cluster dev punj

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PROGRESS REPORT PROVINCIAL OFFICE (SMEDA PUNJAB)

SME CLUSTER DEVELOPMENT PROJECTS

Turn Potential into Profit

Small & Medium Enterprise Development AuthorityMinistry of Industries, Production & Special InitiativesGovernment of Pakistan

http://www.smeda.org.pk

Small and Medium Enterprise Development Authority8th Floor, LDA Plaza, Egerton Road Lahore

Tel: 92-42-111-111-456 Fax: 92-42-6304926-27


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SME Cluster Development Projects Provincial Office SMEDA - Punjab

Turn Potential into Profit

TABLE OF CONTENTS

EXECUTIVE SUMMARY ........................................................................................... 2

1. INTRODUCTION ................................................................................................. 4

2. CLUSTER DEVELOPMENT APPROACH........................................................ 4

3. COMMON FACILITY CENTERS (CFC) ........................................................... 4

3.1 CFCS COMPLETED ..............................................................................................5

3.1.1 Common Facility Center for Computer Pattern Designing, Sialkot...............5

3.1.2 Common Facility Center for Light Engineering Sector, Gujranwala ............6

3.1.3 Artificial Insemination (AI), Burj Attari Lahore............................................7

3.2 CFCS UNDER IMPLEMENTATION ..........................................................................7

3.2.1 Auto Parts Design & Inspection Center, Lahore...........................................7

3.2.2 Wooden Furniture Support Center, Chiniot ..................................................8

3.2.3 Electrical Fittings Industry Support Center, Sargodha.................................9

3.2.4 CFC for Composite Based Material, Sialkot...............................................10

3.3 CFCS UNDER PROCESS (YEAR 2005-2006).........................................................11

3.3.1 Marble & Granite Processing & Training Centre (MGPTC)

Rawalpindi/Islamabad ....................................... ............................................. .......11

3.3.2 Support Services for Leather Sector, Sialkot...............................................12

3.3.3 Rehabilitation of Leather Service Center, Kasur.........................................12

3.3.4 Other Proposals .........................................................................................124. FORMAL FINANCE FOR SME CLUSTERS................................................... 13

4.1 POWER LOOM UP-GRADATION, FAISALABAD .....................................................13

4.2 LENDING SCHEME FOR CUTLERY MANUFACTURERS, WAZIRABAD......................14

4.3 SUPPORT SERVICES FOR AGRI CREDIT (SSAC)...................................................14

5. TECHNOLOGY TRANSFER & UP-GRADATION IN CLUSTERS .............. 15

5.1 TECHNOLOGY UP-GRADATION IN ELECTRICAL FITTINGS CLUSTER, SARGODHA ..15

6. AWARENESS ON INTERNATIONAL CERTIFICATION............................. 166.1 COMPLIANCE GUIDE FOR TEXTILE INDUSTRY .....................................................16

7. CLUSTER PROFILING..................................................................................... 16

8. MARKETING SUPPORT................................................................................... 17

9. RURAL ENTERPRISE DEVELOPMENT TRAINING................................... 17


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Turn Potential into Profit 2

Executive Summary

Clusters are geographical concentration of enterprises which produce and sell a range ofrelated or complementary products and are, thus, faced with common challenges andopportunities. Cluster development is basically supporting and strengthening the clusters

by creating networking among the stakeholders to reduce the cost of doing business,bringing them on a single platform for more voice among policy makers, create newbusiness opportunities, reducing risk of doing business and capacity building of theenterprises. Cluster development has also proved its contributing in employmentgeneration and poverty reduction worldwide.

SME Clusters in Pakistan have huge potential and critical to SME growth. SMEDA hasalways been fully cognizant of the significance of Cluster Development and has takenseveral initiatives. These initiatives includes Technological Up-gradation, establishmentof Common Facility Centers(CFCs) , access to Formal Finance for SME clusters,Marketing support, Improving HR skills and Awareness on International Certification &

Regulations.

