Kolors Switches a Project Report by Preety

Institute Of Business Management & Research, Bangalore

INSTITUTE OF BUSINESS MANAGEMENT & RESEARCHIBMR House, # 44, 6th Cross, Wilson Garden, Hosur Main Road,

Bangalore. 560027. INDIA.

“A Study on the Domestic Electrical Switch Industry”At

Pearl ElectricalBy

BARUN KUMARAND

PRITI KABRA

A Training & Project Report submitted in partial fulfillment of the requirements of Internship Training of Post Graduate Diploma Of

Management(AIMA) II Semester of IBMR

1

Institute Of Business Management & Research, Bangalore

STUDENT’S DECLARATION

I hereby declare that the Training & Project Report titled

“A Study on the Switch Industry”

Submitted in partial fulfillment of the requirements for the Internship Training of II Semester of Masters of Business Management(AIMA)India, is my original work and not submitted for the award of any other degree, diploma, fellowship, or any other similar title or prizes.

Signature of the Student

BARUN KUMAR PRITI KABRA

SMU-07023 Date:

2

Acknowledgement

While I am solely responsible for the content of the study/report, I would like to

thank several people for their kind assistance during my project tenure. Firstly I

would like to thank Mr. Suresh Kumar Biyani member of Board of Directors

PEARL ELECTRICAL, Industries Pvt. Ltd for allowing me to join his prestigious

organization, I am also grateful to other Board Of Directors of PERAL

ELECTRICAL for their continuous support and assistance. Without his help the

project would not have reached the desired fruition. I would also take this

opportunity to thank all the employees of PERAL ELECTRICAL who had helped

me during the project tenure.

I would also like to extend my sincere gratitude to Mr .Ajay Srinivasan,, Chairman

Vaastu Structures Pvt Ltd, Bangalore and Mr. Patel Joint Managing Director for

giving me their precious time which helps me in getting purchase order for the

organization in worked.

I am also thankful to Mrs. Chandra Niranjan, Principal of Institute of

Business Management and Research and my Internal Guide Mr. or their timely

support and assistance. I am indebted to them for their utmost encouragement

and facilities provided for the completion of the project.

Institute Of Business Management & Research, Bangalore 3

At the end I would like to thank everybody who has directly or indirectly helped in

to complete this project.

EXECUTIVE SUMMARY

Introduction

Switches and accessories sector is the mainstay of the electrical industry for

an economy, around which the socio-economic privileges and deprivations

revolve, and any change in its structure is expected to have a corresponding

impact on the existing pattern of marketing of switches. The growth of India’s

switch sector during the 50 years of independence remains impressive. Not

only does it provide livelihood to a large number of the Indian population

directly or indirectly but also it amounts to increasing the GDP of the Indian

economy. With the advancement of the country the technology has also

underwent tremendous changes .The introduction of modern methods of

farming have led to using excellent quality of dices, and also production of

modular switches in an efficient manner in very less time.

There are various kinds of or rather variety of products

prevail only in switches even.One such on which we have mainly

concentrated during our internship programme in “KOLORS”. In this kolors

there are the different kind of switches available. That are – .1).kolors,


2).kolors-kraze, 3).kolors-kreem, 4).kolors–opt. and 5).kolors-kin We

have been given the target of contactors, builders and architectures to

market the company’s product which we have mentioned above. The

company has an extensive approach towards marketing of product

throughout India. The switches plates and metal as well as PVC boxes is

world class.“Are created from Lexan grade polycarbonate raw material

manufactured by GE plastic, USA. Ploy carbonate” has distinct advantages

like high heat and fire retardant, impact resistant ultra violet stabilized.Which

means that the product color does not get faded. Each component that goes

into a product form is a minute precision engineered to ensure long life and

trouble free operation..The manufacturing of the Switches and accessories

has a tendency to pull forward, taking the user with it. This is one of the

reason why Pearl Electrical is emerging as one of the largest manufacturer of

switches and accessories in India..

What so ever may be the choice of the décor and design Modern, Ethnic,

Wood, Cane Victorian or Antique ,”KOLORS” KRAZE has a complete range

which perfectly blends and compliments the interior décor, which is why it is

widely chosen and admired by architectural and interior design

fraternity.”Kolors” Kraze collection of switches in white are classic in gloss

finish ,made of high resistance plastic and have an extremely smooth

finish.”Kolors” Kraze Switches have an enhanced durability & electrical life, as

they pass through stringent tests and confirm the ISI standards.


The company is marketing in Bangalore under the roof of Klub Marketing.

