Fan Industry of Pakistan - A Critical Analysis

7/23/2019 Fan Industry of Pakistan - A Critical Analysis

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Mohammad Ali Jinnah University

REPORTFAN INDUSTRY PAKISTAN

Submitted To:

Mr. Afaq Ali Khan

Course:


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API Sec (A) Fan Industry Of Pakistan

Analysis of Pakistani Industries

Section A

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Prepared By:

Murtaza Asgher Ali

Yousuf Hatim

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Acknowledgement

At the onset we would like to thank our ALLAH who gave us strength

to compile this report. Next we are grateful to the previous students who

worked really hard to compile the data which helped us a lot to make this

report. We hope that the report we tried to make will provide the information

and true picture to the readers and they might show the deep sense of

appreciation for our effort. We are thankful from the bottom of heart and

really grateful to our course instructor Mr. Afaq Ali Khan, who worked hard

with us throughout the entire course.

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TableOfContents

Introduction Electric Fans........................................................................6Types of fans....................................................................................................................6

Overview........................................................................................................9

Historical Background................................................................................11

Variety of Products.....................................................................................12Ceiling Fans..................................................................................................................12

Exhaust Fans.................................................................................................................13

Propellers......................................................................................................................14

Raw Materials..............................................................................................15

Division of Units..........................................................................................16Small size Manufacturers..............................................................................................16Medium size Manufacturers..........................................................................................17

Large size Manufacturers..............................................................................................19

Specialized spare part vendors......................................................................................21

Major Manufacturers & Average prices..................................................21 Average Prices...............................................................................................................22

Domestic Distribution & Exports..............................................................22 Domestic Market...........................................................................................................22

Export in International Market.....................................................................................23

Regulatory Bodies & Institutions..............................................................28

Pakistan Electric Fan Manufacturers Association (PEFMA).......................................28Fan Development Institute (FDI)..................................................................................28

Chamber of Commerce, Gujrat (GCCI)........................................................................30

Banks /Financial Institutions.........................................................................................30Small and Medium Enterprise Development Authority (SMEDA)................................30

Trade Development Authority of Pakistan (TDAP).......................................................31

Technical Educational and Vocational Training Authority (TEVTA)...........................31Punjab Small Industries Corporation (PSIC) ..............................................................32

Pakistan Council for Scientific & Industrial Research (PCSIR)...................................32

Pakistan Standard Institution (PSI)...............................................................................32

Social Dynamics of the Gujrat Cluster .....................................................33

SWOT Analysis...........................................................................................34Problems.......................................................................................................35

Recommendations.......................................................................................36

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Introduction Electric Fans

A mechanical fan is an electrically powered device used to produce an airflow forthe purpose of creature comfort (particularly in the heat), ventilation, exhaust,

cooling or any other gaseous transport.

Mechanically, a fan can be any revolving vane or vanes used for producing currents of

air. Fans produce air flows with high volume and low pressure, as opposed to a gascompressorwhich produces high pressures at a comparatively low volume. A fan blade

will often rotate when exposed to an air stream, and devices that take advantage of this,

such as anemometers and wind turbines often have designs similar to that of a fan.

Typical applications include climate control, cooling systems, personal comfort (e.g., an

electric table fan), ventilation (e.g., an exhaust fan), winnowing (e.g., separating chaff ofcereal grains), removing dust (e.g. sucking as in a vacuum cleaner), drying (usually in

addition to heat) and to provide draft for a fire. It is also common to use electric fans asair fresheners, by attaching fabric softenersheets to the protective housing. This causes

the fragrance to be carried into the surrounding air.

In addition to their utilitarian function, vintage or antique fans, and in particular electric

fans manufactured from the late 19th century through the 1950s, have become arecognized collectible category, and in the U.S.A. an active collector club, the Antique

Fan Collectors Association, supports the hobby.

Types of fans

Mechanical revolving blade fans are made in a wide range of designs. In a home you can

find fans that can be put on the floor or a table, or hung from the ceiling, or are built into

a window, wall, roof, chimney, etc. They can be found in electronic systems such ascomputers where they cool the circuits inside, and in appliances such as hair dryers and

space heaters. They are also used for cooling in air-conditioning systems, and in

automotive engines, where they are driven by belts or by direct motor. Fans create a wind

chill but do not lower temperatures directly.

There are three main types of fans used for moving air, axial, centrifugal (also calledradial) and cross flow (also called tangential).

Axial fans

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The axial-flow fans have blades that force air to move parallel to the shaft about which

the blades rotate. Axial fans blow air across the axis of the fan, linearly, hence their

name. This type of fan is used in a wide variety of applications, ranging from smallcooling fans for electronics to the giant fans used in wind tunnels.

Examples of axial fans are:

Table fan - Basic elements of a typical table fan include the fan blade, base,

armature and lead wires, motor, blade guard, motor housing, oscillatorgearbox,and oscillator shaft. The oscillator is a mechanism that motions the fan from side

to side. The axle comes out on both ends of the motor, one end of the axle is

attached to the blade and the other is attached to the oscillator gearbox. The motor

case joins to the gearbox to contain the rotor and stator. The oscillator shaftcombines to the weighted base and the gearbox. A motor housing covers the

oscillator mechanism. The blade guard joins to the motor case for safety.

Electro-mechanical fans, among collectors, are rated according to their condition,size, age, and number of blades. Four-blade designs are the most common. Five-

blade or six-blade designs are rare. The materials from which the components are

made, such as brass, are important factors in fan desirability.