Worldwide, one of the most widely used practices to support industrial clusters isprovision of Common Facility Centers (CFC). The establishment of CFCs is an integralpart of SMEDAs Cluster Development activities. So far SMEDA has been able toestablish following CFCs with Chambers of commerce and industry and industry/tradeassociations:

Computer Pattern Designing in SialkotThis CFC has facilitated 300 SMEs to get their patterns developed, 122participants trained & 28 are under training and 95 employments generated.

Light Engineering Sector in GujranwalaThe center has provided testing services to 206 SMEs 130 students havecompleted Auto Cad training.

Artificial Insemination Training Center in Burj AttariMore than 1100 technicians have been trained and 900 self employmentsgenerated under this program.

Credit is life line for any running business including SMEs and realizing the potential in

SME sector and its importance, SMEDA has successfully launched following financingschemes in Punjab:

Power Loom Up-gradation, Faisalabad (Rs.226 million to 150 entrepreneurs) Support Services for Agri Credit (SSAC) (Rs.77.45 million to 252 farmers) Lending Scheme for Cutlery Manufacturers, Wazirabad (Rs.5 million to 10

SMEs)


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The proposals for following CFCs were prepared and submitted to Govt. of Punjab. ThePlanning & Development Department-Punjab has approved these CFCs and allocatedRs.100 million for the year 2005-2006. The construction of buildings ad procurement ofmachinery and equipment are under process.

Auto Parts Design & Inspection Center, Lahore Electrical Fittings Industry Support Center, Sargodha

Wooden Furniture Support Center, Chiniot Composite Material Based, Sialkot

Besides above program SMEDA is also working in cluster profiling, marketing supportto cluster stakeholders and training to skills enhancement for SMEs as well as ruralclusters.

SMEDA in collaboration with PSIC and UNIDO has started Cluster DevelopmentProgram for SMEs in Punjab. The objective of this program is to help in developing

seven different SME clusters of Punjab. The Diagnostic Study of these seven clusters hasbeen completed. In the next year action plan would be implemented. Besides theseclusters, SMEDA is also working exclusively with UNIDO in four clusters i.e. SportsWear Sialkot, Auto Part Lahore, PVC Pipes & Plastic Products Lahore and Marble &Granite Rawalpindi/Islamabad.


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1. Introduction

Clusters are geographical concentration of enterprises which produce and sell a range ofrelated or complementary products and are, thus, faced with common challenges andopportunities. There is ample evidence that small- and medium scale enterprises (SMEs)

operating in the same or in related industrial sectors tend to cluster close to one another.This tendency to bunch in well defined areas has been observed in different environmentsin both developed and developing countries, and in different historical periods. There aresound economic reasons for this phenomenon. SMEs operating in such clusters derive aclear competitive advantage from:

Proximity to sources of raw inputs, Availability of suitably customized business development services, Abundance of clients attracted by the cluster tradition in that industry Presence of a skilled labor force.

2. Cluster Development Approach

Cluster development is basically supporting and strengthening the clusters by creatingnetworking among the stakeholders to reduce the cost of doing business, bringing themon a single platform for more voice among policy makers, create new businessopportunities, reducing risk of doing business and capacity building of the enterprises.

SME Clusters in Pakistan have huge potential and critical to SME growth. SMEDA hasalways been fully cognizant of the significance of Cluster Development and has takenseveral initiatives for sustainable development of these clusters in the WTO regime andglobal village era. These initiatives mainly include:

Technological Up-gradation Establishment of Common Facility Centers Technology Transfer Access to Formal Finance for SME clusters Establishing/strengthening cluster associations Marketing support Improving HR skills through support to strengthening/establishing sector specific

institutions, conducting training workshops/seminars and provision of consultants. Awareness on International Certification (Social, Environmental and Health &

safety), Testing and other regulations. Removal barriers in regulatory procedures Support in establishing Business Incubation Centers

3. Common Facility Centers (CFC)

Worldwide, one of the most widely used practices to support Cluster Development isthrough the provision of Common Facility Centers (CFC). The CFCs provide a commonpool of machinery/equipment, testing and inspection services and process technologyrelated services for the collective up-gradation of SME Clusters. The SMEs use thesefacilities for improving quality and adding value addition to their products or processes.


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The specialized high-cost services and technology offered through such an arrangementare those which do not justify investments by a single enterprise.

