GOVERNMENT OF INDIAMinistry of Micro, Small and Medium Enterprises

Office of Development Commissioner (MS1\fE),7th Floor, A Wing,

Nirman Bhawan, Maulana Azad Road,New Delhi-II 0 I08

SUPPLEMENTARY AGENDA

for

3sttt STEERING COMMITTEE l\{EETING

of

Micro & Small Enterprises -Cluster'. Development Program (MSE...ICDP)

DArn is" January 2(:)(,4

3,30 P,M.

VENUE Vereneya Roo.m No.. 21''1.,Udyog Bbawaa, NICli!V Ddbi

..• ~,~Agenda No. 35.1 ~S) Proposal f~r consi~eration of in-principle approval for setting. uP, Common Facility Centres III Fabrication of Steel Box and Allied Products,Gonda City, Uttar Pradesh. . .

. Proposal was received from Institute for Steel Development & Growth, Vide Online Ref., No:- 1968 1Dated: 31112/2013 & recommended by MSME-DI, Allahabad.

Details of the proposalare as under:

DSR Details ,

OSR Conducted By : INSDAG & NIESBUD

Validated By : General Manager, DIC, Gonda

When Started: 01110/2013

When Completed: 14/12/2013 ,

1. Basic Information of Cluster

Name of Cluster: Fabrication of Steel Box and Allied Products

Location of Cluster: Gonda City

Main Product: Steel Almirah, Steel Box, Steel Cl'lair, Steel Cot, Steel Grill,Shutter, Windows, Steel 'fable

No. of Enterprises Micro: 58 Small: 0 Medium: 0including break up(Micro, Small,Medium) :

Turnover for the last five years:

1st Year: 2012-2013 2nd Year: 2011-2012 3rd Year: 2010-2011Amount: 500000000 Amount :460000000 Amount: 450000000

4th Year: 2009-2010 5th Year: 2008-2009Amount: 440000000 Amount: 400000000

Exports for the last five years:

1st Year: 2012-2013 2nd Year: 2011-2012 Jrd Year: 2010-2011Amount: 0 Amount: 0 Amount: 0

4th Year: 2009-2010 5th Year: 2008-2009Amount: 0 Amount: 0

Employment in 500Cluster:

Technology Details: Old Technology:1. Manual Inspection on receiving raw materials.

I2. Cutting by Scissors or by manual shear machines, Gas Cutting

~1-

3. Joining by Gas and Arc Welding.4. Visual Inspection of finished products.5. Manual or spray painting. The cluster needs contemporarytechnology, techniques, so that it may compete in the presentscenario. CFC with modern machines can help the cluster units inmodernizing their production processes and to be competitive

Whether DS YesConducted:

"

'Main findings of DSR Manufacturers are using old technology. Therefore, CFC withmodern machines and equipment is neede,d. Training facilitiesarerequired for updation of knowledge.

Main Problems of Old technology, lack of marketing, poor branding, Lack ofCluster: promotional initiatives !institutional support I activities for.

development of industries.

Other Information : En~re?reneurs are required to be exposed to latest technology for Itheir industry.

2 Information about Proposed CFC

Description Proposed by ImplementationAgency (IA)

Comments byCluster Division

(a.) Justification for CFC The manufacturing process of steel Yet to be examinedboxes and allied products has by Technicalremained mostly traditional. There is Division.hardly any change in technology forabout the last several years. As aresult, the quality and productivity ofthe cluster is very low. There is anurgent need to establish a CommonFacility Centre (CFC) havingmachines of latest technologies suchas CNC Plasma Cutting, HydraulicSheet Bending, Hydraulic PunchingMachine, MIG/TIG WeldingMachines, etc. The abovetechnologies of these machines willhelp in: 1. Improving Yield of unitsby minimizing rejection 2.Improving productivity and quality3.Saving of labour and time-l.Eradicatin ; dimensional distortions5. Making the cluster competitive.

(b.) Location of CFC Gonda

% age of units in radius 90

- 2-

,------ ----------Hf5km -~

% age of units in radius 10oflOkm

(c.) Land for Cf'C

i. Whether land acquired Land has been identified.t 18000 sq. Registeredft.) lease/Sale deed 111

favour of SPV IS

required.

ii. Title is in name of Land will be leased in the name ofSpy for 15 years.

iii. Valuation and its On leased Basis.basis

iv. Land is sufficient Yes

v. Change ofland use Land is in Industrial Area.

vi. If on lease, duration 15 Yearsof lease

vii Whether lease is Lease will be done as per legallegally tenable procedures.

