Department of Scientific & Industrial Research (DSIR).
2. Design of a detailed Survey Questionnaire (Attached in Annexure).
3. Presentation on project execution methodology to Project Review Committee (PRC) for their suggestions and comments.
4. Collection of Address Data Bases from TAGMA, SIAM, IMTMA,
ACMA and CII. 5. Design of abridged questionnaire from the detailed
questionnaire as per the recommendations of the Project Review Committee (PRC) (Attached in Annexure - 1).
6. Mailing, response and data entry for the abridged Questionnaire.
7. Mailing of detailed questionnaire to responders.
8. Field Visits & Data Collection for profiling of units
9. Profile preparation
10. Report preparation
11. Submission of draft report to DSIR
12. Project Review Committee meeting
13. Comments on the draft report
14. Final report
7
2. General Status of Indian Tooling Industry
2.1 India is on the path of progress as far as tool
manufacturing is concerned however the progress is slow when
we compare the export and import figures i.e. Rs.262746.06 &
Rs.431421.06 Lakhs1 respectively for 2005–06. As we know that
all products owe their shape & size to one or the other tool
and hence tooling industry is aptly called the mother
industry. Any unbalanced growth in this sector can critically
cripple the growth of the manufacturing sector in India.
2.2 The number of tool rooms under different associations is:
TAGMA – 415, IMTMA – 350, SIAM – 38, ACMA – 370, Govt. Tool
Rooms – 11, Non Members - 208. Other associations numbering 20
with total membership running in thousands have many members
owning tool rooms. These associations are: Indian Foundry
Association, Federation of Indian Export Organisation (FIEO),
Confederation of Indian Industries (CII), Bearing
Manufacturers Association, Association of Small & Medium
Enterprises, Electrical Appliances Manufacturers Association,
The All India Association of Industries, Indian Industries
Association, All India Plastic Manufacturers Association,
Associated Chamber of Commerce & Industry, Punjab, Haryana &
Delhi Chamber of Commerce & Industry, Faridabad Small
Industries Association (FSIA) etc.
2.3 Good Die, Mould & Tooling contribute greatly to the value
addition of the product. Owing to late recognition of this
aspect, the Indian Tool industry could not flourish and we
continue to import new design tools in large numbers.
2.4 With a cue from the other countries such as US, Japan,
Germany and China, India was able to form an apex association
of Die, Mould & Tool manufacturers called TAGMA (Tool & Gauge
Manufacturers Association) in 1990. Though the association is
contributing its bit for making India a good tooling
destination, we still have a lot to do to surpass others.
Details of the association are given in their website
8
www.tagmaindia.org List of members of TAGMA is given in
Annexure – 2.
2.5 At present the manufacturing industries are members of one
or the other industry association(s) in India which number in
hundreds, including state level and district level
associations. This scenario impedes in assessing our
collective strengths and capabilities in Tooling and Tooling
technologies. Under these conditions the Governmental
intervention seems necessary.
2.6 Government promoted tool rooms
With the accelerated growth of industries, particularly in the
field of engineering, requirements of sophisticated tools have
increased tremendously. The developments in tooling technology
are primarily left with individual organisations with no
national agenda or curriculum. In particular, it is difficult
for small-scale industries to get quality tools due to non-
availability of tool room facilities of their own and
inadequate commercial tool rooms in the country. To fill the
growing gap between demand and supply of tools, the Govt. of
India promoted several tool rooms (11) in technical
cooperation with Government of Germany, Denmark and
Switzerland, to cater to the tooling requirements of small-
scale industries besides providing trained manpower in the
field of tool design; tool making and other allied engineering
trades.
The Government promoted tool rooms are located across the
country. Most of these tool rooms fall in the large and
medium category tool rooms. In addition to design,
development & production of tooling, these institutions
provide short & long term training programmes in different
skills and consultancy to meet the specific needs of the
Indian industry. The profile of these Tool Rooms is given in
Annexure - 5.
9
2.7 Central Institute of Plastic Engineering & Technology
Central Institute of Plastic Engineering & Technology (CIPET)
is one of the pioneering institutes in India established by
Govt. of India, in Plastic Technology catering to design and
skill development programmes.
2.8 Tooling Industry is broadly composed of two types of Tool
Rooms – Captive Tool Rooms and the Commercial Tool Rooms.
While the captive ones cater to its own requirements of its
own unit(s), the commercial ones cater to the domestic as well
as global requirements.
2.9 Commercial Tool Rooms (CTRs) are further classified into
Organised and Unorganised sector. Organised sector consists
mainly of tool rooms in the government and private sector.
They can be further divided into three categories based on
their sales turnovers.
Large – Annual Turnover > Rs.10 Crores
Medium–Annual Turnover in the range of Rs.1–10 Crores
Small – Annual Turnover < Rs.1 Crores
Large CTRs account for over 60% of CTR turnover while as
medium ones account for over 20%.
The major manufacturing players can afford latest captive tool
rooms while the non-major players have to heavily rely on
commercial tool rooms.
Tool rooms can also be classified on the basis of type of
equipment installed and product specialization.
2.10 Markets
I. The exports for all types of tooling accounted for
Rs.262746.06 Lakhs1 for the 2005–06 fiscal which is expected to
grow to Rs.399603.91 Lakhs by 2008–09 based on an average
growth of about 15% per annum.
II. The figures are not impressive since our corresponding
imports are on a higher side e.g. the all tooling component
import for the 2005–06 fiscal was Rs.431421.06 Lakhs which is
Rs.168675 Lakhs more than exports for 2005–06. At this rate
1-Deptt.of Commerce, Min. of Commerce & Industry, GOI
10
India would loose valuable foreign exchange to the tune of Rs.
1686750 Lakhs or 0.17 billion rupees within 10 years. III. As per International Trade Centre under UNCTAD / WTO the
Indian Import and Export (2001–2005) for Product Group No. 695
“Tools for Use in the hand or in machines” was
Year 2000-01 2001-02 2002-03 2003-04 2004-05India–Exports (USD ‘000) 176,716 191,943 243,680 290,030 404,572
India-Imports (USD ‘000) 91,482 113,992 136,426 204,076 278,554
India ranks 19th under exports out of 163 countries and 27th
under imports out of 171 countries. Table indicating tool
exports and imports by various countries of the world for the
above group is given in Annexure 3 & 4. From this table it can
be seen that India’s exports are mere 8% as compared to
Germany, 13% as compared to China, 24% as compared to ROC
(Taiwan), 47% as compared to Korea, 61% as compared to
Singapore and so on. This trend offers more challenges and
Indian Industries would have to gear up to their best in terms
of flexible manufacturing methods, high end tool design,
quality management systems, development of better tool steels,
tool testing facilities, delivery schedules and the
corresponding infrastructure.
IV. The two major user segments are Electronics and
Automobiles followed by Electrical. The share of plastic
moulds has risen considerably approx. 33%. This rise is
attributed to the increased usage of plastics in Automobiles,
Electrical, Electronics, Consumer durables etc.
V. The Indian tooling requirements besides being met from the
domestic tool rooms are also met from large imports. Imports
as a percentage of total tooling requirements is highest in
the plastic products industry. This is mainly due to the need
for complicated moulds and easy availability of standard
Moulds abroad. Electrical & Electronics also has a high
11
proportion of imports. Dependence on commercial Tool Rooms is
relatively higher in the Auto ancillary and consumer durable
segments.
VI. In–house (captive) tooling is high in the Automobiles,
Electrical, Electronics and Defence areas, some of these being
dominated by public sector undertakings and large private
firms who traditionally believed in manufacturing their own
tooling and components and have built in-house facilities. In–
house tooling production is expected to be 50% higher than the
corresponding imports, for 2004-05 which was Rs.835,851.00
million2 for the six categories of vehicles namely Two & Three
wheelers, Jeeps & Utility vehicles, Passenger cars, Light
Commercial Vehicles(LCV’s), Medium & Heavy Commercial
Vehicles(M&HCV’s) & Tractors.
VII. With the entry of global players there are many new
additions of models to the existing cars, commercial vehicles
and two wheelers. The auto ancillary industry manufacturing
the entire range of components for the domestic automobile
industry has posted a turnover of Million USD 12,000 for 2005–
06 which is expected to touch Million USD 15,000 for 2006–073
with export component of Million USD 2930 constituting about
20% of the output.
2.11 Exports
I. Auto component exports rose from $330 million in 1997-98 to
$1800 million3 in 2005-06. With 21.5 percent CAGR, the figure
is expected to cross $2.6 billion by 2007.
II. Over the past two years, 7 Indian component manufacturers
have won the coveted Deming Prize, one of the highest awards
on TQM (Total Quality Management) in the world.
