You are on page 1of 81

Govt. of India, Min.

of SSI


on
Agricultural Implements Industry
at
Karnal (Haryana)
(May 2005)













Prepared by:
Raj Kumar Arora, Asstt. Director (Mech.) &
Cluster Development Executive
Small Industries Service Institute
Ministry of SSI, Govt. of India
11-A, IDC, KUNJ PURA ROAD
KARNAL-132001 (HARYANA)
PH: 0184-2231862, 2230882, 2230910
e-mail: sisiknl@sancharnet.in, rka_nathana@yahoo.com
Website:www.sisiharyana.org
INDEX

S.
No.
Description Page
Executive Summary i to ii
1.
STATUS & IMPORTANCE OF CLUSTERS IN SSI
SECTOR
1
2.
AGRICULTURAL IMPLEMENTS
MANUFACTURING IN SSI SECTOR
4
3.
DESCRIPTION OF THE CLUSTER
6
4.
THE KARNAL AGRICULTURAL IMPLEMENTS
CLUSTER
10
5.
CLUSTER ACTORS
24
6.
LINKAGES AMONG CLUSTER ACTORS
35
7.
CURRENT INSTITUTIONAL MATRIX
36
8.
VALUE CHAIN ANALYSIS
37
9.
ANALYSIS OF BUSINESS OPERATION
43
10.
REALITY TREE DIAGRAMMES
54
11.
INDUSTRY STRUCTURE ANALYSIS
58
12.
SWOT ANALYSIS
61
13.
PRESENT CLUSTER MAP
65
14.
CLUSTER VISION
66
15.
PROPOSED PROGRAMMES / ACTIVITIES
67
16.
TECHNOLOGICAL INTERVENTIONS
69
17.
FUTURE CLUSTER MAP
73
18.
ACTION PLAN / Budget -- YEAR 2005–06
74


i

EXECUTIVE SUMMARY

Agriculture sector affects every aspect of economy of the country. It nearly
contributes 32 % of national income. Use of implements and machinery plays vital
role in increasing the productivity of agricultural output.

The report in hand has tried to identify the areas for improvement in the working of
Agricultural Implements Manufacturing Industry at Karnal (Haryana) to enable it to
produce good quality, standardized and cost effective implements of latest design
to suit newer techniques of farming.

The report is based on information and data collected from SMEs in the cluster,
related industries associations, Govt. departments and institutions working in the
area of agriculture research, development & extension education.

There are around 70 working SMEs in Karnal Agricultural Implements cluster.
Besides there are 25 to 30 units in nearby towns within 20 to 25 km radius.

These units produce implements like – Cultivators, Disc Harrows, Shrub Masters,
Land Levellers, Bund Formers, Seed –cum- Fertilizer Drills, Zero Tillage Machines,
Straw Reapers & Thrashers etc.

Some units manufacture some of the important components of implements such as
– Harrow / Plough Disc, Cultivator Tynes, Cultivator Spring, Shovel. Some Casting
units are also there at Karnal.

Present annual Turn over of Karnal Cluster is around Rs.198 crore. Cluster
provides direct employment to more than 1000 persons. This turn over of Karnal
cluster is 18% of the Gross output of Agricultural implement manufacturing segment
in SSI sector.

The main manufacturing operations performed are –press work, fabrication,
welding, machining, forging, metal forming, heat treatment etc. The working style of
SMEs in the cluster is almost traditional and family run business type. Modern
management techniques are not popular.

ii
Despite the presence of many R & D institutes in local and nearby areas, cluster
member SSIs have not developed strong linkages with them resulting in no
significant improvement in design and standards of implements or introduction /
development of new implements.

Inter firm linkages and sub-contracting among SSIs in cluster are almost non
existent. There are no hard networks (consortias). However there is a
manufacturers association which takes up the matters of common concern with
appropriate authorities.

The major market for Karnal implements is Haryana, UP, Utteranchal, Rajasthan,
MP, Chhatisgarh, Bihar, J harkhand some parts of Maharashtra & Gujarat, and
even north east.

Only 2-3 units are exporting their products . However major export share is from
Harrow disc. Domestic market share of Karnal cluster implements is shrinking due
to various reasons.

There is lot of room for improvement in the working of SSIs in the cluster. Major
areas for improvement are Machinery & Technology, Design, Quality Management
systems, Human resources and Business Development Services. There is also
scope for improving inter-firm linkages and inducing networks for common buying of
Raw Materials and Consortia based exports. This will help in bringing down the
rivalry level in the firms and enhancing there bargaining power in front of Raw
Material suppliers as well as customers too.

There is potential for growth in Karnal agricultural implement cluster provided the
core cluster members show positive interest in implementing the proposed action
plan to achieve the Vision i.e. Technology up gradation through process
improvement and Standardisation with an eye on Quality enhancement and
value addition of the product. The strategic interventions are required to be made
in the areas of Technology up-gradation, Standardisation and Design improvement,
Personal counseling & training, Networking and Trust building.


Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 1 of 81
1. STATUS & IMPORTANCE OF CLUSTERS IN SSI SECTOR

As per the report of third All India Census of Small Scale Industries conducted in
the year 2001-02 there were more than 13,74,974 registered and more than
91,46,216 unregistered small scale enterprises in the country with Total Gross
Output of Rs. 2,03,25,462 Lakh. Out of these 65.55% were SSIs & Small Scale
Ancillaries among registered units and 38.75% in unregistered sector. The remaining
are Small scale Service & Business Enterprises (SSSBEs). Total SSI sector
(including service & Business enterprises) provides employment to about 2.5 crore
persons in total. With more than 6000 products / services produced /rendered in SSI
sector it contributes Rs. 14,19,956 lakh to national exports earnings. The value of
exports was only 5% of the gross output. The regd. SSI sector accounted for 87% of
the total exports with only 14.5 % of the exporting units.

Traditionally, there has been a phenomenon of a group of units manufacturing
same or similar product in close geographical proximity to each other. Such groups
were called clusters. Clustering has been recognized both nationally and
internationally as an engine of growth and identification of the clusters in SSIs had
facilitated effective policy formulation in the past.

As per 3
rd
All India census in the regd. SSI sector in the year 2001-02 a district
having 100 or more regd. SSI units engaged in the manufacture of same product
was considered as cluster for that product in that district. Similarly in unregistered
sector each district having an estimated no. of 500 or more un-regd. SSI units
engaged in manufacturing same product was considered to be a cluster.

According to above criteria 1223 clusters covering 321 products were identified in
the regd. SSI sector. These clusters had 32.68% share in total no. of regd. SSI
units, 18.95% in total market value of fixed assets, 16.99% in total gross output and
27.66% in total value of employment of manufacturing activity of the regd. SSI
sector.

In the unregistered SSI Segment there are 819 clusters covering 250 products had
been identified through out the country. These clusters had a share of 37.85% in
total estimated no. of un-registered units, 22.45% in total estimated market value of
Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 2 of 81
fixed assets, 21.04% in total estimated gross output and 34.63% in total estimated
value of employment in the manufacturing activity in the unregistered units.

Contribution of Clusters in Registered SSI sector is as per table:
Table:1.1
Particulars
Estimated
No. of
Units
Fixed
Investment
Gross
Output
Employment
For 1223 clusters engaged
in manufacturing-Activity in
Regd. SSI sector.

2,85,150 Rs. 15,812.03
Crore
32,862.0
Crore
13,98,846
For Total manufacturing
activity in regd. SSI sector
872449 Rs. 83433.7
Crore
193390.7
Crore
50,56,666
Share of 1223 clusters in
manufacturing activity in
regd. SSI sector (%)
32.68 18.95 16.99 27.66
Source: 3
rd
All India Census of SSIs 2001-02


Contribution of clusters in Un-registered SSI sector is as per table:
Table:1.2
Particulars Estimated
No. of
Units
Fixed
Investment
Gross
Output
Employment
For 819 clusters engaged in
manufacturing-Activity in
Un-regd. SSI sector.

12,50,207 Rs. 5,767.99
Crore
93,070.4
Crore
29,93,410
For manufacturing activity in
un-regd. SSI sector

33,03,366 N. A. N. A. N. A.
Share of 819 clusters in
manufacturing activity in
Un-regd. SSI sector (%)
37.85 22.45 21.04 34.63
Source: 3
rd
All India Census of SSIs 2001-02

As per Census Report, In Haryana, in registered SSI segment there were 38 clusters
having 7468 no. of units having Rs. 1049.91 crore fixed assets & Rs. 7177.73 crore
output and providing employment to 52171 persons. Similarly, there were 02 nos. of
clusters in un-registered SSI manufacturing sector having 1130 units and having
Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 3 of 81
Fixed assets of Rs. 16.77 crore and gross output Rs. 27.02 crore providing
employment to 1637 persons.

In view of the importance attached to cluster in SSI sector, an attempt has been
made to further develop these clusters in a planned and effective manner. Govt. of
India has adopted a scheme named CLUSTER DEVELOPMENT PROGRAMME.
This programme aims at systematically identifying the under performing clusters,
gathering dispersed knowledge through participatory study about its constraints and
potential as well as local linkages and support mechanisms. Then establishing an
atmosphere of trust within a cluster for building a realistic action plan to strengthen
the cluster.

Earlier, during late ninties UNIDO had identified 358 clusters throughout the country
that could be cover under the Cluster Development Programme. Later the list was
updated to 388. In Haryana, 21 clusters were identified for CDP out of which work
on Rice Milling Industry at Karnal was commenced in the year 2004.

Agricultural Implement industry at Karnal though contributing significantly in the
output, still does not fulfill the criteria of 100 or more registered SSI units. But has
been taken up for development by DC (SSI), Govt. of India at the special initiative of
Karnal Agricultural Implements Manufacturers Association (KAIMA)..

Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 4 of 81
2. AGRICULTURAL IMPLEMENTS MANUFACTURING IN SSI SECTOR

Overall National Scenario:
Agricultural Implements manufacturing segment is a significant segment of small
scale manufacturing sector. Its importance can be gauged from the tables given
below:

Table: 2.1
Position of Agricultural Implements Manufacturing Activity in Regd SSI segment
S.No. Criteria Measure Position
1. No. of units 18354 13
th

2. Gross output Rs. 66,324 lakh 43
rd

3. Employment 44799 persons 17
th

4. Export US$ 68.6476 million -
Source: 3
rd
All India Census of SSIs 2001-02 & www.tradeportalofindia.com

Table: 2.2
Agricultural Implements Manufacturing Activity in Un-regd SSI segment
S.No. Criteria Measure Position
1. No. of units 97049 Nos. (estimated) 15
th

2. Gross output 43017 lakhs 26
th

3. Employment 160195 persons 18
th

4. Export Rs. 300 lakhs 16
th

Source: 3
rd
All India Census of SSIs 2001-02

Agricultural Implements manufacturing Clusters in SSI Sector :

From the point of view of total no. of registered SSIs units in clusters, Agricultural
Implements Segment is having 28 clusters spread over 7 States i.e. Punjab,
Rajasthan, U.P., West Bengal, M.P. Gujarat and Karnataka with 5124 nos. of units
with fixed assets of Rs. 90.994 crores and gross output of Rs. 147.84 crores. It
provides employment to 12874 persons.

Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 5 of 81
Similarly, 25 clusters in un-regd. Segment (having 500 or more units) of agricultural
implements are spread in U.P., Bihar, Manipur, J harkahand, Madhya Pradesh,
Maharashtra, Andhra Pradesh, Karnataka and West Bengal with total no. of 35537
units, fixed assets of Rs. 61.063 crores, Gross output of Rs. 130.936 crores and
provides employment to 52,252 persons.

These above mentioned clusters do not include Karnal Agricultural Implement
manufacturing Clusters as it does not fulfill the criteria of one hundred
registered SSI units.
Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 6 of 81
3. DESCRIPTION OF THE CLUSTER

Every aspect of economic life in India is influenced by agriculture. Agriculture
sector contributes nearly 32% of the national income of India and it offers
livelihood to nearly 70% of the total population. Indian Industries depend upon
Agriculture for raw materials as well as for sale of finished products. Agriculture,
There for plays a vital role in the development of economy of the nation. Same is
the case with other developing countries.

Agriculture production depends not only upon land use, but also upon productivity
i.e. the relationship between agricultural output and input. Research and
development work in this field are being undertaken by various institutions all
over the world. Along with providing irrigation facilities, use of high yielding variety
of seeds, use of pesticides and insecticides, use of fertilizers and better
techniques of farming, use of modern agricultural machinery and implements
plays a vital role in increasing the productivity of agriculture output. Therefore
with the increasing awareness and trend in scientific cultivation and mechanised
farming, the use of modern agriculture implements has increased since the early
years of independence i.e. with the advent of green revolution.
.
Defining the Product:
As per “Hand Book of Agricultural Machinery Terminology” (SP-44:1989) by
Bureau of Indian Standards, the definition of Implement is “Equipment generally
having no driven / moving parts, such as Harrow or having simple mechanism
such as Plough. But, practically agriculture operations invariably require the use
of various Implements for different purposes such as tillage, making seed beds,
land preparation, seeding, spraying and dusting pesticides / insecticides,
harvesting, thrashing and processing etc. Many of them are simple but some of
them have moving parts and are driven by power / tractor. Therefore for the
purpose of this diagnostic study all the farm machineries except tractors,
power tillers, diesel engines and water pumps have been considered as
agricultural implements.

Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 7 of 81
BROAD PRODUCT GROUPING:
Based on use and operation , these implements (farm equipments) can be
classified as :---
I. Tillage implements
II. Land & Seed–bed Preparation implements
III. Sowing implements
IV. Plant Protection implements / equipments
V. Harvesting & Thrashing Machines
VI. Processing Machinery
VII. Transportation Equipments

All these implements or farm machinery may be manual, animal or tractor drawn /
driven or motor driven.

I. Tillage Implements :
These are used for breaking up the ground, turning it up and cutting furrows in
the soil. They include -----
i. Different types of Cultivators
ii. Different types of Harrows
iii. Different types of Ploughs
iv. Different types of Rotary Tillers

II. Land / Soil Preparation Implements:
They are for leveling the fields, make partitions & seed beds etc. and include --
--
i. Bund Former
ii. Shrub Master
iii. Ridgers
iv. Dole Maker
v. Soil Scoops
vi. Levellers (Kraha)
vii. Tramplers
viii. Paddy Puddlers & Cage Wheels
Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 8 of 81
III. Sowing Devices:
The following implements are used for sowing various crops:--
i. Seed Drill Machine
ii. Seed-cum-Fertilizer drill
iii. Zero Tillage Seed-cum-Fertilizers drill
iv. Bed Planters
v. Potato Planters
vi. Sugarcane Planters
vii. Paddy Transplanters etc.

IV. Plant Protection Implements / Equipments:
These are used to protect the crops from (a) Weeds, (b) Pests, insects & disease
etc.. They include—
i. Paddy weeders
ii. Hoes
iii. Insecticide / pesticide spray pumps of various types, like ----knapsack
sprayers, foot operated / hand operated or engine operated etc.
iv. Insecticide / pesticide dusters

V. Harvesting & Thrashing Equipment:
Harvesting is the operation of cutting the crops in the field; it can be performed in
three ways i.e. manually, using tractor driven mini-harvesters / reapers or using
self propelled harvesting combine.
Thrashing is the process of taking out grains from the dry crop straw. It loosens
the grain and separates it from straw. The commonly used harvesting & thrashing
implements (tools) and equipments are ----
i. Sickles (manual tool)
ii. Mowers
iii. Reapers
iv. Straw Reapers
v. Threshers (Various types)
vi. Combine Harvester

Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 9 of 81
VI. Processing Implements & Equipments:
These are used to treat / prepare farm products for use, storage & preservation.
The processes included for the purpose are chaff cutting, grain grinding, grain
crushing & grain drying etc. The following implements& equipments are generally
used in processing of grains
i. Chaff Cutter Machine
ii. Grain Graders of different Types
iii. Sugarcane crushers
iv. Driers of different kinds
v. Paddy Processing machines i.e. Rice Shellers

VII. Transportation Equipment:
These are used to transport agricultural produce from farm / field to godown or
marketplace, They include---
i. Bullock Cart
ii. Trolley for Tractor

Above mentioned Agricultural Implements or Farm Machinery is being manufactured
at Bhopal, Ratlam, Bina, Muksi, Sihor, Neemach, Khurai (Sagar) and Indore in
Madhya Pradesh; Saharanpur, Sambhal & Barabanki in Uttar Pradesh; Rudarpur in
Uttranchal, Kota & J aipur in Rajasthan and Unjha & Ahemdabad in Gujrat. Ludhiana,
Hoshiarpur, J alandhar, Malout, Mansa, Ropar & Sangrur are the major industrial
clusters manufacturing farm machinery in Punjab and Karnal is major Cluster
besides good concentration at Sampla, Shahbad Markanda (Kurukshetra) and
Chhuchhakwas (Jhajjar) in Haryana.
Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 10 of 81
4. THE KARNAL AGRICULTURAL IMPLEMENTS CLUSTER

Introduction : Karnal Town of Haryana State is situated on National Highway No.1
(G.T. Road) between Delhi and Chandigarh. It is exactly in the middle of the 250 Km
span between Delhi the National Capital and Chandigarh, the state Capital of
Haryana & Punjab. Karnal is a historical place related to Mahabharta period. This
place was army camp of legendry Karna, the 6
th
brother of Pandvas. Presently
Karnal is the famous for two main reasons. First the presence of around 10 Nos. of
ICAR Units, many of whom are National level like National Dairy Research Institute
(NDRI), National Bureau of Animal Genetic Research (NBAGR) & Directorate of
Wheat Research (DWR) etc. Secondly Karnal is a famous centre of production of
most of the kinds of Agricultural implements and their components. There are about
70 working SSI units producing agriculture implements and their components at
Karnal proper and about 20 to 25 in nearby blocks of the District city.

The Genesis & History: Production of Tractor drawn Agricultural Implements at
Karnal started somewhere around late fifties or early sixties by Sh. Harbans Lal
Rajpal, Sh. Mool Chand Matta, Sh. Ram Kishan Dhall. Sensing the potential & future
of Agricultural Implements, they left the Govt. job of promoting use of tractors and
implements in agriculture and decided to start their own manufacturing unit of
agricultural implements. Some other enterprising gentlemen like Sh. Amir Singh, Sh.
Bahadur Chand and Sh. J asbir Singh also joined hands with them.

M/s Partap Iron Works, headed by Sh. Partap Singh Aneja were already producing
bullock drawn implements at this point of time at Karnal.

During these days cultivators were being imported mainly from Denmark by a Delhi
based firm named M/s New India Equipment owned by S. Tirlok Singh. They were
importing Harrow Disc too. Now their sons have unit of Harrow Disc at Bahadurgarh.

S. Tarlok Singh and S. Mohar Singh of Karnal had also started their firm by 1961
manufacturing implements who afterwards tried their hands in Harrow disc and were
quite successful. Another Delhi based Company, M/s Das Motors was also
Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 11 of 81
manufacturing Agricultural Discs during those days. Discs were mainly imported
from Australia, Yogoslavia and U.K.

Turning points: The first turning point came in the history of Karnal Agricultural
Implements Industry when around 1963-64 Govt. of India allowed direct import of
Agricultural Disc by registered SSI units. This proved to be very profitable and
encouraging to the implement manufacturers.

During that period M/s Eastern Engg. Co., at Bareilley tried manufacturing of horrow
disc but now they have discontinued. One firm from Lakhimpur Kheri (U.P.) also
tried but were not successful. Only Grow More brand disc from Meerut (U.P.) was
able to make regular supplier. Afterwards M/s Das Motors Mr. CR Dass started Disc
manufacturing at Sahibabad. By that time TATA had also started manufacturing &
supplying Harrow discs but being high priced were not purchased by Karnal
Implement Manufacturers. Afterwards around 1970, the item was reserved for
manufacture in SSI sector and TATA being large scale unit was banned from
making discs.

Around 1968-69 Sh. Harbans Lal Rajpal, M/s Pritam Singh Sons, Delhi, Sh. Ram
Gopal Latka of Kaithal & Sh. Mool Chand Matta jointly started manufacturing their
own disc at Karnal with manufacturing capacity of 100 discs per day. About a year
or two later around 1970, Sh. Prem Katyal, Sh. Ram Kishan Chandna & Sh. J .M.L.
Patni started another unit manufacturing agricultural discs in the name of M/s
Universal Steel Disc Co., with about 60 disc. per day capacity.

By this time Sh. Harbans Lal Rajpal started manufacture of tiller tynes with the help
of Sh. Arjun Dev Sehgal of M/s Prakash Engineering Works. Also there was ban on
import of 22”, 24” & 26

Harrow Disc by this time to save foreign currency. This
gave boost to Karnal Agricultural Implement Industry and many more people took
interest in the line.

By the year 1977 Sh. Harbans Lal Rajpal & Sh. Mool Chand Matta separated the
business. Similarly at about this point of time Sh. J .M.L Patni got separated from
Bharat Engg. Co. and started his own units of implements, discs and also cultivator
Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 12 of 81
springs, which after the ban on import, were being manufactured by M/s Sethi Indl.
Corporation of Faridabad and were always in short supply. During this period after
partitions, splits and reorganization among the existing business partners and with
the entry of some new entrants the number of units manufacturing agricultural
implements started increasing. Some of them could sustain with the time and
flourished, but some due to various reasons like financial, managerial or family
problems were closed.

Clustering Phenomena : Beginning from around 1979 through the decades of 80’s
& 90’s there was a boom in agricultural implement industry at Karnal as there was
rising trend in the population of tractors due to liberalized credit (loan) policy of Govt /
Banks for purchase of tractors as is evident from Table-4.1 & 4.2 , which show the
cumulative nos. of 4-wheeled agriculture tractors & Power thrashers in India from
1972 t0 1999 and Production / Sale of Tractors in the country from 1999-2K to 2004-
05 respectively.

