Executive Summary

In the present scenario tariff barrier have come down as compared to early 1990’s, so we have therefore examine to look in depth the implications of new world order, particularly for the small scale sector. This issue is of even greater relevance to a large number of SMEs in the plastic processing sector in and around Delhi region. SMEs have to upgrade their product and process technologically and quality wise. The Honourable Prime minister of India emphasized during the SSI (small scale industry) convention that there is an urgent need to work out effective promotional measure for enhancing the efficiency and productivity of small and medium scale enterprises. He further added that small enterprises across the world have benefited from the economics of agglomeration. Therefore the Technology Information Forecasting Assessment Council (TIFAC) has decided to carry out a study and a validation workshop on “Technology gap analysis study for the plastic cluster in Delhi.” For undertaking this study Central Institute of Plastics Engineering & Technology (CIPET) has conducted one awareness program in the Nangloi area where all the industry peoples are called and convinced them to understand the study and support for the betterment of their manufacturing practice.

Cluster Development: Concepts
Worldwide, small and medium scale enterprises play a leading role in propelling economic growth sustaining livelihood and in promoting equitable regional development. They constitute over 90% of total enterprises in most of the developing economies and are credited with generating the highest rates of employment growth and accounting for a major share of industrial production and exports.

‘Cluster’ can be defined as concentration of micro, small and medium enterprises in a given geographical location producing same or a similar type of products or services and these enterprises face similar type of opportunities and threats. The cluster is known by the name of the product being produced by principal firms and the place they are located in.

An industrial cluster is an agglomeration of companies, suppliers, service providers, and associated institutions in a particular field. Often included are financial providers, educational institutions, and various levels of government. These entities are linked by externalities and complementarities of different types and are usually located near each other. Because of their proximity-by geography and activities-cluster constituents enjoy the economic benefits of several location-specific externalities and synergies. Such benefits include access to specialized human resources and suppliers, knowledge spill overs, pressure for higher performance in head-to-head competition, etc. Moreover, through these linkages, one cluster is inevitably linked with others and to the overall economy.

Need for a Cluster Development
The concentration of largely homogenous enterprises within a relatively limited geographical area facilitates the intervention because of their similarity of needs and support requirements, speeds up the dissemination of best practices because of the pervasiveness of demonstration effects, and allows for a distribution of the fixed costs of interventions among a large number of beneficiaries. This is true for under-achieving clusters as well as for the best performing ones.

However, underachieving clusters are characterized by environments where information does not flow easily and where the various actors are not accustomed to talking with one another. In stark contrast with their counterparts in the more successful well-performing clusters, especially in developed countries, entrepreneurs in under-performing clusters rarely if ever meet one another, do not usually have on-going relationships with BDS providers and are not accustomed to presenting articulated calls for actions to the local policy makers. On the contrary, these clusters are more often than not characterized by extremely fragmented knowledge, latent conflicts, and an absence of a discussion forum. The small and medium enterprises in these clusters therefore have a very poor perception about the feasibility of joint actions.

Cluster Development Methodology
Cluster Development is different from the concept of development of Industrial Estates. The latter is largely based on infrastructure development and creation of new assets, whereas, cluster development aims at holistic development (covering diverse areas like marketing, export promotion, skill up-gradation, infrastructure etc.) and may be designed to cover industrial estates as well as natural clusters, which may have evolved on their own historically at any place.

Targeting industrial development at an industry cluster is based on the assumption that such a strategy will provide greater economic development benefits than those associated with a more diverse industrialization effort. These advantages are grouped into four following areas:-
1. Clustering Strengthens Localization Economies The concentration of an industry at a particular location may result in significant cost savings to firms in the cluster. These cost savings are referred to as localization economies. Sources of potential savings include a greater availability of specialized input suppliers and business services; a larger pool of trained, specialized workers; public infrastructure investments geared to the needs of a particular industry; financial markets familiar with the industry; and an enhanced likelihood of inter-firm technology and information transfers. 2. Clustering Facilitates Industrial Reorganization The transition in industrial organization from large firms engaged in mass production to small firms focused on speciality production is well documented. This change in industrial structure is attributed to increased global competition and the emergence of new production technologies (e.g., computer-aided manufacturing). 3. Clustering Encourages Networking Among Firms Networking is cooperation among firms to take advantage of complementary, exploit new markets, and integrate activities, or pool resources or knowledge. This cooperation occurs more naturally and frequently within industry clusters. And surveys of manufacturing networks find that firms in networks perceive significant advantages from cooperation with their counterparts. Networking firms are more likely than non-networking firms to engage in collaborating and information sharing in marketing, new product development, and technological upgrading. The networking firms also report that their competitiveness and profitability are enhanced by inter-firm cooperation and collaboration.