(d.) Total Building area(sq Building will be constructed ( 4000ft) sq. ft. shed), 1000 sq. ft. training hall

(e.) Rate of construction of Details to be worked out.building

(f.) Main Facility Proposed Welding Machines, Grinding Approval ofMachines, Testing Machines, Tools, Technicalde. for vanous CFC processes, Committee ofTraining and testing. MSE-CDP IS

required.

(g.) Prod capacity of CFC Needs to he worked out.-

(h.) Major Around 600 tons annually. 500Outputs/Deliverables of people will be trained annually.CFC, Projected Testing worth Rs.6QOOOOwill beperformance of the cluster done annually.after proposed intervention(in terms of production,export/domestic sales anddirect/indirectemployment, etc.)

(i.) Pollution clearance Steel Fabrication is not a polluting NOC is required.required or not industry .

. G.) Man Power in CFC 36

Revenue will be gener: kd b : usercharges. training fees and testingcharges for sustainability of a s;ts.

/(k.) Revenue generationI mechanism 101'sustainability ofassetst service/user chargesto be le ied, any other-tobe specified)

3. Infermarion about SPV

Description Proposed by Implemoo.'tation Comments byAgency (lA) Cluster Division

(a.) Name and Address Details to be worked out. Spy IS yet not

(b.) Nature of Spy (company or Details to be worked out. formed. This ISessential forSociety or Trust)establishment of

(c.) Name of the state Govt. and Details to be worked out. CPC.MSME officials in SPY

(d.) Dare of formation of SPY Details to be worked ()~lt

(e.) Number of Members Around 20 Inaa!1iber·s areexpected.

(f.) Bye Laws or MA and AOA Details to be worked Gutsubmitted

(g.) Authonzed Share Capital .(h.) Paid up capital as on ............

0.) Shareholding Pattern .(j.) Commitment letter for Details to be worked .tD-1IIt.

contribution

(k) SPY specific Alc Details to be worked out. Bank Alc no.required.

'(L) Trust Building of SPY, Details to be worked out SPY is not formed.Previous <track record of co-'Operative initiatives pursued bySPV members need to behighlighted with supportdocumentation

(m.) Technical Institution Institute for Steel Development& Growth ba~e organizedseveral training pro~n'nmnes forthe Entrepreneurs of the Cluster.Also work is in pC,,(Dgressto tieup with other technicalInstitutes.

-(n.) ClC may be utilized by

-. -Details to be worked out.

SPV members as also others ina cluster. However, evidenceshould be furnished with regardto Spy member ability to utilizeat least 60 percent of installedcapacity.

(0.)

(a) Power requirement for SOKWcommercial/domestic purpose

(b) Water 100 Liters per day.

(c) Gas/Oil/Other Utilities 200 cubic mtrs. per month.

4. Implement Ar rangements

Comments by ClusterDivision

(a.) Implementing UPTP A, Kanpur, GovernmentAgency of UP.

(b.) Fund receiving UPTP A, Kanpur, GovernmentAgency of UP.

(c.) Implementation 24 months.Period

-(d.) Appraisal ofDPR Yet to be done. SIDBl appraisal is required.and mainRecommendations

(e.) Comments of Yet to be examined byTechnical Division Technical Division.

(f.) Approval of . Recommendation ofTechnical Committee Technical Committee is also

, required.

, (g.) Working capital(In- Details to be worked out. Required.principle sanction of loanfrom a bank, if applicablearrangement made)

-5-

5. Financial Analysis of Cf C

TC 0 IIImen Is by CluSI er Il jvisio n(a.) BEP 54.02

(b.) lRH...Payback period 31.73I---

(c.) DSCRI

(d.) Return on Capital . I ROCE must be above 25% as peremployed (ROCE) guidelines of MSE-CDP.

(e.) NPY

(f.) DER

(g.) Sensitivity Analysis

(h.) Status of CFCs .approved in the State

6. Total Cost: The total cost offthe CFC is as foUow:

Particulars Total Cost (R'S. in Lakh)

Land and its Development 1.00

Building and other Civil Constructions 84.00

Plant & Machineryfiucluding electrification) 65.50

Misc. fixed assets 62.40

Preliminary & Pre-operative expenses, maximum 2% of 51.00project cost

Contingency (2% building and 5% on plant and 5.00machinery)

Margin money for Workiag Capital 49.26

Total Project Cost 318.16

7. Means of Fmance : The suggested means of finance are as follows:

Partieulars %age Amount (R.:s. ia lakb)

SPY contribution 30.22 96.16

Grant-in-aid from GoVit. of India 69.78 222·QPGrant-in-aid from GG>Vtt. of UP 0.00 0.00

Bank Loan/others 0.00 0.00Total 100.00 318.16

·-6-

8. Plant and machine,'), (, ith Bricf Specification)

._---- ..Sol '0. Description No. Costf--.