Table-4.1 : Cumulative number of agricultural tractors (4 wheel) and power threshers
Year Four wheel tractors Threshers
1972 1,48,200 2,05,800
1977 2,75,900 4,84,100
1982 5,18,800 10,25,000
1987 10,20,800 13,63,800
1992
@
13,17,961 18,13,800
1995
@
17,13,595 22,22,000
1996@ 18,53,000 24,22,000
1997@ 20,38,000 28,22,000
1998@ 22,24,000 32,22,000
1999@ 24,78,512 N.A.
Note: @. Data collected from Manufacturers Association.
Source : Agriculture Research Data Book – 2004

It can be seen from table -3.1 that there was addition of more than 5 Lakh new
tractors during the period between 1982 to 1987. This period witnessed growth of
implement industry at Karnal.

The main reasons for development of this as a mini cluster of implement
industry were –
Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 13 of 81
• Regions nearby being agriculturally progressive were adding more and
more tractors ;
• Nearness to Mandi Gobindgarh a major source for structural Steel the
main raw material;
• Location on the National Highway;
• Connectivity with other parts of country and
• Absence of any other alternate major industrial activity suitable for
medium level investment.

This led to growth of implement industry at Karnal.

Table-4.2 : Production & sale of Tractors in India during last 5 years
Year Production Sales
1999-2K 2,78,556 1,73,181
2000-01 2,48,079 2,49,566
2001-02 2,07,324 2,15,005
2002-03 1,66,889 1,71,657
2003-04 1,90,687 1,90,348
2004-05 2,48,976 2,47,531
Source: Tractor Manufacturers Association
The boom in agricultural implement industry continued through 80’s till mid 90’s. By
now even some sort of over capacity was created particularly in the Harrow Disc.
The old players were scared and applied new strategies to keep the market in their
own favour. They being financially sound started their own sheet rolling for Harrow
Disc which was till now being procured from Mandi Gobindgarh. Now as demand of
Rolled Sheet for Harrow Disc went down. Mandi Gobindgarh Supplier closed the
rolling operation. A sheet Rolling Mill at Karnal due to its own problems closed down
the operation. The new people & people with limited financial resources were forced
to scale down the production as they were to depend on sheet supplier who would
supply them at their own terms. The option of having own rolling mill was not viable
for smaller production quantities. In the meantime another unit of disc has come up
at Muzaffar Nagar (UP) with low cost technology and has penetrated into market
share of Karnal.
Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 14 of 81
Presently, about 60 entrepreneur houses (family groups) are working in this sector at
Karnal proper owning around 70 plus SSI units manufacturing various Agricultural
Implements (Farm equipments) and their components.

GEOGRAPHICAL LOCATION & CONCENTRATION:
All these units are situated along the15 Km. stretch of G T Road between village
Madhuban on Delhi side and village Uchani towards Chandigarh, within 1 Km
distance from G T Road except 4 to 5 units on Merrut / Ranwar Road and 4 to 5
units on Kunjpura Road.

Besides these 70 working units at Karnal proper there are around 9 – 10 SSI units
and a Haryana Agro Industries Corpn. Unit at Nilokheri ; 4 to 5 good working units
each are situated in Assandh and Ghraunda blocks of the district.

STATUS & PERFORMANCE OF KARNAL CLUSTER:
As described earlier that the present turn over of Karnal cluster is more than 18 % of
the Gross output of 18354 regd. and 97,049 un-regd units in the country put
together. It is to be mentioned here that almost all the SSIs in Karnal Cluster are
registered with DIC. The Gross output of 70 working units of this cluster during last 3
years is estimated to be as per table below:-
Table 4.3
Year Turn over Rs. In Crore.
2001 -02 120
2002-03 169
2003-04 198
Source:-Field Survey & Impl.Mfrers Association

Estimated marked value of Present fixed assets of these units is Rs. 125 crore. The
cluster provides direct employment to about 1025 persons Besides this more than 75
members of entrepreneur families are directly engaged / employed in supervisory /
managerial work. Further this cluster provides employment to about more than 1000
additional persons during the peak season,

Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 15 of 81
If compared the output of Karnal cluster for 2001-02 with that of combined out put of
28 cluster of agriculture implements in registered segment, It can be seen that
Karnal cluster (70 Units) alone produced equal to 81% of the total output of 28
cluster (excluding Karnal) in registered segment with total 5124 nos. of units that too
with around 2100 persons employed as compared to 12,874 by 28 clusters.

Similarly this output was more than 91% of Gross output of 25 clusters of agricultural
implements in un-registered segment with total nos. 25537 and employment of
52,252 persons.
Fig. 4.1 Graphical comparison of performance of Clusters
Comparison of performance- Karnal versus other clusters
0.00
100.00
200.00
300.00
400.00
500.00
600.00
700.00
V
a
l
u
e

Karnal Cluster
(70 Units)
28 Clusters
(Regd.
Segment)
25 Clusters
(Un-regd
Segment)
All 25+28
Clusters
Karnal Cluster (70
Units)
125.00 21.00 120.00
28 Clusters (Regd.
Segment)
90.99 128.74 147.84
25 Clusters (Un-regd
Segment)
61.06 522.52 130.94
All 25+28 Clusters 152.05 651.26 278.78
Fixed Assets Rs.
In Crores
Emploment in
,00s
Gross output Rs.
In Crores

If compared with 28 clusters of regd segment and 25 of un-regd segment put
together, the output of Karnal cluster alone is 57% of combined out put of both the
segments.

Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 16 of 81
The turn over of Karnal cluster as evident from the table above, seems to have
increased in terms of value. But, this has not happened in real terms, because the
increase is not due to increase in production. Rather, this is due to continuous rise in
the price of steel for the last 3- 4 years. The cumulative rise in prices of steel during
this period is reported to be around 40 %.

ITEMS BEING MANUFACTURED AT KARNAL:
Not all the implements/ equipment are being made at Karnal. Names of the products
being manufactured at Karnal are given in the following tables.
Table 4.4
S.
No.
Name / Description Range of sizes

1 Cultivators – Rigid or Spring
loaded, Suitable for different
tractors
5,7,9,11,13,15 or 17 tynes with profile
cut, press forged or hammer forged
tynes. (7, 9 & 11 tynes being common)
2 Disc Harrows- Trailed or Mounted
type (Notched or plain disc)
6x6, 7x7, 8x8, 9x9, or 10x10 Disc
3 Paddy Harrows 6x6, 7x7, 8x8 Disc
4 Mould Board Plough 2 Furrows or 3 Furrows
5 Disc Plough 2 Furrows or 3 Furrows
6 Reversible Plough 2 Furrows
7 Rotavators (Chain Drive) Width 1.2, 1.5, 1.75 or 2.00 ,mtr.,
8 Shrub Master Standard Size
9 Bund Former/ Dole maker Sheet type or Disc type
10 Ridgers Standard size
11 Levellers – Straight / Reversible 6ft, 7ft and 8ft width
12 Paddy puddlers Standard size
13 Cage wheel Standard size
14 Seed- cum – Fertilizer Drill 7,9 &11 tynes
15 Zero Tillage M/c 7,9 &11 tynes
Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 17 of 81
16 Sugar cane planters Two rows
17 Thrashers- wheat or Multi-crop 12”x24”φ, 14”x27”φ, 27”x30”φ,
30”x30”φ, 33”x30”φ, 36”x30”φ (From
200 kg to 1500 kg per hour)
18 Haramba Thrasher 20 Quintals per Hour
19 Straw Reapers Standard size
20 Trolley for Tractor Standard size Suitable for Various
Tractors
21 Sugarcane Seed Treatment plant Standard size
22 Winnowers Standard size
23 Chaff cutters Standard size

Besides above Mentioned Implements and equipments, Karnal is a nation wide
center for following components of agricultural implements –
Table 4.5
S.
No.
Name / Description Rang of sizes

1. Cultivator Tyne (Hammer forged,
Press forged or Profile cut
Length 23” to 30”
Width x Thickness =50x25mm,
49x24mm 46x22mm, 47x17mm,
50x18mm, 60x23mm, 60x25mm,
75X25mm, 75X32 mm etc. etc
2. Seed Drill Tyne 12”, 22” ( 46X22 mm, 47X17mm)
3. Cultivator Springs (Tension Type) Wire φ 9.2, 9.5 or 10.0 mm
Spring φ 40mm to 50mm (OD)
No. of Coils 26, 27, 28 or 29.5 Coils
(Approx. Length 10” to 12”
4. Plough Spring ( Compression
Type)
Wire φ 9.2, 9.5 or 10.0 mm
Spring φ 60mm (OD)
No. of Coils 8 to 10
Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 18 of 81
Pitch 20mm
5. Shovel for Cultivator Various combinations of
Length 10”, 12”, 13”, 14” or 15”
Width 2.5” or 3”
Thickness 6 mm, 7 mm or 8 mm
Holes 2 or 3
6. Disc for Harrows (Plain or
Notched)
22” to 26” φ, Thickness 4 to 6 mm
(up to 10 mm thickness for export )
7. Spindle for Disc plough Standard Size
8. Hook for Trolley Standard Sizes

As reported earlier also, the demand for 100 % of Hammer Forged Tynes, 70 % of
other types of Tynes, 80 % of Cultivator Spring, 100 % of Forged Disc Plough
Spindles, and 100 % of Forged Trolley Hooks is met by Karnal based SSI
manufacturers.

DEFINING THE SUB-ACTIVITIES:

As discussed in the earlier section, Agricultural Implement covers very wide range.
The main raw materials required are mild (structural) steel section, e.g. Flats,
Angles, Channels, squares, Pipes, Plates, Rounds, BP sheets, CR sheets, etc. The
parts and components used comprise Forged, Cast, sheet metal, Fabrication, Press
work, welding, Machining, grinding etc.

Some of the important operations involved for most of the agricultural implements
are: Shearing, Cutting, Pressing, Gas Cutting, Sheet Metal Fabrication, Welding,
Turning, Grinding and painting etc.

Operations involved in the manufacture of components are : Forging , Heat
Treatment, Hot Forming, Spring Coiling, Pickling, Turning, Drilling, Punching etc.
Since there is a variety of agriculture implements manufactured in the cluster. All the
implements are having different function, design and configuration, e.g. Cultivator
has no moving parts at all. Harrow has low speed moving discs, mounted on an
axle. Seed drills and rotavators also have some low medium speed moving parts
Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 19 of 81
whereas reapers and thrashers have high speed moving parts. Therefore there is
no generic manufacturing process sequence for each product. Still here are
some commonalities and also differences in the manufacturing process sequence.