Which is a certified division of Pearl Electrical. It is one India's largest quality

switches & accessories manufacturers, with a capacity of 180 billion

switches yearly in numbers. The main manufacturing plant is

located in Daman and baddi himachal Pradesh in western as India, with more

than 20 consignment agency points (Ware house) and 170 stockist and

40,000 retailers spread all over India to serve the needs of an ever increasing

quality conscious buyer. Kolors Switches manufacture a wide variety of

Switches and Accessories, like Metal and PVC boxes, Cover Frames,

Universal-Shocket, Inner-Plates.

The project which I am doing is “A Study on the Switches Industry” with

reference to Pearl Electrical. In this project I will study the marketing strategy

extensively discussing about its structure, advantages and limitations. I will

also study the switches industry while discussing its strengths, weaknesses,

opportunities and the threats that it is facing. While studying the same I will

focus mainly on the Kolors Switches in the Switches industry

Table of Contents:

Topics Page No.

1. Introduction to the company 9 - 17

i) General Introduction 9


ii) Introduction to the organization 10

iii) History of the organization 12

iv) Special features 12

v) Competitor details 13

vi) SWOT Analysis of the organization 14

vii) Organizational chart 15

viii) Achievements and Milestones 16

ix) Present status and future plans 17

2. Project Overview 18- 67

i) Research Problem 18

ii) Aims and Objectives 19

iii) modular Switches and Special Features 20

iv) Origin Of Till 21

v) Advantages of Tillers 25

vi) Disadvantages of Tillers 28

vii) Tiller Types 28

viii) Indian Perspective of Tillers 31

ix) Operational Capability of Tillers 34

x) Power Tiller Industry 36

xi) Reason For Low Preference Of Tillers 38

xii) Role of Nabard in financing Tillers 46

xiii) Financing of Tillers by various banks 46

xiv) About VST Tillers and Tractors Ltd. 52

xv) About KAMCO 57

xvi) Bearings Used in a Tiller 62


xvii) Bearings Supplied by TATA Bearings 63

xviii) Methodology 64

xix) Analysis 65

xx) SWOT Analysis 66

xxi) Recommendation 68

3. Appendix 69

4. References 70

5. Bibliography 71

INTRODUCTION TO THE COMPANY

General Introduction


Over four decades “BIYANI GROUP” started a small trading house in Mumbai,

aiming to ecompass the electrical accessories market, locally and also

globally.”BIYANI GROUP” is a reflection af an entrepreneurial vision, determined

courage and will-strong set out to carve its foothold in the field of electrical

accessories and has proven to be successful. The company was established in

1990.And in the same year “Biyani Group” started manufacturing electrical wiring

accessories under the brand name “KANY” followed by “KOLORS” the leading

changeable colour frames and accessories. In 2003 the group started to

manufacture “KOLORS KRAZE MODULAR” switches, which was in no time an

out-an-out nationwide success bringing a new wave of revolution with elegant

design as well as international look and quality as well. Today, ”Kolors” Kraze is

a leading brand in the field of modular electrical switches.Presently the group

has launched “Kolors” Kreem an innovative concept in the field of modular

electrical switches,which is bound to take the market by a storm.

The company has three state of the art manufacturing facilities at Daman in

Western India. It is supported by a full fledge in house product development

division which is continuously innovative and improve various products,

processes and its safety features.

While exerting its utmost focus on Research and Development, the company has

been improving its organizational structure and standards to meet the demands

of time and market. The group quests is to meet the most discerning needs and

requirements of customers; but no compromise is made on quality and safety


and based on this belief the group is in receipt of ISO 9001:2000 certification and

CE certification as well. The registered office of Pearl Electrical is in Mumbai. In

the year 2003, the company has emerged itself in producing modular switches

also apart from piano switches. The company was also recognized as the India’s

one of the best switches producer by the consumer survey of 2007.

Introduction to the organization

Kolors switches is a certified division of PEARL ELECTRICAL INDUSTRIES

INDIA LTD. Its manufacturing facilities located IN Daman. It is one of the largest

bearings manufacturing unit in India. The Kolors switches has successfully

challenged the other leading modular switches manufacturer in India to come

ahead in the race of the prevailing tough competition. The division is committed

to the principles that have made the BIYANI Group one of India’s most dynamic

& respected business houses bringing satisfaction & happiness to its consumers

& business partners alike.

Pearl Electrical manufacture a wide variety of switches and related accessories,

like


http://en.wikipedia.org/wiki/2000

http://en.wikipedia.org/wiki/Mumbai

Cover Frames

2 pin/3pin shocket

Modem jack

Mounting Box

Indicator

Angel Holder

Musical Bell

Pearl Electrical have collaboration with GE plastic of USA for developing &

testing of certain designer and modular switches.

