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F A N I N D U S T R Y !F A N I N D U S T R Y !

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by

SANA SHAIKH AISHA SALAUDDIN SYEDA MARYA HAREEM

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INTRODUCTION

Fan is a daily use item.

Its utility increases, especially in the summer season.

The industry is producing about 5 to 6 million fans per annum and meeting successfully the local as well as the export demand.

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(CONT)

TOTAL PRODUCTION DISTRIBUTION 30 percent fans consist of pedestals 7 percent brackets 63 percent ceiling fans The industry existed at the time of

independence. In early 1950s, it was declared as cottage

industry.

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(CONT) Fan industry is mainly confined to

Gujranwala and Gujrat cities of the Punjab province.

The industry is producing a variety of products in different sizes and designs.

The industry supplies quality products to the local markets.

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H I S T O R Y ! 1940’s heroic efforts made by a few enterprising individuals.

When we go through the history of fan manufacturing industry a reality comes in our view, that Sheikh and Mughal families which dwell in Gujrat-Gujranwala, have played a very significant role in the progress of this industry.

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(CONT)

In this region the history of fan manufacturing is not very ancient, however, since last five decades; work has been done for its prosperity.

1939 establishment of NATIONAL METAL WORKS in Gujrat.

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(CONT) The industry belongs to the light engineering industry category and it is one of the industries that existed the time of independence

In early 1950s it was declare as cottage industry and its more than 50%units are still fall in the category

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WHY IT IS CALLED COTTAGE INDUSTRY?

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REASONS It is because majority of the units does not

have full facilities of production under one roof.

Most of the units are simply assembling units; therefore do not gives brand names to their products.

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RAW MATERIALS

Electric steel sheets Aluminium Enameled copper wire Ball bearing Steel rod PVC.

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PRODUCTS

Ceiling fans Pedestal fans Table fans Table-cum-pedestal fans Circumatic fans Wall bracket fans Exhaust fans Propellers.

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Facts and FiguresGDP contribution Rs 1.5 billion

Total capital Investment Rs 3-3.5 billion

Installed capacity 5-6 Million fans per year

Total fan Production 2.5-3 million fans per year

Volume of exports $4 Million

Employment 25,000 Workers.

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MAJOR FAN PRODUCING COUNTRIES:

Japan Korea Taiwan Hong Kong India China

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PRESENT SCENARIO It does not owe its success to any foreign collaboration or

any from the Government, but to its own people whose constant research for maintaining good quality and devising new methods and techniques of production have now resulted in a product which we can rightfully claim as among the best in the world.

Pakistan has a comparative advantage in the production cost of fancy fans. The per unit cost of these fans is 64$ in the USA, $40 in India while it is only $16 in Pakistan, which is the second lowest, after Hong Kong.

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EXPORTS In 1992-93, only two-lacs fans were exported to

only two countries, Iraq and Yemen. But now the industry is exporting fans to more than 25 countries

Until 1998 about 84 % export of fans was restricted to a few countries such as Saudi Arabia, Bangladesh and etc, which has now increased to more than 50 countries including EU and USA. No doubt the export of fans' exports have great potential, their export is negligible

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(CONT)

The government hasn’t given any incentive to encourage fan export and the progress is due to the efforts of its manufacture and laborers only

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The figures given in table-I indicate that although the exports of ceiling fan increased from Rs134 thousand to 209 million rupees, the trade is fluctuating a great deal.

Year Ceiling Pedestal

1989-90 134 1,289

1992-93 81,762 1,826

1993-94 18,63615,137

1998-99 2,552 32,432

1999-00 15,689 66,370

2000-01 59,259 161,554

2001-02 208,963 183,613

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IMPORTS IMPORT OF BALL BEARING :The only ball

bearing manafacturing unit is lying closed , therefore , import duty on ball bearing should be rationalized.

Credit goes to GFC fan, prominent fan manufacturing company, who made an appreciable attempt to supply samples to the consumers in South America and West Indies, which have been found consistent with electrical standards of these countries

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(CONT) Production of voltage of 220/110 capacities

has also been on the rise, which was the requirements of the countries

Bangladesh is one of the major trade partners in importing millions of fans from Gujarat.

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DEMAND and SUPPLY The actual production has remained about 2.5 million

fans per annum, showing a 50 per cent idle capacity

About 400 units have a production capacity of 5 to 6 million fans, on single shift basis.