Manufacturing process of some representative items are given below.
Fig. 4.2 Indicative Production Process (Cultivator)

TYNE HOLDERS MAIN BEAM PINS TOGGLE


Cutting/Shearing Cutting/Shearing Turning Cutting/Shearing



Press Working Punching/Drilling Press Working Drilling



Straightening Straightening Tikri Welding



Tagging Pin Welding



Primer (optional) Welding the Beam Primer (optional)


Sub -assembly Primer (optional) Tyne Sub-Assly


Welding & J oining (Assly)


Fixing Shovel


Painting
Diagnostic Study Report
Agriculture Implements Industry Cluster at Karnal

Page 20 of 81

Fig. 4.3 A Typical Indicative Production Process (Thrasher)

Feeding System Thrashing System Frame Separating System Casing

Marking Marking Marking Hub Machining Marking




Cutting Cutting Cutting Cutting Cutting



Drilling Drilling Straightening J oining Drilling



Rolling
Bending Rolling Drilling Bending


J oining J oining Aligning Welding J oining


J oining


Assembling Together


Painting
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

21 of 77

Fig. 4.4 Production Process
(Forged Tyne)


Cutting (shearing)




Heat in the Furnace
(1200
0
C about 1 hr.)




Hot Bending (Press)




Close Die Forging Hammer)




Trimming




Normalising (in a pile)





Drilling



Fig. 4.5 Production Process
(Hot Pressed Tyne)


Cutting (shearing)




Heat in the Furnace




Hot Bending (Forming)




Shovel End Forging




End Cutting (Rounding)




Hot Punching



Straightening



Drilling

Diagnostic Study Report
Agriculture Implements Cluster at Karnal

22 of 77

Fig. 4.6 Production Process
(Cultivator Spring)


Wire Rod Pickling



Wire Drawing



Coiling




End Cutting



Hook Bending



Stress Relieving



Packing

Fig. 4.7 Production Process
(Harrow Disc)


Cutting the Billet / Rail


Hot Rolling into Sheet via Mill


Punching


Round / Circle Cutting on Press


Heating In the Furnace


Hot Forming on Hyd. Press


Quenching


Tempering


Shot Blasting(Optional)


Edge Machining


Painting


The production process of implements does not involve any highly technical
operations. Simple machineries such as welding sets, Power presses, Lathes, Power
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

23 of 77
Hacksaw drilling machines are sufficient. However, some degree of specialization in
required in the manufacturing of components like Harrow Disc, Cultivator tyne and
cultivator spring or cultivator shovel. All the implement manufacturers are
outsourcing these components from Karnal based units except Shovel which is
sourced in major quantity form Khatauli in U.P.
However still there is lot of scope of improvements in production methods,
techniques and workmanship. There is more room for improvement in the
manufacture of components.

























Diagnostic Study Report
Agriculture Implements Cluster at Karnal

24 of 77
5. CLUSTER ACTORS
(A) Core Cluster Actors:

Agricultural Implement (Farm Equipment) Manufacturing is a second largest
industrial group of Karnal after Rice milling. It includes Tractor Drawn Tillage,
Sowing, Harvesting equipment, Trailers manufacturing as well as various parts like
Cultivator Tyne, Harrow Disc, Shovel, Cultivator & Plough Springs, Harrow Axle &
Trolley Hook etc manufacturing. There are a few foundry units too.

Karnal is one of the biggest farm equipment manufacturing cluster in the
country. Till 1995 the business performance of this cluster and the emergence of
new units kept on increasing steadily. However, during the late 90’s and early 2000,
the level of competition also kept on intensifying. During 2000 to 2005, quite a few
houses have either closed their operations or have scaled down the production
quantity.

Structure of the Industry :
Category 1 : The Core groups of the cluster are implement fabrication &
assembly units. They are engaged in the fabrication of various types of Tillage
Implements like-Cultivators Disk Harrows, Levellers, Mould Board Plough,
Rotavators etc. Land Preparation Implements like-Bund Maker, Dole Maker, Ridgers,
Cage Wheels, Paddy Puddlers, Soil Scoops (Kraha) Etc. ; Various types of Sowing
implements like – Seed Drill, Seed-cum-Fertilizer Drills, Zero-Tillage Machine, Bed
Planters, Sugarcane Planters, etc. ; Harvesting & Thrashing machines like- Wheat &
Rice Thrasher, Maize Thrashers, Multi-crop Thrashers, Straw Reapers, Harvester
Combine etc. Some units are manufacturing trolleys of tractors also. About 4 to 5
units are exclusively making trolley.

Category 2 : This group comprises of manufactures of Agricultural implements
components. At Karnal the main components being manufactured are
Tiller/Cultivator Tynes, Harrow discs, Cultivator / Plough Springs and Cultivator
Shovel (Phala) Besides this, a small quantity of casting parts is also manufactured .
About 6 units are manufacturing cultivator springs & 6 are manufacturing cultivators
tynes. There are two units manufacturing Shovel for Cultivators.
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

25 of 77

Category 3 : The Category comprises of Harrow Disc manufacturing. Out of the
11 Nos. of this group. Three are having their own rolling mills. At present the only
units, having rolling mill are doing well. Out of others 3 or 4 are able to make the
show run. Rest are running operation intermittently or have totally closed for this
item.

Category 4 : This category is comprised of casting units . Only three foundries at
Karnal are supplying casting parts to Karnal agricultural implement cluster other
major part of demand is fulfilled by the Kaithal based foundries. These casting are
mainly for disk harrow & ploughs. Some castings for threshers & Reapers are
procured from Punjab also.

Category 5 : This group is of the suppliers of structural Steel & spring Steel
wire. Structural steel mainly procured from Mandi Gobindgarh (Punjab). Very few
manufacturer making high quality Implements are using Tata / SAIL Steel Materials.
Spring Steel wire is being procured from M/s. TATA Steels (A Tata Group Company)
& M/s. Usha Martin Ltd. They are taking full benefit of their monopoly. Mandi
Gobindgarh Material generally purchased through commission agent because the
quantities are Smaller & Agents give some Credit facility also. On timely payment
agents pass on a part of discount also.

Category 6 : This Category includes a few trading units who are either trading in
components of Agricultural implements or getting order of some implements &
supply after getting the same manufactured as per their / Customers requirements.
There are hardly three to four units in each category. Other wise quite few of the
implement or Components manufacturing units are also trading in parts like –Shovel,
Thrasher wheels, Harrow spools, Thresher parts or Trolley Axles etc. which are
being manufactured at other places .

Category 7 : These are a few Tools & Die makers who have very un-organised set-
up. They have good practical experience of Press & Forging die making but limited
knowledge about latest Tool & Alloy Steel or methods of their Heat Treatment. Heat
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

26 of 77
Treatment is done in a very crude manner by heating the job in furnaces being used
by Disc, Shovel or Tyne manufacturers & quenching in the oil without any care about
its suitability, quality or grade and without taking care of heat treatment parameters
etc.

Category 8 : These are some 5 to 6 Paint Manufacturing who are suppliers to
almost all the implement manufactures.
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

27 of 77
(B) Other Cluster Actors:

I. Institutions having direct stake in the cluster:

1. KARNAL AGRICULTURAL IMPLEMENTS MANUFACTURERS ASSOCIATION:
KAIMA was founded during 60’s with the aims & objectives of rendering assistance,
as may be necessary to persons engaged in agricultural implements manufacturing
industry and to undertake and do research work in connection with development of
this industry. KAIMA is now a registered body under registration of societies act. It
holds regular monthly Executive Body meetings, 2 to 3 general body meetings a year
and at least one family get-together to achieve its aims and objectives.

The Association actively participates in the regular meetings convened by the state
and central Govt. departments. / offices.

For smooth running of Association working , the work has been entrusted to
following sub-committees:-

1. High Power committee- to deal with official matters like taxation, VAT, and
Cluster Development Programme.

2. Goodwill committee- to deal with disputes and settlement issues.

3. Market Exploration Committee- to explore additional market during lean
season period.

4. Interaction Committee- to deal with cases of sale & purchase of additional /
obsolete machinery.

The association is now concentrating on the CDP, got it approved from AS &
DC(SSI), Govt of India, with the support of Director, SISI, Karnal

The association is in the process of procuring about 26 acres additional land
required in HSIDC Industrial Estate for development & expansion Programme of its
member units.

The Association intends to have a Testing Centre for Raw Materials & Components
as well as a Prototype Development Centre within the cluster itself.



Diagnostic Study Report
Agriculture Implements Cluster at Karnal

28 of 77
2. HARYANA CHAMBER OF COMMERCE & INDUSTRY:- HCCI is a State level
representative of Industry & Commerce in Haryana. It is affiliated to PHDCCI and
has its chapters in most of the districts in the State. The main objective is to establish
a liaison and cooperation between trade (including Industry) and Govt. in an
amicable manner. KAIMA is also an associate member of HCCI.

The chamber is represented in State level high power Committee as well in district
level departmental advisory and coordination Committees of various central and
State Govt. departments such as Excise, Income Tax, Sales Tax, Pollution control,
Electricity Commission / Corporations,. Town Planning etc.

HCCI played an important role in getting exemption of sales Tax on Agricultural
Implements and their parts. Chamber is now ahaving discussions with Govt for
reasonable solution to imposition of VAT.

Besides these activities chamber takes interest in developmental programmes of
SSIs. In the recent years HCCI has joined hands with SISI in Organising some
EDPs, MDPs and a Vender Development Programme-cum Indl. Exhibition.



II. Institutions having indirect relationship with the cluster:

1. SMALL INDUSTRIES SERVICES INSTITUTE : SISI is performing the
following activities:-
• Providing Techno-managerial Consultancy / guidance services to small Scale
Industries
• Statistical data collection & publication of relevant document needed by the
cluster
• Conducting workshops and seminars in the areas of technology, marketing
etc.
• Skill development and capacity building of the employees and entrepreneurs
of SSIs.
• Organising Entrepreneurial Motivational Campaigns, EDPs & MDPs etc.


2. DISTRICT INDUSTRIES CENTRE: DIC was established with the intention to
promote the growth of small scale industries in the district. The center provides SSI
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

29 of 77
registration, which is very much helpful while dealing with banks and other govt.
departments. Some of it’s objectives are as follows
• Keeping updated record of SMEs.
• Providing information to Govt. as per requirement.
• Keeping complete statistical information/ data on small scale industries.
• Implementing industrial policies of the Govt.
• Providing subsidies / incentives as per Govt. rule


3. REGIONAL TESTING CENTRE (NR) New Delhi: RTC New Delhi is one of the
four RTCs set up by Govt. of India to provide
• Testing & quality Control facilities for SSIS in the northern region
• To help in improving the quality of Products to Small Scale
• To provide facility of calibration of Instruments & Ganges for SSIs.

Metallurgy Division have facilities of

• Microscopic analysis & Macro examination also it has facility of Study of
micro structure of metals & alloys at various etching media and magnification
together with photomicrography.
• Non-destructive testing:- Testing & investigation on metals & alloy in the form
of castings, forgings, rolled products, welded components using:-
• Ultrasonic flaw detector
• 300 KV industrial X-ray units
• Physical Testing of Metals:- Such as Hardness Test (Rockwell, Brinell &
Vickers Scales), Micro Hardness, Tensile Test, Compression Test,
Transverse Test Bend & Rebend test, Load test, Drifft & flattening Test
Torsion Test, impact test etc.