PEARL ELECTRICAL is supported by a wide network of offices in India. Pearl

Electrical have direct on line status with most customers and have Zero Defect

PPM status with them. Kolors switches is available in almost 40,000 retailers

throughout the country. Due to its quality, easy availability and the technology

used in manufacturing, it is widely acceptable by a large number of customers.

And is considerably increasing day by day

Values

Customer Driven Excellence

Valuing All Stockist and Dealers

Agility

Management By Fact


Kolors has more than 20 consignment agency points (Ware house) and 170

stockist spread all over India to serve the needs of an ever increasing quality

conscious buyer. Kolors switches was one of the first to start the concepts of

PVC mounting boxes. Armed with their well spread distribution network, they are

extending such facilities to customers like le-grand, Anchor, etc. Other customers

of Kolors switches are potential electrical consultant,

History of the organization

Kolors is a profit centre of Pearl Electrical. It began its operation in 2003 under

Pearl Electrical Industries India Ltd. In 2003 basically the company has started

producing modular switches, when its manufacturing capacity was only 3.0

million bearings per annum. Since then the capacity has been augmented for

manufacturing 25 million bearings from FY-02. In FY-08, 26.36 million bearings

were manufactured and it plans to sell 32 million numbers in FY-09 from the

existing capacity.

Special features

Pearl Electrical is a customer focused organization, and has adopted Lean

Manufacturing and advanced Methodology and culture of working together.

100% employees are involved in the improvement activities through various

operational activities and Suggestion Management Activities. As on today 100%

employees are literate. Kolors Switches is considered the role model of industrial


harmony in Mumbai as there has been a considerable change in single

unplanned man-hour lost since Pearl Electical emerge over in 1993. Safety is the

highest concern here and each incident, whether major or minor is investigated in

a structured manner. Each incident is probed and a “why why” analysis is carried

out and mistake proofing measures are taken to prevent recurrence. That is the

reason there has not been a single fatal incident since 1993. All employees

undergo annual/once in 3 years health check up. Health awareness programs

are conducted from time to time among the family members and also among the

nearby villages.

Competitor’s details

Name of Manufacturers Market Share

FY -04 FY-05 FY-06 FY-07 FY-08

KOLORS

ANCHOR

LE GRAND

Industry Sales Per Million Numbers

The key success factors for the division are

: Sell 32 million bearings

: Retain margin per switch

: Launched duly validated modular switches for luxury homes and appartments.

SWOT Analysis of the organization

Strengths

1. KOLORS brand image

2. Operational excellence


3. Innovative work culture

4. Trained Marketing coordinators for spot resolution of customer complaints

Weaknesses

1. Too much dependence on previous customers

2. Lack of technology partners

Opportunities

1. High growth in the Modular switches sector

2.

Threats

1. Influx of cheap switches from china

2. Increasing raw material cost due to fluctuation in dollar price

3. Rising number of switches manufactures in India.

ORGANIZATIONAL CHART


Achievements and Milestone

• 1993 Establishment of the Pearl Electrical Industries.

• 2003 First division for production of Modular switches had been established.

•

•


•

Present Status And Future Plans

Mumbai-based Kolors switches, the leading producer of piano and modular

switches in the country, is in the process of consolidating its business in the

domestic market. Even as the company continues to work with leading

manufacturers in the industry, in a recent development, Kolors switches has

started business with the some leading builders throughout the country.Kolors

switches has been a 100 percent supplier of various , and now, it has join hands


http://www.indiacar.net/news/n17192.htm

with Indian Railways. They are one among only six to seven companies with zero

defects.' Innovative practices on the shop floor and the implementation of Total

Productive Maintenance (TPM) over the last two years have helped improve

production levels and quality substantially, at the Daman plant. Incidentally,

Kolors switches got the TPM award last year in December; The company is

readying itself for launching new products in the market. 2 way switches and

mounting boxes are products that would be widely accepted by the auto industry

in the days to come.

During the economic revolution period of mid-ninties, the prospect of the modular

switches was considered very high. It was estimated during the fourth five year

plan that the annual demand for the modular switches may sky-rocket to large

number of units. Our economy was liberalized and government was supporting

the firms to come up and establish themselves .Which allows the existing

manufacturers to explore themselves and enter into the production of modular

switches which was the need of the hour in the electrical industry and of the

builders too. As the economy was rising, people were earning the money and

were interested in spending .Which allows the builders, electrical consultants to

make the choice of modular switches .The durability of modular switches, easy

availability with the retailers, and better performance of the product also plays an

important role in defining the high performance of Modular Switches.


