Progress Report - Provincial Office (Smeda - Punjab) : Turn Potential Into Profit

PROGRESS REPORT PROVINCIAL OFFICE (SMEDA PUNJAB)
SME CLUSTER DEVELOPMENT PROJECTS
Turn Potential into Profit

Small & Medium Enterprise Development Authority Ministry of Industries, Production & Special Initiatives
Government of Pakistan http://www.smeda.org.pk Small and Medium Enterprise Development Authority 8th Floor, LDA Plaza, Egerton Road Lahore Tel: 92-42-111-111-456 Fax: 92-42-6304926-27
SME Cluster Development Projects
Provincial Office SMEDA - Punjab
TABLE OF CONTENTS EXECUTIVE SUMMARY ........................................................................................... 2 1. 2. 3. INTRODUCTION ................................................................................................. 4 CLUSTER DEVELOPMENT APPROACH ........................................................ 4 COMMON FACILITY CENTERS (CFC) ........................................................... 4 3.1 CFCS COMPLETED ..............................................................................................5 3.1.1 Common Facility Center for Computer Pattern Designing, Sialkot...............5 3.1.2 Common Facility Center for Light Engineering Sector, Gujranwala ............6 3.1.3 Artificial Insemination (AI), Burj Attari Lahore............................................7 3.2 CFCS UNDER IMPLEMENTATION ..........................................................................7 3.2.1 Auto Parts Design & Inspection Center, Lahore...........................................7 3.2.2 Wooden Furniture Support Center, Chiniot ..................................................8 3.2.3 Electrical Fittings Industry Support Center, Sargodha .................................9 3.2.4 CFC for Composite Based Material, Sialkot...............................................10 3.3 CFCS UNDER PROCESS (YEAR 2005-2006).........................................................11 3.3.1 Marble & Granite Processing & Training Centre (MGPTC) Rawalpindi/Islamabad ...........................................................................................11 3.3.2 Support Services for Leather Sector, Sialkot...............................................12 3.3.3 Rehabilitation of Leather Service Center, Kasur.........................................12 3.3.4 Other Proposals .........................................................................................12 4. FORMAL FINANCE FOR SME CLUSTERS................................................... 13 4.1 4.2 4.3 5. POWER LOOM UP-GRADATION, FAISALABAD .....................................................13 LENDING SCHEME FOR CUTLERY MANUFACTURERS, WAZIRABAD ......................14 SUPPORT SERVICES FOR AGRI CREDIT (SSAC)...................................................14
TECHNOLOGY TRANSFER & UP-GRADATION IN CLUSTERS .............. 15 5.1 TECHNOLOGY UP-GRADATION IN ELECTRICAL FITTINGS CLUSTER, SARGODHA ..15
6.
AWARENESS ON INTERNATIONAL CERTIFICATION............................. 16 6.1 COMPLIANCE GUIDE FOR TEXTILE INDUSTRY .....................................................16
7. 8. 9.
CLUSTER PROFILING ..................................................................................... 16 MARKETING SUPPORT................................................................................... 17 RURAL ENTERPRISE DEVELOPMENT TRAINING ................................... 17
9.1
HONEYBEE FARMING.........................................................................................18
10. CLUSTER DEVELOPMENT PROGRAM FOR SMES IN PUNJAB.............. 18 11. SMEDA-UNIDO CLUSTER DEVELOPMENT PROGRAM FOR SMES ...... 19
Executive Summary
Clusters are geographical concentration of enterprises which produce and sell a range of related or complementary products and are, thus, faced with common challenges and opportunities. Cluster development is basically supporting and strengthening the clusters by creating networking among the stakeholders to reduce the cost of doing business, bringing them on a single platform for more voice among policy makers, create new business opportunities, reducing risk of doing business and capacity building of the enterprises. Cluster development has also proved its contributing in employment generation and poverty reduction worldwide. SME Clusters in Pakistan have huge potential and critical to SME growth. SMEDA has always been fully cognizant of the significance of Cluster Development and has taken several initiatives. These initiatives includes Technological Up-gradation, establishment of Common Facility Centers(CFCs) , access to Formal Finance for SME clusters, Marketing support, Improving HR skills and Awareness on International Certification & Regulations. Worldwide, one of the most widely used practices to support industrial clusters is provision of Common Facility Centers (CFC). The establishment of CFCs is an integral part of SMEDAs Cluster Development activities. So far SMEDA has been able to establish following CFCs with Chambers of commerce and industry and industry/trade associations: Computer Pattern Designing in Sialkot This CFC has facilitated 300 SMEs to get their patterns developed, 122 participants trained & 28 are under training and 95 employments generated. Light Engineering Sector in Gujranwala The center has provided testing services to 206 SMEs 130 students have completed Auto Cad training. Artificial Insemination Training Center in Burj Attari More than 1100 technicians have been trained and 900 self employments generated under this program.
