LIGHT ENGINEERING CLUSTER OF PARWANOO

Introduction

Parwanoo Light Engineering Industrial Cluster is located in Himanchal

Pradesh on Kalka Shimla highway on foothills of Shimla. It is on Haryana
border. 2 K.M. from Kalka and 35 K.M. from Chandigarh. Govt. of Himanchal
Pradesh way back in 1970s offered incentives to attract entrepreneur to set
up Industries in Parwanoo, which was declared backward area at that time.
This decision was taken keeping in view to economic upliftment of hilly state
by providing employment to local and bring Industrial Culture in the state.
There are about 300 small units and 32 large and medium units in the cluster.
There are more than 12500 people employed in the cluster of which about 20
% are women.

About 60% of total units of the cluster are of Light Engineering. These units
are working as ancillary units for large industries like Purolator, Gabriel,
Eicher etc. Supplying semi finished / finished parts, sub assembler as per
requirement of their principles. Tiny units are mostly engaged in sub contract
work are having 4-5 workers with a capital investment of 4-5 lacs, and do not
have sufficient technical skill to update their technologies to match the
competition. Operations involved are presswork, fabrication, metal finishing,
heat treatment, forging etc.
1. Electronic & Computers: Manufacturing Computer parts, assembling
of Monitor etc. These units are of SSI, Medium industries. Units are of
high turnover nature and employing 60% female employees..

Market Potential of the Products:

Most of the products from Parwanoo cluster are market in other states
of India and exported. Particularly, export market of computer monitors, auto
parts etc. is very high. The major companies situated in cluster are Eicher
Demm is manufacturing sub assemblies for their tractor units, LCV, Purolator,
Gabriel, manufacturer auto parts which are of high standard products having
substantial demand in local and international market.
Most of the processes at the cluster level are non-polluting except
electroplating work process units. About 150 units are having subcontracting
relationship with large firms like HCL, Vintron etc.
Support Organisations
There is an association of cluster named as Parwanoo Industrial
Associations. mainly to help members on routine matters.

General Constraints faced by Industries:

1. There is Scarcity of water being hilly area and Cluster is depending on
corporation water, which is not sufficient.
2. Cluster is not getting regular power supply and own Power generators
add to the cost of the products.
3. There is no Housing complex near to the Parwanoo cluster and
employees residing in far-flung villages.
4. Cost of transportation is quite high.
5. Non presence of Financial Institution / office in the cluster.
6. Frequent changes in Govt. policies leads to instability in the ranks of
industries.
7. In coming and out going goods are subject to Tax which add to
products cost produced in the cluster.
8. Technologies in Computer / Electronic changing fast and local units
are unable to match the International competition. There is no Govt.
information support available in the cluster.
9. Technical Education Development programmes as per local
requirement is not available.

Performance of the cluster

The total production of the cluster is about Rs 10000 millions
Due to overall recession in the market cluster is facing financial / marketing
problem. Technology development awareness programme is essential for SSI
& Tiny units and must be motivated to adopt latest technology developed to
match the Internal and International market.
Status report of cluster is enclosed as Appendix attached.
LIGHT ENGINEERING INDUSTRIAL GOODS CLUSTER PARWANOO INDUSTRIAL
ESTATE (HIMANCHAL PRADESH)
CRITERION CHARACTERISTIC
(A) Importance of cluster
(i) Existing contribution to the local economy
(i.a.) Firm analysis
Number of firms 3.9
Major Products Light Engg, Electronic & Computer,
Pharmaceuticals, PVC, Plastic & Auto
Parts.
Turnover range Rs. 900 - 1100 Crores (Estimate)
Investment range Rs. 3 lacks 10 crores (Approx.)
Nature of firms Manufacturer
Production relationship Vertical as well as Horizontal structure
(i.b) Employment analysis
Employment 12,500
Source of labour From near by villages neighboring
state & Bihar
Average wage Skilled Rs. 120/- & Unskilled Rs. 70/-
(i.c) Export No direct exports only large units
doing direct exports
(ii) Location of cluster
Urban/Semi-urban/Rural Semi-urban
Geographic spread Cluster is located on Shimla High
way, within 4 km radius 3 km away
from Kalka& 35 km from Chandigarh.
(iii) Outreach
Other clusters of similar nature Similar SSI & Medium Units exist in
(replicability) Haryana & Punjab
Linkages with other industry and SSI Units have linkage with large
trade industries working as ancillary units.
(iv) Socio-Environment consideration
Environmental problem Not much
Safety standards Satisfactory
Woman employment 15 20% of total employment in the
clusters
(B) Viability of clusters
Demand condition Local not substentional demand but
quite reasonable out side the state
and in international market.
Net birth rate Negative
Producers of strategic items Yes, assembling computer monitors,
electronic parts, watch components &
auto parts.
Major buyers Eicher, Purolator & Gabriel
Production cycle 3 to 10 days
Promoteability
Aspiration level During the survey manufacturer
explained their difficulties and
expecting firm Got. Polices benefits to
industries for revival due to overall
recession in the market.
Attitude Positive attitude.
Industry association 130 Units are member of Parwanoo
Industries Association, Large &
Medium industries are member of CII.
Entrepreneurship tendency Not encouraging
Growth of related industry At present growth is very negligible
due to recession in the market.
Potential for complementation Low. At present NSIC Branch Office
Ludhiana cover the area.