-I. Arc Welding TranSr0n11L'1. Recti Iicr 4 :260(JOO.OO

" ___00 Amp Invcrtcr ~.~ascdl\11(i Welding Machines_. ') 1.150000.00L

..,4.10 Amp Inverter Based TIG Welding MachinesJ. I 645000.00

4. Drilling Machine 1 50000.00

5. Grinding Machines ') 60000.00

6. Band Saw / Power Cutter ') 50000.00

7. Gas Cutting Set 2 80000.00

8. Compressor and Spray Painting Set 1 100000.00

9. Digital Universal 'resting Machines 1 1200000.00

1O. Radiography Testing Facilities 1 500000.00

11. Ultrasonic Testing Machine 1 400000.00

12. 25 KVA Diesel Generator Set 1 355000.00

13. Tools & Tackles 10 200000.00

Total 5250000.00

Shortcomings:

(i) SPY is yet to be formed.(ii) The proposal requires more elaboration as per Annexure IIof guidelines of MSE-CDP.(iii) Land documents not available.(iv) Comments of the Technical Division/Technical Committee are required.(v) Appraisal report from S[OB[ not available.(vi) Project Specific account of SPY.(vii) On preliminary examination of the DPR it is observed that there is sales and purchase of

raw material with a working capital requirement of Rs. 6.03 crore in the total project costofRs. 13.30 crore, which needs clarification. (Proposed earlier).

Proposal for Steering Comm,ittce: A view of the Steering Committee may be taken regardingthis proposal.

Agenda No. 35.2 (i) (S): Proposal for conducting Diagnostic Study (DS) in Silk Reeling &Twisitng Cluster, Chikabalapura, Karnataka.

Details of the proposal are as under:

Name of the applicant: Naresh N, Chikkadasarahalli, Chikabalapura District, Ph:9739718001

Pre-registration Information

Name of Organization: Karnataka Council for Technological Upgradation

State: Karnataka

District: Chikabalapura

Cluster Name & Location: Silk Reeling & Twisitng Cluster, Chikabalapura

Brief Information of ClusterMain Product: i) Common facility centre for Silk Reeling & Twisting

Machineries.ii) Hitech I Modernized Equipment Supplies Depot for

Silk Reeling & Twisting units.iii) Yam Quality Testing and R&D facilities.iv) Raw Silk Yam Storing I Godown facilities.v) Twisted Silk Yam Warp I Weft Storing I Godown

facilities.vi) Dyed Yam Warp I Weft Storing & Suppliesvii) Mechanised Bleaching & Dyeing of Yam facility.viii) Marketing facilities centre for raw silk, Twisted silk

& Dyed warp (Hand Ball warp), Weft.ix) Ready Warp Supplies (Beam Warp)x) Raw Material Depotxi) Quality Testing Centre for Cacoons.

Technological details, Pollution Pollution Control Board clearance will be obtained.angle, etc :

Age of Cluster: New

No. of Units : 3500 Silk Reelers - Utilises the cluster facilities.1000 Silk Twisters - Utilises the cluster facilities.

Profiles of Unit siC ategory : Micro: 3000 Small: 100 Medium: Nil

Women: 500 Village:400 SC/ST: 500

Turnover (Per Annum) : (Rs. in Rs. 30,000 lakhLakhs)

Export: (Rs. in Lakhs) Nil

Employment (Direct/Indirect) : Direct- 650 Indirect- 7500

Women: 350 SC/ST: 1500

Presence of associationlNGO, NGOContact details : Naresh N., Chief Promoter

Main Problems of Cluster: i) Common facility centre for Silk Reeling & TwistingMachineries.

ii) Hitech / Modernized Equipment Supplies Depot forSilk Reeling & Twisting units.

iii) Yarn Quality Testing and R&D facilities.iv) Raw Silk Yarn Storing / Godown facilities.v) Twisted Silk Yarn Warp / Weft Storing / Godown

facilities.vi) Dyed Yarn Warp / Weft Storing & Suppliesvii) Mechanised Bleaching & Dyeing of Yarn facility.viii) Marketing facilities centre for raw silk, Twisted silk

& Dyed warp (Hand Ball warp), Weft.ix) Ready Warp Supplies (Beam Warp)x) Raw Material Depoti) Quality Testing Centre for Cacoons.