Credit is life line for any running business including SMEs and realizing the potential in SME sector and its importance, SMEDA has successfully launched following financing schemes in Punjab: Power Loom Up-gradation, Faisalabad (Rs.226 million to 150 entrepreneurs) Support Services for Agri Credit (SSAC) (Rs.77.45 million to 252 farmers) Lending Scheme for Cutlery Manufacturers, Wazirabad (Rs.5 million to 10 SMEs)
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The proposals for following CFCs were prepared and submitted to Govt. of Punjab. The Planning & Development Department-Punjab has approved these CFCs and allocated Rs.100 million for the year 2005-2006. The construction of buildings ad procurement of machinery and equipment are under process. Auto Parts Design & Inspection Center, Lahore Electrical Fittings Industry Support Center, Sargodha Wooden Furniture Support Center, Chiniot Composite Material Based, Sialkot
Besides above program SMEDA is also working in cluster profiling, marketing support to cluster stakeholders and training to skills enhancement for SMEs as well as rural clusters. SMEDA in collaboration with PSIC and UNIDO has started Cluster Development Program for SMEs in Punjab. The objective of this program is to help in developing seven different SME clusters of Punjab. The Diagnostic Study of these seven clusters has been completed. In the next year action plan would be implemented. Besides these clusters, SMEDA is also working exclusively with UNIDO in four clusters i.e. Sports Wear Sialkot, Auto Part Lahore, PVC Pipes & Plastic Products Lahore and Marble & Granite Rawalpindi/Islamabad.
1.
Introduction
Clusters are geographical concentration of enterprises which produce and sell a range of related or complementary products and are, thus, faced with common challenges and opportunities. There is ample evidence that small- and medium scale enterprises (SMEs) operating in the same or in related industrial sectors tend to cluster close to one another. This tendency to bunch in well defined areas has been observed in different environments in both developed and developing countries, and in different historical periods. There are sound economic reasons for this phenomenon. SMEs operating in such clusters derive a clear competitive advantage from: Proximity to sources of raw inputs, Availability of suitably customized business development services, Abundance of clients attracted by the cluster tradition in that industry Presence of a skilled labor force.
2.
Cluster Development Approach
Cluster development is basically supporting and strengthening the clusters by creating networking among the stakeholders to reduce the cost of doing business, bringing them on a single platform for more voice among policy makers, create new business opportunities, reducing risk of doing business and capacity building of the enterprises. SME Clusters in Pakistan have huge potential and critical to SME growth. SMEDA has always been fully cognizant of the significance of Cluster Development and has taken several initiatives for sustainable development of these clusters in the WTO regime and global village era. These initiatives mainly include: Technological Up-gradation Establishment of Common Facility Centers Technology Transfer Access to Formal Finance for SME clusters Establishing/strengthening cluster associations Marketing support Improving HR skills through support to strengthening/establishing sector specific institutions, conducting training workshops/seminars and provision of consultants. Awareness on International Certification (Social, Environmental and Health & safety), Testing and other regulations. Removal barriers in regulatory procedures Support in establishing Business Incubation Centers
3.
Common Facility Centers (CFC)
Worldwide, one of the most widely used practices to support Cluster Development is through the provision of Common Facility Centers (CFC). The CFCs provide a common pool of machinery/equipment, testing and inspection services and process technology related services for the collective up-gradation of SME Clusters. The SMEs use these facilities for improving quality and adding value addition to their products or processes.
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The specialized high-cost services and technology offered through such an arrangement are those which do not justify investments by a single enterprise. The establishment of CFCs is an integral part of SMEDAs Cluster Development activities. For this purpose series of meetings and in-depth need assessment survey with the industry stakeholders is carried out. These include the local Chamber, local trade and industry associations, SME owners and various public sector institutions. On the basis of these finding proposals for establishment of cluster need based CFCs are prepared.
3.1 CFCs Completed