Ceiling fan - A fan suspended from the ceiling of a room is a ceiling fan.

In automobiles, a mechanical fan provides engine cooling and prevents the engine

from overheating by blowing or sucking air through a coolant-filled radiator. It

can be driven with abelt and pulley off the engine's crankshaft or an electric fan

switched on/off by a thermo switch.

Computer fan

Variable Pitch Fan A variable pitch fan is used where precise control of static

pressure within supply ducts is required. The fan wheel will spin at a constant

RPM (1780 in this case). The blades follow the control pitch hub. As the hubmoves toward the rotor the blades increase their angle of attack and an increase in

flow results.

Centrifugal fan

Often called a "squirrel cage" (due to its similarity in appearance to exercise wheels for

pet rodents), the centrifugal fan has a moving component (called an impeller) that

consists of a central shaft about which a set of blades, or ribs, are positioned. Centrifugalfans blow air at right angles to the intake of the fan, and spin the air outwards to the outlet

(by deflection and centrifugal force). The impeller rotates, causing air to enter the fan

near the shaft and moveperpendicularly from the shaft to the opening in the scroll-shaped

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fan casing. A centrifugal fan produces more pressure for a given air volume, and is used

where this is desirable such as in leaf blowers,hair driers, air mattress inflators, inflatable

structures, and various industrial purposes. They are typically noisier than comparableaxial fans.

Cross flow fan

A cross flow fan, is a centrifugal fan in which the air flows through the fan, rather thanthrough an inlet. The rotor of a cross flow fan is covered to create a pressure differential.

When used in household fans, cross flow fans have a smaller opening on one side and a

larger opening on the other. The resultant pressure difference allows air to flow straightthrough the fan, even though the fan blades counter the flow of air on one side of the

rotation. Cross flow fans give airflow along the entire width of the fan. Cross flow fans

are noisier than ordinary centrifugal fans presumedly because the fan blades fight theflow of air on one side of the rotation unlike normal squirrel cage fans. Cross flow fans

are often used in air conditioners, automobile ventilation systems, and for cooling inmedium-sized equipment such as photocopiers. The action of a fan or blower causespressures slightly above atmospheric, which are called plenums.

Domestic & Industrial Fans

Global fan trade is classified on the basis of energy consumption: the fans consuming less

than 125 Watt of energy are referred to as Domestic Fans (HS 8414.51), whilst thosethat consume over 125 Watt are called Industrial Fans (HS 8414.59).

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Overview

The state of the engineering industry describes the status of industrialization of a country

since it portrays the capability to add value to the primary products and of indigenousproduction of plants and machinery. The developed countries have assigned high priority

to the engineering industry in their own country. The range of light engineering goods

covers electrical goods, transport equipment, domestic appliances, telecommunication

equipment etc. There are about 2,500 registered units and a much larger number in theunorganized sector, with fixed assets of over Rs 100 billion. A number of small industrial

units are operating in Karachi, Lahore, Gujarat, Gujranwala and Sialkot. Engineering

goods have already made a breakthrough in the export market. In addition to exports ofconventional surgical instruments, cutlery goods and other light engineering product,

Pakistan still is far behind in export of engineering goods as compared to NewlyIndustrialized Counties i.e. Korea and Malaysia and thus offers huge potential formanufacture of engineering products It is recognized that capital machinery, light

engineering goods and engineering consultancy services offer great opportunities for

export mainly in the Middle Eastern, African and neighboring countries. The country hasa limited capability to design, test and experiment on new machines. The small and

medium-sized units do not have the finances to risk innovative efforts, while the large

ones are preoccupied with their production and have no time to spare for testing

innovations. There are a number of large industrial units which have successfullyduplicated certain models of machines or adopted the patent or design of a few products

or have acquired the rights on permanent basis on expiry of the validity period. These are

the slow speed engines, sewing machines, cycles, electric fans and motors, dry electricalcells and pumps, to name a few. These efforts have been effective in import substitution

of commodities.

Fan is a daily use item. Its utility increases, especially in the summer season. The industry

is producing about 5 to 6 million fans per annum and meeting successfully the local aswell as the export demand. Out of the total production, approximately 30 per cent fans

consist of pedestals, 7 per cent brackets and the remaining 63 per cent are ceiling fans.

The industry belongs to the light engineering industry category, and is one of theindustries that existed at the time of independence. In the early 1950s, it was declared as

cottage industry and its more than 50 per cent units still fall in this category.

Fan industry is mainly confined to Gujranwala and Gujrat cities of the Punjab province.

The reason for its remaining a cottage industry is that majority of the units does not havefull facilities of production under one roof. They usually give orders to the units having

machines for different parts like fan guards, blade castings, core laminations etc. These

units have lathes, shapers, milling machines, and power pressers, die casting machinesand electroplating equipments. Therefore, most of the units are simply assembling units.

Thus, they do not give brand names to their products.

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Besides small and medium units, a few units are quite large and have integrated system

i.e. from motor winding to high-pressure dies casting. These companies have reputedbrand names and the qualities of their products are of international level. These units are

the main players in the export field.