The establishment of CFCs is an integral part of SMEDAs Cluster Developmentactivities. For this purpose series of meetings and in-depth need assessment survey with

the industry stakeholders is carried out. These include the local Chamber, local trade andindustry associations, SME owners and various public sector institutions. On the basis ofthese finding proposals for establishment of cluster need based CFCs are prepared.

3.1 CFCs Completed

3.1.1 Common Facility Center for Computer Pattern Designing,Sialkot

Sialkot has established its position as a major player in leather products manufacturingand exports. There are more than 380 units engaged in manufacturing and exportingleather garments and leather gloves. However,

in order to compete in an increasingly costefficient, technologically dependent andfashion oriented competitive environment, theneed is to adopt those technologies that are insynch with local demands and enable the localindustry to work at par with emergingcompetition.

Computerized pattern designing is a systemthat helps in increasing labor productivity.The system reduces multiple product approval cycles, saves time and improves on

material consumption. In Sialkot large number of units is SMEs and does not employ in-house pattern designing facilities. Keeping in view the industry needs, SMEDA has spentan amount of about Rs. 2.00 million to establish a specialized CFC for Pattern Designingand Training on Pattern Making.

This CFC offers following services to the industry:

Common Facilities

Pattern Making Grading Marker Making


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Physical Tests being conducted atCFC for Light Engineering Sector

Students Getting Auto Cad Training atCFC for Light Engineering

Training Facilities

Training in manual pattern making Training in computerized pattern making

This CFC has been established in collaboration with Vocational Training Institute (VTI)Sialkot, Punjab Vocational Training Council (PVTC) and Sialkot Industry.

Up-till now, this CFC has facilitated 300 SMEs to get their patterns developed, 122participants received training & 28 are under training and 95 employments generated.

3.1.2 Common Facil ity Center for Light Engineering Sector,Gujranwala

Light Engineering SMEs in Gujranwala currently sufferfrom problems of material selection, physical testing,

material composition, components drawing making andComputer Aided Designing (CAD) training facilities,which has constrained their ability to take full advantage ofthe advanced manufacturing process. Keeping in viewindustry needs, SMEDA has stepped forward for up-gradation of the Light Engineering Service Center (LESC),Gujranwala into a modern Common Facility Center (CFC).

SMEDA has spent an amount of Rs. 2.48 million to establish the CFC and this centeroffers a wide range of testing and consulting services to the industrial sector in generaland light engineering sector in particular. The objective of the center is to support the

industry by providing testing and product designing facilities; this would help inproducing light engineering goods on international standards of quality and precisionmanufacturing.

This CFC offers following services to the industry:

Physical Testing

Hardness Testing Temperature Measurement (Pyrometer) Dynamic Balancing

Material Testing (Chemical Analysis)

Carbon Sulphur Detector Wet Analysis (Ferrous & Non Ferrous)

Designing (Auto Cad)

Consulting Services

Consulting services


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This CFC has been established in collaboration with Light Engineering Service Centre(LESC) - Technical Education & Vocational Training Authority (TEVTA), Gujranwalaand Gujranwala Chamber of Commerce & Industry (GCCI).

The center has started providing services to the SMEs of Gujranwala and other cities. Up-

till now the center has provided testing services to 60 SMEs, 100 jobs have beencompleted and consultancy services provided to 56 SMEs. 130 students havecompleted Auto Cad training and 25 SMEs has been provided design services.

3.1.3 Artificial Insemination (AI), Burj Attari Lahore

The economic uplift of dairy and livestock sector in urban and peri urban areas byincreasing milk production quality, quantity and supply pattern by reproductive andbreeding management of dairy animals is the main objective of Artificial insemination(AI) technician course organized by SMEDA at Vocational Training Institute (VTI) BurjAttari. The main objectives of these training courses are:

Introduction of efficient AI services

Promoting AI technique as rural enterprise development Reproductive management of livestock and dairy animals in related villages to get

optimum production in terms of calves and milk production. Tools, equipment and superior semen quality for AI course.

Training courses are organized regularly and it is an on going activity. More than 1100technicians have already been trained and 900 self employments generated underthis program. The purpose of such program is to Promote Rural Enterprises foremployment generation, rural development and ultimately resulting poverty alleviation.

