1

leather industries

leather industries

GOVT OF BIHAR INDUSTRIES DEPARTMENT

GOVT OF BIHAR INDUSTRIES DEPARTMENT

in Bihar

and it’s potential

in Bihar

and it’s potential

a p r e s e n t a t i o n o na p r e s e n t a t i o n o n

2

There are 50,000 footwear artisans in the state

Bihar is known for the best quality of cow hides, buff calf skins & goat skins

Bihar is very Rich in Cattle Population

Produces 2.64 million bovine hides per annum

3

State has tanneries as well as footwear units in the private sectorState has tanneries as well as footwear units in the private sector

There is abundant skilled labouravailable in the StateThere is abundant skilled labouravailable in the State

In case of Goats population, ranks 3rd

next only to W.Bengal and RajasthanIn case of Goats population, ranks 3rd

next only to W.Bengal and Rajasthan

Produces 5.09 million ovine skins per annumProduces 5.09 million ovine skins per annum

4

LeatherIndustries

In Bihar

MainRegions

OfActivities

LeatherIndustries

In Bihar

MainRegions

OfActivities

5

(In million nos.)(In million nos.)LivestockWealth

LivestockWealth

7.99189.2214.74Cattle

4.2395.484.04Buffalo

12.11127.0715.39Goat

0.98 51.73 1.89Sheep

Bihar All India

Bihar’s share

(%)

6

5.7423.01.32Cattle Hides

4.7128.01.32Buffalo Hides

5.6082.04.59Goat Skins

0.50 30.0 1.67Sheep Skins

Bihar All India Bihar’s share (%)

Hides/ Skins(In million pieces)(In million pieces)

Productionof

Hides & Skins

Productionof

Hides & Skins

Source : All India Survey on Raw Hides and Skins-CLRI, 2005Source : All India Survey on Raw Hides and Skins-CLRI, 2005

Goat skins are smaller in size and they are best suitable materials for the production of glazed kid leathers which are mostly used for Ladies shoes meant for export.

7

(In lakh pieces)(In lakh pieces)

Sheep Skins

Goat Skins

Buff Calf

Skins

Buffalo Hides

Cow Calf

Skins

Cattle Hides

Market

Neg.2.550.100.550.180.32Pur nia

Neg.1.300.100.300.060.42Pabai

0.061.4412.000.040.360.14Muzaffarpur

Neg.1.820.020.480.020.72Aurangabad

Neg.1.22Neg.1.08Neg.0.72Arrah

0.514.500.440.410.150.54Patna

Neg.1.46Neg.0.86Neg.0.35Munger

MarketwiseAvailability

of Hides

& Skins

MarketwiseAvailability

of Hides

& Skins

Source : All India Survey on Raw Hides and Skins Markets- 2005

The tanning industries is confined to a few tanneries in Muzffarpur and another BATA tannery at Mokamaghat, as a result most of the material is destined to Kolkata, Kanpur, Chennai. Some wetblue leathers are sent to Dewas (MP)

The tanning industries is confined to a few tanneries in Muzffarpur and another BATA tannery at Mokamaghat, as a result most of the material is destined to Kolkata, Kanpur, Chennai. Some wetblue leathers are sent to Dewas (MP)

8

The leather tanning industry in Bihar consists of three importantsegments:

Units established under Bihar State Leather Industries Development Corporation (BSLIDC) and its sister concern viz. Bihar Finished Leathers Ltd.Private Tanneries working in Muzaffarpur districtBATA Tannery at Mokamaghat (Patna)

Tanneries under BSLDC(established during ’70s- Tech support from CLRI)

50 buff hides/dayVegetable tanned Sole Leather

Jehanabad780 cattle hides/dayRaw to WetblueSiwan6

100 cattle hides/day500 pcs

Raw to FinishRaw to Wetblue

Sakri(Madhubani)5500 cattle hides/dayWetblue to FinishBarauni41000 goat skins/dayWetblue to FinishMuzaffarpur3

100 cattle hides/day500 cattle hides/day

Raw to WetblueWetblue to Finish

Bettiah2200 hides/dayRaw to WetblueBihta(near Patna)1

CapacityProcessing StagePlaceSl.

All above units are closed since 1993 due to financial constraint for working capital needs.