III. Of the total auto-component exports, developed markets
such as the US and Europe together account for 56 percent,
Asia accounts for 27 percent and Africa accounts for 11
percent of the export earnings.
12
IV. Despite the relatively small share of Asia in the global
pie, India is trying hard to raise its 2–SIAM Website, 3-ACMA
potential. During 2003-04, auto component exports from India
crossed the $1billion mark and the Automotive Component
Manufacturers Association (ACMA) has predicted that this
figure will touch the $5 billion level by 2010.
V. According to a recent study by Frost and Sullivan, exports
are expected to grow at a compound annual growth rate of 21.5
percent to touch $2.57 billion during the period 2003 and 2009
as outsourcing from the country is fast catching up.
However the industry has to catch up fast with Good Designs,
Economies of Volume Production and Quality production. The
auto ancillary industry consists of the following product
segments (as classified by the Automotive Component
Manufacturers Association – ACMA)
Engine parts: Piston rings, Pistons, Engine Valves, Gaskets, Carburettors, Fuel Injection Pumps
Transmission& Steering Parts Transmission Gears, Steering Gears, Clutch Plates, Axles, Wheels, discs
Suspension and Braking Parts Leaf Springs, Shock Absorbers, Brake assemblies
Electrical Parts Spark plugs, Starter motors, Generators, Distributors, Voltage Regulators, Flywheel, Magnetos, Ignition coils
Equipment: Dashboard instruments, Headlights, Horns, Wind screen wipers
Others Fan Belts, Sheet Metal parts, Pressure Disc
2.12 Commercial Tool Rooms
I. The tool rooms are primarily constituted of the In–house
(Captive) Tool rooms and the Commercial Tool rooms. The rapid
growth of the engineering industry has led to the need for a
variety of tooling and related products. Commercial Tool Rooms
(CTRs) are more than 60 years old and supply tooling on a
commercial basis to a variety of industries and operate as
independent companies. A few tool rooms specialize in design
13
of tooling for end users. Government promoted tool rooms also
provide training courses related to tool design and tool
making in addition to manufacture of tooling. There are more
than 600 CTRs in the country. These exclude over 1000 small
units, which are more in the nature of machining shops.
II. Tool rooms are mostly located in regions of end use
industry concentration. CTRs of more recent origin are
offshoots of end user industries i.e. established by personnel
from end user industries. Growing demand for tooling and easy
availability of semi-skilled personnel prompted establishment
of a large number of small scale industries who had the
capability to manufacture simple low value tooling. This led
to proliferation of small ‘tool rooms’ in the industrial belts
around the country, which has contributed to slower growth of
tool rooms with sound capabilities.
III. Some key tool room locations include Bangalore, Chennai,
Coimbatore, Delhi, Faridabad, Hyderabad, Mumbai and Pune.
Government promoted tool rooms are located in areas with
concentration of small-scale industries. However, their reach
extends beyond these regions. Unorganised players have a
presence at almost all industrial locations around the
country.
2.13 Product profile
I. The volumes of plastic moulds have increased substantially
in recent years. Industries that have switched from Press
tools to Plastic moulds (Automotive, Consumer durables) are
growing at a relatively rapid pace. CTRs in turn are toeing
this line and moving into Plastic moulds in a big way. Small
tool rooms, however, continue to be active in Press tools and
Jigs & Fixtures since large proportion of intricate tools are
being imported by users or manufactured in-house. The basic
ones are cheaper to source locally.
II. A few large tool rooms have the capability to manufacture
intricate plastic and die casting moulds and sheet metal tools
14
(progressive & compound). However, majority of the tool rooms
in other categories can manufacture only simple tools and
medium sized moulds. This lack of capability is reflected in
the practice of major users relying on imports and in-house
capability to source critical tooling.
III. Most CTRs do not appear to have a high degree of
specialization in any specific area due to inadequate volumes
for the end user industry. The manufacturing encompasses the
entire range of tooling depending on the capacity and demand.
This has led to the general feeling that Indian CTRs are more
suited for simple tooling rather than complex tooling for
critical applications. This is also evident by the practice of
MNCs and large Indian corporates who have invested in modern
tool room facilities in house or rely on imports for critical
tooling. This is in direct contrast to the international
practice of outsourcing most tooling.
IV. However, of late, the trend appears to be that most tool
rooms with sophisticated facilities are moving towards high
precision plastic moulds in terms of product specialization to
meet the growing demand from industries such as Automobiles,
Consumer durables and Electronics. Some examples are CTRs
which concentrate on tools for stamping for electric motors,
tools for pressing auto components, moulds for plastic pipe
fittings, injection moulds for TV components, etc. Even these
are yet to achieve the degree of specialization required for
complicated dies/moulds or to compete with far eastern Tool
Rooms on delivery and freedom from re-works.
2.14 Facilities
I. Current technology levels across CTRs in India are not as
high as that in the West & Far East as most CTRs have low
levels of product specialization. Due to the wide range of
tooling required and the extent of rework of tooling, the
delivery lead times in the industry are fairly high. This has
resulted in high imports in case of precision tooling. Most
15
large and many medium tool rooms are equipped with
sophisticated machines like EDMs, wire cutting machines, jig
borers, 3 axis and in some cases even 5 axes CNC milling
machines, high speed milling machines capable of machining
hardened dies etc. The standard room is equipped with adequate
electronic and mechanical measuring instruments/gauges,
optical profile grinders and in some cases 3 co-ordinate
measuring machines.
II. In high end CTRs, CAD/CAM systems equipped with high end
software (IDEAS, UNIGRAPHICS, PRO-E, C-MOULD, CAMAND, PRO-
CAST, MOULDFLOW, AUTOCAD, AUTOSURF, MASTERCAM, VISI-CAM, G-
CAM, TEBIS & FANUC) for 3-D solid modelling, analysis and
generation of 3-5 axes machining programmes loaded on high
resolution Pentium PCs and graphics workstations is in use. In
addition, the other software capabilities include plastic flow
simulation analysis, and optimisation of metal casting
parameters. It is perceived that optimum use of these
techniques could improve lead times and quality. Indian CTRs
are picking up newer techniques such as ‘Rapid tooling’,
‘Rapid prototyping’, ‘Skin modelling’ and ‘Stereo
lithography’, which are more widely used in other countries.
III. Teams of well-trained and experienced design engineers
are present in most large tool rooms. However, most tool rooms
face problems in retaining trained manpower that appear to
switch jobs frequently or migrate to other countries in search
of better opportunities. Most large and several medium scale
tool rooms have state of the art machinery for manufacturing
tooling. Sophisticated machines are mostly imported
particularly in the large & medium tool rooms.
2.15 Customer focus
Historically, tool rooms have had a diffused marketing
strategy. Medium and small tool rooms catered to local
companies within a region while, larger firms had wider reach
(customers on a national basis or even foreign customers).
16
Most of the CTRs were dependent on customer referrals rather
than reaching out to customers to expand business.
However, this trend appears to have reversed in recent times
with newer tool rooms taking the initiative to focus on select
user segments with a view to generate volumes and achieve
higher levels of standardization and capacity utilization in
the long run. Most modern tool rooms have their own marketing
cell with personnel who concentrate on business development.
Most of these tool rooms are focused on automobiles,
electronics and consumer durables industry. The need for such
a focus has been felt with CTRs facing over capacity, low
profit margins and downtrends in select industries.
2.16 Delivery schedules and lead times
Lead times typically run to 2 – 3 months for tooling of
different types.
2.17 Pricing
I. It must be stated that the cost composition varies with the
type of tooling – a large bulky tool heavy with material cost,
a large intricate tool with high machining cost, tool from a
large Tool Room high on overheads etc. are some of the
examples of the predominant cost components of different
tooling.
II. Most tool rooms quote on a cost plus pattern. The mark up
is around 25% over their direct costs. The machine hour rates
charged for various machines are listed below for the years
2000 and 2006.
Rate / Hr (Rs.) Sr. MACHINE Survey 2000 Survey 2006
1 CAD Design 100 – 500 400 – 700 2 CNC Lathe 300 – 700 500 – 900 3 CNC Milling 400 – 700 800 – 1200 4 CNC Milling/Die Sinker 500 – 800 800 – 1500 5 CNC Wire Cut 250 – 700 400 – 1000 6 Cylindrical Grinder 50 – 200 250 – 400 7 Conventional Milling 40 – 200 250 – 300 8 Die Sinker 400 Shaping 20 – 60 OBSOLETE 9 Drilling Machine 20 – 30 50 – 100
17
10 Surface Grinder 50 – 250 200 – 400 11 EDM 250 – 800 450 – 1200 12 Tool & Cutter Grinder 40 – 70 50 – 100 13 Conventional:70 14 Heat Treatment 20 – 30 Vacuum
Furnace:250/Kg 15
Jig Boring 10 – 450 Conventional : 300 – 400
16 --- CNC:1000 – 1500 17 Jig Grinding 200 – 600 OBSOLETE 18 Lathe 20 – 80 80 19 Manual Design 30 – 250 350 20 Optical Profile Grinder 80 – 150 CNC: 500 – 600 21 Profile Projector 150 – 200 200 – 250
2.18 Tie-ups and collabourations
Traditionally, tie-ups in this industry were restricted to
government promoted ventures. In the recent past, the tendency
towards specialization has led to tie-ups and collabourations
of CTRs with companies abroad. However, this phenomenon is
true for small number of tool rooms only. More specifically,
the tie-ups are more in the medium scale sector than others.