3.2 CFCs under Implementation

3.2.1 Auto Parts Design & Inspection Center, Lahore

Our auto parts industry is relying on conventional ways of product designing, which istime consuming and is unable to meet the increasing demand and precision required inmanufacturing. Looking at these issues, a proposal toprovide the designing and Inspection services to autoparts vendors was prepared in collaboration with PakistanAssociation of Automotive Parts & AccessoriesManufacturers (PAAPAM) and Punjab Small IndustriesCorporation (PSIC). Project proposal was submitted withPSIC. The Planning & Development (P&D) Department,Govt. of Punjab has approved this project and PSIC isimplementing this project. Tenders for construction ofbuilding and procurement of machinery and equipmenthave been invited.

This center will help the industry to enhance theproductivity and improve the quality of auto parts as per


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demand of international standards and will overcome the constraints of auto partsvendors. This center will offer following services to the industry:

Designing of Mold/Die Designing of Auto Parts

Inspection of Parts, Mold/Dies Training and Consultancy Information dissemination regarding metal cutting and shaping by use of CNC

and CMM machines

Present Project Status

Revised Project cost from 46.66 million to 81.938 million (excluding land) toaccommodate Industrial requirement.

60% Civil Works done and expected completion date is 30th June 2006.

Project Director appointed and is posted at site.

Supporting staff appointed.

Vehicle for Project Director purchased. Tenders for Machinery, Equipment & Furniture received & opened on 14th

February 2006 and is now under scrutiny.

3.2.2 Wooden Furniture Support Center, Chiniot

There are almost 3000-4000 manufacturing units in Chiniot, employing around 25,000people. Declining number of skilled craftsmen and the use of primitive technology aresome of the acute problems faced by this industry. The project proposal has beenprepared in collaboration with Punjab Small Industries Corporation (PSIC). ThePlanning & Development (P&D) Department, Govt. of Punjab has approved this project;PSIC has acquired the land for this project and has started implementing this project.


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Need assessment workshop for Furniture clusterDevelo ment in Chiniot

This centre will help them in developingappropriate expertise to meet theconstant changes in local & internationalmarkets. The proposed center will be aone roof facility for all issues relating to

the wooden furniture manufacturing thatis being faced by Wooden FurnitureIndustry Chiniot. The project wouldprovide facilities in design, training,marketing & advisory areas.

The project would have the followingproposed facilities;

Design Centre Training Cell

Marketing and Advisory Cell Display Centre


Project cost is 12.144 million (excluding land)

70% of Civil Works including Production Hall, Office Block and Display Centerdone and expected completion date is 30th April 2006.

Project Director and staff appointed

Tender opened on 14th February 2006 and is now under scrutiny.

3.2.3 Electrical Fittings Industry Support Center, Sargodha

About 70% of Pakistan's Electrical Fittings are being produced in Sargodha. There areabout 15 large units, 200 SME units and 1,000 cottage industry units of electricfittings industry. Despite its economic importance, the Electric Fittings ManufacturingSMEs in Sargodha currently suffer from a variety of technological obsolescence issues,industry is still working on conventional lines and they do not use basic CNC machinesfor die/mold making. To enhance the productivity and to improve the quality of productsas per the demand of international standards, manufacturer needs the provision of suchfacilities to compete with rapidly changing environment of world in technology. Theproject proposal has been prepared in collaboration with Sargodha Chamber ofCommerce & Industry (SgCCI) Sargodha, Electrical Fittings Manufacturers AssociationSargodha & Punjab Small Industries Corporation (PSIC). The Planning & Development(P&D) Department, Govt. of Punjab has approved this project and PSIC is implementingthis project.


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The center will help SMEs of Electrical Fittings and Accessories, by providingmanufacturing facilities for dies & molds. This center would help SMEs to get theirdie/mold manufactured locally.

The center will offer following services to the industry:

Die/Mold making facilities through latest CNC (wire cut, milling etc) machines Electrical testing Training and consultancy


Revised Project cost from 23.809 million to 38.434 million (excluding land).

30% of Civil Works done and expected completion date is 30th June 2006.