The current output (8 working hours per day) of the Gujrat cluster is about 70, 000,00

(Seven million fans per annum). A rough estimate unveiled that the installed capacity of

the cluster was almost double. Hence, the fan manufacturers were operating undercapacity; their existing setup could attain double output at the minimum provided

exploration of new markets, availability of finance and other variants as closely matched

and explained later in the report. The above mentioned yearly production could be

segregated on the basis of different kind of fans being produced in the following manner:

Electric Fans Total Production Percentage (%)

Pedestal fan 21,000,00 30Bracket fan 490,000 7

Ceiling fan 44,100,00 63

Total: 70,000,00

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Historical Background

The Industrial Revolution in the late 19th century introduced belt-driven fans powered by

factory waterwheels. Attaching wooden or metal blades to shafts overhead that were used

to drive the machinery, the first industrial fans were developed. One of the first workablemechanical fans was built by Alexander Sablukov in 1832. He called his invention, a

kind of a centrifugal fan, an Air Pump. Centrifugal fans were successfully tested inside

coal mines and factories in 1832-1834. When Thomas Edison and Nikola Teslaintroduced electrical power in the late 19th and early 20th centuries for the public, the

personal electrical fan was introduced. Between 1882 and 1886, Dr. Schuyler Skaats

Wheeler developed the two-bladed desk fan, a type of personal electric fan. It wascommercially marketed by the American firm Crocker & Curtis electric motor company.

In 1882, Philip Diehl introduced the electric ceiling fan. Diehl is considered the father ofthe modern electric fan. In the late 19th century, electric fans were used only incommercial establishments or in well-to-do households. Heat-convection fans fueled by

alcohol, oil, or kerosene were common around the turn of the 20th century. The first

American fans were made from around the late 1890s to the early 1920s. They hadbrass

blades, a lot of them also had brass cages, and though they were built very wellinternally, they were far from finger safe, as a lot of them had cage openings so big that

one could put an entire hand or arm right through it. Many children had hands and fingers

severely injured by those fans In the 20th century, fans have become utilitarian. Duringthe 2000s, fan aesthetics have become a concern to fan buyers. The fan is part of

everyday life in the Far East, Japan, and Spain (among other places). Electric fans have

been largely replaced by air conditioners in offices, but they are still a commonhousehold appliance.

Gujrat is a well known industrial city of Pakistan. Main Industries like Fans, Furniture,

Ceramics, Shoes, PVC pipes, Abrasive Cloth, & Motorcycle have played a vital role to

uplift the economy of Pakistan. These industries are not only fulfilling the needs ofdomestic buyers but are also exporting their products to different parts of the world.

These industries are providing employment to a large number of persons directly &

indirectly.

Gujrat is home to the largest concentration of fan manufacturers in Pakistan and is

located in the region with a rich tradition of metal based industries. Before the emergenceof fan production, local metal workshops manufactured components for water pipes(hookas or hubble-bubbles) and water hand-pumps. The Fan manufacturing industry was

started in Gujrat, before the partition of India by late Mr. Muhammad Azam. He founded

M/s S.A Fans in 1944, and drive the industry with his personal technical skills andexperience. (He gained experience on fan manufacturing from the city of India,

Amritsar). After partition, some more entrepreneurs initiated the fan manufacturing

business and got acquainted with the trade in later years. The hot climatic conditions of

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http://en.wikipedia.org/wiki/Industrial_Revolutionhttp://en.wikipedia.org/wiki/Waterwheelhttp://en.wikipedia.org/wiki/Alexander_Sablukovhttp://en.wikipedia.org/wiki/Thomas_Edisonhttp://en.wikipedia.org/wiki/Nikola_Teslahttp://en.wikipedia.org/wiki/Schuyler_Wheelerhttp://en.wikipedia.org/wiki/Schuyler_Wheelerhttp://en.wikipedia.org/wiki/Philip_Diehl_(inventor)http://en.wikipedia.org/wiki/Brasshttp://en.wikipedia.org/wiki/Far_Easthttp://en.wikipedia.org/wiki/Spainhttp://en.wikipedia.org/wiki/Industrial_Revolutionhttp://en.wikipedia.org/wiki/Waterwheelhttp://en.wikipedia.org/wiki/Alexander_Sablukovhttp://en.wikipedia.org/wiki/Thomas_Edisonhttp://en.wikipedia.org/wiki/Nikola_Teslahttp://en.wikipedia.org/wiki/Schuyler_Wheelerhttp://en.wikipedia.org/wiki/Schuyler_Wheelerhttp://en.wikipedia.org/wiki/Philip_Diehl_(inventor)http://en.wikipedia.org/wiki/Brasshttp://en.wikipedia.org/wiki/Far_Easthttp://en.wikipedia.org/wiki/Spain


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Pakistan were the major driving force behind the ever increasing domestic demand and,

thus, the fan industry started to flourish in Gujrat.

Variety of Products

The industry is producing a variety of products in different sizes and designs. The major

products are: ceiling, pedestal, table, table-cum-pedestal fans, circumatic fans, wallbracket, exhaust fans and propellers.

Ceiling Fans

A ceiling fan is a device suspended from the ceiling of a room, which employs hub-mounted rotating paddles to circulate air in order to produce a cooling ordestratification

effect.

Most ceiling fans can be used in two different ways; that is, most fans have a mechanism,

commonly an electrical switch, for reversing the direction in which the blades rotate.

In summer, when the fan's direction of rotation is set so that air is blown downward(typically counter-clockwise, when standing under the fan and looking upwards), the

breeze created by a ceiling fan speeds the evaporation of sweat on human skin, which is

experienced as a cooling effect.

