|
IN FOCUS
Fan industry: local & export markets
By Ismat Sabir
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. Out of the total production, approximately 30 per
cent fans consist of pedestals, 7 per cent brackets and the remaining 63 per cent are ceiling fans. The industry belongs to the light engineering industry category, and is one of the industries that existed at the time of independence. In the early 1950s, it was declared as cottage industry and its more than 50 per cent units still fall in this category.
Fan industry is mainly confined to Gujranwala and Gujrat cities of the Punjab province. The reason for its remaining a cottage industry is that majority of the units do not have full facilities of production under one roof. They usually give orders to the units having machines for different parts like fan guards, blade castings, core laminations etc. These units have lathes, shapers, milling machines, and power pressers, die casting machines and electroplating equipments. Therefore, most of the units are simply assembling units. Thus, they do not give brand names to their products.
Besides small and medium units, a few units are quite large and have integrated system i.e. from motor winding to high-pressure dies casting. These companies have reputed brand names and the qualities of their products are of international level. These units are the main players in the export field.
The industry is producing a variety of products in different sizes and designs. The major products are: ceiling, pedestal, table, table-cum-pedestal fans, circumatic fans, wall bracket, exhaust fans and propellers.
The industry supplies quality products to the local markets, whether branded or unbranded, at competitive prices. About 400 units have a production capacity of 5 to 6 million fans, on single shift basis. The production is equal to the demand, including a nominal quantity of exports. The actual production has remained about 2.5 million fans per annum, showing a 50 per cent idle capacity. The demand for fans is continuously increasing due to increase in population and speedy migration towards big cities, and for exports. The other factor is that during the last few years, local demand for quality products is increasing fast as compared to low price goods. This means people are becoming quality conscious.
Raw materials
Most of the raw materials used by the fan industry are directly or indirectly imported from different countries. Irregular and constrained supplies of some basic input are the main bottlenecks. Some of the raw materials used in the manufacturing of a fan are: electric steel sheets, aluminium, enamelled copper wire, ball bearing, steel rod and PVC.
Major fan producing countries are Japan, Korea, Taiwan, Hong Kong, India and China. Japan is covering high quality market segment of fan market. Korea and Hong Kong are in middle segment of market while Pakistan, India, Taiwan and China are supplying comparatively low quality products at cheaper prices.
Exports
Although fans' exports have great potential, their export is negligible. In 1992-93, only two-lac fans were exported to only two countries, Iraq and Yemen. But now the industry is exporting fans to more than 25 countries.
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. As against ceiling fans, the increase in pedestal fan export is quite stable i.e., continuously rising.
Pakistan has also started exporting parts of fans. During the last four years, as shown in table-II, the amount earned from export rose from Rs4.2 million to Rs107 million in 1998-01, but decreased to about fifty per cent the very next year, 2001-02. However, in spite of big fluctuations, it is believed that if some bottlenecks are removed there is a big scope for enhancing the export of fans.
The situation is that from very the beginning, the government has not given any incentives to encourage fan industry i.e. whatever progress the industry made, it has made on its own resources, and is due to its dedicated and hard working manufacturers and labourers. 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.
The main constraints hindering the growth of industry as well as export are:
Ball bearing is an important part that ensures smooth running and noiseless working of an electric fan. Fan manufacturers are now importing this item because of smuggled ball bearings local units are not producing quality products. Thus, anti-smuggling measures should be taken to save the local industry, which in turn would ensure regular supply of ball bearing to fan industry at reasonable prices. In the meantime, the import duty on ball bearing should be rationalised.
Like ball bearings, Electric Steel Sheet (ESS) is also a major item in fan manufacturing. It determines the quality, performance, durability and electricity consumption of a fan. However, due to ESS shortage and high prices, fan manufacturers are using Mild Steel Sheet (MSS). The motors manufactured from this material are not of good quality and use more electricity.
Prices of raw materials are also a major constraint in export. For instance, in some
cases C&F prices of raw materials in Pakistan are greater than C&F prices of fans from India. Therefore, if the government really wants to increase exports of fan, custom duties on raw materials should be lowered to a reasonable level.
There is an urgent need to establish a research department for innovation and to improve designs of fans according to the requirements of international buyers. Pakistan Standard Institute's procedure should be simplified and the latest technical laboratory should be set-up to test the fans. The PSI should establish its testing laboratory in the area where industry exists and test fans on two standards i.e., at local and international. The test report should be given in a specific period. Further, an institute for labour training should immediately be established with the help of PEFM Association. The other measures to enhance the export, include organising seminars, doing surveys of the foreign markets that would give the idea of how to export, where to export and what to export.
TABLE - I: EXPORT OF FANS
(000 Rs)
Year Ceiling Pedestal
1989-90 134 1,289
1992-93 81,762 1,826
1993-94 18,636 15,137
1998-99 2,552 32,432
1999-00 15,689 66,370
2000-01 59,259 161,554
2001-02 208,963 183,613
Source: Federal Bureau of Statistics.
TABLE - II
PARTS OF FAN EXPORTED
(Million Rs.)
1998-99 4.2
1999-00 16.6
2000-01 109.7
2001-02 57.5
TABLE - III: FAN EXPORTS BY TYPE
(Million Rs.)
1998-99 1999-00 2000-01 2001-02
Ceiling Fans 2.6 15.7 59.3 208.9
Pedestal Fans 32.4 66.4 161.6 183.6
Table Fans 1.1 -- -- 0.9
Exhaust Fans 0.1 0.1 0.1 --
Other Fans 2.9 6.9 5.1 27.2
Fan Blowers 24.9 13.2 0.7 --
Other Fans n.s. 3.0 9.7 5.3 2.0
Total 45.0 42.0 232.1 422.6
