Micro, Small and Medium Enterprises (MSME) in India

Small-Scale Industries: Definition-Role-Policy-Issues and Performance.

Topics for discussion

Meaning

SME-Rationale

Contribution of SME in Indian economy; role of SME

Policy towards SME

Enabling SME towards competitiveness

Pertinent questions

How do small firms behave?

Role of small firms in economic development

Have they fulfilled their role?

What is Small?

Number of employees,

Capital investment,

Value of output,

Level of organization,

Technology,

Source of power,

Type and quality of products.....

Industrialization process

Artisan and household industry

Small industry

Large industry

Definition of SSI

More than 5 but less than 50 workers......

20 without power....10 with power....

100 w/o power....50 with power...

Turnover limits

Investment limit...

Changed definition

In India, the enterprises have been classified broadly into two categories:

(i) Manufacturing; and

(ii) Those engaged in providing/rendering of services.

Both categories of enterprises have been further classified into micro, small and medium enterprises based on their investment in plant and machinery (for manufacturing enterprises) or on equipments (in case of enterprises providing or rendering services).

Changed definition Manufacturing Sector Enterprises: Investment in plant & machinery

Micro Enterprises Does not exceed twenty five lakh rupees Small Enterprises More than twenty five lakh rupees but does not

exceed five crore rupees Medium Enterprises: More than five crore rupees but does not

exceed ten crore rupees Service Sector Enterprises: Investment in equipments

Micro Enterprises Does not exceed ten lakh rupees: Small Enterprises: More than ten lakh rupees but does not exceed

two crore rupees Medium Enterprises: More than two crore rupees but does not

exceed five crore rupees

Source: Micro, Small, and Medium Enterprises Development Act, 2006.

SME in India-Importance

40 percent of production 95 percent of units 6000 products 34 percent exports Growth rate 12 percent 6.41 percent contribution to GDP 10 lakh of investment on an average generates

46.2 lakhs worth goods or services (very high output capital ratio)

Employment generation of around 650 lakhs

SME has always grown on an average faster than industries at 8-13 percent

Contribution to industrial production around 39-45 percent

Contribution to GDP 6-8 percent

Number of MSMEs 26.1 million

Number of Manufacturing Enterprises 18.8 million

Number of Service Enterprises 7.3 million

Number of Women Enterprises 2.1 million (8%)

Number of Rural Enterprises 14.2 million (54.4%)

Per unit employment 6.24

Per unit fixed investment Rs.33.78 lakh

Per unit original value of Plant & Machinery

Rs.9.66 lakh

Per unit gross output Rs.46.13 lakh

Employment per one lakh fixed investment

0.19

Engines of Growth: Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades

Policy support required for Imparting greater vitality and growth impetus to the Micro, Small and Medium Enterprises (MSME) in terms of output, employment and exports and instilling a competitive culture based on heightened technology awareness."

Global scenario of SME

In Brazil, MSEs represent 20% of the total GDP. Of the countrys 4.7 million registered businesses, 96.8% are MSEs andalong with the other 9.5 million informal enterprisesthey employ 59% of the economically active population.

Similarly, informal and micro enterprises account for 39% of labour force and contribute to 24% of the GDP in South Africa; SMEs employ 27% of the labour force and contribute 32% to the GDP; while large enterprises employ 34% people and account for 44% of GDP. (Stats SA 2000 and Abedian 2001).

Global scenario

SMEs comprise over 90% of all industrial units in Bangladesh contributing between 80% and 85% of the industrial employment and 23% of the total civilian employment (SEDF, 2003). They contribute three-quarters of the household income in both the urban and the rural areas.

In Japan, SMEs employ more than 70% of the wage earners, contributing over 55% of value added in the manufacturing sector.

In Thailand in 2003, there were 2006528 enterprises of which 99.5% were SMEs. These SMEs generated products worth 38.1% of GDP and in 2003 they employed 60.7% of Thailands working population.

Global scenario

The real importance of the SMEs, however, can be seen in China where over 68% of the exports come from the SMEs

China has created more SMEs in the last 20 years than the total number of SMEs in Europe and the US combined.