Project Director and staff will be appointed by May 2006, however officiatingProject Director is posted on site.

Vehicles purchased. Tender for computer and machinery received & opened on 14th February 2006

and is now under scrutiny.

3.2.4 CFC for Composite Based Material, Sialkot

Pakistans sports goods sector is concentrated in Sialkot. The products are mostly madefor international market and have received worldwide recognition merely because of thecare that goes into selection of raw material, designing and manufacturing. Pakistansexports in sports goods have been hovering around US $ 300 million for the past 5 years,with an average growth rate of a mere 0.46%. Pakistan has lost its share in wood basedproducts as in international market composite material based sports goods offer a lot ofopportunities. Keeping in view the international demands there is a dire need toencourage sports goods industry for shifting towards composite materials. AccordingSMEDA prepared a proposal in collaboration with Sialkot Chamber of Commerce &Industry (SCCI) Sialkot, Sports goods Association Sialkot Electrical & Punjab SmallIndustries Corporation (PSIC). The Planning & Development (P&D) Department, Govt.of Punjab has approved this project and PSIC has started implementing this project.

This center would consist of following departments

Dies and Molds workshop

Prototype development shop Testing laboratory Training department

Center will be manned by highly skilled human resource which would be providingtraining, technical advice, common services, testing, entrepreneurship services to theentrepreneurs wishing to set up composite material based industry.


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Tender for building has been floated and will be opened on 6th March 2006.Expected completion date for civil works is 30th June 2006.

Appointment of Project Director and staff is under process.

Tender for machinery will be floated on appointment of Project Director.

Technical meetings are being conducted with PCSIR for setting up of the project.

3.3 CFCs under Process (Year 2005-2006)

3.3.1 Marble & Granite Processing & Training Centre (MGPTC)Rawalpindi/Islamabad

The proposed center will support the industry in having better quality raw material i.e.marble and granite blocks and also provide product finishing facilities. To providetraining facility for creating quality in processing and developing value added products. It

will also have the aim of providing entrepreneurial skills to people to start and managetheir own businesses. It will be equipped with latest techniques of marble processing andpolishing. Industry will have the facility to square minimum of 4800 tons of stone, toprocess and finish almost 0.34 million sq ft tiles for export orders and 113,000 sq ftslabs for export orders in one year.

The project would have the following facilities;

Common facility for squaring and auto polishing for the industry. Management Information on Marble & Granite Laboratory Testing (Polishing)

Training Facility

The proposed project has been prepared in collaboration with Pakistan Marble & GraniteManufacturers Association (PMGMS), Rawalpindi/Islamabad. Meetings with relevantassociation were held. Need assessment done. PC 1 was prepared in close collaborationwith stakeholders and submitted with EDF, follow up is going on.


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Light engineering cluster, Faisalabad Engineering cluster, Multan

4. Formal Finance for SME clusters

Credit is life line for any running business including SMEs. However, flow of credit formthe formal sources to SMEs in Pakistan is at its evolutionary stages. There is a generalunderstanding that guidance required by most of the Small and Medium Entrepreneurs(SMEs) approaching SMEDA is in the field of procurement of credit from financialinstitutions. This understanding has been confirmed by analysis of the feed back fromSMEs who visited SMEDA during recent years. It has been verified statistically thatapproximately 38% of the SME visitors who contacted SMEDA required financialadvice.

In our opinion, a primary factor, which hinders professional relationship between banksand SMEs and forces them to rely on comparatively expensive sources of informal credit,

is lack of knowledge regarding financing options/products available with banks to bestsuit their customized business needs. Most SMEs do not even know how to formulatetheir request for obtaining finance.

Financial institutions in Pakistan now realize that SME Financing is different fromfinancing conventional businesses, and present its own risks and opportunities. Realizingthe potential in SME sector, banks are bringing in structural changes by setting up SMEdivisions and SME desks. The time is right to assist financial institutions in identifyingfinancing requirements of different sectors. One of the most efficient ways of doing thatis identification of common need of a sector and design financing program accordingly. Ithelps in establishing standardized loan approval and disbursement procedures and

eventually reduces application handling costs.