In today’s condition there are almost hundred of switch company which are

manufacturing modular switches and had captured their own local market with

has become a tough competition for the national as well as global leaders.

Almost every company is offering more or less a defined number of years as the

gurantee for their switches .Therefore more consistent the switch would be more

will be its demand in the market .In this context Kolors is challenging almost

every well known brand available in the market .Today Kolors is widely

acceptable in every part of the country especially in western, southern, and

eastern part of India. Raw material that is being used in the production process

also helps in accelerating the demand of the switches because consumer today

is very clever and has every idea of market .Therefore for the long term existence

of the firm in the organization all the above mentioned facts should be taken

under consideration.

Project Overview


Research Problem

The topic of the project is “A Study on Switch Industry”

Aims & Objectives

1. To make a detailed study on a switches and the switch industry on a whole

2. To make a comprehensive study of the market research of Pearl Electrical

industry i.e Kolors Switches

3. To study the switches requirements of the switches produced with special

reference to availability of Kolors switches

4. To make a SWOT analysis of the switch industry

5. To study the future prospects of the industry

# A switch is a farming tool used to frame the interior design, The general

appearance of light switches changes very slowly with time. Manufacturers

introduce various new forms and styles, but for the most part decoration

and fashion concerns are limited to the faceplates. Even the

"modern" dimmer switch with knob is at least four decades old, and even in the \

newest construction the familiar toggle and rocker switch appearances

predominate. The shape and size of the boxes and faceplates as well as what is


http://www.experiencefestival.com/a/Light_switch_-_History_and_culture/id/1576661

integrated (for example in the UK it is normal to have the switch built into the

plate) varies a lot by country. The direction which represents "on" also varies

by country. Because of electrical safety considerations in many countries their

design and installation is regulated either by law or by widely accepted industry

standards

Modular Switches and Its Special Features

From the very word "modular", one can make out that there is a which is

powered and enjoy the facility that it can be fitted in any cover frame. As we have

discussed that Kolors is available in five different categories but the best thing

about them is that any switch can be fit into any type of Kolor cover frame.

Because of this feature the kolors modular switches are widely acceptable by the

customers throughout the country. One & two channel remote switch with

dimmer and preset time delay is an exclusive product for our homes and

offices.”Kolors”Kraze Hospitality collection comprises of Electronic .Discount

offered on the product depends on the size of the order.

Origin of Switches

The first light-switch employing quick-break technology was invented by John


Holmes in 1884 in the Shield field district of Newcastle-Upon-Tyne. Light

switches are usually built into the walls of the house. Surface mounting is also

fairly common though is seen more in commercial industrial and outbuilding

settings than in houses. Because of electrical safety considerations in many

countries their design and installation is regulated either by law or by widely

accepted industry standards. In practice however in most countries any

requirements for permits or certification are widely ignored and replacing a light

switch is considered a simple "do-it-yourself" task with the parts being widely

available.

Selecting a Modular Switch

The quality of raw material used for manufacturing and the durability of the

switches are probably the powerful tool, which bound the customer most

commonly to purchase the kolors switches. There is a guranttee of 10 years

regarding the usage of switches and accessories. Most of the builders or

contractors will find it more economical to opt for a kolors switch normally and

even for those commercial as well as residential needs. However, for those who

choose to buy, careful selection of the switch should be based on the nature of

the work to be done, the quality of the home/apartment and ease of repair, as

well as personal preference. The modular switches flexibility gives the builder to

go for a variety of brand of switches, but while selecting what is to considered

ultimately is the net price which they are suppose to pay... Apart from all these

aspects some other factors which are to be considered regarding the selection of


a particular switch is the services in terms of delivery and other after sales

assistance which is needful it it requires.

Sometimes it is also considerable that for what purpose a customer is selecting a

switch says-for residential purpose “or” for commercial purpose.

If the commercial or residential project is cheaper the builder will prefer to go for

the switches which are economical as well as durable.

Following are the factors which are considered while selecting a switch:---

Brand Name

Price

Market Acceptability

Quality of the Product

Customer Satisfaction

Modular Switches Industry

During the industrial revolution period of mid-sixties, the prospect of the modular

switches was considered very high. The priority commitment to customer focus –

in the product quality, company’s competitive pricing and the way they treat the


customer. They ensure that customers always get direct access to company’s

capable staff of engineers and account executives who offer customized

solutions that meet individual requirements. That’s how company’s earned the

trust of our valued electrical and lighting distributors nationwide. However, the

experience over the years shattered the hope when the demand could barely

reach a considerable quantity per annum. Till the end of first decade, the

situation did not alter much but by the year the annual sale has been picked upto