3.1.1 Commo n Facility Ce nter for Computer Pattern Desig ni ng, Sialkot Sialkot has established its position as a major player in leather products manufacturing and exports. There are more than 380 units engaged in manufacturing and exporting leather garments and leather gloves. However, in order to compete in an increasingly cost efficient, technologically dependent and fashion oriented competitive environment, the need is to adopt those technologies that are in synch with local demands and enable the local industry to work at par with emerging competition. Computerized pattern designing is a system that helps in increasing labor productivity. The system reduces multiple product approval cycles, saves time and improves on material consumption. In Sialkot large number of units is SMEs and does not employ inhouse pattern designing facilities. Keeping in view the industry needs, SMEDA has spent an amount of about Rs. 2.00 million to establish a specialized CFC for Pattern Designing and Training on Pattern Making. This CFC offers following services to the industry:
Common Facilities Pattern Making Grading Marker Making
Training Facilities Training in manual pattern making Training in computerized pattern making
This CFC has been established in collaboration with Vocational Training Institute (VTI) Sialkot, Punjab Vocational Training Council (PVTC) and Sialkot Industry. Up-till now, this CFC has facilitated 300 SMEs to get their patterns developed, 122 participants received training & 28 are under training and 95 employments generated.
3.1.2 Commo n Facilit y Center for L igh t Eng ineering Sector, Gujranwala
Light Engineering SMEs in Gujranwala currently suffer from problems of material selection, physical testing, material composition, components drawing making and Computer Aided Designing (CAD) training facilities, which has constrained their ability to take full advantage of the advanced manufacturing process. Keeping in view industry needs, SMEDA has stepped forward for upgradation of the Light Engineering Service Center (LESC), Gujranwala into a modern Common Facility Center (CFC).
Physical Tests being conducted at CFC for Light Engineering Sector
SMEDA has spent an amount of Rs. 2.48 million to establish the CFC and this center offers a wide range of testing and consulting services to the industrial sector in general and light engineering sector in particular. The objective of the center is to support the industry by providing testing and product designing facilities; this would help in producing light engineering goods on international standards of quality and precision manufacturing. This CFC offers following services to the industry:
Physical Testing Hardness Testing Temperature Measurement (Pyrometer) Dynamic Balancing Carbon Sulphur Detector Wet Analysis (Ferrous & Non Ferrous)
Material Testing (Chemical Analysis)
Designing (Auto Cad) Consulting Services Consulting services Turn Potential into Profit
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Students Getting Auto Cad Training at CFC for Light Engineering
This CFC has been established in collaboration with Light Engineering Service Centre (LESC) - Technical Education & Vocational Training Authority (TEVTA), Gujranwala and Gujranwala Chamber of Commerce & Industry (GCCI). The center has started providing services to the SMEs of Gujranwala and other cities. Uptill now the center has provided testing services to 60 SMEs, 100 jobs have been completed and consultancy services provided to 56 SMEs. 130 students have completed Auto Cad training and 25 SMEs has been provided design services. 3.1.3 Artificial Insemi nation ( AI), Burj At tari Lahore
The economic uplift of dairy and livestock sector in urban and peri urban areas by increasing milk production quality, quantity and supply pattern by reproductive and breeding management of dairy animals is the main objective of Artificial insemination (AI) technician course organized by SMEDA at Vocational Training Institute (VTI) Burj Attari. The main objectives of these training courses are: Introduction of efficient AI services Promoting AI technique as rural enterprise development Reproductive management of livestock and dairy animals in related villages to get optimum production in terms of calves and milk production. Tools, equipment and superior semen quality for AI course. Training courses are organized regularly and it is an on going activity. More than 1100 technicians have already been trained and 900 self employments generated under this program. The purpose of such program is to Promote Rural Enterprises for employment generation, rural development and ultimately resulting poverty alleviation.
3.2 CFCs under Implementation