4.1 Power Loom Up-gradation, Faisalabad

Weaving sector of Pakistan is comprised of both the organized and the unorganizedsectors. The organized sector has shuttle-less and Air-Jet looms. Shuttle-less looms areeither the Projectile or Rapier type. The un-organized sector nationally called "PowerLoom" sector, has about 225,000 looms. Faisalabad is the biggest cluster in Pakistan,having about 125,000 Power Looms. The fabric manufactured on the shorter width loomsmostly caters to the local market demand while the wider width looms take care of thequality conscious export market of made-ups. As derived by the demand of exportmarkets, awareness is already increasing to replace the existing shorter width power

looms with wider width auto or shuttle-less looms.

Capital requirement has been one of the major hurdles for the up-gradation of the PowerLoom sector. SMEDA in collaboration with SME Bank Ltd prepared a customizedlending scheme for technology up-gradation i.e. either for the replacement of existinglooms or for the installation of new looms as expansion of existing projects. After wardsPunjab Small Industries Corporation and UNION Bank also take up the idea and started


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Launching of Lending Scheme for CutleryManufacturers Wazirabad

loaning for this purpose. So far Rs.226 million disbursed by PSIC, Union Bank SMEBank and. Around 150 entrepreneurs have benefited by this lending scheme.

4.2 Lending Scheme for Cutlery Manufacturers, Wazirabad

Majority of the cutlery manufacturers purchases steel on credit of 60 days bearing 5%

higher cost which on annually add up to 30% on nominal basis. Due to the unawarenessof these manufacturers regarding different credit options available in the form of formal/bank credit, they avail supplier credit (30%) instead of bank credit (10-12%). Byreplacing the supplier credit with bank credit the manufacturers can significantly reducetheir cost of operations. The proposed customized lending program for SMEs working inCutlery Sector Wazirabad will help to meet their working capital requirement.

SMEDA along with All Pakistan Cutlery and Stainless Steel Utensils Manufacturers andExporters Association (APCSUMEA) and Bank of Punjab (BoP) prepared a customizedlending scheme proposal. The scheme was successfully launched. More than 40applications were submitted to Bank of Punjab. Bank of Punjab approved 20 applicationsand Rs. 5.0 million disbursed. Further more 15 cases are under process.

4.3 Support Services for Agri Credit (SSAC)

Economy of Pakistan is heavily dependent on agriculture sector and about 42 percent ofpeople are depending on agriculture. Looking atthis aspect SMEDA has designed one scheme

Support Services for Agriculture Credit(SSAC) targeting small farmers. This schemeis basically a bridge between millions of smallfarmers and all those financial institutions thatare in the business of providing credit to theagriculture sector. This can harbinger a newapproach towards creating dynamic agriculture

credit markets by developing specialized skills in catering to the needs of the rural sector


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that includes agriculture, rural small scale industry and trade and special clientele likewomen. This project aims at providing bridge between farmers and financial institutionsfor timely availability of credit and latest technical information at farmers doorsteps.

The scheme was launched in collaboration with Askari Commercial Bank and Bank of

Punjab. This project has provided financing ofRs.77.45 mn to 252 farmers.

5. Technology Transfer & Up-gradation in Clusters

In the times to come, technology would dictate the manufacturing sector in any industry.The industries with superior technology will ultimately have a cutting edge by beingequipped with the ability to provide quality products and services in a cost effectivemanner. In todays world, when the process of technology change has become anunbridled phenomenon, it is very essential that the industries try to keep pace with therapid changes in the technology, identify and adopt ones, which fit the best in their set-up. SMEDA appreciates this fact and therefore, plans to encourage industries thinking inthe direction of upgrading their existing technology.

5.1 Technology Up-gradation in Electrical Fittings Cluster, Sargodha

According to industry sources, there are around 10,000 manual presses being used formanufacturing bakelite products in Sargodha. One model bakelite automatic press machineshould be developed for manufacturing bakelite (phenolic resin) products having temperature andtime controller. For demonstration, this machine should be installed at existing unit. After itssuccess all the manual bakelite products manufacturing press should be replaced by hydraulicpress machine.