This trend is expected to continue with several tool rooms
drawing up plans for collabourations or having already
identified partners for the same in the future. Tool rooms,
which go in for such tie-ups/collabouration, do so with the
aim of starting to follow the international practice of
specialization. They generally have sophisticated equipment
and skilled personnel and are able to export tooling either to
the collabourators or to third world markets.
2.19 Brief of Large, Medium & Small Tool Rooms
I. Large Tool Rooms
a) There are more than 250 large CTRs. They have good
infrastructure & sophisticated facilities including precision
machinery & design capabilities and are characterized by high
investment levels (Rs.10 – 30 Crores), wide reach (national &
international) and a customer base encompassing major
automobile, consumer durable players among others. Their
18
investments have been made in phases over the years and thus
several of these CTRs enjoy a relatively higher
Turnover/investment ratio of (1.6). These tool rooms supply
intricate (high precision) tooling to the user industries.
b) Facilities
Most of these larger CTRs have sophisticated machinery and
does bulk of the precision work in house. They have CNC
turning machines, milling machines, boring machines, CNC wire
cutting machines, jig boring and jig grinding machines. Not
all of them however have optical profile grinders. Most of
these machines are imported. The standard room is normally
equipped with machinery such as 3 co-ordinate measuring
machine, profile projector, electronic & mechanical measuring
instruments etc. Most of the tool rooms in this category have
tool design capabilities in addition to testing facilities.
They have a separate designs department. One or two tool rooms
have rapid proto typing system. Several large tool rooms have
undertaken expansion and modernization programmes in phases
over the past few years.
c) Sub-contracting
The operations normally sub-contracted are rough machining
milling, turning, grinding and heat treatment. More than 70%
of those requiring heat treatment outsource due to the
specialized nature of the activity, while around 30% have in-
house facilities for the same. Since, the size of tooling
differ, hence there is no optimum size of furnace. Around 20%
of large CTRs also subcontract precision machining when their
own facilities are overloaded.
Sub-contracting is based on price, reach and delivery times
rather than specialization. Large CTRs often (over 30%) sub-
contract ‘low value adds’ activities to reduce costs. Smaller
tool rooms and machine shops undertake sub-contracting
activity to utilize capacity and resources. Most of the sub-
contractors are in the unorganised sector, have only a few
19
machines and undertake work of all types from all quarters.
They lack in the technical & financial strength to organize
themselves to a higher and focused level of operations.
Large tool rooms mainly focus on Plastic moulds and simple
Press tools & Dies. Tool rooms in India have the capability to
manufacture moulds of more than 10-ton size; the other tools
manufactured are Die Casting Dies and Jigs & Fixtures. Most
large tool rooms are moving away from simple low value tooling
that requires lower skills and less precision work to high end
precision tools. A few large tool rooms are also moving to
component and sub-assembly production since end users of
components are more and more reluctant to deal with too many
and insist that one vendor must take responsibility for
components and their tooling. Further, since most CTRs have to
undertake trial production of components in order to
demonstrate their tooling, the necessary machines (at least
one) exist with them. They could therefore leverage their
existing machinery to integrate vertically and provide value
added services to their customers.
Punches & dies manufactured by such tool rooms are mainly
simple and a few progressive types. Plastic moulds are mostly
Injection moulds for engineering plastics, blow moulding and
thermosetting plastics. Die-casting dies are mostly for
pressure die-casting. Tool rooms promoted by the government
and a few private sector tool rooms also specialize in
providing tool design and consultancy services apart from
manufacture of tooling.
d) Quality
Over 70% of the large CTRs have ISO 9000 and some have QS 9000
certification. An equal number are moving towards one.
Quality is benchmarked by consistent adherence to tolerances.
Rejection rate is in the range of 1.5-3%. They have written
quality control procedures and inspection sheets.
20
e) Customer segments
Large tool rooms have a major chunk of their business coming
from automotive and Electronics industries. Auto ancillary,
Consumer durables and Electrical also account for significant
proportions. Huge capacity additions and frequent model
changes over the past few years by the user industries has
driven demand for high quality tooling. Most CTRs have long-
term relationships with their customers. The user industries
tend to split the work between 2 - 3 CTRs.
f) Resources - Raw Material
Most large CTRs purchase imported steels from the agents of
the following companies located in India such as Assab -
Sweden, Daido - Japan, Nachi - Japan, Buderus – Germany,
Bohler – Austria, Thyssen – Germany, Alpine – Austria etc.
Around 10% of the companies also import these steels directly.
Others purchase the steel from local traders as and when
required. Raw material is generally tested while purchasing
and CTRs insist on test certificates.
Outsourcing is mainly done by the major like DME, Vishal,
Zyfix Equic, Kalyani, Presto, Industrial Punches, and India
Mould Bases. In cases where the customer insists on a superior
product or when the CTR belongs to a group of companies,
imports are done. Some sources for import are Hasco -
Singapore, Mastip – New Zealand, Watlow – US, IEM Springs –
US, Spinal Springs – Italy, Pi-tech - Italy, etc. Imported
components include hot runner systems, Mould heater, Hot Spree
Brush, Cartridge heater, Die springs, and Ball gauges
g) Resources - Manpower
The number of personnel in industry varies from a low of 40 to
as high as 1200. Graduate Engineers are recruited for design
and production management. People trained by NTTF, CIPET,
GTTC, CITD, Indo-Danish, Indo-German Tool Rooms etc are taken
as toolmakers. ITI trainees are employed as machinists.
21
II. MEDIUM TOOL ROOMS
a) Medium tool rooms would be about 400, who have established
tool rooms in the recent past. These CTRs have made higher
upfront investments during start-up and have a relatively
lower ‘Turnover-Investment’ ratio (0.4). They have moderate
infrastructure consisting of fewer precision machinery than
large CTRs, have capability to produce precision tooling and
have good reach being mainly regional.
b) Facilities
Investment levels vary from Rs. 2.5 - 10 Crores. Typical
machinery includes Spark erosion, Wire cut EDM and relatively
fewer CNC machines than large CTRs. Few of these tool rooms
also have tool testing and heat treatment facilities available
in-house. They have a separate design department with CAD, CAM
facilities. About 80% subcontract heat treatment jobs while
the rest have in-house facility. Precision machining is
subcontracted by about 35% of medium CTRs while about 40%
subcontract roughing, turning and milling too.
c) Product range
Medium scale CTRs manufacture Plastic moulds, Punches & Dies
that accounts for 55-60% of the total turnover. However, the
capacity of moulds is relatively lower (<6 ton) as compared to
large CTRs. Component manufacturing accounts for 10 - 12%
while Jigs & Fixtures account for 8 – 9% of the turnover.
Medium scale tool rooms also appear to have shifted focus to
Plastic moulds and precision machining in recent times.
d) Customer profile
Medium scale tool rooms also have automotive and consumer
durables as their key customer segments. Electrical,
electronics and plastic product industry constitute other
significant segments. Increased demand for these products is
driving demand for high quality tooling. Lead times vary from
1 to 3 months.
22
e) Quality
Only a few CTRs have ISO 9000 certification. Quality is
benchmarked by consistent adherence to tolerances. The
rejection is quite high – varies from 2% to 10%.
f) Resources - Raw material
Around 25% of CTRs use only imported steel. An equal number
use both imported steel as well as local steel. Purchase of
imported steel is from local traders and direct imports are
rare. The raw materials are checked for their conformance to
the specifications only when the value of purchase is high. In
other cases, certificates are considered to be sufficient.
g) Standard components
Instances of in-house manufacturing are higher as compared to
large CTRs. Imports are rare and done mainly for springs, pins
and hot runner systems. A medium CTR employs around 20 - 150
employees. There are one or two exceptions with around 600
employees. Engineers are required for design department and
production management function. Toolmakers are recruited from
NTTF, CIPET, GTTC, CITD, and ITI trainees are employed as
machinists.