A I . fPnarysis 0 roposa

Parameters Proposed by Implementation Agency (IA)

Implementing Agency, its Karnataka Council for Technology Upgradation-KCTU,experience in cluster Bangalore, Govt. of Karnataka. KCTU is the nodal agency fordevelopment Cluster Development in the State.

Project Cost with break up(Rs. in lakh)

S. No Particulars Amount1 Travelling Cost 0.452 Admn & Misc. Cost 0.603 Salary 1.104 Stationery & Printing 0.255 Other 0.10

Total 2.50

Technical Agency to be Swaroop & Co.associated & its expertise Experience In Khadi institutions Accounts, Budgeting

Financials, Management Consultants and Quality enhancementmanagement and export promotion consultancy.

Justification for DSR --

Outcomes of conducting DSR --Amount Recommended : (Rs. in 2.50Lakhs)

Proposal for Steering Committee: Cluster Division recommends the proposal. SteeringCommittee may approve the proposal for conducting diagnostic study in Silk Reeling & TwisitngCluster, Chikabalapura, Karnataka at a total cost ofRs. 2.50 lakh with 100% Gol.

Agenda No. 35.2 (ii) (S): Proposal for conducting Diagnostic Study (DS) in HandloomWeavers Cluster, Chikabalapura, Karnataka.

Details of the proposal are as under:

Name of the applicant: Nagaraj Gandhi, No. 154,31 st Ward, Thimmasandra, Chintamani Tlq,Chikabalapura District, Ph: 09448059673

Pre-registration Information

Name of Organization: Karnataka Council for Technological Upgradation

State: Karnataka

District: Chikkaballapur

Cluster Name & Location: Handloom Weavers Cluster, Chikabalapura

Brief Information of Cluster

Main Product: i) Mechanised Bleaching & Dyeing facility.ii) Ready Warp Supplies - (Beam Warp)iii) Raw Material Depotiv) Computer Designing Centrev) Printing Section for flat printing, Screen Printing,

Hand Block Printing.vi) Softening, Polishing, Starching Facilities.vii) Quality Testing and R&D Facilities.viii) Market Facilities.ix) Hitech / Modernized Equipment Supplies Depotx) Creation of new designs centre in Unisex Garmentsxi) Storing / Godown facilities

Technological details, Pollution Pollution Control Board clearance will be obtained.angle, etc :

Age of Cluster: New

No. of Units : 2500 Handloom Weavers - Utilises the cluster facilities.

Profiles of Units/Category : Micro: 2000 Small: Nil Medium: Nil

Women: 400 Village: 11 SC/ST: 100

Turnover (Per Annum) : (Rs. in Rs. 12,500 lakhLakhs)

Export: (Rs. in Lakhs) Nil

Employment (Direct/Indirect) : Direct- 500 Indirect- 5000

Women: 250 SC/ST: 1000

Presence of associationlNGO, NGOContact details: Nagaraj Gandhi

Main Problems of Cluster: i) Raw material depot not in existence.ii) Ready warp unit is not in existence.

iii) Hitech Bleaching & Dyeing, Printing, Designing,Design centre is not available.

iv) Quality enhancing facilities is not availablev) Creation of new designs centre is not availablevi) Storing facilities not available

A I . fPnalysls 0 roposa

Parameters Proposed by Implementation Agency (IA)

Implementing Agency, its Karnataka Council for Technology Upgradation-KCTU,experience in cluster Bangalore, Govt. of Karnataka. KCTU is the nodal agency fordevelopment Cluster Development in the State.

Project Cost with break up(Rs. in lakh)

S. No Particulars Amount1 Travelling Cost 0.502 Admn & Misc. Cost 0.503 Salary 1.004 Stationery & Printing 0.305 Other 0.20

Total 2.50

Technical Agency to be Swaroop & Co.associated & its expertise Experience III Khadi institutions Accounts, Budgeting

Financials, Management Consultants and Quality enhancementmanagement and export promotion consultancy.

Justification for DSR --

Outcomes of conducting DSR --

Amount Recommended : (Rs. in 2.50Lakhs)

Proposal for Steering Committee: Cluster Division recommends the proposal. SteeringCommittee may approve the proposal for conducting diagnostic study in Handloom WeaversCluster, Chikabalapura, Karnataka at a total cost of Rs. 2.50 lakh with 100% Gol.