units. Although many reasons have been extended from time to time for low

response to modular switches and even set up a committee to investigate the

difficulties of promoting modular switches, it appears that some of the important

aspects of potential modular switches users have not been accounted for in

sufficient measure. The committee's findings in the "Report of Committee on

Modular Switches" indicates the major reasons for low demand as (i) non-

availability of modular switches at low cost, (ii) rising of selling price, (iii) lack of

confidence in customer due to absence of product initially in the market and after

sales service, (iv) non-availability of well matched accessories etc. There seems

to be some still deeper reasons for the modular switches not drawing the

attention of potential users. What makes them suffer is the lack of

entrepreneurship. There is also a fear amongst them that if they borrow money

and unable to repay it then they may even lose their small holdings of market. It

is not that such potential buyers are waiting indefinitely to make choice of an

appropriate modular switches source but the number who are deciding in favour

of modular switches are small.


The modular switches industry has gone through a very rough weather during the

initial years and many units folded up their manufacturing activities. However,

during the recent years a few new units have also come up with manufacturing of

modular and plain switches.They are also having a good market share n todays

competitive scenario. Some of them are assembling Chinese completely knocked

down units for marketing in India. A few units now under development have many

hurdles to cross. Some organizations are engaged in further improvement and

development of modular switches and accessories. Time to time the proven

implements is being released for manufacturing, making modular switches and

accessories operation more versatile and efficient.

Availability of Kolors Switches

The kolors switch industry has gone through a very rough weather and many

units folded up their manufacturing activities. However, during the recent years a

company has increased the quantity of its production. Toady kolors switches are

available with almost 170 dealers, 40000 retailers and still counting. Switches

and other related accessories are now easily available even in rural places if it

required. The product has got the customer acceptability and is competing with

all other leading brands with cut to cut edge. Comparing to all other brands

available kolors has got much more acceptability which is enhancing its reach

easily to the potential consumer. The company’s product base is very wide and

the market defined for its various switches range is different. Apart from kolors it

has some range which is cheaper than kolors and is mainly concentrating on


households. Earlier Anchor was the only king in the market and was the

individual player but with the emergence of kolors –Anchor faced a tough

competition.

PROJECT OVERVIEW

In this project I will be focusing on the various operational aspects of pearl

electrical industry namely: 1.Finance 2.HR

3. Operatins 4.Marketing

VST Tillers Tractors LTD

VST was started in the year 1920 with its dealing in petroleum products. Using

this strong base, the Group quickly diversified into automotive marketing and

after-sales service. From this activity grew the network of the organization


throughout the southern states of Karnataka and Tamil Nadu. With this firm

foundation, the Group further diversified into manufacturing and promoted M/s.

VST Tillers Tractors Limited in 1965, in association and joint venture with the

Mitsubishi Group, Japan. The factory was set up on the outskirts of Bangalore

and began with the production of single cylinder Diesel Engines and Power

Tillers(2-WheeledTractors).

In 1984, VST Tillers Tractors Limited entered into an additional technical and

financial collaboration again with the Mitsubishis, Japan, for manufacture of

compact four wheel drive tractor with rotary. Due to its long association with

Mitsubishi, VST have absorbed the latest technology and work culture. This has

not only helped them to be perfect in every product it manufactures but also

satisfying every demand of their customers. VST manufactures power tillers (10-

15BHP), tractors (18.5 BHP), diesel engines & precision components like

crankshafts & connecting rods. Its products are sold under the brand name - VST

Shakti, Mitsubishi-Shakti and Euro Trac. The company is the undisputed market

leader in the Indian tiller market enjoying more than 50% market share. It also

exports its products to countries in South & East Asia, Middle East, Africa,

Europe, USA etc. It is also into trading supplying imported machinery from other

countries such as rice transplanters, combine harvesters, garden tillers, reapers,

hedge trimmers, bush cutters, hole diggers etc.

Over the years, VST Tillers Tractors Ltd., has established an extensive and

efficient countrywide sales and after-sales service network backed by easy

availability of spare parts. Periodic training programmes for dealers and


customers are taken up to keep them constantly updated on improvements in its

products.