III. SMALL TOOL ROOMS
a) Small tool rooms would comprise of over 800 players with
local presence, limited infrastructure & facilities, low
investment levels (<Rs.2.5 Crore), limited market reach and a
few local customers. These tool rooms produce moderate quality
tooling with lower precision requirements. These tool rooms
mainly compete on the basis of price with other tool rooms.
These cater to all types of industries.
b) Facilities
These tool rooms in this category generally do not have
sophisticated testing facilities. Typical infrastructure
includes conventional machines. These outsource precision
machining and heat treatment. Generally no separate manpower
for design & development. In about 75% of the cases the tool
23
drawings are provided by the customers. A set of typical
machinery installed at a small CTR is given below.
Machine Size Qty. CNC Wire Cut 400 X 300 2 Jig Boring 400 X 250 2 Cylindrical grinder K 1300 - 300 2 Milling machine 5 Surface grinder 10 - 18 2 Lathe machine 6 ft. 1 Drilling machine 1
c) Product range
Small tool rooms mainly produce relatively simple Punches and
Dies and undertake conventional machining activity accounting
for 45-50% of turnover. In addition, small plastic moulds
contribute 20%, Jigs & Fixtures 15% and component
manufacturing around 8 - 10% of the turnover. Many small tool
rooms offer tooling with wider tolerances and cater to select
clientele. The main focus of these tool rooms is to maximize
capacity utilization. Some small tool rooms undertake sub-
contracting activity to utilize capacity and resources.
d) Quality
Very few small CTRs have quality certification. There is no
separate Quality Assurance department either. Quality is
benchmarked by tighter tolerances. Of those who require heat
treatment, more than 85% outsource heat treatment facilities,
more than 60% precision machining and about 35% of rough
machining.
e) Customer segments
Ordnance and Aerospace (Others group) have high captive
production. However, they sub-contract some machining and
since, small tool rooms have machining facilities, they
account for around 20% of their turnover. Other significant
segments are Automobiles and Electrical.
f) Delivery schedule and lead times
Lead-time varies from 15 days to 3 months.
24
g) Resources - Raw Material
Around 20% purchase imported steels from agents. Over 80%
purchase steel from local dealers. In certain cases, customers
provide the steel themselves. Testing of raw material for
adherence to specifications is infrequent and consequently
reliance on certification by the supplier is high.
h) Standard components
Small CTRs completely outsource standard components either
from national or local players. At times, the customers supply
the components.
i) Manpower
The number of employees ranges from 8-50. Diploma engineers
and Graduate engineers are employed for design and production
departments. NTTF trainees are employed as toolmakers and ITI
trainees are recruited and developed as machinists.
2.20 CAPTIVE TOOL ROOMS
The facilities available in most in-house tool rooms do not
show segmental variations. However large captive tool rooms
have sophisticated state of the art equipment and they are
capable of producing all their requirements including
precision tooling. Tool rooms attached to smaller companies
are generally more for maintenance work. Tools manufactured
would depend on the segment and their needs. Imports are high
in precision machining. Precision Captive tool rooms tend to
sub–contract low level machining work. Sometimes even testing
and quality control is done from outside. About 40% of such
tool rooms get the heat treatment work done on contract basis.
Automobile industry is one of the largest consumers of tooling
in the country. The overall requirement of tooling in this
industry is put at more than Rs. 20,000 million. Cars and two
wheelers constitute the largest segments respectively.
The tooling requirements are planned well in advance by most
of the companies by a centralized production planning and
control department. Critical tooling is usually manufactured
25
in-house or imported. Most automobile manufacturers have made
huge investments in tool rooms.
2.21 UNORGANISED SECTOR
Estimated at above 2000 units, these are machine shops mainly
catering to sub-contracting activity, but call their work
centres as tool rooms. These players are characterized by low
investments (< Rs.35 lakhs) and have a localized presence –
mainly clustered in pockets around Bangalore, Chennai,
Coimbatore, Hyderabad, Kolkatta, Mumbai, Pune, Delhi,
Faridabad, Ghaziabad and some parts of Punjab. These are
typically ‘one man show’ that function like small workshops
and do jobbing work at highly competitive prices, providing
low technology tooling such as simple sheet metal tools and
machining operations like turning, milling & shaping. These
tool rooms cater mostly to select industries located within a
geographic region and have no specialization in terms of
product range or industries served. Most of them can be
classified as jobbers. The annual turnover range of such tool
rooms is Rs.5 - 20 lakhs.
Unorganised players are active mainly in Jigs & Fixtures and
subcontracting work. These account for over 70% of their
turnover. The tooling manufactured by these tool rooms are of,
relatively, lower quality & precision and meet the
requirements of select price conscious users.
2.22 Future Markets
The total market (imports exports) based on the trend of 2005–
06 & 2006-07 for all types of tooling is expected to be more
than Rs.1173789 Lakhs in FY 2008 -09. However considering the
new market potential which Indian industries could tap the
figure would be almost the double. Auto and electronics will
continue to be the major users. Tooling mix however is
expected to change. Plastic moulds would see an increased
usage. The survey analysis has identified the following
26
percentage production of various tools which is an indicator
for the product mix required in the future.
Moulds – 18%, Die Casting Dies – 14%, Jigs – 13%, Press Tools
– 11%, Fixtures & Gauges – 9% each, Special Cutting Tools &
Forging Dies – 6% each, Mandrels & Thread Rolling Dies – 4%
each, Others – 6%.
27
3. International Scenario
3.1 After the United States, Japan is the world's second
largest supplier of moulds and dies and is the world's largest
exporter of moulds and dies. The International Special Tooling
& Machining Association (ISTMA) an international association
representing 25 special tooling and machining associations
throughout the world including India represent over 8,000
companies (excluding the Indian list) and over $40 billion
U.S. dollars in annual sales. ISTMA World is in charge of the
central coordination and organization of all international
activities. United under this roof are the following regional
sections.
• ISTMA Americas • ISTMA Europe • ISTMA Asia / FADMA 3.2 The world trade (import & export) for 2004 of Industrial
moulds is represented in the figure on the next page. It can
be seen that the 5 major exporting countries in the order of
their exports are – Japan, Germany, Italy, Canada & USA and
the 5 major importing countries based on the value of imports
are – USA, China, Mexico, Germany & Japan.
3.3 In other words the major exporting countries also have
some import component, generally low tech, and low cost
tooling components. The import export bar Chart for India
would be very similar to that of China based on the available
import export data but it is not represented in the chart
since no official data is sent to ISTMA from India.
3.4 As per ISTMA the tooling landscape is changing
continuously with new regional and global competitors coming
on the scene, new regional dynamics taking place, more complex
partnerships and global competition, new markets and new
marketing and commercial skills coming up.
3.5 The technologies are changing in terms of Fast
Prototyping, Hybrid moulds, Multi-material moulding and in-
28
mould assembling, Micro and Nano scales, New Materials, High
speed 6+ axis machines.
3.6 Mould makers face a brave new world of highly competitive
environment at the regional / global levels demanding new
skills. It is felt that 2/3rd of the requirement of moulds by
OEM’s and multinationals would be made in East Asia and other
low cost countries. The European and US mould makers will
compete for the remaining 1/3 of high precision and high
complexity moulds on a basis of concurrent engineering,
certified quality, integrated and innovative services and also
advanced technologies.