3.2.1 Auto Pa rts Design & Inspection Ce nter, La hore
Our auto parts industry is relying on conventional ways of product designing, which is time consuming and is unable to meet the increasing demand and precision required in manufacturing. Looking at these issues, a proposal to provide the designing and Inspection services to auto parts vendors was prepared in collaboration with Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) and Punjab Small Industries Corporation (PSIC). Project proposal was submitted with PSIC. The Planning & Development (P&D) Department, Govt. of Punjab has approved this project and PSIC is implementing this project. Tenders for construction of building and procurement of machinery and equipment have been invited. This center will help the industry to enhance the productivity and improve the quality of auto parts as per
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demand of international standards and will overcome the constraints of auto parts vendors. This center will offer following services to the industry: Designing of Mold/Die Designing of Auto Parts Inspection of Parts, Mold/Dies Training and Consultancy Information dissemination regarding metal cutting and shaping by use of CNC and CMM machines
Present Project Status

Revised Project cost from 46.66 million to 81.938 million (excluding land) to accommodate Industrial requirement. 60% Civil Works done and expected completion date is 30th June 2006. Project Director appointed and is posted at site. Supporting staff appointed. Vehicle for Project Director purchased. Tenders for Machinery, Equipment & Furniture received & opened on 14th February 2006 and is now under scrutiny.
3.2.2
Wooden Furnit ure Support Ce nter, Chi niot
There are almost 3000-4000 manufacturing units in Chiniot, employing around 25,000 people. Declining number of skilled craftsmen and the use of primitive technology are some of the acute problems faced by this industry. The project proposal has been prepared in collaboration with Punjab Small Industries Corporation (PSIC). The Planning & Development (P&D) Department, Govt. of Punjab has approved this project; PSIC has acquired the land for this project and has started implementing this project.
This centre will help them in developing appropriate expertise to meet the constant changes in local & international markets. The proposed center will be a one roof facility for all issues relating to the wooden furniture manufacturing that is being faced by Wooden Furniture Industry Chiniot. The project would provide facilities in design, training, marketing & advisory areas. The project would have the following proposed facilities; Design Centre Training Cell Marketing and Advisory Cell Display Centre
Need assessment workshop Development in Chiniot for Furniture cluster

3.2.3 Project cost is 12.144 million (excluding land) 70% of Civil Works including Production Hall, Office Block and Display Center done and expected completion date is 30th April 2006. Project Director and staff appointed Tender opened on 14th February 2006 and is now under scrutiny. Electrical Fittings Indust ry Support Center, Sa rgodha
About 70% of Pakistan's Electrical Fittings are being produced in Sargodha. There are about 15 large units, 200 SME units and 1,000 cottage industry units of electric fittings industry. Despite its economic importance, the Electric Fittings Manufacturing SMEs in Sargodha currently suffer from a variety of technological obsolescence issues, industry is still working on conventional lines and they do not use basic CNC machines for die/mold making. To enhance the productivity and to improve the quality of products as per the demand of international standards, manufacturer needs the provision of such facilities to compete with rapidly changing environment of world in technology. The project proposal has been prepared in collaboration with Sargodha Chamber of Commerce & Industry (SgCCI) Sargodha, Electrical Fittings Manufacturers Association Sargodha & Punjab Small Industries Corporation (PSIC). The Planning & Development (P&D) Department, Govt. of Punjab has approved this project and PSIC is implementing this project.
The center will help SMEs of Electrical Fittings and Accessories, by providing manufacturing facilities for dies & molds. This center would help SMEs to get their die/mold manufactured locally. The center will offer following services to the industry: Die/Mold making facilities through latest CNC (wire cut, milling etc) machines Electrical testing Training and consultancy

Revised Project cost from 23.809 million to 38.434 million (excluding land). 30% of Civil Works done and expected completion date is 30th June 2006. Project Director and staff will be appointed by May 2006, however officiating Project Director is posted on site. Vehicles purchased. Tender for computer and machinery received & opened on 14th February 2006 and is now under scrutiny. CFC for Composite Based Mate rial, Sialkot
3.2.4
Pakistans sports goods sector is concentrated in Sialkot. The products are mostly made for international market and have received worldwide recognition merely because of the care that goes into selection of raw material, designing and manufacturing. Pakistans exports in sports goods have been hovering around US $ 300 million for the past 5 years, with an average growth rate of a mere 0.46%. Pakistan has lost its share in wood based products as in international market composite material based sports goods offer a lot of opportunities. Keeping in view the international demands there is a dire need to encourage sports goods industry for shifting towards composite materials. According SMEDA prepared a proposal in collaboration with Sialkot Chamber of Commerce & Industry (SCCI) Sialkot, Sports goods Association Sialkot Electrical & Punjab Small Industries Corporation (PSIC). The Planning & Development (P&D) Department, Govt. of Punjab has approved this project and PSIC has started implementing this project. This center would consist of following departments Dies and Molds workshop Prototype development shop Testing laboratory Training department
Center will be manned by highly skilled human resource which would be providing training, technical advice, common services, testing, entrepreneurship services to the entrepreneurs wishing to set up composite material based industry.
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Tender for building has been floated and will be opened on 6th March 2006. Expected completion date for civil works is 30th June 2006. Appointment of Project Director and staff is under process. Tender for machinery will be floated on appointment of Project Director. Technical meetings are being conducted with PCSIR for setting up of the project.
3.3
CFCs under Process (Year 2005-2006)
3.3.1 Marble & Gra nite Processing & T raini ng Cent re (MG PT C) Rawalpindi/ Islamabad The proposed center will support the industry in having better quality raw material i.e. marble and granite blocks and also provide product finishing facilities. To provide training facility for creating quality in processing and developing value added products. It will also have the aim of providing entrepreneurial skills to people to start and manage their own businesses. It will be equipped with latest techniques of marble processing and polishing. Industry will have the facility to square minimum of 4800 tons of stone, to process and finish almost 0.34 million sq ft tiles for export orders and 113,000 sq ft slabs for export orders in one year. The project would have the following facilities; Common facility for squaring and auto polishing for the industry. Management Information on Marble & Granite Laboratory Testing (Polishing) Training Facility
The proposed project has been prepared in collaboration with Pakistan Marble & Granite Manufacturers Association (PMGMS), Rawalpindi/Islamabad. Meetings with relevant association were held. Need assessment done. PC 1 was prepared in close collaboration with stakeholders and submitted with EDF, follow up is going on.
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3.3.2 Support Se rvices for Leathe r Secto r, Sialkot