Arguments for SME (SSI)

Desirable Characteristics

Labour intensity (employment generation, women employment) Positive income distribution effects Balanced regional development (industrial dispersion) Entrepreneurship and managerial base Flexibility in operations Ability to Export Innovation Eco-friendly growth, Technology adaptation Utilization of local raw material Complementary/ancillary to LSI Small order quantities

Survival difficult under normal market conditions

Market inhibits growth

Frame policies to attack market imperfections(capital, labour, land)-direct interventions-supportive policy

Common Problems of a heterogeneous industry

as identified by PM task group Lack of availability of adequate and timely credit;

High cost of credit;

Collateral requirements;

Limited access to equity capital;

Problems in supply to government departments and agencies;

Procurement of raw materials at a competitive cost;

Problems.

Problems of storage, designing, packaging and product display;

Lack of access to global markets;

Inadequate infrastructure facilities, including power, water, roads, etc.;

Low technology levels and lack of access to modern technology;

Problems

Lack of skilled manpower for manufacturing, services, marketing, etc.;

Multiplicity of labour laws and complicated procedures associated with compliance of such laws;

Absence of a suitable mechanism which enables the quick revival of viable sick enterprises and allows unviable entities to close down speedily; and

Issues relating to taxation, both direct and indirect, and procedures thereof.

SME through the policies

One of the first countries to show special concern towards SME

1948-1991: In all the Policy Resolutions from 1948 to 1991, recognition was given to the micro and small enterprises, termed as an effective tool to expand employment opportunities, help ensure equitable distribution of the national income and facilitate effective mobilization of private sector resources of capital and skills.

SSI Policy Support

47 items in 1967 to 873 items in 1984

Promotional and protective measure

Exclusive production whatever can be produced on a small scale must be so produced

Technical and marketing support

Fiscal concessions (excise exemption)

Credit at subsidised rates (Priority Sector Lending Programme of commercial banks)

Extension of business services by government (infrastructure development and establishment of institutes for entrepreneurial and skill development)

Criteria Technical feasibility Manufacturing process simple (Labour intensive) Meet demand Semi-urban and rural environment Improving competitiveness vis-a-vis LSI which has better

economies of scale, mass production, wider marketing network, credit availability, promotional techniques

Ineffectiveness of these policies due to its thin spread,

discouraged growth of SSI into large ones and had a stunting effect

These policies are now obsolete and inadequate

In 1997 28 percent was the share of production in reserved

category by SSI 47-48 percent capacity utilzation Less than half of the 6 lakh units were engaged in

production of reserved items 90 products produced by one company each, Quantity

produced was negligible Value of product of 692 items as low as 100 million Removal of QR...reserved items could be produced by MNC

and imported into country, but Indian LSI could not produce it due to reservation.

Aim of policy support

Policies must be growth oriented,

Promote entrepreneurial entry,

Growth of enterprise

Technology upgradation and

Labour productivity

1991-1999

The new Policy for Small, Tiny and Village Enterprises of August, 1991 laid the framework for government support in the context of liberalisation,

which sought to replace protection with competitiveness to infuse more vitality and growth to MSEs in the face of foreign competition and open market.

Supportive measures concentrated on improving infrastructure , technology and quality.

1999 onwards: The Ministry of MSME [earlier known as Ministry of Small Scale Industries and Agro & Rural Industries (SSI & ARI) came into being from 1999 to provide focused attention to the development and promotion of the sector.

MSMED Act, 2006 The Act also provides for a statutory consultative mechanism at

the national level with a balanced representation of all the sections of stakeholders and with a wide range of advisory functions.

Establishment of specific funds for promotion, development, and enhancement of the competitiveness of these enterprises;

notification of schemes/programmes, progressive credit policies and practices;

preference to products and services of MSEs in the government procurement;

more effective mechanisms for mitigating the problems of delayed payments;

and a scheme for easing the closure of business by these enterprises

Performance Evaluation

Productive efficiency

Cost

Productivity

Allocative efficiency

Labour intensity,

Employment,

Product mix

Performance of SSI

Year

Total MSMEs (in lakhs)

Fixed Investment (in crores)

Production (` crore)

Employment (in Lakhs)

2008-09

285.16

6,21,753 8,80,805 659.35

2009-10*

298.08

6,93,835 9,82,919 695.38

2010-11#

311.52

7,73,487 10,95,758 732.17

Need for Greater Engagement with MSEs

To Generate Large-scale Employment:

Across globe 70 percent of new jobs created by SME

The employment intensity of the registered units investment of Rs 0.72 lakh is required for creating

one employment in MSME sector as against Rs 5.56 lakh in the large organized sector.

