Financial meltdown a boon for small factories in Punjab

January 20th, 2009 - 1:40 pm ICT by IANS  

Mohali (Punjab), Jan 20 (IANS) The global financial slump has come as a boon for small industrial units in Punjab. As the bigger units pare down production and focus on cost-cutting, orders have begun to be re-routed to the small-scale sector in the state.”Our business has gone up by over 60 percent in the past three-four months. Many of our new clients are from Gujarat and Maharashtra. Our workers are working round the clock to complete orders,” said Adhish Bansal, who runs a small auto bearings manufacturing unit in this industrial town about 10 km from Chandigarh.

Atul Mahajan, owner of a small-scale precision engineering equipment unit in Mohali, has a similar story. “Earlier, we only had clients in this industrial area and did not send our products to other states. It’s different now.”

Today, Mahajan said, demand has shot up and sometimes orders have had to be refused on account of the excessive workload and deadline pressure.

“This slowdown in the economy has certainly proved a blessing in disguise for many small-scale units operating here. Various small-scale industries have started getting good business,” said K.S. Mahal, general secretary, Mohali Industries Association (MIA).

But everyone is not happy. According to a senior MIA official, the bigger units in Punjab’s Jalandhar industrial area, around 150 km from here, are suffering as they cannot run production on a lower scale to execute small orders.

Baljeet Singh, who runs an auto parts manufacturing unit in Jalandhar, says: “Our international export business has fallen by 50 to 60 percent and in the domestic market by over 30 percent . Many clients are going to smaller firms to get products at lower prices.

“In 2007, we did good business, but the last six months of 2008 were very difficult for us. We cannot compete with small industries as we cannot sustain for long by cutting down production because of the big capital investments we made.”

Davinder Singh Khokhar, who runs a hosiery unit in Ludhiana, around 100 km from here, said: “Big industries are facing a liquidity crunch, as we do not have any stable source of cash flow. Many entrepreneurs here are planning to shift to some small-scale industry as at present it seems to be the only money-spinning and viable option.”

The auto components sector is one of the main industries of Jalandhar, which has 300 units that employ more than 4,500 people.

Over 1,200 small-scale and large-scale units employing more than 100,000 people operate in Mohali. Most of these manufacture engineering goods and automobile parts.

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