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    SME-Management Assignment: Submitted To

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    The document discusses the household appliance manufacturing cluster in Gujranwala, Pakistan, describing the key products produced, production processes, support institutions, and challenges facing the cluster. It identifies opportunities for investment in areas like low-power appliances, import of machinery, and joint ventures with international brands. The recommendation is for the government to reduce import duties and GST rates to incentivize production and make components more affordable.

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    SME-Management Assignment: Submitted To

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    29 views6 pages
    The document discusses the household appliance manufacturing cluster in Gujranwala, Pakistan, describing the key products produced, production processes, support institutions, and challenges facing the cluster. It identifies opportunities for investment in areas like low-power appliances, import of machinery, and joint ventures with international brands. The recommendation is for the government to reduce import duties and GST rates to incentivize production and make components more affordable.

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    The document discusses the household appliance manufacturing cluster in Gujranwala, Pakistan, describing the key products produced, production processes, support institutions, and challenges facing the cluster. It identifies opportunities for investment in areas like low-power appliances, import of machinery, and joint ventures with international brands. The recommendation is for the government to reduce import duties and GST rates to incentivize production and make components more affordable.

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    SME-Management Assignment: Submitted To

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    The document discusses the household appliance manufacturing cluster in Gujranwala, Pakistan, describing the key products produced, production processes, support institutions, and challenges facing the cluster. It identifies opportunities for investment in areas like low-power appliances, import of machinery, and joint ventures with international brands. The recommendation is for the government to reduce import duties and GST rates to incentivize production and make components more affordable.

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    SME-Management

    Assignment

    Name: Muhammad Haider Pasha


    REG No : L1F16BBAM0134
    Section: A
    Submitted To
    Prof. Sidra Nasreem
    Introduction: Gujranwala is playing an important role in supporting Pakistan's economy. It is
    an industry developed district in the country. Taking into account the availability of raw
    materials and skilled labor, The Gujranwala district supports a variety of sectors. It is
    considered a production center of electrical appliances, light engineering articles, kitchen
    utensils, plastic and ceramic products and sanitary articles. The home appliance industry
    originally came from the fan industry that existed on a small scale in the nearby city of Gujrat
    before the division. Since then, Gujranwala was already famous for the production of iron,
    steel and other metal products, so the production of household appliances flourished in the
    Gujranwala region. There are about four hundred appliance manufacturing units in Gujranwala
    city and adjacent areas. Most of the units are small and rural with Except for some large ones,
    with a brand famous all over Pakistan. Mostly small and cottage tier units function as
    subcontractors for large units operating in Gujranwala and other large ones Pakistan cities,
    such as Lahore, Karachi, Gujrat, etc. Small-scale units are the real comeback bone of this sector
    as they provide work to a large number of people and collectively they represent over 90
    percent of the internal market. The cluster mainly includes semi-mechanized production
    plants with limited automation and adaptation of the latest technologies. Over the years, this
    group has expanded and led to a large chain of appliance manufacturing problems in the area
    and continues to grow. The cluster directly employs 4,500 people with a total investment close
    to PKR 1.4 billion.

    Defining the Products: Appliances, also called household appliances, are predominantly
    Electric machines, which help with household functions, such as cooking, cleaning or eating
    storage. Appliances can be widely classified into three classifications, which it includes small
    appliances, large appliances and consumer electronics.

    The main products of the domestic electrical goods produced in the cluster mainly include the

    following:

    • Electric Fans (all types)

    • Washing Machines and Spin Dryers

    • Room Air Cooler

    • Electric Motors and Pumps

    • Stabilizers

    • Tube Light Fitting

    • Electric Heaters, Geyser and Ovens


    The production of Fans, Washing Machines, Air Coolers and Motor & Pumps dominates the

    manufacturing of appliances in the cluster. The cluster is advancing towards the production of

    consumer electronics made of plastic.

    Analysis of Business Operation


    The production operation and the manufacturing process vary according to the different types
    of household appliances. Therefore, production units have a distinctive production process
    based on nature and type of goods produced. Mainly casting and manufacturing are two key
    distinctive processes involved in the production of household appliance parts in Gujranwala.
    According to requirement, parts and objects are cast or manufactured. So these fade away or

    manufactured finished parts are assembled to produce the required finished products.