3.7 The tool making industry in Europe comprises of about
10,000 companies mainly SME’s employing about 2 lakhs people
with yearly sales of about 20 billion Euros (Source ISTMA
Report – Spain). The imports by European Union are presented
below in Fig.1
Year
Fig.1: Imports of various tools by European Union 3.8 The Tool Industry general scenario in US & Europe is given below: I. USA
• Trend 2005 versus 2004: o Tool & Die +8% o Moulds +8% o Special Machines +15% o Precision Machining +13%
Million Euros
29
o Aerospace +14%
II. Canada • 80% located in southern Ontario • Impacted by strong Canadian dollar and globalization • Western provinces expanding with aerospace, oil, gas and
mining • Shortage of highly skilled people
III. Germany • Output +60% in 10 years, versus +20% for overall industry • Last two years a total 3 to 4% decline • Dependent on the automotive industry • Main exports to: Switzerland, USA, Czech Republic, China • 2004 production
a. Dies 4.2 billion Euro b. Injection Moulds 1.6 billion Euro c. Die cast dies 0.2 billion Euro
IV. Switzerland • Similar to Germany • Slowdown started 1Q05 • Capacity utilization = 87.9% • Turnover equals 459.6 million Euro • Export ratio: 78.2% • Exports to the U.S.: up 4.3% • Number of companies: 510 • Margins down
V. Italy • Business conditions generally rated good • Losing business due to large companies shifting to
Eastern Europe & Far East • Keen price competition from China
VI. Great Britain • Output and orders slow • Margins under pressure • Domestic market for dies and Moulds equals 450 million
52.9 million export • Insufficient number of apprentices • Fighting for better government support
VII. Portugal • Mould industry margins eroding • 11% of production is consumed domestically • Exported worth 335 million Euro, up slightly • French market up, U.S. market down from 3rd to 5th • Competitive in niche markets for highly complex Moulds
VIII. France • Mould production worth 1 billion Euro • Employees 9,000 • 1/3 Exports, 1/3 Imports
IX. Spain • OEMs moving to emerging countries • Trading companies offering tools from emerging countries
30
• Exports: dies off, Moulds steady • Imports: dies up 69%
X. Finland • Growth registered: +20% • Delays are of the order of two to three months • Russian market is strong and is becoming the major
trading partner • Mainly selling to domestic customers • Skilled labour is available but not in the needed locations
XI. Czech Republic • Dependent on automotive sector • Generally reduced interest in technical jobs. Most recently moderate improvements due to ease of finding jobs and high average earnings
XII. Slovenia • Sales equals 121 million Euro • Export = 72 million Euro
XII. Hungary • Lack of understanding of our industry. Concerned about: tax, regulations, energy costs, etc. • Currently healthy, but expecting slow-down due to
stagnation in Germany, especially in the auto industry • Cost going up and increasingly tough competition from
China • Companies that are busy are typically specialists/experts
in the field • Severe reduction in the number of apprentices • Loss of skilled workers due to retirement • Need government incentives to invest and train
XIV. Estonia • Going quite well • All companies rating business conditions good or at least
fair • Average order backlog 11 weeks • Sales up 10% versus '04
An overview of exports (Value in USD) by various countries during 2001 – 2005 for the product group 695 (Tools for use in hand or in machines) as compiled by International Trade Center (UNCTAD/WTO) is given in Annexure - 3. 3.9 Asia's Mould & Die Industries are represented internationally through its apex association - FADMA (Federation of Associations of Die & Mould industry in Asia) comprising of 11 Member Associations namely: 1. China Die & Mould Industry Association (CDMIA) 2. Indonesia Mould & Dies Industry Association (IMDIA) 3. Japan Die & Mould Industry Association (JADMA) 4. Korea Die & Mould Industry Cooperative (KODMIC) 5. Malaysia Mould & Die Association (MMADA) 6. Die & Mould Association of Pakistan (DIEMAP)
31
7. Philippine Die & Mould Inc. (PDMA) 8. Singapore Precision Engineering & Tooling Association
(SPETA) 9. Thai Tool & Die Industry Association 10. Chinese Taipei-Taiwan Mould & Die Industry Association
(TMDIA) 11. Tool & Gauge Manufacturers Association of India (TAGMA)
3.10 The Tool Industry General Scenario in Asian Region I. Japan Demand based production & ordering of specific products, which
require special skills to make, have been common practices in
Japan's mould and die industry. This has nurtured specialized
small shops, which have become the industry's backbone. These
shops have built long-running business ties with particular
customers. This has allowed the industry to accumulate the
skills that are attuned to the needs of customers. Yet, as
product life cycle becomes shorter, customers are demanding
higher precision, speedier delivery, and lower pricing. This,
coupled with the increasing difficulty of attracting new
workers, has made the mould and die industry's operating
environment more and more difficult. One of the important
reasons that have made the industry's future precarious is the
shifting of production to other Asian nations.
90% of Japan's mould and die industry comprises firms whose
number of employees is 20 or less. Compared with the Japan
Machine Tool Builder's Association's membership of
approximately 100, that of the Japan Die & Mould Industry
Association (founded in 1957) is much larger at 573. As annual
sales of both industries stand at 1 trillion yen each, the
average size of firms in the mould and die industry is
smaller. The industry's largest firms employ several hundred
workers on average. These include Ogihara, Ikegami, Showa
Seiko, Kuroda Precision, Miyazu, and Mitsui High-tech.
The remaining smaller firms employ 20 workers or less. The
Japan Die & Mould Industry Association consists of the
headquarters and the three branch offices in charge of
Eastern, Western and Central Japan, respectively. The
32
Association is a non-profit organisation, operated on a
voluntary basis.
CAD Usage
CAD changes the way moulds and dies are made. More and more
customers tend to supply drawings electronically rather than
physically. At present, roughly ten Japanese moulds and die
manufacturers engage actively in development of the market
Asia-wide. The connections these manufacturers have
established with customers by sharing CAD systems are weak.
Their Asian competitors, are much more familiar with CAD they
rarely produce physical drawings. The customers participate in
design-in sessions by using CAD communication and electronic
mail. In some cases, even the revision or finalization of
drawings is handled electronically via CAD. Communication is
Japanese manufacturers' weak point. Mould and die making shops
in particular have difficulties keeping pace with the growing
moves to build CAD-based connections with the U.S.
At present, it still is better for Asia (excluding Japan) to
import moulds and dies from Japan. Making a given mould takes
100 hours in Japan, while it takes 300 hours in Asia. In
Japan, the owners of many mould-making shops have entered the
trade as apprentices.
II. ROC (Taiwan) The Taiwan Mould & Die Industry Association (TMDIA) was
founded in 1990. Its membership exceeds 900. The number is
estimated to reach 4,000-5,000, if smaller non-member firms
were included. Taiwan's mould and die industry's workers
number 100,000. Mr. Terry Kuo (Kuo Taiming), chairman of Hon
Hai Precision Industry, and former TMDIA chairman, qualifies
as the world's 100 wealthiest individuals. TMDIA's present
chairman, Mr. William H. Chi operates the world's second
largest stapler maker, after Max. Most of the Taiwanese
technical personnel have been educated in the United States,
and hence no difficulties in operating CAD/CAM programs.
33
Taiwan's manufacturers are connected to their customers in the
U.S. through the medium of CAD. Clusters of smaller shops have
developed. Shops are specialized in each step of the
manufacture process, and are linked horizontally. In this
system, investment efficiency is better than if shops
individually invest in all machinery to handle all steps of
the manufacturing process. In many instances, the owners of
shops forming a group are related by blood. The main family
orchestrates the division of operations, such as grinding,
within the group. In Japan, shops tend to operate
independently and with many different types of machines. In
South Korea, groups are pyramidal. Samsung does business only
with Samsung. Mould and die making training institutions have
been mushrooming. There are some instances where an
institution whose current enrolment is 6,000-10,000 enlists a
new intake of 3,000.
III. Hong Kong Until ten or so years ago, Hong Kong had remained the mould
and die-making hub of Asia. Following the return to Chinese
sovereignty, Hong Kong's mould and die industry weakened
dramatically as it has shifted production to China. The
disappearance of the border has made technical exchanges
easier, triggering an influx to Shenzhen and Shanghai of
manufacturers seeking to take advantage of cheaper labour.
Engineers have remained in Hong Kong. Many shipments from Hong
Kong to China come from Taiwan. 42% of Taiwan's total exports
are channelled via Hong Kong to China. Hong Kong's trading
houses have shown themselves reliable import agents for China.
Hong Kong is trying to change from a manufacturing hub to a
financial centre.
IV. China China's mould and die industry is the world's largest in the
total numbers of firms and workers. The number of workers
exceeds 400,000, most of them employees of state firms.
However, nearly all State-operated shops are bankrupt with
34
only township and village-operated shops remaining operable.
While pay is a 20th that of Japan, moulds cost a 10th as much
as in Japan. This indicates that the efficiency is lower. The
quality of products is also poor.
V. Singapore Singapore's mould and die industry is represented by the
Singapore Precision Engineering and Tooling Association.
FADMA's secretariat is also located there. Singapore is
enthusiastic about promoting the industry. Singapore plays a
vital role in the manufacture of state-of-the-art moulds and
dies. The government has been guiding the industry's
development. As the manufacturing sector lacks workforce, the
industry finds it almost impossible to increase the production
volume significantly. It may become Asia's technical education
and training centre. One prominent training institution is the
Institute of Technical Education. Government, universities and
the industry work in cooperation. Chinese language ability is
seen as a competitive advantage in business.
VI. Malaysia The government has been steering the mould and die industry's
development in the same way as Singapore. The industry is
given top priority under the government's industrial policy.
However, the government tries to promote too wide a range of
industries, from automobiles to communications, to give the
industry the support it needs. The manufacturing sector's
labour shortage constitutes a bottleneck.
The automotive industry, Malaysia's key industry, suffers from
high cost and quality problems as too much emphasis on the
promotion of “Proton” hampers competition. The industry
operates only on a small scale, so it has to depend on imports
from Japan and other nations to procure moulds and dies.