Product Testing includes structural steel- non standard quality

RTC also imparts two types of trainings to meet the demand of testing personals
from SSIs.
• 6 Months Training to fresh Diploma Engineers or Science graduates in the
fields of Chemical, Electrical, Mechanical & Metallurgical Testing
• 2 or 3 weeks specialized training in specific range of products for technicians
sponsored by the industry.

4. NATIONAL INSTITUTE OF SECONDARY STEEL TECHNOLOGY, MANDI
GOBINDGARH: NISST is providing technical services to secondary steel sector by
arranging seminars and workshops in the State and undertakes consultative projects
and pollution studies in the industry. This institute has been established by Ministry
of Steel, Government of India to render the services to secondary steel industry
sector, which includes Steel Re-rolling mills, Induction furnaces/Arc Furnaces,
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

30 of 77
Foundries etc. The Institute provides HRD, Technical support to the industry in
various fields of Engineering In Steel sector.

5. PROCESS & PRODUCT DEVELOPMENT CENTRE AGRA: PPDC Agra is a
National centre of excellence in the field of foundry & forge technology under
Ministry of Industry, Govt. of India. The Centre has four major divisions viz,
• Product Development Division Comprising of foundry & forge shops.
• Testing Division.
• Consultancy and Training division &
• Support Services & Maintenance division consisting of machine shop &
Heat Treatment Sections

The Centre undertakes Consultancy & framing assignments in Product development
& Process improvement in small scale casting & forging industries.

6. NATIONAL METALLURGICAL LABORATORY: The National Metallurgical
Laboratory is working in the field of metallurgy and metal sciences. It is one of the
premier research institutes in our country. It has 9 technology divisions like;
• Analytical Chemistry (ANC) Division
• Computer Applications(CAP) Division
• Corrosion Protection (CRP) Division
• Engineering (ENGG.) Division
• Ferrous Processing (FRP) Division
• Minerals Processing (MNP) Division
• Materials Characterization(MTC) Division
• Materials Processing (MTP) Division
• Non Ferrous Process (NFP) Division


7. NORTHERN REGION FARM MACHINERY TRAINING & TESTING INSTITUTE,
HISAR: This institute was setup under Ministry of Agriculture to propagate
agricultural mechanization through imparting training on repair , maintenance and
operation of various agricultural machinery. Later the institute was also assigned the
task of testing of agricultural equipment and machinery. The various agricultural
Equipments are tested as per BIS guidelines to assess the suitability under different
agro climatic conditions. The institute is recognized to test Combine harvester by
Min. of Agriculture and to test I.C. Engines under BIS certification Mark scheme. The
training courses are being organized for user level, Technician level and Managerial
level persons. Need based course are also organized.
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

31 of 77
The institute is equipped with Workshops, Farm for imparting on the job trainings and
demos, Audio-visual section, a well organized Library and Rest House facility.

8. DEPT. OF FARM POWER & MACHINERY: This is an important constituent of
College of Agricultural Engineering. & Technology, CCS Haryana Agricultural
University, Hisar. The college runs
• Graduate program leading to a degree in B.Tech.(Ag. Engg.). Duration of the
program is 4 years.

• Post graduate programs leading to M.Tech. in the disciplines of Farm Power
& Machinery, Soil and Water Engg. And Agricultural Processing and Food
Engg.

• .Post Graduate Diploma of One year duration in

i ) Water Resource Management
ii) Food Packaging Technology

Ongoing Research Projects
• Development, testing and popularization of implements in Haryana State.
• All India Coordinated Research Project on research and development of farm
implements and their adoption under actual field conditions in Haryana
State.

Achievements: The Department has done pioneer Research & Extension work for
giving a boost to farm mechanization in Haryana State.
The salient achievements being:·
Acid Delinting Technology / Hand Operated Acid Delinters of different capacities.
Manual Seeders, Wheel Hand Hoe, Crust Breaker, Cotton Stalk Puller, Papad and
Wadi making Machines.
Developments / promotion of bullock drawn machines like land preparation,
land leveling, Stubble Collector cum Planker, Mustard Drill, Seed cum fertilizer
drills, Weeding machines.·
Developments / promotion of Tractor operated machines i.e.
Rotavators, Puddlers, High Clearance Weeders, High capacity Crop Threshers,
Paddy Transplanters, Automatic Sugarcane Planters, Ridge Seeders/Bed Planters,
Potato Planter & Digger etc.

Diagnostic Study Report
Agriculture Implements Cluster at Karnal

32 of 77
9. CENTRAL INSTITUTE OF AGRICULTURAL ENGINEERING, BHOPAL: CIAE
was established in 1976 to address research issues related to agricultural
engineering. Initially, research and developed work related to farm machinery, post
harvest technology and energy in agriculture, were taken up. Keeping with functional
utility, the Divisions at the Institute were reorganized and two additional divisions
namely Agro Industrial Extension and Instrumentation were created during VII plan.
The Divisions were further reorganized and an additional division of Irrigation and
Drainage Engineering was created.
The CIAE coordinates its research and development activities through Agricultural
Universities, other ICAR Institutes, All India Coordinated Research Projects and
State Agro-Industrial Development Corporations and small scale farm machinery
manufacturing industries for commercial exploitation of technology.

Institute has number of well equipped research laboratories in the areas of
agricultural engineering and associated disciplines housed in five buildings, six
laboratory sheds, a threshing yard for farm equipment testing and evaluation,
a Model Agro-Processing Centre for demonstration of processing activities to
farmers and entrepreneurs and two well equipped workshops and prototype
production centre.

10. DIRECTORATE OF WHEAT RESEARCH KARNAL: A constituent institute
under ICAR, the DWR IS engaged in enhancing the productivity and profitability of
wheat and barley on ecological sustainable basis . The thrust areas are crop
improvement, Resource Management , Crop protection and health , Quality and
basis Sciences , statistics and social science.

They are engaged in research development and standardization of various form
equipment for Zero tillage and Rotary tillage etc. and are sharing the information
generated with progressive implement manufacturers.


11. RICE and WHEAT CONSORTIUM: RWC for the Indo-Gengatic Plains (IGP) is a
collaborative Programme about sustainability of Rice-Wheat System of IGP. The
collaborators are CIMMYT (an international organization for the improvement in
Wheat and Maize based at Mexico.)
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

33 of 77
IRRI Philippine, many European, Australian and Indian organizations. At Karnal
RWC is located in and is working in co-operation with DWR and has made some
significant advances in zero tillage technique and Bed Planting Technique RWC is
promoting 2
nd
generation machines which are capable to manage the loose residue
in combine harvested areas of rice-wheat system.

12. HARYANA STATE INDUSTRIAL DEVELOPMENT CORPORATION: HSIDC
has been playing the role of an institutional entrepreneur as well as development-
cum-financial institution for industrial growth. The major achievements are:-
• To provide industrial infrastructure in the state.
• To provide term loan/ leasing assistance to industrial units as a state level
financial institution.
• Providing merchant banking service to the industry.
• To set up industrial units in Public/J oint/assisted sectors.

HSIDC is Ist state level financial Institution to achieve ISO-9000 Certification.


13. HARYANA FINANCIAL CORPORATION: HFC meets the credit needs of small
/medium scale industrial units in Haryana for the purpose of acquiring fixed assets
such as land, building and plant & machinery.

14. HARYANA AGRO INDUSTRIAL CORPORATION LTD: HAIC is a Public Sector
Undertaking in the primary objective of providing services to the former in Haryana.
One of their objectives is to acquire, purchase, give or sell implements, machinery,
equipment, appliances, tools etc. either on hire purchase system or on payment by
instalments.

15. NATIONAL SMALL INDUSTRY CORPORATION LTD: NSIC is a Govt. of India
corporation working toward promoting, aiding and fostering the growth of SSIs and
industries related to small scale service / business enterprises for past half a century.
It provides comprehensive support to small scale industries including marketing,
Technology, and credit as well as by strengthening linkages with large and medium
scale enterprises and enhancing exports of projects and products from small scale
enterprises.

Diagnostic Study Report
Agriculture Implements Cluster at Karnal

34 of 77
16. SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA: SIDBI is principal
financial institution for :
• Promotion ;
• Financing
• Development of industry in small scale sector; and
• Co-ordinating the function of other institutions engaged in similar activities
SIDBI has been assisting the entire spectrum of SSIs and also Medium scale
industries (investment in plant & machinery up to Rs. 10 crore) under various
schemes tailored to meet the requirements of setting up of new projects, expansion,
diversification, modernization and rehabilitation of existing units. Besides , the
projects in the service sector with total project cost up to Rs. 25 core are also eligible
for availing assistance from SIDBI. The bank also finances industrial infrastructure
projects for the development of SSI sector. The main / Popular schemes are—
• Direct Credit Scheme for SSI and Service sector.
• Credit Linked Capital Subsidy scheme (CLCSS)
• Technology Up-gradation Fund Scheme (TUFS) for Textile Industry
• Credit Guarantee Fund Trust for Small Industries(CGTSI)


17. ENGINEERING EXPORT PROMOTION COUNCIL: EEPC was set up in the
year 1954 under the sponsorship of Ministry of Commerce, Govt. of India. The main
objective of the council is promotion of exports of engineering goods, projects and
services from India. It has a membership of 8500 firms. Other activities of these
organization are:
• Promotion of Engineering Industry in the international market.
• Providing marketing intelligence of the exports, laisoning with overseas
buyers.
• Organising structured promotional events
• Organising trade fair, buyers-sellers meet, etc.

18. DOON VALLEY INST. OF ENGG. & MANAGEMENT, KARNAL(DIET): This
institute opened a few years back is running engineering degree as well as P. G.
management courses. The college management has expressed their interest in
joining hands with SISI and industries associations to work for the development of
local industries. A consultancy cell is planned to be opened in the college to cater to
the needs of industry.


Diagnostic Study Report
Agriculture Implements Cluster at Karnal

35 of 77
6. LINKAGES AMONG CLUSTER ACTORS

Inter Firm Linkages:
Productions Linkages : These include all manufacturing links among enterprises.
As far as is concerned about Vertical linkages (user-producer) they are existing in
cluster for the components being manufactured at Karnal, But horizontal linkages
(among manufacturing of same product) are almost non-existent baring one or two
stray cases. Therefore sub-contracting relationship is not popular for components,
sub assemblies or outside processing job work most of the firms are vertically
integrated and perform most of manufacturing operations in house. This has limitised
the scope of flexibility in product change.

As for as commercial links is concerned SMEs have established linkages with the
suppliers of raw materials, inputs & also with traders (Sellers), marketing & export
agent local as well as in nearby towns/ clusters.