In winter, buildings in colder climates are usually heated. Air naturally stratifies that

is, warmer air rises to the ceiling while cooler air sinks to the floor. A ceiling fan, with its

direction of rotation set so that air is drawn upward (typically clockwise), takes cool air

from lower levels in the room and pushes it upward towards the ceiling. The warm air,which had naturally risen to the ceiling, is forced out of the way of the incoming cool air;

it travels along the ceiling and down the walls, to lower levels where people in the room

can feel it; this reverse rotation has the added advantages of not creating the wind-chilleffect of the summer operation scheme, and of heating the air slightly by forcing it along

the entire surface area of the ceiling which is typically hot due to risen hot air trapped on

the other side in the attic.

Even though most ceiling fans can be mounted to all types of ceilings, not all can bemounted to angled or cathedral ceiling without an added bracket or down-rod.

Configurations

Commercial or industrial ceiling fans are usually used in offices, factories orindustries. Commercial ceiling fans are designed to be cost effective and can save

more than 75% on energy savings, which is always welcome in businesses. The

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industrial or commercial ceiling fans only use three blades plus a high-speed

motor to function. To use more blades would strain the motor and use up more

electricity. It can be purchased with an ultra quiet motor. These energy efficientceiling fans push massive amounts of air compared traditional ceiling fan. If its

summer they keep the air circulating and in winter they push warm air from the

ceiling to the floor.

A hugger or low profile ceiling fan has been installed as close as possible to thesurface of the ceiling without the ceiling fan blades scraping it. Hugger fans are

usually installed in rooms which have lower ceilings. Hugger ceiling fans cant be

used in rooms with vaulted ceilings. In cold climates, a ceiling fan may disperseheat to warm up the room as well by dispersing downwards the warm air that rises

to the ceiling surface. Though the ceiling fan cannot lower room temperatures,

when used in tandem with a room air-conditioner it may be able to disperse thecool air all around the room.

Outdoor ceiling fans may be used in covered locations but outside the houseproper, such as in a porch exposed to the garden. The outdoor ceiling fan should

never be placed where the elements (especially water) can reach it and its motor.Outdoor ceiling fan should be covered with a rust-proof finish and non-warp

blades. Outdoor fans are made of materials which can withstand cold, heat and

humidity.

Energy star ceiling fans are manufactured under the energy star label. Usuallyenergy star fans hold the distinction of being more energy efficient (50%), have

lower price tags, and save a lot of money on energy savings. There are also

energy star ceiling fans cooling other types of structures besides home such as

warehouses, offices, businesses, and schools. Energy star ceiling fans areavailable in home repair stores and furniture stores, or you may order the product

online at a discount online store.

Exhaust Fans

A whole-house fan or exhaust fan is a type of fan installed in a building's ceiling,

designed to suck hot air out of the building. It is sometimes confused with an attic fan.

A whole-house fan sucks hot air out of a building and forces it into the attic. This

displaces the very hot air trapped in the attic (which is pushed out the gable-end or soffitvents). Then, with windows and/or doors open to the outside, the whole-house fan draws

cooler outside air into the building to replace the hot air (creating a cooling breeze whilstdoing so).

Attic fans, by comparison, only serve to remove some hot air from the attic; no direct

cooling effect is provided to the actual living space.

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A whole-house fan can significantly lower the temperature in a building very quickly,

and is much less expensive to operate than air conditioning. Newer whole house fans are

extremely environmentally friendly and energy efficient additions to house coolingsystems. On temperate days they can be turned on to circulate rising hot air out of the

house while pulling cool air in. Also new models are quieter and smaller than their older

counterparts.

Propellers

A propeller is a type offan which transmits power by converting rotational motion into

thrust. It can be used to drive an aircraft, ship, or the fluid within apump. It consists ofone or more blades about a central shaft and operates like a rotating screw orwing. A

pressure difference between the forward and rear surfaces of the airfoil-shaped blade is

produced and air or water accelerated behind the blade. Propeller dynamics can bemodeled by both Bernoulli's principle andNewton's third law.

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Raw Materials

Most of the raw materials used by the fan industry are directly or indirectly importedfrom different countries. Irregular and constrained supplies of some basic input are the

main bottlenecks. Some of the raw materials used in the manufacturing of a fan are:

electric steel sheets, Aluminium, enameled copper wire, ball bearing, steel rod and PVC.

Major fan producing countries are Japan, Korea, Taiwan, Hong Kong, India and China.Japan is covering high quality market segment of fan market. Korea and Hong Kong are

in middle segment of market while Pakistan, India, Taiwan and China are supplying

comparatively low quality products at cheaper prices.

The current average consumption of the main materials according to the mentioned

percentages for fan manufacturing is as follows:-

S. No. Name of Material Quantity

1 Copper enameled

wire

39,739,50 kg

2 Aluminium 10,790,000 kg

3 Ball bearings 13,400,000

4 Aluminium blades 41,176,25 kg

5 Iron guards 29,000,00 kg

6 Capacitors 70,000,00

7 Raw pug iron 15,440,000 kg

8 Electrical steel sheets 23,118,450 kg

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Division of Units

Small size Manufacturers

The core competence of small manufacturers was the ability to produce low cost fans atminimal prices. The low costs were achieved as a result of

1) hiring only seasonal employees,

2) using simple, traditional production techniques & machines mostly(second-hand)

3) by catering to far-flung rural markets through wholesalers. Raw material

generally used was of inferior quality.