Proton's local procurement rate is 85% as calculated in the
number of components used, however the actual rate is
significantly lower. In another key sector, the electronics
industry, which is centred upon the manufacture of ICs,
35
suppliers of moulds and dies are overly concentrated in the
Penang district. While demand for moulds and dies for home
appliances exceeds supply, domestic products cannot compete
with imports in either pricing or quality. The market for
precision moulds for pressing is under-supplied, as suppliers
are limited to only one or two Japanese manufacturers. There
is a large number of mould and die manufacturers, and a number
of industry associations. Prominent mould and die manufacturer
associations are based in Selangor (automotive sector) and in
Penang (electronics sector). Many mould and die manufacturers
are operated by Chinese that are rarely supported by the
government, which adopts a bumiputra-oriented policy. The
industry associations are not organized nationally, and have
trouble taking concerted steps.
VII. Thailand The Thai Tool & Die Industry Association was founded in 1994.
The number of Thailand's mould and die manufacturers is
estimated at 400. Too many industrial sectors have emerged at
the same time and workers change jobs too readily, factors
that has made it difficult for the mould and die industry to
accumulate technology. Unfortunately, the prosperity of a
nation is also linked to the growth of mould and dies
industry. Furthermore, high tariffs are imposed on imports,
despite the fact that the industry cannot grow without being
exposed to competition. The tariff rate has been raised to 35%
(as an emergency safeguard) to reduce/avoid imports. The
automotive sector already has all essential support, including
indigenous mould manufacturers and Japanese suppliers; hence
further investment in the support sector is not needed in the
immediate future. A source of greater concern is the outcome
of efforts to establish a system of mutual supply of parts
within the ASEAN region, as SAFTA's creation calls for
international division of labour. Following the slump in
domestic demand, the automotive sector has been trying to
36
become more export-oriented. How far and smoothly this will
progress remains to be closely monitored. The transfer of
technology and the providing of business management guidance
are needed for local Thai manufacturers. Currently, the
electronics sector faces even more difficult hurdles. Thailand
is highly likely to become the world's HDD supply base. This
will be possible only if the number of suppliers of precision
moulds and dies increases.
VIII. South Korea The Korea Die and Mould Industry Cooperative have membership
of 300 firms. The total number of the Nation’s mould and die
manufacturers is estimated at 1,700. Controlled by the
financial conglomerates, the mould and die industry has little
room for growth. This might make the nation's recovery from
the economic crisis all the more difficult. ROC (Taiwan) is
more recession-resistant because its machine tool and mould
and die industries are stronger.
IX. The Philippines The Philippine Die and Mould Association have a membership of
90 firms. These manufacturers' main products are IC moulds and
connector moulds. Precision moulds for use in the electronics
sector are in extremely short supply. Difficulties are likely
to arise if mould and die manufacturers switch customers.
Isuzu Motor experienced trouble when it launched an engine
plant, because all suppliers were solely those of IC moulds.
The root of this problem appears to lie with the ways in which
institutions provide technical education and training.
37
4. Survey Analysis & Profiles
4.1 By 2008-09 the total value of Indian tooling
business comprising of its imports and exports is expected
to be more than Rs.1173789 Lakhs and the growth would
continue steeply in line with the growth of the industrial
goods and services.
4.2 The world tooling business is currently at 40
Billion Dollars and is expected to grow at the rate of
more than 20% annually. With this rate the tooling
business is going to double every four years. Is India
geared for this level of tooling activity. This double
challenge for the Indian tooling industry would require
dedicated approach.
4.3 A close look at the Indian Tooling industry reveals
that the sector is moving towards a tougher competitive
environment. Within the Asian context the threat is also
from low cost suppliers such as Republic of China whose
tooling export business is 75% more than India as per
International Trade Center report.
4.4 The main cost components of tool making comprise of
design, raw materials, manufacturing, inspection & testing
and transportation. Out of these the critical cost is that
of Raw Materials which in most cases is imported. As a
result the overall cost of the tool is higher compared to
some of the Asian competitors.
4.5 Indian R&D efforts are lacking towards development
of better quality raw material (tool steel) and inspection
& testing facilities. No information has been received on
new patents.
4.6 At present the Indian manufacturing industries are
members of one or the other industry association which
number in hundreds, including state level and district
level associations. This scenario impedes in assessing our
collective strengths and capabilities in Tooling and
38
Tooling technologies. This is amply clear from the reports
of various international bodies on Tooling such as ISTMA
(International Special Tooling Manufacturers Association),
FADMA (Federation of Die & Mould Manufacturers
Association) wherein they report “No Data Available from
India”.
4.7 The apex association of Die & Mould manufacturers in
India i.e. TAGMA(Tool & Gauge Manufacturers Association)
has just 415 members on its rolls today which is small
considering number of manufacturing units and members
affiliated to various associations. Considering membership
of other associations having tooling as likely component
in their manufacturing operations the figure could have
been more than 3000 members.
4.8 The liberalization polices initiated during the 90s
gave a boost to development of the Indian industry
including tooling. A larger spectrum of moulds, dies and
tool manufacturing companies has been incorporating modern
production techniques; spending moderately on improved
tool designs, besides making a dent in untapped export
markets worldwide, however focused approach, plan and
policies by the Govt. towards tooling sector needs review
vis-à-vis other countries.
4.9 Based on the response from 58 units (list given at
page no. 39) to the questionnaire survey the following
observations are made. Also the various issues facing the
industry have been mentioned later.
a) The age of units varied from 6 years for the recently
commissioned units to about 70 years for the old unit.
b) The tooling industry principally comprises of
Commercial and Captive Tool Rooms. While as the number of
captive tool rooms is larger than the number of commercial
tool rooms, their operations are focussed for their
internal usage of tooling.
39
LIST OF COMPANIES WHO RESPONDED TO THE QUESTIONNAIRE 1. Asna Enterprise 2. Machine Tool Prototype Factory
3. Associate Tools 4. Advance Cooling Systems P. Ltd
5. Cemech Tools Limited 6. Polychem Enterprises
7. Central Tool Room 8. Sridevi Tool Engineers Pvt. Ltd.
9. Chitram Engineering Pvt Ltd. 10. Wendt India Limited
11. Deep Plastic Industries 12. Central Institute of Plastics Engineering & Technology
13. Edic Dies& Moulds Engrs(P) Ltd 14. Stuser Tools Pvt. Ltd.,
15. Elscint Automation 16. D.K. Engravers
17. G Plast Private Limited 18. Renuka Auto Crank
19. Indo German Tool Room 20. Elemec Industries
21. Lavingia Enterprise 22. Somnath Forging
23. Liba Enterprise 24. Miranda Ansaw Pvt. Ltd
25. Metal Craft Industries 26. Anand Airline Accessories
27. Motor Industries Co. Ltd 28. Kinetic Engineering Ltd
29. Prabha Industries 30. Wood Shape Works
31. Raj Alimento Industries(P) Ltd 32. Gold Aids
33. Rollano Dies & Tools Pvt. Ltd. 34. Hindustan Automation
35. Sansha System Ltd. 36. Aniruddha Wire Cut Tools
37. Sescoi India Solutions Pvt. Ltd
38. Alliance Techno Crafts
39. Shree Ganesh Engineering 40. Indian Tool Mfrs Ltd.
41. Siddha Engineering 42. Subhash Engineering Works
43. St.Joseph's Technical Institute
44. IDEMI
45. Sunikh Precision Pvt.Ltd 46. B Joy Engineering Works
47. Tech Tools 48. Electro Plastic Pvt Ltd.
49. Tools and Instruments Company 50. Om Sai Moulds & Plastics
51. Universal Machine Tools Mfg.Co 52. Onkar Dies Pvt. Ltd.
53. Vasantha Tool Crafts (P) Ltd. 54. Addison & Company Limited
55. Vora Industries 56. Central Tool Room, Ludhiana, Punjab
57. Yogesgwar Engineering Pvt Ltd. 58. Rockwell Automation India Ltd.
40
The response from such captive tool rooms has been poor
generally on account of the amalgamated structure and
revenues along with the principal product, hierarchical
constraints etc. The distribution of the response received
is depicted in Fig. 2.
Commercial86%
Captive9%
Others5%
Commercial Captive Others
c) The percentage distribution of the units based on their
legal status is depicted in Fig. 3. with corporate
accounting for 35%, followed by Partnership &
Proprietorship at 29% and 24% respectively.
d) Tool rooms have also been classified on their nature of
operations i.e. Small Tool rooms, Medium & Large Tool
rooms. Their distribution in terms of % is given in Fig.