This proposed technological up-gradation of bakelite electrical products press will help to movethe industry towards step by step automation to compete with rapidly changing environment ofworld in technology. It would not only improve the quality of products but would help theindustry to increase the volume and create better working environment for the workers who workon these presses.

Manual press used by Electrical Fittings Manufacturers in Sargodha


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SMEDA team has already held meetings with electrical fittings manufacturers and visited unitsalong with PITAC and private consultants to identify the appropriate solution for up gradation ofmachinery.

For practical demonstration and to explain the benefits of Hydraulic Press, various manufacturersof electrical fittings from Sargodha were invited to see the working of advanced (hydraulic)presses being operated in a unit at Lahore. Consultants have also been identified to facilitateElectrical Fittings industry in design and development of hydraulic presses along with up-gradation of existing presses which are installed with some manufacturers at Sargodha.

Initially model presses would be installed in 3 to 4 model factories, afterwards SMEDA wouldalso develop a network of such machinery manufacturers and take them to the clusters for thematchmaking between machine manufacturers and SMEs.

The up-gradation of the cluster would be completed in close collaboration with SCCI andBakelite Association Sargodha.

6. Awareness on International Certification

6.1 Compliance Guide for Textile Industry

Under the WTO regime, our industry would have to comply with the internationalenvironmental & social standards and intellectual property rights. The emerging tradescenario at the global level has brought challenges to Pakistan's export sector. The issueslike child labor, human rights, environment and management standards have startedsounding the note of warning for our major exports including textiles and leather sectors,followed by the conditions set by the market forces. The importing countries as well asindividual buyers are now demanding that the exporting companies should carry thecertification in the areas of environment, Social Compliance and also comply with the

conventions and treaties signed by Government of Pakistan. So there is an urgent need toprovide information regarding different compliance requirement to the textile industrystakeholders and especially for export oriented units. It would help the industry toupgrade their production facilities and management systems in the changing worldscenario, which ultimately would enhance the image of the industry in internationalmarkets and would help to boost of exports of Pakistan in textile industry.

To cater the needs of stakeholders meetings were organized at various forums includingexperts from PIQC, NESQ, WWF & international certifying professional companies(BVQI, SGS & DNV) and Textile entrepreneurs. First draft is being compiled and will besent to the relevant professionals and stakeholders for review.

7. Cluster ProfilingInformation regarding industrial sectors/clusters is most important for attracting newinvestors and foreign buyers. In this regards SMEDA Punjab has initiated the project ofPreparing Cluster Profile of six following clusters in Punjab. These profiles will providethe basic information regarding history & background of clusters, core cluster actors,current scenario of cluster, analysis of business operations, institutional setups and issues& problems of the clusters.


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1. Bed Wear Cluster, Multan2. Light Engineering Cluster, Faisalabad3. Electrical Fittings and Accessories Cluster, Sargodha4. Ceramics Cluster, Gujranwala

5. Furniture Cluster, Gujrat6. Ginning Cluster, Rahim Yar Khan

Draft cluster profiles for Electrical Fittings and Accessories Cluster (Sargodha), CeramicsCluster (Gujranwala) and Ginning Cluster (Rahim Yar Khan) have been prepared and areready for printing.

8. Marketing Support

Marketing has always been a major problem for SMEs, its intensity varying fromindustry to industry and from enterprise to enterprise. SMEs in Pakistan have always

faced some kind of marketing constraints due to lack of support services or their lack ofadequate budgeting for it. Furthermore, the scarce awareness, absence of information andtime to take advantage of existing services results in weak demand for their products.Keeping in view the marketing need of Clusters, SMEDA Punjab has initiated to developand launch cluster specific websites. These websites will be developed with thecollaboration of trade associations. SMEDA will help develop the websites andassociation will be responsible for maintaining and running the websites. Initiallywebsites foe following clusters will be developed.

1. Website for Cutlery Cluster Wazirabad2. Website for Mango Cluster Multan

To create networking among cluster players an Indian marketing expert Mr. JagatShah was invited to Pakistan in co-operation with UNIDO. Mr. Jagat Shah visitedSports wear Sailkot & Plastic sector Lahore on the invitation of SCCI and LCCIrespectively and gave them valuable information on international marketing.