Small Scale UnitsUnits 450Project Cost Rs. 0.5-1.0 Mn

Employment 20-25

Production 2,000-10,000

Revenue Generated Rs. 2.0-5.0 Mn

Machinery used

The small manufacturers were using rather older production techniques and machinery intheir production process. The quantity of each machine varied from 2 to 6 for each type,

the following machines were mostly used:

Lathe Machine (Belt type)

Drill machine (Bench type)

Automatic winding machine for ceiling fans (Locally made)

Hand coil machine for pedestal fans

Die for blade bending

Air compressor & gun for painting

Oven for backing Paint (natural gas operated)

Electrical devices for fan checking

The following electrical devices were usually applied for the checking of fans:

Watt meter (manual)

RPM meter

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Manufacturing process

The Production process of the small manufacturer is very simple (here we will discussthe example of the Ceiling fan manufacturing process). The manufacturers just used to

buy the main parts of fans and assemble the parts using: Turning or Tooling the parts

Winding the rotor stator

Assembling

Painting

Checking

Packing

Manufacturing process of Small Manufacturers

Medium size Manufacturers

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The manufacturing firms used to manufacture relatively limited range of medium priced

economy fans through

1) employing less capital intensive processes,2) utilizing medium quality material,

3) selectively outsourcing components to low cost vendors.

Generally, like the larger manufacturers, the medium-sized manufacturers also used toperform coil winding process in-house (a critical process with huge impact on the quality

of the end-product) only for the ceiling fans, using the locally made automatic winding

machines. Some of the medium sized firms also used rotary die casting machines to diecast the main body plate of the fan and a few were also using the automatic press for

developing rotor stator in-house.

Medium Scale UnitsUnits 50

Project Cost Rs. 10-20 Mn

Employment 60-80

Production 20,000-60,000Revenue Generated Rs. 150-250 Mn

Machinery used

Lathe Machine (Belt type)

Drill Machine (Bench type)

Automatic winding machine for ceiling fans (Locally made)

Hand coil machine for pedestal fans Die for blade bending

Rotary die casting machine

Dies for body casting

Semi automatic press for rotor stator


Oven for backing Paint (natural gas operated)

Electrical devices for fan checking

The following electrical devices were used for checking of fans:

Watt meter (Manual)

RPM meter

Test chamber to check the air delivery

Manufacturing process

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The Production process of the medium manufacturer was somewhat different from the

small manufacturers as they used the in-house installed rotor stator facility by manual

stampation press & moulding facilities on rotary die casting machines.

Manufacturing process of Medium sized Manufacturers

Large size Manufacturers

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Large manufacturers were distinguished by their ability to acquire new machinery and

production techniques, and to invest in equipment, employees, brand equity, and

distribution channels development. Their products were more expensive, composed ofhigher quality raw material, used modern machinery during production processes and the

product range was also quite diversified. Generally, the manufacturers used to introduce

at least one new design every year. Other than the common metal-made fans, they hadalso introduced plastic bodied fans Decorative fans and fans with fancy lights were

their most recent improvements. Estimation indicated that about 80-90% of fans from the

Gujrat cluster were exported only by the large manufacturers for the last many years. Thereasons figured out for this large share in the total exports could be linked to the:

1) Brand establishment in the international markets

2) Financial sources

3) Marketing techniques4) Skilled and trained management staff

5) Better communication/negotiation skills

6) Modern technology

7) Maintenance of separate funds for R&D.

Large Scale Manufacturing

Units 8

Project Cost Rs. 250-350 Mn

Employment

Production 6

Revenue Generated Rs. 150-250 Mn

Machinery used

Capstan lathe machine (Belt type)

Lathe machine (Notched Gear type)

Drill machine (Bench type)


Oven for backing paint (natural gas operated)

Automatic winding machine ceiling fans (Imported & Locally made)

Automatic coil winding machine (pedestal fan)

Automatic paper insertion machine (pedestal fan)

Coil & wedge inserting machine (pedestal fan) Lacing machine (pedestal fan)

Automatic progressive die Stamping power press

High pressure die casting machine

Enameled copper wire plant

CNC wire cut machine (for die making)

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Electrical Devices for fan checking

The following electrical devices were used for fan checking:

Watt meter (Manual)

RPM meter Test chamber to check the air delivery

Specialized spare part vendors

The main vendors present in the fan cluster Gujrat are listed below as:

S.no. Description of Firms No. of Firms

1 Guard makers 30

2 Rotor makers 45

3 Nakka 254 Aluminium blades 3

5 Rods 15

6 Blade carrier / Pari 20

7 Canopy 35

8 Enameled copper wire 12

9 Insulated wire 10

10 Dimmers 25

11 Packaging material 25

12 Aluminium casting 45

13 Pig iron casting 20

14 Plastic parts 20

Vendors

Units 1000

Project Cost Rs. 0.45-1 million

Employment 5-20

Major Manufacturers & Average prices

BRAND NAME COMPANY

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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

Average Prices

2003 2007 2009

Millat 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

Domestic Distribution & Exports

Domestic Market

The major production of the cluster was marketed in the national domestic market. It as

estimated that about 60% of the fans sold were used in the rural areas and the rest were

used in the urban areas. Various different advertising/marketing methods were adopted

by the fan manufacturers including wall chalking, hoardings on the road sides,newspapers, periodicals, key chains, clocks, writing pads, calendars, cable & television.

