industrial policy, its spatial aspects and cluster development in ...

global value chains are also made to identify critical weaknesses. The analysis points out
that there are several supply side constraints as well as weaknesses in value addition. It
must be emphasized that the value chain presented below represents what is typical for
the industry. It is possible that some larger firms may be slightly better placed and some
small ones slightly adversely placed than the representation presented below. However,
the numbers provided below have been verified by industry representatives.
The overall structure of the value chain (Figure 3-10) suggests that industry typically
adds 23% in value addition of around Rs 450 per fan. The vendors are also adding
almost same amount of value addition, however the importers take the major bulk of the
value addition.
Figure 3‐10: Typical Value Chain of Fan
Vendors &
Suppliers
50% of the materials are
imported.
Component Cost (Rs)
Raw Material 1453
Casting 50
Assembly 67
Overheads 186
Marketing 20
Selling Price : Rs.2100
Raw
Material
81.8%
Casting
2.8%
95% of the costs are for electricity
consumption.
Major cost in this component is electricity
charges.
Assembly
Value Chain analysis has revealed the following issues facing the industry:
3.8%
213
Overheads
10.5%
Marketing
1.1 %
Importers