4. The small tool rooms constitute 62% while as medium &
large comprise 38%
Fig. 2 - % Distribution of Nature of Tool Rooms
41
35%
29%
24%
7%
5%
Corporate
Partnership
Proprietorship
Pvt
Others
62%
38%
Small Medium & Large
Fig. 3 - % Distribution of Units based on their Legal Status
Fig. 4 - % Distribution of Units based on their Nature of Operations – Small v/s Medium&Large
42
e) The survey revealed that the numbers of foreign technical
collabourations are few in numbers. In terms of percentage it
is only 12%. The pie chart depicting the share of
collabourations and otherwise is given in Fig. 5.
f) Tool rooms generally have low but highly skilled manpower.
The survey included mapping of manpower which was done in four
categories
i) Units employing less than 25 employees
ii) Units employing 25 – 50 employees
iii) Units employing 50 – 100 employees and
iv) Units employing greater than 100 employees
The % distribution for all categories is given in Fig. 5. g) The production tooling generally comprises of Jigs,
Fixtures, Gauges, Press Tools, Die Casting Dies, Moulds for
different applications (Plastics, Rubber, Mineral materials,
Casting, Other materials), Forging Dies, Mandrels, Thread
Rolling Dies, Special Cutting Tools etc. The survey identified
the pattern of tooling production keeping in view the demand
both domestic and international. This pattern is depicted in
Fig. 7 as percentage of different categories of tooling.
88%
12%
Collaboration No Collaboration
Fig. 5 - % Distribution of Units having Foreign Technical Collaboration
88%
43
<25 Employees 48%
25 - 50 Employees16%
50 - 100 Employees11%
>100 Employees25%
<25 Employees
25 - 50 Employees
50 - 100 Employees
>100 Employees
1 3 %
1 4 %
9 %
1 1 %
9 %
1 8 %
5 %
4 %
3 %
6 %
8 %
J ig s
F ix tu re s
G a u g e s
P re s s T o o ls
D ie C a s t in g D ie s
M o u ld s
F o rg in g D ie s
M a n d re ls
T h re a d R o llin g D ie s
S p l. C u tt in g T o o ls
O th e rs
Fig. 6 - % Distribution of Units & Employee Strength
Fig. 7 - % Distribution of Tools Produced
44
4.10. The Questionnaire survey has also revealed the following
Issues being faced by the Industry
I. High Capital Investment
Tool rooms are capital intensive. A medium sized tool room
would cost around Rs.100 – 120 million. This is due the fact
that the tool room machinery requires high precision and
accuracy features.
II. Quality
Frequent changes in product drawings and consequently tooling
specifications while tool manufacture is in progress leads to
tool quality and delivery schedule problems. The wide range of
work, which an Indian tool room is forced to undertake, also
leads to quality problems. This brings in the phenomena of low
volumes – low specialisation – low quality approach.
Quality issue is also related to the training and development
of skill for the work force. Additionally in absence of any
worldwide standards for the raw materials, design,
manufacturing, surface finish, safety features etc also lead
to product quality problems.
III. Technology
A general opinion about the Indian Tool Rooms is that the
technology employed lags behind the Western countries and also
some countries in the Asian Block such as Korea, Taiwan,
Malaysia, and Singapore. This is untrue as far as some of the
good tool rooms are concerned but the majority of the picture
seems to be correct. The same is true of the latest software’s
such as CAD / CAM, 3 D Modelling, Rapid Prototyping etc.
although the Indian Tool Rooms are picking up on this front
too.
IV. Operational Issues
These include the lack of proper infrastructure –
transportation, raw materials, standard components, sub
contracting, high manpower turnover and lack of economies of
scale. In addition to these, constraints due to inadequate
45
design – design for ease of manufacturing, design for
maintainability, design for safety, design for jigs and
fixtures, design for less cycle time operation are the
critical operational issues being faced by the total industry
as a whole.
V. Competition from Imports
With liberalisation, imports have become easy and these are
partly affecting the Indian Tool Rooms owing to some duty
structures. The major issue with respect to imports is the
high cost of imported raw material (different grades of steel:
High Carbon High Chromium, Hot Die Steel, Tool Steels, High
Carbon Steels, Mild Steels etc.) for tool manufacture thereby
offsetting the cost of the finished product.
VI. Lack of Database
Due to lack of proper database the tool room industry is not
in a position to clearly identify the various benchmarks vis-
à-vis the foreign suppliers. The good work done by our tool
rooms also does not get proper publicity for attracting more
markets & clients as a result of lack of national level
database. Information sharing among the association members is
also very poor purely from the commercial point of view.
VII. Training / Educational Courses
The industry – institution interface is lacking. Not many
institutions are offering advanced tool design courses. Any
courses have to be specific to the industry requirements. It
would be appropriate to involve the major industries and the
industry associations while formulating the training
curriculum by various training institutes offering courses in
Tool Design & Manufacture.
VIII. Availability of Export Market related information
The study has identified that due to lack of proper
information regarding export market and simple procedures and
documentation, our tool designers and manufacturers are not
able to enhance their export capability.
46
IX. Employee Turnover
Another major issue of CTR’s and captive tool rooms is the
turnover rate of skilled manpower. Tool designers and
toolmakers from India are considered competent by tool rooms
abroad. The trend is more for 3 – 5 years experience in
plastic mould making industries. Salaries levels vary
depending on experience of the personnel bur are definitely
much higher than the Indian companies.
X. Comments on Export Capability
Based on the Questionnaire survey the response by some of the
industries on their export capability is given as under:
Sr Company Comments on their Export Capability 1. Vasantha Tool
Crafts (P) Ltd i) Can export engineering plastic moulded components used in electrical, electronic engineering in addition to caps and closures ii) Can design & manufacture 2-plate, 3 plate split modules, fully hot runner and semi hot runner moulds.
2. Associate Tools Confident to meet export requirements 3. Deep Plastic
Industries Can make high quality Ball pen mould, which would be import substitute and it, can be exported also.
4. Central Tool Room
i) Largest service provider of RP facilities in India. The services can be exported. ii) Good machinery & expertise is available for making injection moulds, press tools, Die casting dies, Jigs Fixtures & Gauges
5. Chitram Engg.(P) Ltd
Willing to export step by step
6. Prabha Industries
We have good understanding of Europeanstandards & requirements
7. Metal Craft Industries
Our capabilities are comparable to Japanese; Italian & Korean tool makers with definite cost advantage.
8. Vora Industries Good capability to produce quality tools, help needed in market research, visits with delegations and participation in exhibitions.
9. Tools & Instruments Co.
Lot of scope for electronic industry punches manufactured on latest CNC machines. Credit facilities needed.
10 G Plast (P) Ltd Have integrated facility as one Stop
47
shop service provider. 11 Stuser Tools (P)
Ltd i) Capable to meet Quality requirements ii) Need to identify prospective buyers
12 Liba Enterprise Can produce good quality moulds at short notice.
13 Tech Tools Want info on export markets 14 Machine Tool
Prototype Factory
Core competency in design & manufacturing of special purpose machine tools for defence production; can be used for exports as well.
15 Anand Airline Accessories
Need to know our customers
16 Miranda Amsaw (P) Ltd
Marketing assistance needed.
17 Dran Engineers (P) Ltd
Need Simplified Import Export procedures
18 Gold Adis Need Contacts abroad, Details on Trade Fairs, Exhibitions, responsible Govt Agencies
19 Subhash Engg. Works
Link between buyers & sellers to be expanded
20 Indian Tool Manufacturers
We are exporting cutting tools and want to maintain a lead.
21 Choice Precitech India (P) Ltd
40 – 50% turnover is exported. We want to know more markets.
4.11 Profiles of Govt. run & Commercial Tool Rooms
The survey analysis also included collecting details of products and profiles of the units. These include 11 Govt supported tool rooms and 76 private units listed below, whose details are given in Annexure 5. Out of these a few responded to our Questionnaire survey as well.
