MP units' revival strategy targets foreign shores

Ailing manufacturing sector reaps rewards of reaching out.

The Madhya Pradesh Laghu Udyog Sangh has managed a revival of sorts for the state’s SMEs in the manufacturing sector. This turnaround, though, is limited only to export orders.

In 1999, 11,500 units in Madhya Pradesh were either sick or closed. To turnaround these ailing units, Sangh Chairman RS Goswami chalked out a plan to arrest their fall.

The problem was in the manufacturing sector, where most units were shifting to trade.

Goswami encouraged the units to explore international markets. This strategy has paid off and now a number of SMEs in MP are doing well in their chosen manufacturing field.

Such has been the success of the SMEs that bankers have accorded priority to SMEs. Credit flow has gone up from Rs 1,475 crore in 2003 to Rs 5,773 crore in March 2008.

Goswami says: “We started our journey in 2003. Eight members went to participate in Enterprise India Trade Show in Kazakhstan and Kyrgyzstan. Later, we participated in another trade show in Tajikistan. After receiving overwhelming responses, we made more visits to Egypt, Dubai, Ukraine, China, Algeria, Jordan, Belarus and Russia. The visits helped us in bagging more export orders. We have developed new business contacts with the world. The international market has evinced interest in us.”

He motivated members of the Sangh by giving examples of his own company, Hind Pharma, which developed business tie-ups with 12 countries for manufacture of water purification tablets.

Till 2003, a business trip was a distant dream for a small scale industrialist in Madhya Pradesh. A number of SMEs in MP have now posted significant increase in their exports.

Arvind Gugalia, president, MP Refractories Association, said: “Eight years ago, we were groping in the dark. Laghu Udyog Sangh organised a business trip to Egypt from where we received encouraging response. We developed contacts with SMEs in countries in West Asia. Recently, I visited Jordan as a part of Sangh delegation to attend ‘Rebuild Iraq Trade Fair.’ Now I am expecting exports to touch Rs 10 crore this year,’. He adds: “When you visit countries under a banner, you bear credibility. It pays.”

Normally, SMEs hardly get support from state or central government. Sanjay Shrivastava, another member of the Sangh, says: ‘My exports were zero till 2003. I even did not have IEC (Import Export Code). We had no international exposure, since we were hesitant while dealing with foreigners. I visited Ukraine in 2003 as a member of Sangh delegation and received good response. It was a tough task to get international exposure. But now, I am gearing up to supply (electrical insulating materials) to the United Arab Emirates. My export order is expected to touch Rs 1 crore.” His company Surendra Composite Pvt Ltd is looking for new market.

Deepak Sharma, director linkage, Telecom Pvt Ltd: “What attracts us is the respect, which other nations have for India. MP was facing a severe funds crunch. Even when MP had funds, SMEs were the least priority. The middlemen always have their say. We had no option but to explore the market.” He is now overwhelmed with orders of Rs 4 crore for supply of solar lights and electronic display boards from Jordan and Algeria.