Status

of

Tanning

Industry

in

Bihar

Status

of

Tanning

Industry

in

Bihar

9

Status

of

Tanning

Industry

in

Bihar

Status

of

Tanning

Industry

in

Bihar

Private Tanneries working in Muzaffarpur districtFive out of nine tanneries established in BELA industrial estate in Muzaffarpur are at present working, they are:

Destination of end products : Tamilnadu / Tata unit at Dewas, MP

3000 goat skins/dayor 300 pcs hides/day

Raw to WetblueSABA Tannery5

800 goat skins/day or 70 hides/day

Wetblue to FinishESPHNA Tanners

4

4000 goat skins/dayor 400 hides/day

Wetblue to FinishNorth Bihar Tanneries

3

500 hides/dayRaw to WetblueGreen Leathers Ltd.

2

200 cow or 2000 goat skins/day

Raw to FinishAlpha Leathers1CapacityProcessing StagePlaceSl.

All above units have established Chrome Recovery Plants and also Effluent Treatment Plants. Major problem is the disposal of treated waste water.

BATA Tannery at Mokamaghat: This Unit is working at low capacity due to effluent problem.

10

Footwear units in Bihar consist of two segments:(i) Organized units

Mechanised unit owned by Bihar State Leather Industries Development Corporation (BSLIDC) in different places which are closed due to financial constraints.

One unit of Bata India Ltd, which is operational since 1942, making different types of footwear.

Boots3000 prs/monthBhagalpur5Shoes1000 prs/monthBettiah6

Common Facility Centre for footwear/ leather goods

Fatuah4Boots3000 pairs/monthDarbhanga3Boots3000 pairs/monthBiharsharif2

Boots for Police and Safety shoes

3000 pairs/monthBikram (near Patna)

1

ProductCapacityUnits owned by BSLIDC

Sl.

Status

of

Footwear

Units

Status

of

Footwear

Units

11

(ii) Artisan / Household units

Other artisan units located in all urban and semi-urban centres, namely

Muzaffapur, Bettiah, Danapur, Patna etc.

There are about 1000 household / cottage footwear units in these places, making Chappals, Sandals and handmade shoes for local wholesale and retail market both in leather and non-leather materials.

They source leather and non leather materials from Kolkata.

There are a few job work units supplying stitched components to Bata India Ltd.

There is sufficient local demand for footwear manufactured through cottage/ household units in Bihar. These are sold in places like Kanpur, Kolkata, Agra etc.

These household /artisanal units need the following:a) necessary financial support for working capital needsb) skill upgradation and marketing support

Status

of

Footwear

Units

Status

of

Footwear

Units

12

Tech.

Training

Institute

Tech.

Training

Institute

Muzaffarpur Institute of Technology (MIT)The Leather Technology department was started in 1986 at MIT.It has 4 1/2 years degree course, with 4 year academic programme and 6 months practical training.15 persons are taken per batch. At present, a 6-member faculty is engaged for running this course. The students turned out of this college are getting readily employment outside the state since the tanning industry has dwindled in this state.

13

Given the inherent strength of raw material availability in good quality, the Tanning Sector in the Muzaffarpur region is to be strengthened.Establishment of Common Effluent Treatment Plant in Muzaffarpur region. CETP to be established as an environmental safeguard measure.Technological upgradation and modernisation of tanneries.Once Tanning industry is strengthened finished leather in the state can be augmented for manufacturing of value added leather products in the state itself.

CriticalInterven-

tionsRequired

CriticalInterven-

tionsRequired

14

Developing local Footwear manufacturing artisanal units. Such units are to be developed in the form of Self Help Group, which can be provided financial assistance and support through various govt schemes. Establishment of a dedicated Leather Complex, which can house tanneries, leather products manufacturing units as well as allied industries on the lines of Kolkata Complex.To commission preliminary study for finding out feasibility of establishing such a dedicated Leather Complex, agencies like IL&FS is to be engaged.

CriticalInterven-

tionsRequired

CriticalInterven-

tionsRequired

15

There is need to construct good slaughter houses for the production of hygienic meat and proper recovery of byproducts such as hides and skins, intestines etc. in a phased manner.

There is also a need to undertake thorough study on the prevailing conditions of urban slaughter houses in the state.