The proposed center will help the industry to improve the quality of finished leather with the uniform application of finishing mixture. This method can also reduce about 50% finishing cost, as the wastage of finishing chemicals is only 10-15% as compared with 40-50% with conventional method. The reduction in wastage of finishing chemical would reduce environmental pollution. The center will also help industry to get innovative designing on leather products. This center will educate local SMEs of leather industry regarding the need and requirements of Social Compliance.
The proposed center will comprise of following facilities: Installation of Roller Coater Embroidery Machine Establishment of Social Compliance Cell
Production floor Garment Factory of a Leather
The proposed project has been prepared in collaboration with Pakistan Leather Gloves Manufacturers & Exporters Association (PLGMEA), Sialkot and Leather Product Development Institute (LPDI), Sialkot. PC-1 was prepared in close collaboration with stakeholders and submitted with EDF, follow up is going on. 3.3.3 Rehabilitation of Leather Service Center, Kas ur
The Leather Service Center (LSC), Kasur was established in 1988-90 by the Govt. of the Punjab with the collaboration of Dutch Government. The Leather Service Center was transferred from PSIC to Technical Education & Vocational Training Authority (TEVTA) in 2001 to revive the center, but TEVTA did not revive this center till now. At the moment LSC is not functioning. The building and machinery of the center is deteriorating day by day. This center had provided a lot of facilities to tanning industry of Kasur and helped a lot to grow the SMEs of tanning industry. The revival/rehabilitation of LSC will help SMEs to cater to the intermediate processing needs of manufacturers including splitting, shaving and dyeing. The project of Rehabilitation of Leather Service Center, Kasur requires restoration of installed machinery in operating form, civil works and hiring of skilled staff for running the center. The machinery/equipment is already installed in the center. The condition of the installed machinery is miserable but the restoration of all installed machinery except Vacuum Dryer in operating form is possible. All the restoration of machinery can be done by local technical experts. 3.3.4 Other Proposals SMEDA is also going through extensive consultation with respective industry stakeholders, technical institutions, associations and related Government departments/agencies to prepare proposals for following clusters: Foundry cluster, Lahore
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Light engineering cluster, Faisalabad Engineering cluster, Multan
4.
Formal Finance for SME clusters
Credit is life line for any running business including SMEs. However, flow of credit form the formal sources to SMEs in Pakistan is at its evolutionary stages. There is a general understanding that guidance required by most of the Small and Medium Entrepreneurs (SMEs) approaching SMEDA is in the field of procurement of credit from financial institutions. This understanding has been confirmed by analysis of the feed back from SMEs who visited SMEDA during recent years. It has been verified statistically that approximately 38% of the SME visitors who contacted SMEDA required financial advice. In our opinion, a primary factor, which hinders professional relationship between banks and SMEs and forces them to rely on comparatively expensive sources of informal credit, is lack of knowledge regarding financing options/products available with banks to best suit their customized business needs. Most SMEs do not even know how to formulate their request for obtaining finance. Financial institutions in Pakistan now realize that SME Financing is different from financing conventional businesses, and present its own risks and opportunities. Realizing the potential in SME sector, banks are bringing in structural changes by setting up SME divisions and SME desks. The time is right to assist financial institutions in identifying financing requirements of different sectors. One of the most efficient ways of doing that is identification of common need of a sector and design financing program accordingly. It helps in establishing standardized loan approval and disbursement procedures and eventually reduces application handling costs.
4.1 Power Loom Up-gradation, Faisalabad

