Chandigarh fastener industry faces negative growth

The fastener industry in Chandigarh is staring at negative growth this year. Industrialists cite the firming up of raw material prices and the high cost of working capital as the two major factors why they expect 15-20 per cent negative growth this year.

The fastener industry is Chandigarh’s most prominent manufacturing industry, with an estimated 450 enterprises manufacturing products such as cold forged nuts, machine screws, self-tapping screws, rivets, bolts and nuts, which are supplied to customers across the country, including automobile manufacturers, the railways and government departments.

The industry is estimated to be worth Rs 400 crore, and 80 per cent of the enterprises are in the micro category.

A L Aggarwal, a fastener industry insider, said that prices of raw material – especially MS rounds and wire rods – had risen by Rs 6,000 per tonne in the last few months. This has been compounded by a 20-25 per cent increase in the cost of working capital in the past three months, on account of bank loans getting dearer.

Aggarwal said he expected the industry to experience double-digit negative growth this year. But there are other factors at work as well.

The Energy and Resources Institute (TERI), which is implementing a World Bank-aided project together with the Small Industries Development Bank of India (Sidbi), quotes a diagnostic study conducted for the Chandigarh fastener industry as saying that the industry does not have any infrastructure in place for training workers.

The industry laments the absence of industry-led training programmes that are customised to meet the skill set requirement of manufacturers.

Access Consultancy Service (ACS) was recently hired to mentor a training programme. Deepak Sharma, proprietor of ACS, who has been closely monitoring the fastener industry, believes that besides the lack of skilled manpower, the industry is facing other problems. One of them is the lack of focus on innovations.

If the industry has to prosper with the changing times, Sharma noted, a cluster-based approach needed to be adopted, and it could yield encouraging results. Aggarwal said the industry is now more receptive towards the idea of having a cluster-based approach.

He said, however, that the government, especially the micro, small and medium enterprise ministry, would have to extend a helping hand: “In the absence of any officials from the ministry visiting our units and sharing information about a cluster-based approach, it is not possible for the industry alone to tread the path of cluster development.”