1. Central Institute of Tool Design, Hyderabad 2. Central Tool Room & Training Centre (CTTC), Bhubaneshwar 3. Central Tool Room & Training Centre (CTTC), Calcutta 4. Central Tool Room, Ludhiana, Punjab 5. Indo Danish Tool Room (IDTR), Jamshedpur, Jharkhand 6. Indo German Tool Room, Aurangabad, Maharashtra 7. Indo German Tool Room (IGTR), Indore, M. P. 8. Indo German Tool Room (IGTR), Ahmedabad, Gujarat 9. Tool Room & Training Centre (TRTC), Guwahati, Assam 10. Central Institute of Hand Tools, Jalandhar, Punjab 11. Hand Tool Design, Development & Trg. Centre, Nagaur, Raj. 12. Abhijeet Dies & Tools Private Ltd 13. Adept Polymers Private Limited 14. Alpha Industry 15. BPL India Limited 16. Brakes India limited 17. C.K.Moulds & Dies (Pvt) Ltd. 18. Carl Zeiss India Pvt. Ltd
48
19. Chitram Engineering Pvt. Ltd. 20. Classic Moulds & Dies 21. Conex Avio Auto Pvt. Ltd. 22. Dankel Tech 23. Devu Tools Pvt. Ltd. 24. Dietech India Pvt. Ltd 25. Electro Plasts Private Limited 26. Elemec Industries 27. ELTA Tools & Dies 28. Esteem Industries 29. Filtrum Tools & Components Pvt. Ltd. 30. Fine Components & Tools Private Limited 31. Fine Dies & Moulds (India) Pvt. Ltd. 32. Hasco India Pvt. Ltd. 33. Hindustan Automation 34. Horizon Industrial Products (P) Ltd. 35. Hrithik Tools Pvt. Ltd. 36. Incite Cam Centre 37. Industrial Punches Rabourdin Pvt. Ltd. 38. JAII Maruthi Tools (P) Ltd. 39. JBM Auto Limited 40. Jekuma Tools & Guages Pvt. Ltd. 41. Jyoti Plastics Works Pvt. Ltd. 42. Kalyani Mould Base Pvt. Ltd. 43. Karthigeya Moulds & Dies Pvt. Ltd. 44. Kay Dee Enterprises 45. Kennametal India Limited 46. Ketki Dies & Tools Pvt. Ltd. 47. Kinetic Engineering Limited 48. Kowski Toolings 49. Lakshmi Designers 50. Mahindra & Mahindra Limited 51. Mastercraft Engineers Pvt. 52. Metal Craft Industries 53. Metals India 54. Minda Huf Limited 55. Motor Industries Co. Ltd. 56. M-Tech Industries 57. NTTF Industries Limited 58. Onkar Dies Pvt. Ltd. 59. P.H. Polyplast 60. Precision Punches & Dies 61. Premauni Tools 62. Prince Design-N-Tooling Technology Pvt. Ltd. 63. PROTEKZ 64. Raut Engineering Pvt. Ltd. 65. Renata Precision Components Pvt. Ltd 66. Renuka Auto Crank 67. Sandhar Steady Stream Tooling Pvt. Ltd. 68. Sansha System Ltd. 69. Savitri Automation 70. Sermo Arrk India Limited 71. Servotronics 72. Shri Gajanana Industries (I) Pvt Ltd. 73. Sridevi Tools Engineering Pvt. Ltd.
49
74. Suhner India Pvt. Ltd. 75. Sunikh Precision Pvt. Ltd. 76. The Supreme Industries Limited 77. Tata Motors Ltd 78. Tool and Instruments Company 79. Toyama Electric Limited 80. Ultra Engineers (unit II) 81. Vanula Tools & Moulds Pvt. Ltd. 82. Vasantha Tool Crafts Pvt. Ltd. 83. Vipul-S Plastocrafts Pvt. Ltd. 84. Vishal Precision Products Pvt. Ltd. 85. Vrindavan Engineering Works 86. Welmech Engineering Company Pvt. Limited 87. Yeshshree Press Comps. Pvt. Ltd.
50
5. Recommendations
1. Considering the fact that by 2008-09 the total value of
Indian tooling business comprising of its imports and
exports is expected to be more than Rs.1173789 Lakhs and
that the growth would continue steeply in line with the
growth of the industrial goods and services, offers more
challenges and Indian Industries would have to gear up
adequately to match this challenge.
2. Besides the above home front scenario the world tooling
business currently at 40 Billion Dollars and expected
growth rate at more than 20% annually is another major
challenge which could be adequately countered through
flexible manufacturing technique, high end tool design,
quality management systems, development of better tool
steels, tool testing facilities, delivery schedules and
the corresponding infrastructure.
3. The threat from low cost suppliers such as Republic of
China has to be met with a multipronged approach such as
technology up gradation, improved tool designs, adopting
cost effective production processes, training & testing
facilities, low cost indigenously produced quality raw
material at par with market trends and more importantly
rationalization of the import duties on the raw materials.
4. Indian R&D efforts need to be aimed towards development of
better quality raw material (tool steel) and inspection &
testing facilities. DSIR may initiate suitable R&D
projects with National Metallurgical Labouratory for
development of indigenous better grade tool steels.
5. In order to showcase collective strength of Indian Tooling
industry it is recommended that the Department Of Commerce
and Industry bring out data on tooling under three main
categories i.e. i) Machine Tools ii) Hand Tools and
iii) Die & Mould (Jigs, Fixtures, Gauges, Press Tools, Die
Casting Dies, Moulds, Forging Dies, Mandrels, Thread
51
Rolling Dies, Special Cutting Tools etc.) and allocate HS
codes accordingly.
6. In order to bring all tool manufacturers (whatever their
affiliations, with whatever association they are
affiliated, whether commercial or captive, large, medium
or small, organised or unorganized) under one umbrella,
it is recommended that DSIR develop a portal fully
devoted towards Tooling & Tooling Technologies of India,
wherein registration would provide the units with
certain concessions e.g. Free Energy Audit for the Unit
etc. This would help generate vast amount of valuable
data on our tooling capability and attracting foreign
markets. This portal should be accessible to all types
of Tool manufacturers for enhancing our export
capability.
7. TAGMA (Tool & Gauge Manufacturers Association) needs to
play a pivotal role in bringing all type of tool
manufacturers under one umbrella to have larger stake in
helping India become a tooling destination of world. The
association would have a larger say in voicing concern
of the tooling fraternity as a whole.
8. There are 100 million highly educated people, and their
work ethics are especially strong. India has the
potential to grow as a net exporter of moulds and dies.
9. Of late, some of the tooling units are undertaking
forward integration by which they are able to
manufacture components for which they make tooling. This
is a logical conclusion for others to follow as well.
10. The large units have the benefit of advanced technology
compared to the small units, a large number of which
still depend on traditional and obsolete technology. It
would be appropriate for such industries to approach
financial institutions such as SIDBI to modernise from
time to time. TAGMA could hire expertise for a group of
52
industries in finalising modernisation plans with
benefits accruing to a larger group.
11. Indian tooling industry’s future growth prospects solely
depend on how fast the sector can reposition itself
considering the trends in global markets and technology.
12. The swiftness with which the major players catch up with
the rapid changes both internally and externally and
also at the vendor level will determine the success in
the medium term growth.
13. In the long term by 2012, to be a global player the
Indian tooling industry needs to thoroughly change its
production and business strategy by focussing on
innovative tool design and effective project management.
14. Department of Commerce, Ministry of Commerce & Industry,
Govt. of India have formulated Codes (HS Codes
classification) for giving import and export figures on
quarterly, bi-annually and annual basis. The codes need
further streamlining keeping in view the large spectrum
of tooling that has emerged over the years.
15. Testing of mould is an important aspect before releasing
it for commercial use. It is difficult for smaller units
to have adequate testing facilities thus hampering
export potential. It would be necessary to have common
facilities for such testing based on industrial cluster
approach.
16. As of now there is little evidence to suggest any
serious impact either on the tool-manufacturing units as
a result of WTO, so far as the domestic market is
concerned. But due to severe competition globally the
Indian players have to be ready for any WTO
interventions in future.
17. In the prevailing competitive environment the industry
association TAGMA with the help of exporters association
53
should formulate institutional arrangements (co-
operatives) for market development programs with the
help of engineering export promotion council (EEPC) to
reach overseas markets by arranging catalogue shows
abroad and providing details regarding import
regulations in various potential markets.
18. In the above venture banks/financial institutions may
also extend financial support. The main purpose of these
cooperative bodies could be to fetch competitive prices
for the products. This may be undertaken by adopting a
cooperative approach with the backing by the Government,
especially for warehousing facilities and selling in
export market, with a common brand name.
19. In the emerging competitive scenario the tiny, small
and medium establishments need to be redefined in terms
of investment limits of Rs. 1 crore, Rs 5 crore and Rs.
10 crore respectively. Also to have vibrant small &
medium units, a special category may also be formed
with investment limit of Rs 10-15 crore with
encouragement to raise equity capital including foreign
equity, if required to supplement institutional
finance.
20. Sustainable technology development is an important
area for maintaining competitive advantage. Hence
efforts need to be made to have a proper linkage at the
level of University or/ and Research Institutions for
meeting the technology development requirements of the
industry. More project/schemes need to be evolved with
proper funding in co-ordination with S&T departments
like DSIR, TEDO, CSIR, DRDO, etc.
21. In the competitive environment acquiring international
certifications and standards (e.g., environment,
energy, quality standards, etc.) both in products and
54
processes has become a minimum requirement. Appropriate
incentive schemes with required funds must be made
available to attain and upgrade the existing standards
and norms. Institutions like the Bureau of Indian
Standards (BIS), National Productivity Council may be
involved to continually engage in the quality
improvement programs and enforcing the standards.