Separate Industrial Parks for footwear and leather goods to be developed near Patna.

Muzaffarpur can be developed as a major Tanning Complex inviting entrepreneurs for establishing medium & large scale tanning units.

CriticalInterven-

tionsRequired

CriticalInterven-

tionsRequired

16

Onthe

Horizon

Onthe

Horizon

Construction of Common Effluent Treatment Plant:For treatment of effluent from tanneries, CETP (Common Effluent Treatment Plant) is to be setup at Industrial Area, Muzaffarpur under the guidance of Central Leather Research Institute, Chennai.A senior Scientist from CLRI has already made spot survey of the proposed site and detailed Project Report (DPR) is expected from CLRI very soon.

17

Footwear Design & Development Institute:The Govt of Bihar has already requested Ministry of Commerce & Industry, Govt. of India to establish Footwear Design & Development Institute in the State

The institute is to be established on the pattern of FDDI at NOIDA.

The State Govt is ready to provide all necessary support and help in this regard.

On

the

Horizon

18

19

Industrial Incentive Policy : 2006Industrial Incentive Policy : 2006( Effective for five years since 01-04-2006)

StrategyCreation of favorable industrial environment.Single Window Clearance Act, 2006.Bihar Infrastructure Development Enabling Act,2006Self Certification of inspection of the factories.Simplification of the labour laws .Creation of high quality entrepreneurship and skill development.Establishment of Land Bank.Marketing arrangement for handloom and handicraft products.Encouragement of Public Private Partnership.Infrastructure Development.Rehabilitation of sick units.

20

Pre production Incentive• 100 percent exemption on Stamp Duty and Registration.• Facility will be available only once.

Post production Incentives• Reimbursement of cost incurred on Project Report• 50 percent amount subject to maximum of Rs 75000 on the Cost.• Project Report must be prepared by Consultant approved by

Department of Industries.• Reimbursement only after commercial production.

Post production IncentiveIncentive granted on land and Shed.Industrial units located in BIADA/EPIP/ Food Park/Agri-Export Zone are eligible for following incentives:-

25% or Rs15.00 lakhs (Maximum)All large/Medium mega units 2-

50% or Rs4.50 lakhs (Maximum)Small/Tiny units 1-

GrantIndustrySl.

Industrial Incentive Policy : 2006Industrial Incentive Policy : 2006( Effective for five years since 01-04-2006)

21

Financial Assistance for Technical know-how.

Reimbursement of 30 percent maximum Rs. 15 lacs of the fees paid to the recognisedinstitution/Organisation for technical know how. This facility will be available after commercial production.

Incentive grant for capital investment on captive Power Generation/ D.G. Set.

50 percent grant on expenditure incurred on Plant and Machinery after production.

Relief from payment of electricity duty under Bihar Electricity Duty Act, 1948.Post Production Incentive

Incentive on Commercial Taxes80 percent reimbursement against the admitted VAT amount deposited in the Government for a period of ten years. Maximum subsidy amount is 300 percent of the invested capital.The incentive will not be payable on the amounts imposed as penalty and the difference of the amounts between tax assessed and accepted under the CST/Bihar VAT Act, 2005 and Bihar Entry Tax Act.Zero VAT- units producing zero VAT items and pay income tax would be eligible for an incentive up to a maximum utilisation of 40 percent of the installed capacity.Other facility:-

Luxury Tax - 100 percent exemption for 7 years.Electricity Duty - 100 percent exemption for 7 years.Market Fee - 100 percent exemption for 7 years.Conversion Charges - 100 percent exemption for 7 years.

Industrial Incentive Policy : 2006Industrial Incentive Policy : 2006( Effective for five years since 01-04-2006)

22

Post production IncentiveIncentive to units in production-

25 % percent reimbursement of the deposited amount in the StateGovernment account against the approved VAT amount.Incentive to Schedule Caste/Tribe/ women/Handicapped.Grant/ Concession/ Reimbursement of additional 5 percent than the prescribed amount. Up to a turn over limit of 30 lakhs per annum for small/Tiny industries will avail 100 percent subsidy on the deposited amount in the Govt. account as VAT for 10 years.

Exemption from AMG/MMGExemption from AMG/ MMG for working and new units for 5 years

Central Sales Tax· Only one percent payable for commodities manufactured by small/

medium units registered in Bihar.