R&D Linkages between SMEs & institutions are also not strong enough to
contribute to any technological up-gradation or innovation.
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

36 of 77
7. CURRENT INSTITUTIONAL LINKAGE MATRIX

The matrix below reveals the degree of linkage among various Cluster Actors as per information gathered by interaction with them
measured on scale of 5. The figure 0 (Zero) depicts no linkage whereas figure 5 tells Strongest linkage. NA means not sufficient
information is available on the linkages of particular institutions.


K
A
I
M
A

H
C
C
I

S
I
S
I

D
I
C

R
T
C

N
I
S
S
T

P
P
D
C

N
M

L

N
R
F
M
T
T
I

D
F
P
M

C
I
A
E

D
W
R

R
W
C

H
S
I
D
C

H
F
C

H
A
I
C

N
S
I
C

S
I
D
B
I

E
E
P
C

D
I
E
T

KAIMA - 4 3 2 0 0 0 0 1 0 1 1 0 3 3 3 0 0 1 0
HCCI 4 - 2 2 0 0 0 0 0 0 0 0 0 4 4 3 2 1 2 0
SISI 3 2 - 3 1 0 1 0 0 0 0 0 0 1 2 0 3 4 1 2
DIC 2 2 3 - 0 0 0 0 0 0 0 0 0 4 4 3 2 1 2 0
RTC 0 0 1 0 - NA NA NA NA NA 0 0 0 0 0 0 NA 0 NA 0
NISST 0 0 0 0 NA - NA NA NA NA 0 0 0 0 0 0 NA 0 NA 0
PPDC 0 0 1 0 NA NA - NA NA 0 0 0 0 0 0 NA 0 0 0 0
NML 0 0 0 0 NA NA NA - 0 0 NA 0 0 0 0 NA 0 0 NA 0
NRFMTTI 1 0 0 0 NA NA NA 0 - 2 2 0 0 0 0 0 0 0 0 0
DFPM 0 0 0 0 NA NA 0 0 2 - 2 0 0 0 0 1 0 0 0 0
CIAE 1 0 0 0 0 0 0 NA 2 2 - 1 3 0 0 0 0 0 0 0
DWR 1 0 0 0 0 0 0 0 0 0 1 - 5 0 0 0 0 0 0 0
RWC 0 0 0 0 0 0 0 0 0 0 3 5 - 0 0 0 0 0 0 0
HSIDC 0 4 1 4 0 0 0 0 0 0 0 0 0 - 5 0 0 NA 0 0
HFC 3 4 2 4 0 0 0 0 0 0 0 0 0 5 - 0 0 NA 0
HAIC 3 3 0 3 0 0 NA NA 0 1 0 0 0 0 0 - 0 0 0 0
NSIC 0 2 3 2 NA NA 0 0 0 0 0 0 0 0 0 0 - 5 NA 0
SIDBI 0 1 4 1 0 0 0 0 0 0 0 0 0 NA NA 0 5 - NA 0
EEPC 1 2 1 2 NA NA 0 NA 0 0 0 0 0 0 0 0 NA NA - 0
DIET 0 0 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -

Diagnostic Study Report
Agriculture Implements Cluster at Karnal

37 of 77
8. VALUE CHAIN ANALYSIS

The major raw material for Agricultural Implements is structural steel which is the
base for costing the product. With the price fluctuation at Mandi Gobindgarh, the
price of implements at Karnal also fluctuate in the same manner. The Booking of
orders is done on the basis of steel price at Mandi Gobindgarh. The present price of
structural steels at Mandi Gobindgarh varies between Rs. 26000 to 27000 for M.T.
Fluctuation of even Rs. 100 per MT affects the costing of an implements. The prices
of implements fluctuate on daily basis, almost like commodity.

Rates of some Main Items/Parts being used in Production of Agriculture
Implements at various points of time within 3 months period:

S.
No.
Name of Item /
Description
Rate
(Last Week
of March 05)
Rate
(3
rd
Week of
April 05)
Rate
(1
st
Week of
May 05)
1. Structural Steel at Mandi
Gobindgarh
Rs. 26200 / MT Rs. 26700 / MT Rs. 26000 / MT
2. Structural Steel TATA/ SAIL Rs. 29000 / MT Rs. 29000 / MT Rs. 29000 / MT
3. Spring Steel Wire Rod Rs. 35250 / MT Rs. 37500 / MT Rs. 36000 / MT
4. Spring Steel Wire Rs. 39000 / MT Rs. 41500 / MT Rs. 41000 / MT
5. Disc for Harrow 22” X4 mm Rs. 300 / Pc Rs. 310 / Pc Rs. 320 / Pc
6. Disc for Harrow 24” X4mm Rs. 340 / Pc Rs. 355 / Pc Rs. 370 / Pc
7. Disc for Harrow 26” X4mm Rs. 480 / Pc Rs. 500 / Pc Rs. 525 / Pc
8. Cast Spool for Harrow Rs. 25.50 / Kg Rs. 25.50 / Kg Rs. 28 / Kg
9. Tynes- Close Die Forged Rs. 33 / Kg Rs. 36 / Kg Rs. 36 / Kg
10. Tynes -Press forged Rs. 28 / Kg Rs. 31 / Kg Rs. 30 / Kg
11. Tynes- Profile Cut Rs. 36 / Kg Rs. 38 / Kg Rs. 40 / Kg
12. Cultivator Spring-
Commercial Wire
Rs. 37 / Kg Rs. 41 / Kg Rs. 40 / Kg
13. Cultivator Spring- Special
Wire
Rs. 41 / Kg Rs. 45 / Kg Rs. 44 / Kg
14. Cultivator Shovel-
Muzaffarnagar
Rs. 28 / Kg Rs. 28 / Kg Rs. 30 / Kg
15. Cultivator Shovel- Karnal Rs. 32 / Kg Rs. 32 / Kg Rs. 33 / Kg
16. Hardware Commercial
Quality
Rs. 35 / Kg Rs. 35 / Kg Rs. 38/ Kg
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

38 of 77
Costing Method
Tiller (cultivator), 9 Tyne, Rigid Type, Wt.190 Kg.
(Medium Quality)

S.
No.
Component
Description
Nos.
off
Wt. per
piece
(Kg)
Total
wt.
(Kg.)
Rate
(Rs)

Amount
(Rs.)
1 Shovel 9 - 5 28 /Kg 140
2 Tyne Profile Cut 4
5
5
7
55 36 /Kg 1980
3 Spring -- 00
4 Hardware (commercial) 15 35 525
5 Structural Steel (Local) 110 27 3064
6 Welding +Elect.
expenses
-- -- 200
7 Painting -- -- 150
8 Labour -- 150
9 Scrap/wastage -- 50
10 Interests -- 150
11 Selling Expenses -- 200
12 Other Expenses 300

Total
6909

Quoted selling price
7600

Profit (Approx.)
691

Note:- In practice the product is sold at much lower price due to cost
based competition thereby compromising the technological up gradation
& modernisation of the unit in long run.
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

39 of 77
Costing Method
Tiller (cultivator), 9 Tyne, Spring Loaded, Wt.200 Kg.
(Medium Quality)

S.
No.
Component
Description
Nos.
off
Wt. per
piece
(Kg)
Total
wt.
(Kg.)
Rate
(Rs)

Amount
(Rs.)
1 Shovel 9 - 8.5 28 /Kg 238
2 Tyne Press Forged 9 4 36 28/Kg 1008
3 Spring (9.5 mm wire) 18 1.5 27 37/kg 999
4 Hardware (commercial) 15 35 525
5 Structural Steel (Local) 113.5 27 3064
6 Welding +Elect.
expenses
-- -- 250
7 Painting -- -- 150
8 Labour



-- 200
9 Scrap/wastage -- 50
10 Interests -- 150
11 Selling Expenses -- 200
12 Other Expenses 300

Total
7134

Quoted selling price
8000

Profit (Approx.)
866

Note:- In practice the product is sold at much lower price due to cost
based competition thereby compromising the technological up gradation
& modernisation of the unit in long run.
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

40 of 77
Costing Method
Tiller (cultivator) 9 Tyne, Spring Loaded, Wt. 235Kg.
(High Quality)

S.
No.
Component
Description
Nos.
off
Wt. per
piece
(Kg)
Total
wt.
(Kg.)
Rate
(Rs)

Amount
(Rs.)
1 Shovel 9 - 9 32 /Kg 288
2 Tyne Forged (EN-42) 9 5 45 33 /Kg 1485
3 Spring (10 mm wire) 18 1.9 34.2 105 /Pc 1890
4 Hardware (Superior
quality)
15 45 /Kg 675
5 Structural Steel (TATA) 132 32 4224
6 Welding +Elect.
expenses
-- -- 300
7 Painting -- -- 250
8 Labour -- 200
9 Scrap/wastage -- 50
10 Interests -- 150
11 Selling Expenses -- 200
12 Other Expenses 300

Total
9862

Quoted selling price
11000

Profit (Approx.)
1138
Note:- In practice the product is sold at much lower price due to cost
based competition thereby compromising the technological up gradation
& modernisation of the unit in long run.
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

41 of 77
Costing Method
HARROW (TRAILING TYPE, 7 x 7 ; weight 500 kg) Medium Quality

S.
No.
Component
Description
Nos.
off
Wt. per
piece
(Kg)
Total
wt.
(Kg.)
Rate
(Rs)

Amount
(Rs.)
1 Discs 24” x 4.0 m.m,. 14 9 126 340 /Pc 4760
2 C.I. Spool 12 3.75 45 26 / Kg. 1170
3 Hub (including bearing) 4 6 24 200 /Pc 800
4 Pipe (Axle) 2 nos. 8 16 30 / Kg. 480
5 Hardware (Commercial
Quality)
-- -- 10 35 /Kg 350
6 Structural Steel (Local) -- -- 279 27 /Kg. 7533
7 Welding +Paint +Elect.
expenses
-- 300
8 Labour -- 300
9 Scrap/wastage -- 100
10 Interests -- 200
11 Selling & Other
Expenses
-- 200

Total
16193

Quoted selling price
18000

Profit Approx.
1807

Note:- In practice the product is sold at much lower price due to cost
based competition thereby compromising the technological up gradation
& modernisation of the unit in long run.







Diagnostic Study Report
Agriculture Implements Cluster at Karnal

42 of 77
Costing Method
HARROW (TRAILING TYPE, 7 x 7 ; weight 600 kg) High Quality

S.
No.
Component
Description
Nos.
off
Wt. per
piece
(Kg)
Total
wt.
(Kg.)
Rate
(Rs)

Amount
(Rs.)
1 Discs 24” x 4.4 m.m,. 14 10 140 400 /Pc 5600
2 C.I. Spool 12 6 72 30 / Kg. 1800
3 Hub (including new
bearing)
4 6 24 400 /Pc 1600
4 Pipe (Axle) 2 nos. 25 50 1000 /
Pc
2000
5 Hardware (High Tensile) -- -- 15 45 /Kg 675
6 Structural Steel
(TATA/SAIL)
-- -- 299 29 /Kg. 8671
7 Welding +Paint +Elect.
expenses
-- 400
8 Labour -- 400
9 Scrap / wastage -- 100
10 Interests -- 300
11 Selling & Other
Expenses
-- 400

Total
21946

Quoted selling price
24000

Profit (Approx.)
2056

Note:- In practice the product is sold at much lower price due to cost
based competition thereby compromising the technological up gradation
& modernisation of the unit in long run.