Weaving sector of Pakistan is comprised of both the organized and the unorganized sectors. The organized sector has shuttle-less and Air-Jet looms. Shuttle-less looms are either the Projectile or Rapier type. The un-organized sector nationally called "Power Loom" sector, has about 225,000 looms. Faisalabad is the biggest cluster in Pakistan, having about 125,000 Power Looms. The fabric manufactured on the shorter width looms mostly caters to the local market demand while the wider width looms take care of the quality conscious export market of made-ups. As derived by the demand of export markets, awareness is already increasing to replace the existing shorter width power looms with wider width auto or shuttle-less looms. Capital requirement has been one of the major hurdles for the up-gradation of the Power Loom sector. SMEDA in collaboration with SME Bank Ltd prepared a customized lending scheme for technology up-gradation i.e. either for the replacement of existing looms or for the installation of new looms as expansion of existing projects. After wards Punjab Small Industries Corporation and UNION Bank also take up the idea and started
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loaning for this purpose. So far Rs.226 million disbursed by PSIC, Union Bank SME Bank and. Around 150 entrepreneurs have benefited by this lending scheme.
4.2 Lending Scheme for Cutlery Manufacturers, Wazirabad

Majority of the cutlery manufacturers purchases steel on credit of 60 days bearing 5% higher cost which on annually add up to 30% on nominal basis. Due to the unawareness of these manufacturers regarding different credit options available in the form of formal/ bank credit, they avail supplier credit (30%) instead of bank credit (10-12%). By replacing the supplier credit with bank credit the manufacturers can significantly reduce their cost of operations. The proposed customized lending program for SMEs working in Cutlery Sector Wazirabad will help to meet their working capital requirement.
Launching of Lending Manufacturers Wazirabad
Scheme
for
Cutlery
SMEDA along with All Pakistan Cutlery and Stainless Steel Utensils Manufacturers and Exporters Association (APCSUMEA) and Bank of Punjab (BoP) prepared a customized lending scheme proposal. The scheme was successfully launched. More than 40 applications were submitted to Bank of Punjab. Bank of Punjab approved 20 applications and Rs. 5.0 million disbursed. Further more 15 cases are under process.
4.3 Support Services for Agri Credit (SSAC)

Economy of Pakistan is heavily dependent on agriculture sector and about 42 percent of people are depending on agriculture. Looking at this aspect SMEDA has designed one scheme Support Services for Agriculture Credit (SSAC) targeting small farmers. This scheme is basically a bridge between millions of small farmers and all those financial institutions that are in the business of providing credit to the agriculture sector. This can harbinger a new approach towards creating dynamic agriculture credit markets by developing specialized skills in catering to the needs of the rural sector
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that includes agriculture, rural small scale industry and trade and special clientele like women. This project aims at providing bridge between farmers and financial institutions for timely availability of credit and latest technical information at farmers doorsteps. The scheme was launched in collaboration with Askari Commercial Bank and Bank of Punjab. This project has provided financing of Rs.77.45 mn to 252 farmers.
5.
Technology Transfer & Up-gradation in Clusters
In the times to come, technology would dictate the manufacturing sector in any industry. The industries with superior technology will ultimately have a cutting edge by being equipped with the ability to provide quality products and services in a cost effective manner. In todays world, when the process of technology change has become an unbridled phenomenon, it is very essential that the industries try to keep pace with the rapid changes in the technology, identify and adopt ones, which fit the best in their setup. SMEDA appreciates this fact and therefore, plans to encourage industries thinking in the direction of upgrading their existing technology.
5.1 Technology Up-gradation in Electrical Fittings Cluster, Sargodha

According to industry sources, there are around 10,000 manual presses being used for manufacturing bakelite products in Sargodha. One model bakelite automatic press machine should be developed for manufacturing bakelite (phenolic resin) products having temperature and time controller. For demonstration, this machine should be installed at existing unit. After its success all the manual bakelite products manufacturing press should be replaced by hydraulic press machine.
Manual press used by Electrical Fittings Manufacturers in Sargodha
This proposed technological up-gradation of bakelite electrical products press will help to move the industry towards step by step automation to compete with rapidly changing environment of world in technology. It would not only improve the quality of products but would help the industry to increase the volume and create better working environment for the workers who work on these presses.
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SMEDA team has already held meetings with electrical fittings manufacturers and visited units along with PITAC and private consultants to identify the appropriate solution for up gradation of machinery. For practical demonstration and to explain the benefits of Hydraulic Press, various manufacturers of electrical fittings from Sargodha were invited to see the working of advanced (hydraulic) presses being operated in a unit at Lahore. Consultants have also been identified to facilitate Electrical Fittings industry in design and development of hydraulic presses along with upgradation of existing presses which are installed with some manufacturers at Sargodha. Initially model presses would be installed in 3 to 4 model factories, afterwards SMEDA would also develop a network of such machinery manufacturers and take them to the clusters for the matchmaking between machine manufacturers and SMEs. The up-gradation of the cluster would be completed in close collaboration with SCCI and Bakelite Association Sargodha.
6.
Awareness on International Certification
6.1 Compliance Guide for Textile Industry