Industrial Incentive Policy : 2006Industrial Incentive Policy : 2006( Effective for five years since 01-04-2006)

23

Industrial SicknessSmall Industry SectorState Level CommitteeChairman- Director of IndustriesMember - Bank, Financial Institution, Reserve Bank ,Industry Government machinery and Experts.Statutory Right to the Committee· No registration for sick units in every years.· Determination of Rehabilitation tenure.· Time bound rehabilitation package.· Incentives under Industrial Policy available as per the package but not move them twice.· Exemption of AMG/ MMG/DPS for sick units for five years from the declaration of sick.

Large and medium Sector (Non BIFR)State Level CommitteeChairman - Secretary IndustryMembers - Banks, Financial Institutions, Reserve Bank, Industry Association, Govt . machinery , experts.· Provision of approval of package on recommendation of the committee through State Level

Committee headed by Chief Secretary.· Exemption of AMG/MMG/DPS for Sick units for five years from the declaration of sick. · Industrial Rehabilitation Package : Proposal for Industrial Rehabilitation package for

revival of the sick and closed units with the help of the Commercial bank, State Govt and Bihar Industry Association.

Industrial Incentive Policy : 2006Industrial Incentive Policy : 2006( Effective for five years since 01-04-2006)

24

Incentive on Expansion/ Diversification/ ModernisationIncentive to existing units for expansion/ diversification and modernisation on incremental production as new units as per provisions of the policy.

Incentive on quality certificate75% of the cost incurred in obtaining Certificate of ISO standard (equivalent).

Incentive on implementation of Reservation PolicyAdditional 10 percent incentive will be available to the units implementing the reservation policy of the Government.

Industrial Incentive Policy : 2006Industrial Incentive Policy : 2006( Effective for five years since 01-04-2006)

25

Single Window ClearanceState Investment Promotion Board

Single Window ClearanceState Investment Promotion Board

Rs. 517.10 CroresCapital Investment for Extension of Mill8

07Approved proposal received by SIBP for Extension of Mill

7

Rs. 4557.00 CroresEstimated capital investment proposal approved by SIBP for Sugar Mill

6

21Proposal received by SIBP for new Sugar Mill5

63. Other Proposal

182. Technical Institute

651. Industries

Sectorwise Proposal4

85790Proposed employment generated3

Rs. 36323.50 CroresProposal Approved by SIBP for Capital Investment2

89Number of Proposal Received in SIBP1

26

Single Window ClearanceState Investment Promotion Board

Single Window ClearanceState Investment Promotion Board

89

65

186

Total No. ofProposalsIndustries

Tech.Institute

Others

27

Bihar Development and Investment Promotion CouncilBihar Development and Investment Promotion CouncilFor improving the developmental growth rate by focusing on all sectors, for campaign against poverty and injustice through good governance based on democratic principles by developing social infrastructure, for improving the quality of life and for improving the investment climate and for advising the State Government, as a think tank State Government have decided to constitute a group comprising of the following members. This will be known as Bihar Development and Investment Promotion Council.

Chief Minister, Bihar will be the Chairman of the Council. The representation sectorwise of Memebers in the Council will be as follows:-(i) Vice Chairman, State Planning Commission - Vice Chairman

ECONOMISTS(i) Dr. Shankar Acharya, Ex. Chief Economic Advisor,

Ministry of Finance Member(ii) Dr. Rajiv Kumar, Director, ICRIER Member(iii) Dr. Suman Bery, D.G., NCAER Member(iv) Shri M. Govind Rao, Director, NIPFP Member(v) Shri O.P. Mathur, Principal Consultant, NIPFP Member

CORPORATE(i) Shri B. Muthuraman, M.D., Tata Steel Ltd. Member(ii) Shri Homi R. Khusrokhan, M.D., Tate Chemicals Ltd. Member(iii) Shri Anand Mahindra, Vice Chairman, M&M Ltd. Member(iv) Shri Sunil Bharti Mittal, CMD, Bharti Enterprises. Member(v) Shri Kumar Mangalam Birla, Chairman, Birla Group Member(vi) Shri Suresh Neotia, Chairman, Ambuja Cements Ltd. Member(vii) Shri Sanjiv Goenka, Vice Chairman, RPG Ent. Member(viii) Shri Analjit Singh, Chairman, MAX Member(ix) Shri Habil Khorakiwala, Chairman Wockhardt Ltd. Member(x) Smt. Rajshree Pathy, Chairman Member(xi) Ms. Priya Paul, Chairman, Apeejay Surrendra Group. Member