Diagnostic Study Report
Agriculture Implements Cluster at Karnal

43 of 77
9. ANALYSIS OF BUSINESS OPERATION

The following section presents an analysis of Business Operations for the Karnal
Agricultural Implements Manufacturing Cluster. The analysis is based on following
factors:
• Raw Materials & Components
• Technology (Machinery & Products)
• Products & Marketing
• Background of Entrepreneurs and their Enterprises
• Finance and working capital
• Man Power Requirement
• Infrastructure facilities
• Business Development Services (BDS)
• Quality, Standards and Management Systems

(i) RAW MATERIALS AND COMPONENTS:
The major raw material used in the Agriculture Implements is structural steel i.e.
Angles, Channels and Flats of various thickness and section sizes. A little quantity
of High Carbon Steel is also required for shovels of ploughs.

Main source of supply of this raw material is Mandi Gobindgarh, the steel town of
Punjab at a distance of 130 kms. from Karnal. A very few progressive units who
have built up their brand image are using SAIL or TATA material also.

Sheet for thresher and seed drill is commercial quality CR / BP Sheets without
much consideration of any quality parameters–

Raw Material for Harrow Disc is EN-42. Earlier the sheet was supplied by a
Gobindgarh Supplier. But as some of local disc manufacturers started rolling their
own sheet, Gobindgarh supplier has closed the operation. Local Manufacturers now
prefer 2
nd
grade Rail from SAIL being an economical proposition and fulfilling the
quality (hardness) parameters also as compared to billets. Up to some time back the
largest exporting unit of this cluster M/s Karnal Agricultural Industry Ltd. was
importing SAE 1070 billets against Advance Licence. But due to price of steel gone
up in the international market , they also prefer now to procure local (SAIL)material.
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

44 of 77
Raw Material for Cultivator Tyne is also produced from Gobindgarh in the form of
Flats and is easily available. Two units having own Rolling mill are rolling the
material for their own requirements.

Spring Steel Wire for Cultivator Springs: Only two suppliers are monopolizing the
market 1
st
being M/s TISCO and 2
nd
being M/s Usha Martin Ltd. supplying wire rod.
Both of these suppliers are exploiting the market to their best advantage and the
spring manufactures, who are unable to store the wire/wire rod in time are not able to
make good season.

For Shovel: Though there are two units at Karnal. But very little quantity is picked
up by 2 or 3 local manufacturer owing to their price being higher as compared to
shovel being produced at Khatauli (U.P.) which are economical as compared to
being manufactured at Yamunanagar (Haryana) and Karnal. Raw Material for Shovel
being manufactured at Karnal and Khatauli is scrap (broken) Leaf Spring from
Automobiles which is available in plenty in UP itself , also the labour in UP is
economical. That is why Khatauli made shovels are comparatively cheaper.

Cast Spool for Harrow are besides three local foundries, mainly procured from
Kaithal and function of the item being for structural purpose, have no quality
problems. However Harrow hub and Thresher Plumber Block and other parts of
Seed drills are produced from Goraya, Ludhiana, Moga and Mansa etc. towns of
Punjab.

Similarly, Machined shafts, gears, pulleys, sprockets, sub Assemblies and thresher
head and gear box assemblies as well as thresher blades and fasteners etc. are also
procured from Ludhiana and other towns of Punjab.

Materials for Press tools and forging dies etc. are purchased from Delhi or Ludhiana
as there is not much developed engineering industry at Karnal to fascinate any
trader to open a shop.

Paint used for the agricultural Implements is generally local made. There are around
5 to 6 units manufacturing satisfactory quality for domestic market product. However,
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

45 of 77
for export quality implements, paint of reputed manufacturers is available from local
market.

As far as is concerned for Structural Steel from Mandi Gobindgarh or 2
nd
grade rail
from SAIL, owing to limited suppliers and absence of any testing laboratory at
approachable distance, and alternate source of supply, they are compelled to accept
and use whatever is supplied by Gobindgarh suppliers. Therefore, due to non-
consistency in material quality, there are sometimes problems in machining
operations; but as there is no system of fits and tolerances being followed, the
problem is taken very lightly because the product is for rough use in the fields.
However, there is a little bit check on consistency of the hardness of material for
Harrow Disc, Cultivator tynes. The Spring wire is procured form main producers
along with Test Certificate.

Mandi Gobindgarh Raw Material (structural steel as well as HCS for tyne) market is
totally in the grip of Arhtiyas (Commission agents) who are cutting into the profit
margin of implements / component manufacturers of this cluster. Common buying, if
possible, may contribute to cut down the raw material cost to a significant extent.
Even another nearby Raw Material Market of Muzaffarnagar can also be tapped by
forming some hard networks (Consortia’s) in order to get advantage of economy of
scale through common buying. Alternately the leading mills at Ghaziabad can be
explored or some mill owner in Haryana itself can be persuaded to meet demand of
this cluster of industry.

(ii) MACHINERY AND PRODUCTION:
Since there is variety of implements being manufactured in the cluster, there is no
generic manufacturing process sequence for all the products. However the general
sequence followed is :
• Cutting the structural elements to size
• Bending/Press working
• Cutting sheets to size and shape
• Fabricating the structure
• Putting sub assemblies and components
• Final Assembly &
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

46 of 77
• Painting

Normally the machines employed are general purpose like - Welding Sets, Power
Presses, Drilling Machines, Lathes, Power Hacksaws, Hydraulic Presses, only
locally developed special purpose tension type spring coiling adda is used for
cultivator springs. Most of the machines used are manufactured at Ludhiana, Batala
and Delhi or near by areas.

Some of the units have changed over to MIG welding from conventional Electric Arc
welding process. As there are long off seasons in the trade, there is no
botheration for proper upkeep, maintenance and productivity of the machines.

The process of manufacturing has almost remained traditional. The welding
fabrication is done on the ground / floor in even the high production units also. There
is no concept of work benches or assembly line.

Since the end product has got very rough use and the end user is also not much
aware & educated; therefore, no consideration is imparted to tolerances. No concept
of limit gauges exists in the cluster.

Furnaces are used in the trade for hot forging. Only a very few units are using
temperature controllers on the furnaces that are locally made under the supervision
of some private manufacturers. Therefore some times there is non-uniformity in the
quality of product.

Representative of PCRA or similar organization can be helpful to educate the
furnace handling personals towards cutting fuel cost.

A lot of technological interventions needed to be made, discussed in a separate
section.

(iii) PRODUCT:
Main products are Tillage implements like various types of Cultivators, Disc Harrows,
Ploughs, Rotavators. Land preparation implements, like Puddlers, Bund Former,
Soil Scoops, Tramplers etc., Sowing implements like Seed-Cum-Fertilizer Drill, Zero
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

47 of 77
Till Machine, Bed Planters etc., Harvesting and Thrashing implements like various
types of straw Reapers and Thrashers.

The products being manufactured at Karnal are conventional and popular
implements drawn by tractor, dominantly being used in most parts of the country
barring Punjab, extreme south and hilly and semi-hilly areas. The minus point is that
they are reported to be the copy of the implements being used in various regions or
as per customer’s requirement.

No innovations worth mentioning have been made in Design, Structure or Materials
or Aesthetics etc. of the implements. Only weight of the iron or thickness of the
material is increased to impart strength. Concept of metallurgy of material is almost
neglected in front of cost based competition.

The designs, as reported, are either copied from those introduced by various tractor
manufacturers like Escorts, Massey Fergusan, International (Mohindra) etc. other
reputed implements manufactures in various states like Punjab, Gujarat,
Maharashtra etc. as per the requirements of the customers and are many a times
named after those original manufacturers.

There is lot of scope for producing implements / equipments based on latest
techniques of farming. The need is for developing linkages with various R & D
institutions situated at Karnal and in nearby places.

(iv) MARKET:
Domestic Market: The Karnal cluster is situated in Agriculturally Rich belt of Punjab,
Haryana and Western UP. The demand from near by areas imparted strength to the
cluster and other developing states like Rajasthan, Gujarat, MP, Maharashtra,
Eastern UP and Bihar also looked to Karnal for established implement industry
owing the economical cost of implements.

But now as the awareness is increasing, some manufacturers have started
fabrication and assembly in those states locally or some artisans turned
entrepreneurs are shifting from here to those places. They procure the components
from Karnal and other places and save on the transportation cost of assembled
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

48 of 77
implements, structural steel is available in UP at Muzaffarnagar, Raipur in
Chhatisgarh. Similarly at various places in other states also.

Moreover there is almost saturation point for implements in near by regions of
Haryana, Punjab, Western UP, Northern Rajasthan. Sale of new tractors have gone
down in these areas also. Over all sale has gone down as compared to last decade.
It is reported that above mentioned reasons resulted in around more than 25% cut in
sales of agricultural implements directly form this cluster.

Karnal cluster owing their financial soundness as compared to small artisan/trader
turned assemblers/manufacturers will have to compete on the basis of managerial,
technological operational efficiency rather than on the basis of quality. A Karnal
made brand reputation needs to be established.

Export Market: Two or three units are exporting their products. At least one is
exporting implements & other components like Harrow Discs directly. It is reported
that 2 to 3 units are exporting indirectly i.e. through units located at Karnal or through
Ludhiana / Delhi based exporters / agents. Exports are being made to even USA,
GERMANY, AUSTRALIA etc. besides developing and under developed countries
like Sri Lanka, Bangla Desh & Nepal etc., but this is a very small fraction of the over
all turn over of the cluster.

Cluster members need more awareness in export marketing, & export
documentation. As units are small, it is almost imperative that networking is done
among the SSIs to fulfill the requirements of importers abroad and in order to capture
large export orders. This will ensure economy of scale as well as develop
accountability of the entrepreneurs. Export Consortia can be formed to ensure brand
building, participating in international fairs, negotiating with buyers and compete with
other countries on quality and price fronts.

(v) ENTREPRENEURES AND THE ENTERPRISES:
A majority of the enterprises are family owned. The owner and the other family
members are the managers, marketers and many a times operators, technicians and
negotiators too. Hardly any qualified people are recruited from outside. As a result
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

49 of 77
no fresh idea came up and the process of manufacturing remained traditional. Hiring
experienced and specialized persons in different functional areas necessitates
higher pay, which entrepreneurs are generally not willing to pay due to cut throat
competition on cost. Some times entrepreneurs are not even aware of source.

In order to upgrade the competency of entrepreneurs, for enabling them to get
optimum out put from their resources/enterprises, they need to be provided training
through workshops, seminars in the technical and managerial fields/functions.