Checks migration

Status of Employment Generation

Among the MSEs in India, the dispersed food products sector generates maximum employment (13.7% of total employment in the MSE sector), followed by non-metallic mineral products (10.9%) and metal products (10.2%).

Per unit employment is highest (20) in units engaged in beverages, tobacco, and tobacco products. Next come cotton textile products (17)

The presence of MSEs across States is not uniform. Tamil Nadu (14.5%) makes the maximum contribution to employment followed by Maharashtra (9.7%), Uttar Pradesh (9.5%), and West Bengal (8.5%).

To Sustain Economic Growth And Increase Exports

GDP Growth target of 10 percent; MSE must grow at 12 percent

Non-traditional products account for more than 95% of the SSI exports.

The performance of garments, leather, and gems and jewellery units has been remarkable in the last decade.

The SSI sector dominates in export of sports goods, readymade garments, woollen garments and knitwear, plastic products, processed food, and leather products.

The US, Europe, and West Asia are the major export destinations

For Making Growth Inclusive

The MSE sector is a microcosm of all vulnerabilitiesit touches upon the lives of women, children, minorities, SCs, and STs in the villages, in the urban slums, and in the deprived pockets of flourishing towns and cities.

Empowers people to break the cycle of poverty and deprivation

Challenges Heterogeneous

Traditional crafts to high-tech industries

Dispersed accessing government schemes

little bargaining power

exploited by the middlemen, unit owners, and big business houses

Mostly Unorganized Not able to take up aggressive marketing

Market access

quality, bulk production, and inability of meeting big orders, packaging

Inadequate access to credit and working capital 14.2% of the registered and 3.09% of the unregistered MSEs

availed of bank finance.

The percentage share of the MSEs (erstwhile SSI) in non-food Bank Credit declined from 15.1% in 199091 to 8.0% in March 2007

Challenges.....

Non-availability of quality raw materials and packaging facilities on a timely basis:

dyes, yarn, power, etc..along with lack of credit puts the SME into shark middlemen and money lenders and pushes them into low competitiveness

Challenges.......

Insufficient market research, linkages, and design inputs Pushes them to rely on petty traders, middlemen

or big business for marketing their products

Example: Most people are unaware of Chamba Chugh, natural fibre purses and cushion covers, passion fruit pickles, Bhuvastra (garment of the Earthmade in coir), Chamba Chappals, Camel Hair Carpets (which do not burn) of Jodhpur, and the intricately carved tables of Ladakh.

Technical improvements to meet the market demand; advertising

GLOBALIZATION: challenges and opportunities

MNC, LSI: Aggressive marketing-traditional sector fails to compete

Tool for development: manufacturing of engineering and automobile products have shown excellent growth in the past decade due to their expertise in supplying OEM assemblies and sub-assemblies, components, etc

Big global market for handcrafted products

GI, TK and patents to prevent cheap imitations

Technology Upgradation And Achieving Economies Of Scale

Investment limit

Loss of fiscal benefits when they move upwards towards ME

Competition from cheap imports

Access to information across globe imperative

Technology, literature, suppliers etc

Rehabilitation of Sick SSI Units

Reasons: lack of demand, shortage of working capital, non-availability of raw material, power shortage, marketing problems, etc.

Three yardsticks used to measure sickness, viz., (i) delay in repayment of loan over one year, (ii) decline in net worth by 50%, and (iii) decline in output in last three years,

7.82% were sick Kerala, Tamil Nadu, Andhra Pradesh, Karnataka,

and Maharashtra together accounted for 54.28%

Eleventh plan approach SSI: Sustained engine for growth and inclusive growth and

employment CAGR target 15.4 percent; employment 4 percent

Move from welfare approach to empowerment livelihood and social security Relationship between LSE and SME should be that of

complementarities and not that of adversity Organize the SME into clusters Cluster financing; Collateral free financing Aggressive marketing GI mapping and registration

12th Plan approach paper

Create enabling environment

Reduce subsidies, level playing field

Cluster approach

Innovation and creativity

Mitigate business risks for start ups

Infrastructure

Access to national and international markets...

Tool rooms, marketing support, design clinics, IPR, IT etc..