9. Rural enterprise Development Training

Since agricultural practices in Pakistan are characterized by small-scale and low-incomefarming, therefore, to overcome poverty, the promotion of rural enterprises areconsidered as an important policy thrust by organizations like SMEDA. Rural EnterpriseDevelopment does not require big investments and infrastructure; therefore it can helppoor families to earn their livelihoods, hence alleviating poverty in rural areas. Also, ruralwomen are equally encouraged to participate in enterprise development program. RuralEnterprise Development deals with job-creating abilities, activities and economicefficiency in rural areas. The target group of such programs or the beneficiaries is therural people.


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9.1 Honeybee Farming

To support rural enterprise development, SMEDA is facilitating the farming communityto start their business in honey bee keeping. SMEDA Punjab in collaboration withUniversity of Agriculture, Faisalabad, University of Punjab, Lahore and Punjab RuralSupport Program (PRSP) initiated a project to develop new entrepreneurs in rural areas of

Punjab. In this regard, entrepreneurship development programs were organized fromApril 2003 to May 2005 in which women also participated. For this purpose, trainingswere conducted in Sargodha and Lahore in which interested participants, both male andfemale from all over the Punjab were trained so that they could start their business asearly as possible. The main objectives of these training were:

Introduction of honeybee farming as a second source of income and a mean ofpoverty alleviation by creating employment opportunities in rural areas.

Management of honeybee hives, colonies, queens etc Identify major issues/problems in promoting honeybee farming as rural enterprise

and to suggest measures for further generating such kind of employment.

Mrs. Nasreen Muzaffar, Director, HBRI, demonstrating beehives during the seminar of Bee Keeping

The purpose of such programs was to promote Rural Enterprises like honeybee farmingfor employment generation both in males and females, rural development and finallypoverty alleviation. So far 20 rural enterprises have been established through this support.

10. Cluster Development Program for SMEs in Punjab

SMEDA with collaboration with Punjab Small Industries Corporation (PSIC) and UnitedNations Industrial Development Organization (UNIDO) and has started ClusterDevelopment Program for SMEs in Punjab. The objective of this program is to help indeveloping different SME clusters of Punjab. This project is planned in two phases. InPhase-I (2004-2005), Diagnostic Study will be carried out and action plan will beprepared for following seven clusters. Phase II (2005-2007), is the implementation ofthe action plan prepared during Phase-I.

1. Ceramic Pottery Cluster, Gujrat


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Inaugural ceremony of CDA Training Program

organized by SMEDA & UNDO at NIPA Lahore

2. Domestic Electrical Appliances Cluster, Gujrat/Gujranwala3. Leather Goods Cluster, Sialkot4. Wood Working Cluster, Chiniot5. Ginning Cluster, Rahim Yar Khan6. Handloom Cluster, Multan

7. Textile Machinery Cluster, Faisalabad

Diagnostic Study for above mentioned clusters has been completed. In the next yearaction plan would be implemented. Different interventions would be made likestrengthening of Associations, creation of SMEs networks, cluster website, joint trainingprogram etc. these all intervention would lead to more productivity and in some clusterswould result in more exports.

11. SMEDA-UNIDO Cluster Development Program for SMEs

Clusters are backbone of any economy and in Pakistan, importance of clusters is muchmore because of its contribution in

employment generation and exports.Looking at clusters potential, experienceof SMEDA in cluster developmentprograms in Pakistan and very rich andinternational exposure and experience ofUNIDO in cluster developmentprograms, SMEDA is proposing aCluster Development Program jointlywith UNIDO in Pakistan. InitiallySMEDA will work exclusively in fourfollowing clusters of Punjab:

1. Sports wear Sialkot2. Marble & Granite Rawalpindi/Islamabad3. PVC and plastic products Lahore4. Auto parts Lahore.

In the year 2005-2006, diagnostic study would be completed and action plan would beprepared. Soft interventions in clusters i.e. strengthening of association, creatingnetworks, cooperation among SMEs and such type of activities would be focus of thisproject. Physical projects like CFCs for design, testing, training facility proposals andother facilities for the clusters would be prepared.

cluster dev punj

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