VST has three manufacturing facilities spread across Bangalore, Mysore and

Hosur. The total installed capacity is around 13,000 units of tillers and tractors

combined. Currently, it is working only at 70% capacity leaving ample scope for

further growth with no capex requirement in the short term. Its power tillers

already have a strong presence in Karnataka, Tamil Nadu, Maharashtra, Orissa,

Gujarat and is gaining market share in West Bengal and Andhra Pradesh. Its

tractors division is growing at an enormous pace with strong demand coming in

especially from Maharashtra and Gujarat. Its precision components division

besides contributing to revenue continues to supply critical engine components

for captive consumption. In 2005 this division won TS16949 certification, which

will help in further developing the overseas market for its engine component

business. In order to beat the competition and increase its market share in the

lower end tillers market, VST has decided to import Chinese tillers in the CKD

form, assemble them at its Hosur facility and market them under a new brand

Dragon Power Tiller (14 HP horizontal four stroke single cylinder) through its

marketing and distribution network. The company is also in negotiation with its

technical partner, Mitsubishi, for setting up a 50:50 joint venture to manufacture

diesel engines for power generators and tractors.

The main products are

Tillers


Tractors

Diesel Engines

Technical Specification of a VST Tiller

Technical Specifications of a KAMCO Power Tiller

Model No- Engine-VST Shakti 130DI

Type – Horizontal 4 stroke single cylinder water cooled diesel engine

Fuel Tank Capacity- 11 litres

Speed – 14 km/hr

Tilling width- 600 mm

Tilling depth- 150mm

Functions performed –Dry Tilling, Wet Puddling, Cultivating, Ploughing,

Deweeding, Ridging, Water Pumping, and Transportation

ABOUT THE COMPANY

Board Of Directors

Managing Director- V P Mahendra

Director - A Hishikawa

Director (Operations) - (up to 11/8/07) A T Nahender


Additional Director - B C Sreenivasa Iyengar

Director (Alternate to A Hishikawa) - K Tanaka

Director - M K Bannerjee

Director (Up to 28/07/08) - M Tanaka

Director - R Subramanian

Chairman and Director- V K Surendra

Director- V Ramachandran

Director- V T Velu

Deputy Managing Director- V. V. Pravindra

Director (Up to 26/11/2005) - V. V. Vijayendra

Turnover of the company

2005-2006: 138 crores

2006-2007: 162 crores

2007-2008: 189 crores

Production per month -1550

Average weight of a tiller- 460 kgs


Speed of a tiller- 14km/hr

Price of a tiller- Rs. 1, 30,000

Fuel used in tillers- Diesel

No of bearings required in a tiller- 20

Major supplier of bearings –

A) TATA- 50%

B) FAG- 20%

C) NEI- 15%

D) FAG- 15%

Financing of VST Tillers

The growth of tiller industry is dependant on availability of Government Subsidies

and Bank Finance to small farmers. But it is a fact that India being a developing

country the farmers are mostly unable to invest huge amount in purchase of

tillers. To assist the farmers, State Bank of India (SBI) and VST Tiller Tractors

Ltd has devised a new loan scheme called SBI-VST Shakti for farmers as a part

of the farm mechanization programme.

The scheme offers the cost of the power tiller minus 5 per cent as margin with

hypothecation of the tiller and mortgage of lands covering the loan or any other

tangible security (50 per cent of loan amount). The current interest rate is 10 per


cent per annum for a repayment period of maximum nine years for an amount of

Rs 50,000 to Rs 2 lakh.

Kerala Agro Machinery Corporation (KAMCO)

KAMCO was established in 1973, to impart momentum to the agricultural

scenario in India. Modern mechanized farming techniques were required to make

large scale cultivation profitable. Moreover independent India looked upon

agriculture as the backbone of its economy. Initially it was a wholly owned

subsidiary of Kerala Agro Industries Corporation Ltd. (KAIC), Trivandrum, for

manufacture of agricultural machinery specifically Power Tillers and Diesel

Engines. Subsequently KAMCO became a separate Govt. of Kerala undertaking

in 1986. Paid up capital is Rs. 161 lakh Present Net Worth of the Company is

Rs. 6014.14 lakh. Total work force at present is 567 Certified for ISO 9001 - 2000

version from September 2002.

KAMCO , started off by setting up its first full fledged plant in Athani, where

KAMCO power tillers were manufactured in collaboration with world renowned

Kubota, Japan. The product was warmly received by agricultural community and

has still retained its No. 1 position for over three decades.

The innovative management practices and dedicated workforce have also

contributed significantly to the KAMCO success story. No wonder, today it is a


Rs. 1000 million company with its products reaching all over India and exports

landing up in Iran, Haiti and Sri Lanka.