Twelfth Plan Approach

Credit: Timely, adequate and affordable credit

Branches near clusters;

Credit rating,

Equity support, venture capital and angel funds; SME exchange;

Credit Linked Capital Subsidy Scheme

Technology Technology and Quality Upgradation Support to MSMEs

substantial reduction in cost of manufacturing by enhancing labour productivity, reducing material wastage and minimising energy consumption.

R&D; cluster development Design Clinics Scheme for MSMEs Acquisition and up gradation Multi-layered support provision of technology PPP modular industrial estates with plug and play facilities Lean Manufacturing Competitiveness Programme for

MSMEs(Transport, inventory, motion, waiting, overproduction, over processing, defects)

Promotion of Information & Communication Tools (ICT) in Indian MSME Sector

Competitiveness

The programmes include:

setting up of design clinics,

application of lean manufacturing technologies for increasing competitiveness of firms by systematically identifying and eliminating waste throughout the business cycle.

These programmes will be demand driven and will be implemented in the PPP mode in selected industrial clusters.

Technology upgradation: testing centres, and autonomous organizations such as the Tool Room, Product and Process Development centres

promote new and emerging technologies, assess present levels of technology and their upgradation, set up technology information centres/data banks and an IT portal for information dissemination to carry out detailed technology audits.

Infrastructure Development

Cluster based intervention: soft interventions (viz. technology, marketing, exports & skill development) and hard interventions (viz. setting up of Common Facility Centre (CFC), etc.).

Marketing infrastructure

Modular industrial estate

Quality assurance

Tool rooms, testing centres etc..

Infrastructure deficiency: power supply, quantity and quality, tariff differences to be looked into

Marketing and Procurement

Marketing Assistance and Technology Upgradation Scheme for MSMEs; Most important tool of business development Gamut of aspects: packaging, labeling, trade mark, bar

coding, brand building, advertisement, domestic & international exhibitions, buyer-seller meet, marketing intelligence, e-marketing and customer service

Relative advantages by LSE widening and deepening of international markets Global competitiveness Export potential/Export Promotion Global foot print-offshoring

Skill Development & Training

Large pool of human resource

upscale the training capacities

Spreading facilities in backward areas

Certified trainers

Web based MIS

Scientific development of training programs

Self-sustaining in long run

Enabling first generation entrepreneurs

Support facility for start ups

National Manufacturing Competitiveness Programme

Building Awareness on Intellectual Property Rights for the Micro, Small & Medium Enterprises (MSMEs)

Scheme for Providing Support for Entrepreneurial and Managerial Development of SMEs through Incubators

Enabling Manufacturing Sector be Competitive through Quality Management Standards (QMS) and Quality Technology Tools (QTT):

Procurement policy

MSE- Cluster Development Programme

Credit Guarantee Scheme

Credit Linked Capital Subsidy Scheme for Micro and Small Enterprises (CLCSS) for MSEs

Fiscal Concessions

Strengthening of Database

Inclusiveness

Policy Environment Union Budget 2012-13

Targeted Tax-free bonds for financing infrastructure projects were raised to `60,000 crore in 2012-13. This includes ` 5,000 crore earmarked for SIDBI.

To enhance availability of equity to MSME sector, `5,000 crore India Opportunities Venture Fund would be set up with SIDBI.

With the objective of promoting market access of MSEs, the Government has approved a policy which requires ministries and Central Public Sector Enterprises to make a minimum of 20% of their annual purchases from MSEs. Of this, 4% will be earmarked for procurement from MSEs owned by Schedule Caste/Schedule Tribe entrepreneurs.

The turnover limit for compulsory tax audit of accounts as well as for presumptive taxation would be raised from `60 lakh to `1 crore for Small & Medium Enterprises.

In order to augment funds for SMEs, capital gains tax on sale of a residential property would be exempt, if the sale consideration is used for subscription in the equity of a manufacturing SME company for purchase of new plant and machinery.

Considering the shortage of skilled manpower in the manufacturing sector and to generate employment, weighted deduction at the rate of 150% of expenditure incurred on skill development in manufacturing sector in accordance with specified guidelines would be provided.

In order to improve the flow of institutional credit for skill development, a Credit Guarantee Fund would be set up. This will benefit youth in acquiring market oriented skills.