Under the WTO regime, our industry would have to comply with the international environmental & social standards and intellectual property rights. The emerging trade scenario at the global level has brought challenges to Pakistan's export sector. The issues like child labor, human rights, environment and management standards have started sounding the note of warning for our major exports including textiles and leather sectors, followed by the conditions set by the market forces. The importing countries as well as individual buyers are now demanding that the exporting companies should carry the certification in the areas of environment, Social Compliance and also comply with the conventions and treaties signed by Government of Pakistan. So there is an urgent need to provide information regarding different compliance requirement to the textile industry stakeholders and especially for export oriented units. It would help the industry to upgrade their production facilities and management systems in the changing world scenario, which ultimately would enhance the image of the industry in international markets and would help to boost of exports of Pakistan in textile industry. To cater the needs of stakeholders meetings were organized at various forums including experts from PIQC, NESQ, WWF & international certifying professional companies (BVQI, SGS & DNV) and Textile entrepreneurs. First draft is being compiled and will be sent to the relevant professionals and stakeholders for review.
7.
Cluster Profiling
Information regarding industrial sectors/clusters is most important for attracting new investors and foreign buyers. In this regards SMEDA Punjab has initiated the project of Preparing Cluster Profile of six following clusters in Punjab. These profiles will provide the basic information regarding history & background of clusters, core cluster actors, current scenario of cluster, analysis of business operations, institutional setups and issues & problems of the clusters.
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1. 2. 3. 4. 5. 6.
Bed Wear Cluster, Multan Light Engineering Cluster, Faisalabad Electrical Fittings and Accessories Cluster, Sargodha Ceramics Cluster, Gujranwala Furniture Cluster, Gujrat Ginning Cluster, Rahim Yar Khan
Draft cluster profiles for Electrical Fittings and Accessories Cluster (Sargodha), Ceramics Cluster (Gujranwala) and Ginning Cluster (Rahim Yar Khan) have been prepared and are ready for printing.
8.
Marketing Support
Marketing has always been a major problem for SMEs, its intensity varying from industry to industry and from enterprise to enterprise. SMEs in Pakistan have always faced some kind of marketing constraints due to lack of support services or their lack of adequate budgeting for it. Furthermore, the scarce awareness, absence of information and time to take advantage of existing services results in weak demand for their products. Keeping in view the marketing need of Clusters, SMEDA Punjab has initiated to develop and launch cluster specific websites. These websites will be developed with the collaboration of trade associations. SMEDA will help develop the websites and association will be responsible for maintaining and running the websites. Initially websites foe following clusters will be developed. 1. Website for Cutlery Cluster Wazirabad 2. Website for Mango Cluster Multan To create networking among cluster players an Indian marketing expert Mr. Jagat Shah was invited to Pakistan in co-operation with UNIDO. Mr. Jagat Shah visited Sports wear Sailkot & Plastic sector Lahore on the invitation of SCCI and LCCI respectively and gave them valuable information on international marketing.
9.
Rural enterprise Development Training
Since agricultural practices in Pakistan are characterized by small-scale and low-income farming, therefore, to overcome poverty, the promotion of rural enterprises are considered as an important policy thrust by organizations like SMEDA. Rural Enterprise Development does not require big investments and infrastructure; therefore it can help poor families to earn their livelihoods, hence alleviating poverty in rural areas. Also, rural women are equally encouraged to participate in enterprise development program. Rural Enterprise Development deals with job-creating abilities, activities and economic efficiency in rural areas. The target group of such programs or the beneficiaries is the rural people.
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9.1 Honeybee Farming