The demand for fans is continuously increasing due to increase in population and speedy migration towards big cities.

As people are becoming quality conscious so there is a tough competition.

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NAME OF PRODUCT

Average Price (Rs):

Ahad Fans 1975

Pak Fans 1470

Royal Fans 1563

Younas Fans 1512

Parvaz fans 1391

GFC Fans 1282

Super Asia fans 1345

Average Price 1584

AVERAGE PRICES OF FAN

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CLASSIFICATION OF GLOBAL FAN TRADE

It is based on energy consumption. The fans that:

Consume less than 125 watts of energy (SITC 74341) are generally referred to as Domestic

Fans and the fans that that consume over 125 watts (SITC 74343) are classified as Industrial

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(CONT) Pakistan has earned $ 3.896 mn. From

exports of domestic fans whereas it has earned $0.104 mn.from exports of industrial fans

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GST and Duty Structures

GST on Fans 15%

Import Duty on Fans 25%

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FUTURE PROJECTIONS

Export of fans touched double figures in 2001-02 and the exports are targeted at $20mn because of duty free access products provided by the European union.

Fans according to engineering vision the target of

fan industry would be to capture 10%of US & EU markets by the year 2012.

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Its efficiency and freezing the sale price at present level, both for domestic and international markets.

The production target has also fixed at 11.3mn. Fans per annum in 2012. Out of which 6.4 mn. Fans would be exported.

(CONT)

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(CONT) Whatever progress the industry made, it

has made on its own resources, and is due to its dedicated and hard working manufacturers and laborers. In spite of the lack of proper training the industry has innovated and uplifted the standard to the level where its products can compete in the world markets as government provided no incentives.

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PROBLEMS Ball bearing is an important part that ensures smooth

running and noiseless working of an electric fan.

Like ball bearings , electric steel sheet (ESS) is also a major item in fan manafacturing. It deteremines the quality , performance ,durability and electricity consumption of a fan .Due to ESS shortage and high prices , fan manafacturers are using Mild Steel Sheet (MSS) The motors manafactured from this material are not of good quality and use more electricity.

Lack of political framework: (no recognition at policy

level).

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(CONT) Lack of ownership & commitment of agencies involved;

took almost 2 years to inculcate vision of this change mgmt exercise

Resource mobilization was the major issue to get short-term wins.

Lack of articulation culture and empire building attitude at all levels.

Too much high prices of import raw materials.

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RECOMMENDATIONS

If the government really wants to increase exports of fan, custom duties on raw materials should be lowered to a reasonable level.

Pakistan Standard Institute's procedure (PSI) should be simplified and the latest technical laboratory should be set-up to test the fans.

An institute for labour training should immediately be established with the help of PEFMA.

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(CONT)

Fan industry has been a neglected one by the government while it should be fully recognized like any other export-oriented industry of Pakistan.

An urgent need in big companies to establish research departments within their factory premises for innovation and to improve designs of fans according to the requirements of international buyers.

Government should rationalize custom duties on fan raw material i.e., it should be lowered to a reasonable level.

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(CONT) Government should sponsor exclusive delegations of

the industry for visit to African countries, Indian occasion including Australia, Indonesia and Philippine, South America and Caribbean island countries.

HR development training awareness on ISO 9000 quality manufacturing standards needs to be patronized to overcome the lack of facilities.

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(CONT)

Ministry of science and technology with cluster council project and FDI to provide technical extensive facilities for the local industries community.

Director training, export promotion bureau should established his camp office in Gujrat.

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WTO IMPACT!

WTO will have a positive impact in Pakistan because it will remove trade barriers which this industry faces a lot.

Japan the major competitor , after the

implementation of WTO it is likely that Japan will move towards heavy industry and Pakistan will get a chance to explore more and it will enhance exporting of fans as well.

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(CONT) WTO will have negative impact if it does

not improve its quality of labour and does not implementation new technology.

As the splits and ACs are being purchased by peoples who can afford it.

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CONCLUSION It has great potential but needs consideration by

government.

The recommendations should be implemented.

The problem should be solved.

PSI should be provided incentives and encouraged.

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THE ENDTHE END

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QUESTIONS ARE APPRECIATED!QUESTIONS ARE APPRECIATED!