Today KAMCO has four manufacturing plants in KERELA:

Athani- started in 1992 for manufacture of tillers

Kalamassery- started in 1992 to step up production of Diesel Engines

Kanjikode- started in 1995 to step up production of power tillers

Mala- began in 2000 to meet the rising demand for power reapers

The main products of KAMCO are

KAMCO Power Tiller

KAMCO power reaper

KAMCO Diesel Engine


The Company has 45 dealers all over India. New Dealers appointed to cover

selected districts in Tamil Nadu, Karnataka, Maharashtra, Orissa and Andhra

Pradesh. Close interaction with the Govt. of India in the formulation of new

schemes & policies for farm mechanization. Regular demonstrations and service

camps are being organized in various States. Well defined quality system

procedures adopted covering all activities to ensure quality of products &

customer satisfaction. Improvements are made on regular basis based on the

feed back from the customers & dealers. Regular interactions with all Vendors

including site visits to maintain and improve the acceptance level of components.

Technical Specifications of a KAMCO Power Tiller

Model No- Engine: ER 90

Tiller: KMB200

Type – Rotary, diesel powered, water cooled with radiator

HP- 9 – 12

Fuel Consumption – 1.5 litres per hour

Fuel Tank Capacity- 10.7 litres


Speed – 4 km/hr

Tilling width- 600 mm

Tilling depth- 190mm

Tilling Capacity- 1 hectare/8hr

Average weight of a tiller- 485 kg

Functions performed – Tiller, ploughing, puddling, leveling, ridging, weeding,

pumping, spraying, transporting

ABOUT THE COMPANY

Turnover of the company

2005-2006: 80 crores

2006-2007: 91.2 crores

2007-2008: 101 crores

Production per month -800

Price of a tiller- Rs 1, 03,000

Fuel used in tillers- Diesel

No of bearings required in a tiller- 20

No of Bearing per tiller- 23


Major supplier of bearings – Tata, SKF, FAG, HMT

Financing Of KAMCO Tillers

CANARA Bank has signed a pact with power-tiller maker Kerala Agro Machinery

Corporation Ltd (KAMCO) to finance small farmers to buy KAMCO tillers, a bank

news release said. According to the pact, Canara Bank would now be the

preferred financier for KAMCO power tillers in West Bengal, Andhra Pradesh,

Kerala, Karnataka, Maharashtra, Orissa, Pondicherry, and Tamil Nadu. This is

expected to benefit the small farmers with land holdings of less than 5.00 acres.

The loan tenure stretches from five to nine years. Under the scheme Canara

Bank would give financing solution to farmers buying KAMCO power tillers with

enhanced features like reduced margin & attractive pricing.

Bearings required in a Tiller

Symbol Application

6004 Rotary, Main & Sub Shaft

6204 Clutch pulley shaft, main & sub shaft, counter shaft

6205 Intermediate shaft, Rotary, Balancer shaft, PTO sub shaft

6206 Side plate, case, axle & rotary

6208 C3 Cover, balancer shaft


6204 2Z Main clutch

6206 2Z Rotary

6202 2Z Fan & dynamo

6304 Shaft, Steering clutch, counter shaft

6305 Clutch pulley, Rotary mission shaft

6306 Tr. Case, rotary

LS8 Main & sub shaft

6207 Timing parts, final shaft

6209 Timing parts, final shaft

51103 Tail wheel assembly

H43028 Clutch, release bearing

NJ310 Crank Shaft

NUP 310 Crank shaft

Bearings supplied by TATA Bearings

1. 6004

2. 6204


3. 6205

4. 6206

5. 6208C3

6. 6204 2Z

7. 6206 2Z

8. 6304

9. 6305

10.6306

11.6207

12.6209

Methodology

As per the need of the study I have used various research methodologies to

extract the various necessary information. The data furnished by me is the result

of the various primary and secondary researches done by me. I have used two

types of research methodologies namely

A) Primary Research including Questionnaires and Interviews with senior

level people of Tata Steel, VST Tractors and KAMCO.

The questionnaire included 19 open ended questions.


B) Secondary data including websites, journals and various projects done in

the company by senior people.

Analysis

There are more than 30 players in the tiller industry. Some of the major

manufacturers are VST KAMCO, Punjab tractors, HMT Ltd, Escorts, and

Mahindra and Mahindra, The market for power tillers is expected to grow steadily

during the current year with emphasis provided by the government to the rural

economy. The demand for Power Tillers largely survives on Govt. subsidies and

Bank Finance and though Public Sector Banks have been supporting the


agricultural credit portfolio, timely disbursement of agricultural advances has

been a constraint for the growth of Power Tiller Industry in India.. During this

year, in line with WTO norms the Union Budget lowered the peak customs duty

making imported Chinese Power Tillers cheaper. This has led to larger volumes

being imported by many players leading to competitive pressures. China being

the major competitor to India. Meanwhile, the Government is continuing to focus

on increased funding to the agricultural sector through NABARD and improve

rural infrastructure including irrigation which will translate to better demand for

the tiller industry

SWOT Analysis of the Tiller Industry

Strength

India is a developing country, its main subsistence being agriculture. It is also a

fact that most of the farmers have small land holdings. Power tillers are the two-

wheeled version of tractors that are targeted at farmers with small land holdings,

or those who cannot afford expensive tractors. It works best on smaller land

holdings (up to 2.5 hectares) and the horse power requirement is lower. Most of


the power tillers are diesel operated with a horse power ranging from 5.5 to 13.