    The brief explanation of these processes along with allied production operations are as
    follows:

    Casting:- - is a manufacturing process in which a liquid material is generally poured into a


    mold, which it contains an empty cavity of the desired shape and is then left to solidify. After
    solidification of The cooling molds are removed from the molds. Foundry is often used to
    create complex shapes otherwise it would be difficult or uneconomical to do it by other
    methods. Majority of The jets, especially the large ones, are made with sand molds. The sand
    is mixed with a binder and pressed in a wooden model that leaves a cavity in the sand
    according to the model of the particular product. Permanent metal molds are also used to
    make different types of small and simple parts.

    Fabrication: is the process of creating metal structures in a certain way through cutting,
    Bending, edging and stamping of sheet metal. It is a value added process which involves the
    creation of machines, parts and structures of various raw materials. Production stores are
    employed by value added contractors, original equipment manufacturers and resellers.

    Assembling: - it is a manufacturing process in which different parts are added such as the
    semi-finished product assembly that moves from workstation to workstation where other
    parts are added in sequence until the final assembly (i.e. the final product) is produced.

    Institutional Setup
    Gujranwala Chamber of Commerce & Industry (GCCI)

    Address: Aiwan-e-Tijarat Road, Trust Plaza, Gujranwala

    Tel: +92 55-9200391-4

    Web: www.gcci.org.pk

    Support Institutions

    Regional Business Center (RBC) – Small & Medium Enterprises Development Authority
    (SMEDA)
    Address: GBC Building, Aiwan-e-Iqbal Road, Trust Plaza, Gujrnawala

    Tel: +92-55-3734600

    Web: www.smeda.org.pk

    Trade Development Authority of Pakistan (TDAP)


    Address: 20-E, Satellite Town, Pasroor Road, Gujranwala

    Tel: +92-55-9200138 - 9

    Web: www.tdap.gov.pk

    Punjab Small Industrial Corporation (PSIC)


    Address: Small Industrial Estate no. 2, G.T.Road, Gujranwala

    Tel: +92-55-4283074

    Gujranwala Business Centre (GBC)

    Address: Aiwan-e-Tijarat Road, Trust Plaza, Gujranwala

    Tel: +92-55-9200868

    Web: www.gbc.org.pk

    Gujranwala Tools, Die and Moulds Center. (GTDMC)


    Address: Sialkot Bypass Chowk, Sialkot Road, Gujranwala

    Tel: +92-55-3827321 - 23

    Web: www.gtdmc.org.pk

    Light Engineering Service Center (LESC-TEVTA)


    Address: Small Industrial Estate no. 1, G.T. Road Gujranwala

    Tel: +92-55-9200661, 9200800

    Fan Development Institute (FDI)


    Address: Gorali, G.T. Road, Gujrat

    Major cluster issues and problems


    The following are the main problems that limit the growth and development of household
    appliances.

    production clusters in the region:

    • High waste rate due to the use of the old technology. Most of the manufacturers are using it
    Old technology and locally produced machines which result in high and low waste Quality
    production. The use of technological automation, in particular numerical control machines, is
    required for quality products.

    • There is an urgent need to improve product quality, standardization and design.

    • Poor quality of the sheet produced / available locally.

    • Lack of awareness of national and international standards.

    • The availability and cost of public services, in particular electricity and gas, are the main
    concerns Manufacturers.

    • The lack of adequate brand development and marketing practices has limited cluster growth
    and expand both nationally and internationally. The units do not have specialized personnel.
    marketing departments. Likewise, there is limited emphasis on website development, Product
    advertising and participation in exhibitions.
    • The level of education of workers working in this group is very low, which also creates
    difficulties in learning and accepting new tools and techniques.

    • The continued increase in imports of cheap Chinese household appliances to the market is a
    major concern for cluster manufacturers. Since consumers prefer to buy Chinese products, are
    better in design, quality and cost.

    Investment opportunities and attractive areas of cluster


    The growing demand for domestic appliances as well as the potential of export offers. Many
    profitable investment opportunities for investors.

    Following are some potential projects.

    1. Manufacture of low consumption appliances.


    2. Melting and laminating unit
    3. Commercial chains and purchasing houses for export orders
    4. Import of automatic machinery
    5. Create a network of providers
    6. Joint venture with international brands

    Recommendation: I will recommend the government it is essential for the government to


    reduce basic customs duty on parts used in manufacturing of key components such as motors
    etc . One of the key measures in the sector could be the reduction of GST rates on electronic
    components and the rationalization of plates for various categories of products. The GST rate
    cuts on components would offer producers an incentive to expand production. To invest on
    R&D so the products can be efficiently made and cost effective as well as they should lend
    loans without intrest.

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