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Distribution Channel

In big cities like Karachi, Lahore, Peshawar, Hyderabad, large manufacturers used to selltheir products either through their own outlets or through distributors. The distributors in-

turn used to engage and distribute fans amongst other clients including dealers, subdealers and retailers. On the other hand, medium & small manufacturers used to sell theirproducts only through several intermediary agents and small retailers. In far flung rural

towns and villages, the sales business was usually conducted by small retailers.

The typical distribution channel model used by the entrepreneurs is depicted in thediagram below:

Export in International Market

Global fan trade is classified on the basis of energy consumption: the fans consuming less

than 125 Watt of energy are referred to as Domestic Fans (HS 8414.51), whilst those

that consume over 125 Watt are called Industrial Fans (HS 8414.59). Besides meeting

the domestic requirements, electric fans are also being exported from Pakistan. The majorFan export markets included the Middle Eastern countries, Bangladesh, Saudi Arabia,

Sudan and South Africa, etc.

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Although fans' exports have great potential, their export is negligible. In 1992-93, only

two-lac fans were exported to only two countries, Iraq and Yemen. But now the industry

is exporting fans to more than 25 countries.

The figures given in table-I indicate that although the exports of ceiling fan increased

from Rs134 thousand to 209 million rupees, the trade is fluctuating a great deal. Asagainst ceiling fans, the increase in pedestal fan export is quite stable i.e., continuously

rising.

Pakistan has also started exporting parts of fans. During the last four years, as shown in

table-II, the amount earned from export rose from Rs4.2 million to Rs107 million in

1998-01, but decreased to about fifty per cent the very next year, 2001-02. However, in

spite of big fluctuations, it is believed that if some bottlenecks are removed there is a bigscope for enhancing the export of fans.

The situation is that from very the beginning, the government has not given any

incentives to encourage fan industry i.e. whatever progress the industry made, it has madeon its own resources, and is due to its dedicated and hard working manufacturers and

labourers. In spite of the lack of proper training the industry has innovated and uplifted

the standard to the level where its products can compete in the world markets.

The main constraints hindering the growth of industry as well as export are:

Ball bearing is an important part that ensures smooth running and noiseless working of anelectric fan. Fan manufacturers are now importing this item because of smuggled ball

bearings local units are not producing quality products. Thus, anti-smuggling measures

should be taken to save the local industry, which in turn would ensure regular supply of

ball bearing to fan industry at reasonable prices. In the meantime, the import duty on ballbearing should be rationalised.

Like ball bearings, Electric Steel Sheet (ESS) is also a major item in fan manufacturing.

It determines the quality, performance, durability and electricity consumption of a fan.However, due to ESS shortage and high prices, fan manufacturers are using Mild Steel

Sheet (MSS). The motors manufactured from this material are not of good quality and

use more electricity.

Prices of raw materials are also a major constraint in export. For instance, in some casesC&F prices of raw materials in Pakistan are greater than C&F prices of fans from India.

Therefore, if the government really wants to increase exports of fan, custom duties onraw materials should be lowered to a reasonable level.

There is an urgent need to establish a research department for innovation and to improvedesigns of fans according to the requirements of international buyers. Pakistan Standard

Institute's procedure should be simplified and the latest technical laboratory should be

set-up to test the fans. The PSI should establish its testing laboratory in the area whereindustry exists and test fans on two standards i.e., at local and international. The test

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report should be given in a specific period. Further, an institute for labour training should

immediately be established with the help of PEFM Association. The other measures to

enhance the export, include organising seminars, doing surveys of the foreign marketsthat would give the idea of how to export, where to export and what to export.

Exports Of fans (000) Rs.

1989-90 134 - 1,289

1992-93 81,762 - 1,826

1993-94 18,636 - 15,137

1998-99 2,552 - 32,432

1999-00 15,689 - 66,370

2000-01 59,259 - 161,554

2001-02 208,963 - 183,613

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%

25

Exports (US $Million)Year

16.662005-2006

14.22004-2005

11.82003-2004

0

5

10

15

20

25

30

35

40

45

50

Exports (US$

million)

2003-04

2004-05

2005-06


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EXPORT OF INDUSTRIAL FANS

Country SharesPakistan 0.02%

France 2%

Netherlands 3%

Sweden 3%

Korea 1%

Canada 5%

Uk 4%

Italy 9%

Usa 14%

Japan 19%

Germany 33%

Taiwan 7%

Exports of Pakistans fan

COUNTRY Other Fan Fan under 125 Watt

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BANGLADESH 44% 48%

SAUDI ARAB 14% 19%

UAE 25% 17%

OTHERS 17% 16%

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Regulatory Bodies & Institutions

Pakistan Electric Fan Manufacturers Association

(PEFMA)

Pakistan Electric Fan Manufacturers Association (PEFMA) was incorporated under the

Companies Ordinance 1984 on the 12th of December, 1989. The registered office of the

association is situated within the premises of FDI. The area of operation of theassociation covers the entire Pakistan including Azad Jammu & Kashmir. 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 the members;

Meeting platform to conduct meetings with various stakeholders;

Organize courses regarding technical education with FDI.

There were about 148 registered members of the association. The membership fee of the

association was Rs. 1000/- per annum.

Fan Development Institute (FDI)

FDI was established in Gujrat in 2001 by the joint efforts of Trade Development

Authority of Pakistan (TDAP) and the Ministry of Science & Technology (MOST). Theinstitute possesses the role of Training Centre for the fan industry and also fulfils the

laboratory testing requirements of the industry.

