Presentation - Fan Industry of Pakistan - A Critical Analysis

8/8/2019 Presentation - Fan Industry of Pakistan - A Critical Analysis

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Fan Industry of Pakistan

Presented By;

Yousuf Hatim (SP08-BB-0137)Murtaza Asgher Ali (SP08-BB-0083)


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Agenda

Introduction

Historical Background

Figurative overview

Variety Of Products

Division Of Units

Raw materials

Manufacturing Process

Major Companies

Average Prices Exports

Pakistans Share in worldExports

Regulatory Body &institutions

Linkages

Importance of fans

Increasing demand

Manufacturers viewpoint

Governments roles

SWOT analysis

Problems Recommendations


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What are Fans?

A fan is a device used to agitate or move air or gas;it can be categorized into four distinct types:

Centrifugal

Propeller

Axial Flow Mixed Flow

Domestic Fan

The fans that consume less than 125 watts of energy.

Industrial Fan

The fan that consume over 125 watts of energy.


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Introduction

The fan industry is mainly clustered in thefour major cities namely, Gujrat, Gujranwala,Lahore and Karachi.

The industry belongs to the light engineeringindustry category, and is one of the industries

that existed at the time of independence.


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Introduction

Around 40% of the total sales are five largefirms in Gujrat and two in Gujranwala.

Fan industry is producing about seven 7million fans per annum. Out of the totalproduction, approximately 30% fans consist

of pedestals, 7 % brackets and the remaining63% are ceiling fans.


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Historical Background

Electric Fan was invented in 1886 by Schulyer Wheeler.

Before partition in 1944, fan manufacturing was started by M/sS.A Fans in Gujrat.

In 1950s, it was declared as cottage industry and its more than50% units still fall in this category.

In 1992-93, only 200,000 fans were exported to Iraq and Yemen.

In 1999, 3 million fans were produced from which 50,000 wereexported.


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Figurative Overview

2000-01 2005-06

Installed capacity 5-6 million fan / year 7 million fan / year

Capacity utilization 50% 80%

Total production 2.5-3 million fan/year 5.6 million fan / year

Direct Employment25000 people

30,000 people

Indirect Employment 40,000 people

Annual Revenue Rs. 2.25-2.7 billion Rs. 5.25 billion

Exports US $3.89 million US $16.66 million

Imports - US $160,000

GDP Contribution Rs. 1.5 billion -

Capital investment - Rs. 5 billion


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Variety Of Products

The industry is producinga variety of products indifferent sizes and designs, these are:

Ceiling

Pedestal Table

Table-cum-pedestal fans

Circumatic fans

Wall bracket

Exhaust fans

Propellers


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Ceiling Fan

Bracket Fan

Industrial Fans


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Louvre Fans

Exhaust Fans


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Division Of UnitsSmall Scale Units

Units 450

Project Cost Rs. 0.5-1.0 Mn

Employment 20-25

Production 2,000-10,000

Revenue Generated Rs. 2.0-5.0 Mn

Medium Scale Units

Units 50

Project Cost Rs. 10-20 Mn

Employment 60-80


Revenue Generated Rs. 150-250 Mn

Large Scale Manufacturing

Units 8

Project Cost Rs. 250-350 Mn

Employment 200-300


Revenue Generated Rs. 150-250 Mn

Vendors

Units 1000

Project Cost Rs. 0.45-1 million

Employment 5-20


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RawMaterials Used In Production

Some of the rawmaterials used in the

manufacturingof a fan are:

Electric steel sheets

Aluminium

Copper wire

Ball bearing

Steel rod PVC


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ManufacturingProcessBody Plate ofAluminum

Tooling &Turning

Drilling

Rotor Stator

Tooling &Grinding

Winding

Axle Fitting

Fitting of RotorStator in Body

& Nakka

Painting

Checking

AluminumBlades

Store

Painting

Pressing ByDies

Fitting ofBlade Carrier

Packing &Checking

Fitting &Assembling


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Major Electric Fan Companies

BRAND NAME COMPANY

PAK FAN M/S Wahid Industries Limited, G.T. Road, Gujarat

G.F.C. FAN M /s General Fan Company(Pvt) Ltd, G.T. Road, Gujarat

YUNUS FAN M/s Younas Metal Works , G.T.Road, Gujarat

ROYAL FAN M/s Rafiq Engineering Industries (Pvt) Ltd, , G.T. Road,Gujarat

METRO FAN M/s Hi Tech Industries (Pvt) Ltd, , G.T. Road, Gujarat


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Average Price (Rs)

2003 2007 2009Millat Fans Rs. 1625 Rs. 1850 Rs. 1900

Pak Fans Rs. 1470 Rs. 1750 Rs. 2050

Royal Fans Rs. 1563 Rs. 1650 Rs. 1850

Younas Fans Rs. 1512 Rs. 1600 Rs. 1825

Parwaz Fans Rs. 1391 Rs. 1600 Rs. 1850

G.F.C Fans Rs. 1282 Rs. 1600 Rs. 1850

Average Price Rs. 1474 Rs. 1675 Rs. 1890


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Exports

0

510

15

20

25

3035

40

45

50

Exports (US$ million)

2003-04

2004-05

2005-06

Year Exports (US$ Million)

2003-2004 11.8

2004-2005 14.2

2005-2006 16.66


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Pakistans Share In TheWorlds Exports

EXPORT OF INDUSTRIAL FANSCountry Shares

Pakistan 0.02%

France 2%

Netherlands 3%

Sweden 3%

Korea 1%

Canada 5%

Uk 4%

Italy 9%

Usa 14%

Japan 19%

Germany 33%

Taiwan 7%

EXPORT OF DOMESTIC FANS

Country Shares

Pakistan 0.1%

Singapore 1%

Uk 1%

Taiwan 20%

China 44%

Thailand 6%

Germany 5%

Usa 3%

Italy 2%

Spain 2%

Japan 2%

Other 13%


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Regulatory Body &

Institutions


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PEFMA

Pakistan Electric Fans Manufacturers Association. PEFMA was incorporated under the companies ordinance 1984

on 12th December, 1989.

