Foundry's melting fortune
In 2012, some 30 odd disillusioned foundry operators of Samalkha saw a glimmer of hope when a Delhi-based consultancy firm told them that their fortunes can change for better if they cater to the burgeoning demand of over 1 lakh chaff cutters (known as toka in local parlance) to co-operative dairies of Gujarat and Rajasthan.chandigarh Updated: May 30, 2013 01:27 IST
In 2012, some 30 odd disillusioned foundry operators of Samalkha saw a glimmer of hope when a Delhi-based consultancy firm told them that their fortunes can change for better if they cater to the burgeoning demand of over 1 lakh chaff cutters (known as toka in local parlance) to co-operative dairies of Gujarat and Rajasthan. The demand though came with a rider - the quality of the chaff cutters should be impeccable. And that was the end of the grin on the faces of the chaff cutter manufacturers.
Ved Mittal whose Shri Ram Casting is situated just off the national highway in a dusty industrial estate created by Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) is no optimist. “The state of affairs is pathetic for the foundry cluster in Samalkha. It has been quite a while since we decided to go for technology upgrade. But we have not moved ahead. In fact we have not been able to collectively put our act together. Outdated technology and labour problems are sounding the death knell for this cluster,” says Mittal as he shows around his foundry which is lying idle due to non-availability of labour.
Pradeep Kumar of Durga Foundry says that already a sizeable number of foundry units - about 40 by conservative estimates - have closed down on account of various problems. “People ridicule me when I tell them that we are not going to last for more than 3-4 years. But this is the fact,” he says.
The problem areas
A diagnostic study report (DSR) prepared by New Delhi-based Foundation for MSME Clusters says that the level of advanced technical knowledge and process knowhow is poor among majority of manufacturers. “For decades, similar products are being manufactured here and the manufacturers have failed to keep themselves abreast of ever-changing organised market trends,” it says.
The quality of the final product - the chaff cutter - is poor and no efforts have been made to improve it. Besides, in the absence of proper testing facilities, the foundries are not able to get quality raw material. “We have no way to find out whether the coke (made from coal) we use has the right ash content or more. Similarly, to test cast iron, scrap and pig iron, the manufacturers have to go to Delhi laboratories. Panipat has one such testing laboratory but it is very expensive and results are extremely poor,” says Pradeep Kumar of Durga Foundry.
If the processes and technology are not improved, Samalkha will lose major market share to clusters such as Batala and Goraya in Punjab. Also, there is a need to improve the working conditions, otherwise the labour will start migrating or look for other opportunities. “Despite added transport costs, units in Batala, Agra and Ahmedabad are having a major market share in this region,” reads the DSR.
In the foundry cluster, occupational health and safety issues also take a backseat to work. The DSR says that poor working conditions in the cluster have forced workers to either remain absent from duty or quit.
“Poor ergonomics and safety standards in most of the units are a major issue. Also, the level of technical knowledge and practices are poor. A common facility centre (CFC) will help them emerge as a brand for the small town,” said TL Satyaprakash, director, industries and commerce, Haryana.
Is technology really the answer?
While technology upgrade has been listed as the core solution for the dying foundries, Ved Mittal's experience has been quite shattering. In 2012, Mittal spent Rs 8 lakh on a set of semi-automatic moulding machines along with related paraphernalia to cut down manual work. “They are gathering dust for the past one year as I do not have skilled workers to operate them. I now repent investing money in technology,” Mittal says pointing towards a yet-to-be-unpacked compressor equipment. He says that technology in the absence of skilled hands is meaningless.
Failed revival attempts
Though attempts have been made to bring a turnaround in the fortunes of the foundry cluster, shortage of finances and lack of leadership did not allow fructification of plans. “Ours is a poor cluster. Money is a big problem for us. We failed to initiate the process of setting up a CFC as we were unable to pitch in with our share of finances,” says Sachin Mittal of Haryana Iron Foundry. Mittal says the foundry entrepreneurs can't afford to make fresh investments.
A foundry is a factory which produces castings of different metals. The most common metals processed are cast iron and aluminium. Samalkha cluster was developed in late 1940s when the family of a local trader initiated this business. Since they already had base in Punjab's Goraya foundry cluster, they brought trained manpower from Punjab. By 1991, about 70 foundry units had started operating in this cluster. However, the number fell down in the successive years and about 30 units were shut down. One reason for the shutdown was change in a central government policy that allowed units to get raw material at subsidised rates.
Number of units: 30. All are micro enterprises.
Employment: The cluster provides employment to about 1,200 skilled and semi-skilled workers. There are both contractual as well as permanent workers.
Estimated annual turnover of the cluster: R90-95 crore
This industry is barely surviving. We need skilled workers and for that we need a training centre in Samalkha. Our machines are antiquated but we do not have money to buy new equipment. To put it bluntly - In kaarkhanon mein kaar to udd gayi hai sirf khaane bachey hai
Pradeep Kumar, Durga Foundry
Our product lacks quality. Also, we do not have a good marketing reach. We must try to create a single brand name for our chaff cutter. It will not be possible unless we improve our manufacturing protocol
Sachin Mittal, Haryana Iron Foundry
I have been in this trade for more than two decades now. Without government's support and technology upgrade, I don't think this cluster will be able to survive
Ved Mittal, Shri Ram Casting