Machinery/Equipment

The following machines were installed in FDI:

CNC (Computerized Numerical Control) vertical machining centre CNC wire cut EDM ( Electric Discharge machine)

Fully automatic surface grinding

Lathe machines

Mechanical Hacksaw

Drilling machines

Shaper machines

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Training Institute

Training courses were being offered in the following areas: Basic Electrical Technology certificate course (4 months)

Basic Mechanical Technology certificate course (4 months)

CNC Machine Operator course (1 month)

Electrical Fan Testing course (2 weeks)

AutoCAD course (2 months)

Electric motor winding course (2 months)

Mechanical Draftsman course (2 months)

The institute has the capacity of 60 students in different courses. The enrolled strength of

the institute was 30 students at the time of compilation of this report. Majority of thefresh trainees were inducted by large manufacturers. (According to the information

provided by the FDI, almost 90% of the students trained by the institute have been

employed by the cluster).

Testing Laboratory

FDI was undertaking the following testing facilities for the industry:

Fan Testing (According to the data provided by the officials of the FDI only 30%of the fan industry availed the fan testing facility)

Material Testing

Die making (According to the information provided by the officials of the FDI,about 130 jobs in die making have been performed for the cluster)

Future Projects

The institute was planning to start Training programme on Die & Mould Making.Some other projects in the pipeline were:

Extension of land

Construction of building

Hostels

Staff accommodations

Guest House

In addition to FDI, there were several other technical training institutes providing skilledpersons to the fan industry:-

Pak Swedish Institute of Technology

Faran Institute of Technology

Gujrat Institute of Technology

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Chamber of Commerce, Gujrat (GCCI)

The Gujrat Chamber of Commerce & Industry was providing valuable services to both

the commercial and industrial sectors in the area. Especially for the fan cluster, the

Chamber was serving in the following manner:-

Attestation of document for exports;

Issuance of the Certificate of Origin for exports;

Meetings with foreign trade delegations;

International Trade fairs information provision;

Organization of seminars about international trades and quality standards;

Facilitating to solve the problems from its platform.There were about 1200 members belonging to the commercial/industrial sector registered

with the Chamber(About 70-80% of the entrepreneurs related to the fan cluster were themembers).

The annual membership fee was Rs.1000.

Banks /Financial Institutions

Twelve different banks were providing the banking and overdraft/credit facilities to the

commercial and industrial sector. About 30% of the fan manufacturers had acquired thecredit facility from at least one of these Banks/Financial Institutions. However, the

increase in the rate of markup to 12-14% was creating problems for the manufacturers.

Small and Medium Enterprise Development

Authority (SMEDA)

SMEDA was established in October 1998 to take on the challenge of developing Small &Medium Enterprises (SMEs) in Pakistan. It is a relatively new organization, with a

futuristic structure and focus on providing business development services to small and

medium enterprises. It is not only an SME policy-advisory body for the Government of

Pakistan but also acts as a one-stop shop for its SME clients.

SMEDA Overview and service profile

SMEDA Gujrat office was established in 2002;

Developed Light Engineering sector study;

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Sector brief and other reports developed on Fan;

Developed Fan sector growth strategy;

Meeting of SMEDA with FDI & fan manufacturers (approx. 10-15 per year);

Developed feasibility report on Fan guard in 2002 updated in 2006.

Trade Development Authority of Pakistan

(TDAP)

TDAP is the primary agency of the Government of Pakistan engaged in the promotionand boosting of country's exports. Since its inception in 1963 as an attached department

of the Ministry of Commerce, TDAP continued to facilitate the exporters in overcoming

difficulties faced by them on the supply and demand side. Various services are provided

by TDAP in the areas of marketing, communication, human resource development,

regulations etc.

Facilitative role of TDAP for the fan cluster

Provided funds for the building of Fan Development Institute and PakistanElectric Fan Manufacturers Association;

Provision of information about the related International exhibitions and trade fairsto the cluster;

Arrangement of the trade delegations; so far, 3-4 trade delegations had been

conducted for the fan cluster since 2000; provided the Kenya warehouse facility;

however, no entrepreneur did avail the opportunity so far.

Technical Educational and Vocational Training

Authority (TEVTA)

TEVTA is another significant endeavor of the Government of Punjab, which focuses on

the development of human resource in terms of skill up-gradation for girls and boys. It

directly leads to an improvement in employment opportunities of the students who arereadily employed by the industry.

TEVTA was managing nearly 400 different technical, commercial and vocational

training institutes throughout the province. There were 16technical/commercial/vocational institutions (11 for men and 5 for women) operating

under TEVTA in Gujrat, imparting training in various trades including mechanical,

electrical, and auto-engineering, instrument, welding, wood working and commerce.Approximately, an average of 90 students used to pass the mechanical, electrical and

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instrument courses annually. Only 2% of those students are employed in the cluster3.

There were no specific courses related to the fan industry offered by TEVTA.

Punjab Small Industries Corporation (PSIC)

PSIC is the provincial department which supports the establishment of small and cottage

industries in the province of Punjab. PSIC has provided facilities in the following areas:

Offered credit facilities to small and cottage industries (new and existing

businesses). According to the PSIC officials, the loaning scheme was announced

in 1992 with a maximum limit was 7,50,000/- and the mark-up rate was 7%. Only8-10 entrepreneurs from Gujrat Fan cluster had availed the facility so far.

Established the industrial areas for small industries. The industrial estate project

was started in 1961/62 and consisted of 568 Kanals. About 50-60% of the fanmanufacturing facilities were operational in the industrial estate.