EPCG scheme, lower interest rate, zero tax rates, promotion of SME in NE states, duty free import etc remain

Clusters

Related firms and industries have tended to locate in close geographical proximity for a number of reasons.

In his 1916 economic text, Alfred Marshall was one of the first to see the benefits of spatial clustering: the existence of a pooled market for specialized workers; the provision of specialized inputs from suppliers and service providers; and the rapid flow of business-related knowledge among firms, which results in technological spillovers.

It may be difficult to predict where clusters will emerge beforehand, but their growth is easier to predict due to the benefits gained from the strategy.

A variety of terms are synonymous to a cluster; these include co-location, industrial districts, and innovative milieus.

Improving competitiveness of SME through Clusters-

Clusters are geographic concentrations of interconnected companies or institutions that manufacture products or deliver services to a particular field or industry.

Clusters typically include companies in the same industry or technology area that share infrastructure, suppliers, and distribution networks.

Supporting firms that provide components, support services, and raw materials come together with like minded firms in related industries to develop joint solutions and combine resources to take advantage of market opportunities.

These are groups of related businesses and organizationssometimes direct competitors, but more often operating in a complementary manner.

They may comprise more than just one industry classification, and a true cluster is more than just a supplier-producer-buyer model.

Pioneering contribution for Cluster Development Approach (CDA) were made by Porter (1990, 1998), Harrison (1992), Humphrey and Schmitz (1995), Nomisma (1996) and Tewari (1997).

International experiences show that micro, small and medium enterprises are unable to face competitive pressure because of their isolation and ineffective linkages with relevant support organizations and commercial service providers.

In developed countries like Italy, USA, France and Germany, clusters of SMEs bound together in strong and dynamic networks and relying upon strong linkages with relevant local / national support institutions have proved competitive in the global context.

Cluster exists in developing countries too like India, Brazil, Peru & Mexico.

Competitiveness of firms and location-Micheal Porter diamond model (see the material emailed earlier)

three important activities:

increased productivity (through specialized inputs, access to information, synergies, and access to public goods),

more rapid innovation through cooperative research and competitive striving, and

new business formation filling in niches and expanding the boundaries of the cluster map

Why Clusters are Important to Regions

Clusters generate wealth, exports, jobs, sources of information

Firms are attracted to clusters because of:

economies of scale

productivity advantages

marketing and other competitive advantages

Globally, clusters are driving regional growth

Sparks innovation

Clusters offer special opportunities to better provide assistance by:

reaching and educating all competitive companies in a sector

accelerating the learning curve and confidence with opportunities for firms to learn from firms

offering a format for delivering well-coordinated services

SME in India were vulnerable because it had neither the size nor the technology advantage to be able to withstand the competitive pressure on it.

Strong protectionist regime, reduced competitiveness.

SME marginalized due to severe competition

SME sector has been outperforming the larger firms by a wide margin since the turn of the century

Firms Cluster in One Place for Bottom Line Reasons

Reduce transaction costs

Specialize

Exploit one anothers specialties

Increase rates of innovation

Pursue joint solutions to common problems

Build a common labor pool, technology, infrastructure

Learn collectively what it takes to be competitive

A cluster is a sector targeted geographical concentration of micro and/ or small & medium enterprises (MSMEs/MSMEs), service providers and institutions faced with common opportunities and threats.

In other words, a cluster of MSMEs is a concentration of economic enterprises, producing a typical product/service or a complementary range of products/services within a geographical area.

The location of such enterprises can span over a few villages, a town or a city and its surrounding areas.

A cluster in a district consists of 100 or more registered MSME units which are engaged in manufacturing the same product as per ASICC 2000 (at 5 digit-level).

There were 2443 clusters covering 321 products in registered MSME sector.

These clusters had a share of 45.92% in total number of units, 34.58% in total employment, 36.12% in Original Value of Plant and Machinery, 33.64% in total Market Value of Fixed Assets and 19.01% in total Gross Output of registered MSME sectors

There exists an Automotive Industrial Cluster in Chennai where before and after intervention it is found that there is increase in Infrastructure Interrelationships, Technology Interrelationships, Procurement Interrelationships, Production Interrelationships and Marketing Interrelationships and Lean Manufacturing techniques also implemented in this cluster.

Gujarat reported the highest number of clusters with 369 clusters. States of Uttar Pradesh and Tamil Nadu reported 359 and 350 clusters, respectively.