28

Bihar Development and Investment Promotion CouncilBihar Development and Investment Promotion CouncilINDUSTRY ASSOCIATIONS(i) Shri Tarun Das, Chief Mentor, CII Member(ii) Shri K.P.S. Kesri, President, BIA Member(iii) Shri R. Seshasayee, President, CII Member(iv) Shri Amit Mitra, Secretary General, FICCI Member(v) Shri Anil K. Agarwal, President, Asso.CCII MemberMEDIA(i) Shri Pranoy Roy, CMD, NDTV Ltd. Member(ii) Shri Shekhar Gupta, Editor-in-Chief, Indian Express Member(iii) Shri Prakash Jha Member(iv) Shri Suhel Seth, Chairman, EQUUS ADS MemberBANKING & FINANCE(i) Dr Rakesh Mohan, Dy. Governor, RBI Member(ii) Shri O.P. Bhatt, Chairman, SBI Member(iii) Shri K.V. Kamath, MD & CEO, ICICI Bank Ltd. Member(iv) Shri B. Lall, MD & CEO, IDFC Member(v) Shri Ravi Parthasarathy, Chairman, IL&FS MemberLEGAL(i) Shri Fali S. Nariman MemberSCIENCE & TECHNOLOGY SECTOR(i) Dr. R. Mashelkar, D.G., ICAR MemberENVIRONMENTALIST(i) Shri R.K. Pachauri, D.G., TERI MemberMANAGEMENT EXPERT(i) Prof. V.S. Vyas, Chairman, Institute of Dev. Study, Jaipur MemberCONSTRUCTION(i) Shri Hafiz Contractor MemberChief Secretary Member SecretaryCouncil, for achieving the objectives, may seek the assistance of other experts, reputed institutions and organizations. They may be invited, as per therequirement, as special invitees for the meetings of the council.

29

Bihar Development and Investment Promotion CouncilBihar Development and Investment Promotion Council

Activities of the Council

Fixing sectoral targets for all-round development, laying down guidelines and concretisation of focus issues and for monitoring of the developmental activities and mid term review will be some of theactivities of the council.

Council will also be advising the State Government on the possibilities of investment in sectors, for strategy for attracting private sector investment etc. The council with reference to its activities may make rules for, laying down procedures and regulations. There shall be specific provisions relating to powers of the council in the rules/regulations.

The secretarial assistance will be provided by the Industries Department and the expenses of the council will be met out of the budget of the Industries Department.

30

Bihar FoundationBihar FoundationFor improving the industrial climate in the State and for encouraging the investment by Non Resident Indian/Biharis, the State Government have decided to constitute a "Bihar Foundation". The objectives of the foundation are as follows:-(i) To provide a forum for and facilitate communication and interaction between Non-Resident Biharis and the State of Bihar;(ii) To facilitate the participation of Bihari Diaspora in the development of State;(iii) To act as a Self-Help Groups in other Metros and Provinces in India which have alarge Bihari migrant population;(iv) To take steps for improving vocational training and skill inculcation of migrants Biharilabour to improve their wages and conditions of work;(v) To establish, develop and support Centres for documentation, set up Reference and information Centres and systems and administration and common service centers relevant to the welfare of Non-Resident Biharis;(vi) For establishing local chapters in different countries and within the country wherever the Non Resident Bihari;(vii) To provide inputs and suggestions to the government regarding policies and schemes designed for improving the socio-economic development of the State and create such funds and endowments as necessary for these objectives;(viii) To undertake activities for assisting the State Government and for achieving the objectives of the foundation.

31

StatusNo. of Industrial Area - 44Acquired Land - 4345 AcresAllotted Land - 1555 AcresLand available - 813 AcresNo. of working units - 561Investment - 13258.47 lakhsEmployment - 14280EPIP, Hajipur - 94 Acres

BIHAR INDUSTRIAL AREA DEVELOPMENT AUTHORITY (BIADA)

32