To support rural enterprise development, SMEDA is facilitating the farming community to start their business in honey bee keeping. SMEDA Punjab in collaboration with University of Agriculture, Faisalabad, University of Punjab, Lahore and Punjab Rural Support Program (PRSP) initiated a project to develop new entrepreneurs in rural areas of Punjab. In this regard, entrepreneurship development programs were organized from April 2003 to May 2005 in which women also participated. For this purpose, trainings were conducted in Sargodha and Lahore in which interested participants, both male and female from all over the Punjab were trained so that they could start their business as early as possible. The main objectives of these training were: Introduction of honeybee farming as a second source of income and a mean of poverty alleviation by creating employment opportunities in rural areas. Management of honeybee hives, colonies, queens etc Identify major issues/problems in promoting honeybee farming as rural enterprise and to suggest measures for further generating such kind of employment.
Mrs. Nasreen Muzaffar, Director, HBRI, demonstrating beehives during the seminar of Bee Keeping
The purpose of such programs was to promote Rural Enterprises like honeybee farming for employment generation both in males and females, rural development and finally poverty alleviation. So far 20 rural enterprises have been established through this support.
10.
Cluster Development Program for SMEs in Punjab
SMEDA with collaboration with Punjab Small Industries Corporation (PSIC) and United Nations Industrial Development Organization (UNIDO) and has started Cluster Development Program for SMEs in Punjab. The objective of this program is to help in developing different SME clusters of Punjab. This project is planned in two phases. In Phase-I (2004-2005), Diagnostic Study will be carried out and action plan will be prepared for following seven clusters. Phase II (2005-2007), is the implementation of the action plan prepared during Phase-I. 1. Ceramic Pottery Cluster, Gujrat
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2. 3. 4. 5. 6. 7.
Domestic Electrical Appliances Cluster, Gujrat/Gujranwala Leather Goods Cluster, Sialkot Wood Working Cluster, Chiniot Ginning Cluster, Rahim Yar Khan Handloom Cluster, Multan Textile Machinery Cluster, Faisalabad
Diagnostic Study for above mentioned clusters has been completed. In the next year action plan would be implemented. Different interventions would be made like strengthening of Associations, creation of SMEs networks, cluster website, joint training program etc. these all intervention would lead to more productivity and in some clusters would result in more exports.
11.
SMEDA-UNIDO Cluster Development Program for SMEs
Clusters are backbone of any economy and in Pakistan, importance of clusters is much more because of its contribution in employment generation and exports. Looking at clusters potential, experience of SMEDA in cluster development programs in Pakistan and very rich and international exposure and experience of UNIDO in cluster development programs, SMEDA is proposing a Cluster Development Program jointly with UNIDO in Pakistan. Initially SMEDA will work exclusively in four Inaugural ceremony of CDA Training Program following clusters of Punjab:
organized by SMEDA & UNDO at NIPA Lahore
1. 2. 3. 4.
Sports wear Sialkot Marble & Granite Rawalpindi/Islamabad PVC and plastic products Lahore Auto parts Lahore.
In the year 2005-2006, diagnostic study would be completed and action plan would be prepared. Soft interventions in clusters i.e. strengthening of association, creating networks, cooperation among SMEs and such type of activities would be focus of this project. Physical projects like CFCs for design, testing, training facility proposals and other facilities for the clusters would be prepared.
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Progress Report - Provincial Office (Smeda - Punjab) : Turn Potential Into Profit

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PROGRESS REPORT PROVINCIAL OFFICE (SMEDA PUNJAB)

SME CLUSTER DEVELOPMENT PROJECTS

Turn Potential into Profit

SME Cluster Development Projects

Provincial Office SMEDA - Punjab

Turn Potential into Profit

SME Cluster Development Projects

Provincial Office SMEDA - Punjab

Turn Potential into Profit

SME Cluster Development Projects

Provincial Office SMEDA - Punjab

Turn Potential into Profit

SME Cluster Development Projects

Provincial Office SMEDA - Punjab

Turn Potential into Profit

SME Cluster Development Projects

Provincial Office SMEDA - Punjab

Cluster Development Approach

Common Facility Centers (CFC)

SME Cluster Development Projects

Provincial Office SMEDA - Punjab

3.1 CFCs Completed

Turn Potential into Profit

SME Cluster Development Projects

Provincial Office SMEDA - Punjab

Physical Tests being conducted at CFC for Light Engineering Sector

Material Testing (Chemical Analysis)

SME Cluster Development Projects

Provincial Office SMEDA - Punjab

3.2 CFCs under Implementation

SME Cluster Development Projects

Provincial Office SMEDA - Punjab

Present Project Status

Wooden Furnit ure Support Ce nter, Chi niot

Turn Potential into Profit

SME Cluster Development Projects

Provincial Office SMEDA - Punjab

Present Project Status

Turn Potential into Profit

SME Cluster Development Projects

Provincial Office SMEDA - Punjab

Present Project Status

SME Cluster Development Projects

Provincial Office SMEDA - Punjab

Present Project Status

CFCs under Process (Year 2005-2006)

SME Cluster Development Projects

Provincial Office SMEDA - Punjab

3.3.2 Support Se rvices for Leathe r Secto r, Sialkot

Turn Potential into Profit

SME Cluster Development Projects

Provincial Office SMEDA - Punjab

Light engineering cluster, Faisalabad Engineering cluster, Multan

Formal Finance for SME clusters

4.1 Power Loom Up-gradation, Faisalabad

SME Cluster Development Projects

Provincial Office SMEDA - Punjab

4.2 Lending Scheme for Cutlery Manufacturers, Wazirabad

Launching of Lending Manufacturers Wazirabad

4.3 Support Services for Agri Credit (SSAC)

SME Cluster Development Projects

Provincial Office SMEDA - Punjab