According UNIDO (2005), there are around 400 industrial clusters and more than 3,000 rural and artisan clusters in India.

The clusters are based on important industry groups: machinery and parts manufacture (15 per cent); textile (11 per cent) and chemical industry (10 per cent).

regional spread of clusters, the highest concentration is in Western India (42 per cent), followed by northern India (38 per cent), Southern India (11 per cent) and eastern India (9 per cent).

The concentration of clusters in western and northern India can be attributed to the fact that these areas are rich in entrepreneurial talent and are industrially well developed.

Moreover, they are agriculturally developed; and they provide a rich market base for the consumption of goods produced in the SSI sector.

Location-wise distribution of clusters produces four categories:

Metropolitan city- based clusters; city-based clusters; town-based clusters and small town/rural area-based clusters.

80 per cent of the clusters are located either in cities or towns.

Only 9.4 per cent (or 13 out of the 138 clusters) are based in rural or small towns.

The SMEs emerged as competitive global players. Indian auto component manufacturers have been successfully supplying components to many domestic customers as well as OEMs (original equipment manufacturers) such as Ford, General Motors (GM), Daimler Chrysler and Fiat.

Auto component manufacturers (ACMs) such as Delphi, Visteon, Caterpillar and Cummins have started procuring components from many SMEs in India, which they find capable of meeting high quality standards at competitive prices.

Many small and medium size organisations are on the way to becoming medium and larger ones.

Many SMEs are also trying the initial public offer (IPO) channel to raise funds, but the capital market is still not SME-friendly.

Financial support forthcoming in recent times

In a recent study of SMEs, Sridharan (2006) noted that the top 20 percent of the registered SMEs could be comfortably plugged into the supply chain systems of large organisations.

the future of the bottom 20 per cent of the registered SMEs is uncertain due to the erosion of their market share, and

the middle 60 per cent are not able align themselves with the supply chain systems, though there is strong demand from customers.

The top 20 per cent of SMEs are mainly from auto, Pharma, engineering, power and apparel industries, and these are facing different problems such as funding, product quality and labour problems.

A major difficulty of the SME sector is that it is highly differentiated with slender local power base

According to ACMA (2007) reports, India occupies second position in two-wheeler manufacturing in the world (with 6.52 million units),

fourth place in passenger car segment in Asia (with 1,209,654 units),

the largest three-wheeler manufacturer in the world (with 374,414 units),

the fifth largest commercial vehicle manufacturer in the world (with 350,033 units) and

the second largest tractor manufacturer in the world (with 248,976 units) next to China.

The National Manufacturing Competitiveness Council (NMCC) was formed for providing the infrastructure that would facilitate implementation of industrial clusters.

The creation of special economic zones (SEZs), export-processing zones/cluster initiatives for exporters and special concessions, facilities like offshore banking units, enables exporters to minimise their transaction costs and to work in a hassle-free environment.

Chennai Auto Cluster

The Tamil Nadu State has a B to B environment, producing everything from bicycles to battle tanks.

Tamil Nadu accounts for 21 per cent of passenger cars, 33 per cent of commercial vehicles and 35 per cent of automobile components produced in India.

Indeed, Chennai is known as the Detroit of India.

Over 100 large companies in the auto and ancillary industry are based in the State, maintaining highest production norms by implementing internationally recognised quality standards such as TPM and TQM.

Chennai has been the destination of choice for international automotive giants such as Ford, Mitsubishi motors, Hyundai, Visteon, etc. and home to the internationally acclaimed TVS Group, Rane Group, Ashok Leyland, India Pistons and Amalgamations Group which started their businesses in Chennai, before going on to become world leaders in their own fields.

The success of these industries is hardly surprising, considering that Tamil Nadu stands first in India in terms of supply of manpower with skills in areas such as automobile and production, electrical engineering, CAD/CAM etc.

The vision of Chennai auto cluster is to become a global source for auto component supplies

Chennai provides an excellent manufacturing base for the auto component Industry.

Presently, it hosts more than 100 key players in the auto component industry.

It is found that most of the firms in the Chennai Cluster are small suppliers;

Tier 2 or Tier 3 suppliers; and replacement and small job-shops.

Moreover, the local industry has a very strong links with local technical and business schools in the State.