Currently, PSIC has acquired land (about 1400 Kanals) for the new Industrial

Park on Bhimber road, Gujrat.

Pakistan Council for Scientific & Industrial

Research (PCSIR)

The institute used to provide the facility of testing laboratory for all kinds of industrial

products produced in Pakistan. For the fan industry, the institute used to issue the

Standard Certificate according to PS-1/1991. The fee structure was as follows:

Pedestal fan Rs 3500

Ceiling fan Rs 3000

PCSIR also used to certify fan products on behalf of SASO (Saudi Arabian StandardOrganization); a pre-requisite for Fan exports to Saudi Arabia. SASO and PCSIR used to

jointly inspect the export consignments according to the standard as detailed in paras 112

and 113. PKR 35000 were charged for the process.

Pakistan Standard Institution (PSI)

The institute used to issue the license for all the industrial sector products to be procured

for Public sector organizations. For fans, the license was issued for each fan separatelyand a fee of Rs 3000 was charged for the purpose.

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Social Dynamics of the Gujrat Cluster

The Gujrat Fan cluster has evolved over a long span of time. The present configuration ofthe cluster was the reflection of the changes and adjustments that have taken place

overtime including the habits of the entrepreneur, the growth of workers into SMEs andthe spread of the skills from the workers of the pioneer firms to the new comers. All these

developments have gradually contributed to the evolvement of a dynamic cluster entity.

Most of the entrepreneurs belong to either the blacksmith (Lohaar) family or they are

Skeikh or Kashmiries. The influence of the caste system is not very high.

The fan manufacturers of Gujrat normally used to produce larger volumes of low cost

products. In the current situation, an acute price competition was present among themanufacturers, and the quality has been sacrificed to reduce the cost of the product. Even

the big players (manufacturers) were also involved in this price-war. Some of thereasons behind the cut-price competition included the unbalanced demand and supplies,policies which were trader-oriented not manufacture-oriented, unplanned growth of the

industry, etc.

There was a shortage of educated personnel in the business. Most of the manufacturers

were under-matric. This lack of education had suffered the businesses at all the levels

starting from management to the shop-floor labour handling.

The factory policymaking was analyzed to be weak, and marketing and management

were non-professional. The concepts of record keeping and account maintenance were

the domain of entrepreneur himself or the manager (Munshi) of that firm. Theupcoming generations of the entrepreneurs were relatively more educated, depicting

entrepreneurial realization and acknowledgement of modern educational needs. Being

religiously minded, most of the entrepreneurs avoided dealings with the banks due to theInterest system. The lack of trust on each other was also a communal problem.

The labour was employed from nearby villages as well as from far-off areas, depending

on the nature of reference. The skills were transferred to the new comer through thetraditional Ustad-Shagird System. All the training was provided practically on the

manufacturing floor.

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SWOT Analysis

Strengths:

Presence of large manufacturers;

Fan product: durability & performance;

Availability of raw material within the cluster;

Presence of specialized vendor industry;

Local machinery manufacturers;

Presence of Fan Development Institute.

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 manufacturingseason.

Opportunities:

New and unexplored international markets;

Unutilized production capacity;

Product/material diversification.

Threats:

Quality standards/certifications;

Competitions with international manufacturers like China & other countries: Fan

products more light weight, less priced, attractive;

Dependency on Imported raw material.

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Problems

The competitive products in the international market were light weight,plastic bodied, attractive and low priced. However, Pakistani fan productswere more durable and exhibited higher functional performancecharacteristics.

The immediate concern of small manufacturers was the problemassociated with the Distribution channel, especially in the domesticmarket. On the other hand, export marketing was the major focus area forthe medium enterprises.

The labor was not trained from any technical institute, and the seasonalityeffect had also reduced the productivity and efficiency of labor.

Most of the small & medium manufacturers were using old technologies intheir production facilities, which was a major reason for increased costsand lower productivity.

Most of the small manufacturers criticized the role of FDI for clusterdevelopment, and termed FDI as an extension facility of largemanufacturers. The Die manufacturing rates of FDI were higher than orequal to the market. Entrepreneurs also complained that FDI was adiagnosis centre and not a solution provider.

Role of PEFMA as a representative body of Gujrat fan manufacturers hadbeen largely diminished over the passage of time. The association washardly meeting its expenditures because of having no other source ofincome.

Late dissemination of information and palming only the selected few werethe usual dissatisfaction remarks about GCCI.

The need of a specialized industrial estate was highlighted during theinteractions. The entrepreneurs even exhibited keen intentions to investfor the purpose.

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Recommendations

Provision of Fan market information (Local & Intl);

Exposure visits of potential markets;

Participation in Trade fairs/exhibitions;

Advertisement at network level (Local);

One-to-one meetings with buyers through Intl consultant;

Seminars on Quality standards.

Training need analysis survey in cluster;

Awareness workshops on training (why, what & how);

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

Capacity building of FDI faculty; a solution provider platform;

Seminar on increase in productivity level through technology up-gradation(synergies with NPO & TUSDEC);

Exposure visit through Intl consultant to technological benchmark cluster;

Meetings with stakeholders to solve financial problems linked withprocurement of more expensive technologies.

Domestic market exploration on Industrial fans usage;

Information provision regarding the World trade on various types of fanswith different materials;

Seminar on usage of new materials; exploration of the role of stakeholdersto support the initiative.

Documents

Fan Industry of Pakistan - A Critical Analysis