The area of operation covers the whole of Pakistan includingAzad Jammu & Kashmir.

There are about 148 registered members

PEFMA was providing the following facilities to its members.

Quality Awareness seminars

Information provision regarding the international trade fairs

Arrangement of trade delegations through TDAP

Settlement of disputes among members

Meeting platform to conduct meetings with several stakeholders

Organize courses regarding technical education with FDI


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Fan Development Institute (FDI)

FDI was established in Gujrat in 2001 by thejoint efforts of Trade Development Authorityof Pakistan (TDAP) and the Ministry of

Science & Technology (MOST).

The institute possesses the role of Training

Centre for the fan industry and also fulfils thelaboratory testing requirements of theindustry.


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Gujrat Fan Cluster

In collaboration with Ministry ofScience &

Technology (MOST) and Pakistan Electric Fan

Manufacturers Association (PEFMA).

In

November 2001


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Others

OtherInstitutions are;

Chamber of Commerce & Industry, Gujrat (GtCCI) Banks /Financial Institutions

Small and Medium Enterprise DevelopmentAuthority (SMEDA) Trade Development Authority of Pakistan (TDAP) Technical Educational and Vocational Training

Authority (TEVTA)

Punjab Small Industries Corporation (PSIC) Pakistan Council for Scientific & Industrial Research

(PCSIR) Pakistan Standard Institution (PSI)


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Linkages

Backward Linkages

Steel industry

Wire manufacturing

Ball Bearing

Paint industry

Plastic industry

Transportation

Labor

Forward Linkages

Machine manufacturing

Construction industry

Air conditions

Exports

Banks & financialinstitutions


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Importance of Fans

Made life comfortable Avoid mosquitoes Improvement in hygiene Enhance the energy I

mprovement in educational environment Used in cars for cooling Ventilation Cheaper product Consumes low energy

More use in rural areas; (60% are used in rural areas) Air condition is expensive Used in different industries


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IncreasingDemand

Due to increase in population

Migration of people towards big cities

Increase in exports

Local demand for quality product isincreasing

Climate of Pakistan

People are becoming quality conscious Per capita income is increasing

Electricity projects in rural areas


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Manufacturers Viewpoint

Fan manufacturers have enhanced the prices offans by 20 per cent due to a 100 percent increasein raw material prices.

Manufacturers could not afford to continue the policyof lifetime guarantee in the wake of continuous hikein input prices.

The exporters of fans and allied goods could not

survive if they do not have sufficient stocks ofimported raw materials as well as finished goods soas to fulfill the demand of the domestic as well asinternational buyers.


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Governments Role

To avoid the mis-declaration, accommodate theinputs of industry and to facilitate the capital goodsindustry around 96 new tariff lines have beencreated.

The duties on imports have been cut down to 0%,5%, and 10% from 5-25 percent.

Provides every opportunity to the businessmen toparticipate in various international fairs and helpsthem to move forward


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SWOTAnalysis


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Strengths

Presence of large manufacturers;

Fan product: durability & performance;

Availability of raw material; Presence of specialized vendor industry;

Local machinery manufacturers;

Presence of Fan DevelopmentI

nstitute.


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Weaknesses

Lack of proper marketing techniques; Low marketing budget; Old technology; High wastages; Monopoly of raw material providers; Non-standardization of parts; Exploitation by the distributors & retailers; Labor not trained from any technical training institute;

Less technical assistance available; Low working capital; Load shedding of Electricity & Natural Gas during the

peak manufacturing season.


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Opportunities Threats

New and unexploredinternational markets;

Unutilized productioncapacity;

Product/materialdiversification.

Quality standards andcertifications;

Competitions withinternational manufacturers

like China & other countries;

Fan products more lightweight, less priced,attractive;

Dependency onI

mportedraw material.


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Problems The competitive products in the international market

were light weight, plastic bodied, attractive and lowpriced.

The immediate concern of small manufacturers was theproblem associated with the Distribution channel,

especially in the domestic market.

The labor is not trained from any technical institute, andthe seasonality effect had also reduced the productivityand efficiency of labor.

Most of the small & medium manufacturers were usingold technologies in their production facilities, which wasa major reason for increased costs and lowerproductivity.


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Problems (cont..)

Role of PEFMA as a representative body of Gujrat fanmanufacturers had been largely diminished over thepassage of time. The association was hardly meeting itsexpenditures because of having no other source ofincome.

Late dissemination of information and palming only theselected few were the usual dissatisfaction remarksabout GCCI.

The need of a specialized industrial estate washighlighted during the interactions. The entrepreneurseven exhibited keen intentions to invest for the purpose.


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Recommendations

Provision of Fan market information (Local & International).

Exposure visits of potential markets.

Participation in Trade fairs/exhibitions.

Advertisement at network level (Local).

Seminars on Quality standards..

Awareness workshops on training.

Strengthening of the role of FDI: meeting platform; introduction ofcustomized training courses.

Seminar on increase in productivity level through technology up-gradation synergies.

Meetings with stakeholders to solve financial problems linked with

procurement of more expensive technologies. Domestic market exploration on Industrial fans usage.

Information provision regarding the World trade on various types offans with different materials.


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THANKYOU

Presentation - Fan Industry of Pakistan - A Critical Analysis

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