Evaluation Study MSE Cluster Development - Ministry of Micro ...

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Chapter No: 6 – Hard Interventions in Sampled Clusterscase is that of the CFC at the Rubber Cluster in Chenganacherry, Kerala, here a largeautomated rubber mixing plant has been constructed. This common facility is reportedto enable the uniform mixing of raw rubber with various other chemicals and agents toproduce treated rubber which is further processed into various products. The quality ofthe mixing determines the final quality and finesse of the goods produced by theindividual SMEs in the cluster and also substantially reduces the ‘rejection rate’.As seen in Table 6.3 this common facility has been functioning since February 2007, andat the time of our visit to Chenganacherry in early March 2008 it had completed 13months of operations providing us a glimpse its monthly revenue, expenditure andoperating surplus/deficits.Table No.-6.3: REVENUES, EXPENDITURE AND OPERATING SURPLUS/DEFICIT OF CFC(RUBBER CLUSTER CHENGANACHERRY)All figures in this table are in Rs. unless specified otherwise)MonthUserChargesWagesAccessoriesConsumablesLubricantsAMC &RenewalsElectricityChargesRubberOil forPumpsTotalOperatingSurplus/DeficitFeb 07 2310 4800 181 200 591 5772 -3462Mar 07 93008 37552 27433 4555 3700 67659 23810 164709 -71701Apr 07 145524 37800 2737 3100 2703 157715 37254 241309 -95785May 07 181458 31035 3116 11426 103937 46454 195968 -14510June 07 180888 41615 2103 3740 3300 109988 46307 207053 -26165July 07 226341 40695 2695 1185 700 110447 57943 213665 12676Aug 07 239790 42985 2140 3525 3150 10450 136594 61386 260230 -20440Sept 07 171358 40310 825 2123 4760 300 129298 43868 221484 -50126Oct 07 221990 44944 3990 4552 1040 1200 105579 56829 218134 3856Nov 07 240544 41784 377 4887 5990 20522 140367 61285 275212 -34668Dec 07 264697 50684 5267 1040 11876 140762 28358 237987 26710Jan 08 306579 56645 861 2342 5946 146058 32883 244735 61844Total 2274487 470849 35626 38083 24205 72123 1348404 496968 2486258 -211771It is encouraging to see that the revenues earned by way of monthly user charges hassteadily risen over the 12 month period while the monthly expenditure on various itemshave remained largely stable. This has resulted in operating deficits mainly in the initialmonths but also moderate operating surplus as the functioning of the facility hasprogressed. While there have been operating deficits during 5 of the initial six monthsand only one month during which there has been an operating surplus the workingresults seem to have improved in the last 6 months with only three months of operatingdeficit and three months of operating surplus. While electricity charges account for thelargest single component of total expenditure (54.23%), the second largest componentof expenditure is that incurred for the Rubber Oil for Pumps (19.99%), these two112
Chapter No: 6 – Hard Interventions in Sampled Clustersexpenditure items account for as much as 75 percent of the total expenditure. Labourcosts account for the third largest component of expenditure (18.94%). The entireprocess is energy intensive and with no immediate supplementary energy sources insight this will continue to remain a major challenge. This facility is also reported to beworking at a fairly low level of capacity utilization at present. The facility was reported tobe working on a single shift and at a capacity utilization of 33 percent. It is also reportedby SPV functionaries that a majority of the individual cluster units are making low endrubber products which do not require high quality rubber, and thus the utilization of thisfacility is low. However this scenario is likely to change once the cluster starts movingup the value chain. The increasing competitiveness, and quality consciousness is alsolikely to force this movement up the value chain.Moreover the strong demonstration effects that the CFC has already induced, is expectedto improve its capacity utilization quite significantly in the near future. Some large firmsfrom outside the cluster are reported to be using this facility and if the spare capacitycontinues to persist the SPV is likely to continue allowing the use of this facility to nonclustermembers. However in such a situation a higher differential tariff for non-clustermember needs to be introduced in order to attract cluster members, who are not yetattracted sufficiently to use this common facility.The Second case is that of the CFC built to serve the Foundry Cluster in Ahmedabad,Gujarat. The common facility that has been created here is a testing laboratory and afairly large conference hall. It is important to recollect that this cluster is highlydispersed with units located far apart. One is hard pressed to find an adequate numberof users from within the cluster. The cluster is also reported to have only a limitednumber of individual units raising doubts regarding the full utilization of this facility onthe basis of its use by cluster members alone. It is most likely that in an attempt togenerate additional revenue to meet the operating costs this facility will have to bethrown open to non cluster users. The size of the auditorium is also disproportionate tothe actual needs of the cluster members and is likely to be hired out for users unrelatedto the common needs of cluster actors. Turing to the working results complied in Table6.4 for period of seven months, one finds that the figures on revenues as compared toexpenditures incurred are not very encouraging with fairly large operating deficits in 6out of the seven months during which this facility has functioned.Table No.-6.4: REVENUES, EXPENDITURE AND OPERATING SURPLUS/DEFICIT OF CFC(FOUNDRY CLUSTER AHMADABAD)(All figures in this table are in Rs. unless specified otherwise)MonthUserChargesLabourexpensesElectricityRawMaterialsOtherExpTotalExpensesProfit/LossOct-07 17150 32002 4416 34730 71148 -53998Nov-07 27675 41295 3984 14100 59379 -31704Dec-07 29850 41770 3325 34536 79631 -49781Jan-08 43800 41623 4232 28310 74165 -30365Feb-08 81825 41723 3770 30812 76305 5520Mar-08 134688 52261 7282 137178 196721 -62033Apr-08 31600 48360 2151 5669 56180 -24580Total 366588 299034 29160 285335 613529 246941113
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EVALUATION STUDY OF MICRO & SMALLEN
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2.12 PROGRESS AND PRESENT STATUS OF
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INDEX OF TABLESTable No.- 1.1: CLUS
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COMMONLY USED ABBREVIATIONSBDSBusin
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31 million persons spread over 12.8
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Nevertheless, it is expected that t
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4. Role of the schemes in bringing
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Table No. - 1.1 (contd.)East/ North
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ANNEXURE - 1.1 Guidelines for Clust
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• Approval of budget and leveragi
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14. Contribution of the Ministry of
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Chapter No:2 - The General Profile
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