Today, the average cost of a power tiller is around Rs 95,000 which is almost

one third of the cost compared to a tractor. As power tillers use less labour per

unit of land compared to tractors and bullock carts, it is increasingly used in very

intensive cultivation of paddy, intercropping for horticulture and plantations. A

power tiller owner is able to recover a better margin and fixed cost from custom

hiring, unlike a tractor owner. All these factors together add to the strength and

indicate towards a bright picture of the tiller industry at present as well as in the

future.

Weakness

Tillers being of low horsepower capacity are not useful when the fields are large

or more tilling depth is required. Therefore larger farmers do not prefer the use of

tillers. As tillers are less profitable there are not too many producers of tiller in

India while most industries prefer producing tractors. A tiller industry is one of the

ignored segments of the economy. Even the government gives more preference

to tractors than tillers. Number of loans advanced for tillers are lesser compared

to tractors and in most cases the farmers are ignorant about the various loan

schemes.

Opportunities

Power Tillers and Tractors remain a crucial link with farmers for the development

of agriculture since India’s arable land is the second highest in the world. Power


Tillers being a cost effective machine plays a vital role in increasing rural

prosperity and spreading awareness of the benefits from Farm Mechanization.

Meanwhile, the Government is continuing to focus on increased funding to the

agricultural sector through NABARD and improve rural infrastructure including

irrigation which will translate to better demand for the power tillers. Further,

ensuring remunerative prices for farmers and accelerating the Bharat Nirman

programme which will further improve sale of the products.

Threats

The tractors produced by the Indian producers are costly due to high price of the

various inputs. Along with this due to lowering of custom duties the import of

Chinese tillers have increased subsequently. These Chinese tillers are cheaper

compared to the Indian counterparts. This had been one of the major threat and

obstacle to the growth of the tiller industry in India.

Recommendations

As discussed earlier the demand for tillers is mainly dependent on government

subsidies. So there is not much in the hands of the manufacturers as such.

1. The government should try to make available cheap and timely credit to the

farmers in order to increase the sales.

2. They should also lessen the amount of security required to take the loan so

that even the small farmers can afford to take loans.


3. Farmers should be made aware of the various loan schemes so that they can

avail them easily

4. The manufacturers, keeping in view the increased competition in terms of

cheaper prices, should try to introduce innovative and modern technologies

which could cut down their cost of production making the end products

cheaper.

5. It is also a fact that there are too much of intermediaries between the

manufacturers and the final consumers which often lead to price

manipulations and increase in the final costs. So the manufacturers should try

to reach the farmers directly so that they can be charged a fair price.

6. The farmers should be trained so that they can use the tillers effectively

7. The manufactures should give a special emphasis on after sales service.

Appendix

Questionnaire

Name of the company

Location

Name Of Respondent

Designation

1. When was the company established?


2. Name Of owner

3. How many branches does the company have?

4. Various products of the company

5. Turnover of the company

2005-2006

2006-2007

2007-2008

6. Production per month of tiller-

7. Is the production fixed or varies according to the demand of agricultural

sector?

8. Average weight of a Tiller-

Tractor-

8. Speed of a Tiller-

Tractor-

9. Price of a Tiller-

Tractor

10.Which is the fuel used in Tillers/Tractors?

11.What is the number of bearing required per tiller?

12.What is the symbol wise application of the bearing?

13.Major supplier of bearings-

14. What percentage of bearing does each company supply?

15.What fuels the demand of tillers?

16.How does the company reach its customers?


17.What do you feel about the prospects of the tiller industry on a whole?

18.Do you plan to increase the product line of your company?

References

1. Mr. Harmindar Singh - Chief Sales Manager (Engg), TATA Bearings

2. Mr. Vikram Kuntar- Internal Guide (Institute Of Business Management &

Reasearch)

3. Mr.Nagendra, Vice President (Marketing) of VST Tillers & Tractors Ltd.,

Bangalore

4. Mr. M. Hariharan, Sr. Manager (Marketing) of KAMCO, Kerela


Bibliography:

Earlier projects of the company

Brochures, pamphlets and websites of Tata Bearings, KAMCO and VST.

Google .com


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