The methodology addresses both the vision and capacity building objectives. This section emphasizes the three phases which each cluster project is expected to undergo over its lifetime, namely: Preparation of a diagnostic study and formulation of a cluster action plan; Implementation of pilot and strategic projects; and the self-management phase. A key tool for cluster development is the diagnostic study. This study gathers previously dispersed and fragmented knowledge about the economic and social conditions of the cluster and its development potential, as well as the state of inter-firm relationships and the existing institutional support mechanisms. The diagnostic study also provides a valuable opportunity to enforce awareness about the approach and to promote trust among the cluster actors. Moreover, it helps to identify potential leaders from within the cluster and, more generally, the suitable counterparts to assist implementation. The diagnostic phase ends with the preparation of a broad action plan for the cluster. This document is drafted by the Focal Point together with key cluster representatives and offers a vision around which to gather the support and collaboration of the various cluster actors. The preparation of such a plan is the essential first step in developing long-term local capacities for responding to evolving economic and technical circumstances, rather than as a once-for all prescription. The first draft of the cluster action plan is thus a working document which must be revised as more information about the cluster is disclosed and on the basis of the results of the initial interventions. Nevertheless, it is expected that the information gained as a result of the diagnostic study and the joint preparation of the action plan (especially concerning the competitive position of the cluster in the national and international market) will suffice to identify the potentialities of the cluster as well as the key obstacles which prevent it from taking up the opportunities provided by the globalization of the Indian economy.

The methodology followed by CIPET &TIFAC for doing this project:
1. A detailed questionnaire is prepared in discussion to TIFAC &CIPET officials for understanding the problems associated with in the cluster. - The detailed questionnaire is given in Annexure-I. 2. A seminar cum awareness programme is conducted in the cluster for interacting with the cluster members and recording all the problems existing in the cluster. - Some snapshots of the seminar are attached in the Annexure-IV. 3. The detailed one to one interaction with industry people done is being carried out in their factory and offices are recorded. The detailed list of the Participants is attached in Annexure-II.
Following are the main steps of a cluster development: • Selection of cluster(s) • Selection of Cluster Development • Executive(s) Trust building • Diagnostic study • Preparation of action plan • Approval of budget and leveraging of funds • Monitoring and evaluation • Handing over and exit • Self-management phase

Study: Objective & Scope
The main objective of the study is to present the status of the technologies including the process and the product involved in the manufacturing of all varieties/segments/sizes/volumes/capacities of plastic products manufactured in the Nangloi plastics clusters in Delhi and present a detailed and comprehensive comparison of the currently used/followed technologies (product and process technologies etc) and practices in plastics products manufacturing in the above cluster with standard practices and advanced technologies used/followed by other large industries/manufacturers in India as well as outside India. The Technologies is to be focused in this study namely the injection moulding machine, extrusion and thermosetting including study of moulds used for injection and blow moulding for producing multi-colour products. The study also bring out the causes of the existing technological gaps and suggesting remedial measures and ways to remove these gaps in technology and to present a Technology Intervention Action Plan for upgrading the technology of the industries/units in the cluster.

The Scope of the study is to focus on the Nangloi plastic products manufacturing cluster in Delhi. The industries/units to be covered in this study will include all industries/units of the micro, small and medium scale involved in manufacturing of plastic products/items in the cluster as well those industries/units involved in making multi-colour dies/products. All Four technologies i.e. injection moulding, blow moulding, extrusion and thermosetting is to be studied under the existing technological gaps and solution to these gaps. The Study of moulds used for injection and blow moulding for multi-colour products also to be included in this study. The study is to be done in close consultation with the existing industry association and to be validated by the stakeholders (industry associations, entrepreneurs, industries/units & Govt. bodies) through a validation workshop to be organized before finalization and submission of the aforesaid study to TIFAC.

The scope of the survey of the plastic products manufacturing industries in the Nangloi cluster of Delhi is the following:-
• Finding out the present status and its gap in the product and processes technologies used in the cluster & study of multi-colour moulds and the current practices in plastic products manufacturing. • Finding out and suggesting the solution/remedial measures for the existing technological gaps and suggesting immediate (near term) as well as medium term and long term requirements for technology up gradation of the technology base in the cluster for making the globally competitive. • To recommend a detailed Technology Intervention Action plan based on findings of the study for improving the technology status of the manufacturing industries/units in the cluster. • Suggesting mechanism/model and methodology to be followed for reaching out to the cluster for effective implementation of the MSME program activities of TIFAC. • To compile the findings from the survey in the form of a report about the technology status, existing gaps in the technology/practices, possible technical solutions for filling up the gaps, suggestions for technology.

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