(vi) FINANCE AND WORKING CAPITAL:
As there is sudden demand and off take of different implements as per their season
(cropping pattern) of Rabi & Kharif which at present are generally 5 to 6 months a
year for any particular type of implement, the units have to keep ready the stock of
components and materials as the same is not available on 100% basis during the
season period. This involves lot of funds. Banks are generally liberal in providing
working capital. Mandi Gobindgarh suppliers (commission agents) also provide
credit facility by overcharging exorbitantly. So finance side problems arise either for
a few small SSI units or whenever there is problem of recovery of payment from the
market. However in the process of buying through commission agents , there is
some hidden cost , which at some times goes up to 4 % extra which as discussed in
raw material Para of this section can be saved to a great extent through common
buying. Payment recovery problem has started recently due to fall in demand and
because of competition from new entrepreneurs at various places near to the market
pockets catered by Karnal cluster.

The export oriented units are effectively utilizing the export credit facilities.

(vii) MAN POWER REQUIREMENT:
Generally semiskilled workers are required. Some experienced technicians /
Foremen are employed, however barring 2 to 3 organized units hardly any
qualified/experienced engineers are employed. Owing to rough nature of job,
without much dimensional accuracy & precision, very few qualified engineers like to
join this line to adopt as their carrier. This is probably one of the main reason for the
technological backwardness of this cluster.
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

50 of 77

No efforts have been made to train and upgrade the skills of workers in an
organized/formal manner.

(viii) INFRA STRUCTURE:
Almost all the enterprises are located near the National High Way or a few in the
HSIDC Industrial Estate that is again situated on the National Highway roads are
good.

Power supply is not regular and consistent particularly it is not dependable in
summer months which are a season period for majority units in the cluster. Units,
therefore, have installed their own generator set standby.

It is observed that during the season periods there is shortage of space in the units.
In case the SSIs are receptive to the idea of enhancing their productivity and quality
, they need more space for assembly & storage of materials & finished goods.

Critical Infrastructures like
i) Material Testing facility
ii) Tool Room facility &
iii) Prototype Development Centre
do not exist locally or within day to day approachable distance.

(ix) BUSINESS DEVELOPMENT SERVICES (BDS):
Operational BDS provider are available and SMES in the cluster are utilizing their
services like transportation, CAs, Banks, Maintenance job Workers, Labour
Contractors.

Short term BDS providers like Commission Agents from Mandi Gobindgarh or Sales
Agents though not in plenty but are operating. But concept of engaging Long Term
Strategic BDS providers is not popular among SSIs. Only two or three SMEs
understand their importance and are utilizing services of a few of this kind.

Govt. Agencies, NGOs and Institutions like IARI, DWR, Sugarcane Breeding and
Research Centre, Haryana Agriculture University Regional Research Station, are
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

51 of 77
locally situated but rarely approached by the industry barring a few organized SMEs.
Similarly National Institute of Technology Kurukshetra is there. An Engineering and
Management Institute has come up at Karnal a few years back. There are no
industry institute linkages. NPC, ECGC, DGFT, SIDBI are also approachable but no
significant services from them have been obtained. SISI is some times approached
but no concrete project has been worked out except present CDP.

Some BDS providers within the state are:
1. Northern Regional Farm Machinery Testing & Training Centre, Hissar.
2. Department of Farm Power & Machinery, College of Agriculture
Engineering, CCS, HAU Hissar.
3. Haryana Govt. Tool Room-cum-Testing Lab J agadhri.

Some other BDS providers in near by areas /states are:
1. ICAR Pusa New Delhi.
2. Agricultural Universities of Punjab, Himachal, Pantnagar (UA),
Rajasthan, MP etc.
3. Central Institute of Agriculture Engineering Bhopal.
4. Central Tool Room Ludhiana
5. Tool Room and Training Centre Wazirpur New Delhi.
6. IIT New Delhi.
7. National Test House, Ghaziabad.
8. Sri Ram Test House and Institute for Industrial Research New Delhi.
9. SISI Workshops at Okhla (New Delhi), Bhiwani and Ludhiana.
10. Regional Testing Centre (RTC), Okhla (New Delhi)

Agricultural Implements being a rough and tough product, people never cared to
search for BDS providers in the area of technology, Marketing, Export, etc. Due to
this and limited exposure of entrepreneurs in these fields, the process of
manufacture and quality of product did not change over the years, neither any
innovation evolved. Rather market has started shrinking. Agricultural Implements
being not a very high profit item and fees of BDS being very high, consortia
approach should be adopted for areas like Karnal made brand building. If the
demand for strategic BDS providers is created, there is possibility that some BDS
providers may open contact point at Karnal.
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

52 of 77

(x) QUALITY MANAGEMENT AND GENERAL MANAGEMENT SYSTEMS:
At least one Agricultural Implement Manufacturing Unit and two component
manufacturers have achieved ISO-9000:2000 QMS certification. Only a few of the
remaining have a little organized and structured working. They may achieve the
level of implementation of QMSs, but most of SSIs are neither aware of the
importance and benefits of QMS nor they have necessary Human Resources for the
job.

The units have gained financial strength during good old days and now they invest
the funds in storing raw materials and components in off season. Prices of steel are
rising continuously for the last few years. This storage of material contributes to the
profitability of the units. Other wise counting on the basis of financial analysis tools,
most of the units would not be found performing well.

Keeping up to date inventory, records and even proper House-keeping are also not
so important areas for the SSIs in this cluster.

Technically the use of well designed jigs and fixtures, Gauges are not important for
the majority of units. Fits and tolerances are unheard terms for them. Need of
making component drawings or assembly drawing is never felt. Due to these
reasons the SSIs in this clusters are working as just dignified, bigger size version of
traditional fabrication / engineering workshops of old style. The engineering industry
base to catch new engineering product has not developed.

To bench mark on this concept, some Ludhiana based agricultural implement
manufactures are using parts machined on CNC machines (Lathes), and cutting on
the weight of the implement / equipment but adding value to their product.

The overall management function of the cluster members is not efficient in general in
terms of systems, due to non engagement of qualified personals professionals and
non delegation of authority for routine work. Entrepreneurs are engrossed in day to
day affairs of co-ordinating the business and remain pre-occupied with immediate,
short term issues or problems with little emphasis on long term planning. There
seems to be no intention to increase activity level due to fear of loss of control. Two
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

53 of 77
or three houses have, therefore, adapted the horizontal route to growth. Informal
business, evading statutory norms and dues, non declaration of statutory information
and avoiding coming under Factory Act is another reason for non-growth of this
sector. Reason being that most of the entrepreneurs are not from professionally
educated sector.

Some times back some Harrow Disc manufacturing units tried to use ISI Mark but
could not continue due to some inbuilt practical problems of the system decided to
discontinue with the use of ISI Mark. One or two seed drill and thrasher
manufacturers also tried with ISI Mark, but due to additional activity of maintaining
documentation and non availability of materials/components conforming to ISI
specifications in small quantity compelled them to discontinue with use of ISI Mark.

Still, as told earlier, some of the units are having the potential of implementing
inventory control/record, proper house-keeping and Quality Management Systems.
Only awareness needs to be created.
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

54 of 77
10. REALITY TREE DIAGRAMMES

Raw Material:



Machinery & Technology:




Lack of knowledge
& awareness
Lack of Technology
BDS
Poor Quality Raw
Materials
Poor Linkages with
R & D institutes
Non willingness to
pay higher salaries
Latest Machines are
costly
Latest Machines are
not installed
Higher Price of
RawMaterials
Large Mfrers.
Increasing prices
Increase in steel prices in
international market
No raw material
bank
Capital cost high
Poor Quality of Raw
Material
No Testing Facility
in the Cluster
No alternate source
to Gobindgarh
Low production &
Product Quality
Non availability of
Technical experts /
engineers
Technological
obsolescence
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

55 of 77


Products:




Marketing:



























Technological
obsolescence
Quality not matching
with international
standards
Poor Quality of Raw
Materials
Lack of
knowledge
Poor linkages
with R & D
institutes
Local mfrers
mushrooming at
various places
Cut throat
competition
Cost based
competition
Low productivity (poor
management)
No marketing
BDS provider
Shrinking local
market
Lack of
networks
Lack of
awareness
No joint
marketing or
Brand building
Decline in sale
of new tractors

Diagnostic Study Report
Agriculture Implements Cluster at Karnal

56 of 77
Entrepreneurs & their Enterprises:



Finance and Working capital:



Manpower:


No good returns
on investment
High cost of
capital
Inability to face
competition
Poor quality &
productivity
Competition in
domestic market
No joint
marketing
Lack of
networks
Lack of knowledge Not high level of
professional
education
Increased
cost of
product
Inability to face
competition
High cost of
capital
Non existence of
qualified /
experienced
engineers
Non-willingness to
invest on training
Non willingness
to pay higher
salary
Low Tech product
Technology did not
change much
No manpower
planning /
development
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

57 of 77


Infrastructure:




Business Development Services:




Strategic BDS
not developed
Low tech /
conventional
product
Industry demand
poorly projected
Less pro -activeness
in core cluster actors
Creativity &
innovation
missing
Lack of
awareness in
entrepreneurs
No other strong
industry segment
present
Impact on
quality &
productivity
Space shortage
Inability to project
the problem rightly
Less unison
among cluster
actors
Non existence of
local R.M. /product
testing facility
Lack of awareness
Govt. Non -
Intervention
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

58 of 77
11. INDUSTRY STRUCTURE ANALYSIS
Fig. 11.1

ENTERY BARRIERS

RIVALRY


BARGAINING POWER
OF SUPPLIERS


BARGAINING POWER
OF BUYERS



The figure indicates the business environment in which this industry operates and its
vulnerability to the various market forces in respect of four major factors as
discussed here under-

1. ENTERY BARRIERS: The entry barrier from the point of view of investment in plant
& machinery in the implement segment is medium level. Only an investment of Rs.
5 to 6 lakh (including tooling) is needed to make an entry. However, to reap the
benefit of economy of scale, high investment in working capital is required as the
quantity & value of raw material is on high side. The value addition is not very
encouraging. Moreover the bargaining power of the major raw material (Structural
Steel) supply segment the rolling mills as well as commission agents at Gobindgarh
is also high.

There is no proprietary skill or high technology of any kind involved. Neither there is
any brand identity culture. Only 2 to 3 unit shave been able to create their brand
identity, But still there is not much product differentiation. Most of the products are
common and are produced by number of enterprises within and outside the cluster
Moderately high for
Implement; High for
Components
High
High High
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

59 of 77

Entry barrier in components (Disc, Tyne, spring & shovel ) manufacturing side
are high due to the cost of Plant and machinery, tooling investments and kind of
technology (process) involved.

Entry barrier on implement side is hightened by another factor that exit barrier is high
because of payment recovery being in favour of dealers/ traders (Customers).

2. Rivalry is existing among the firms rather on high side as almost all are mainly
dependent on domestic market, particularly on retail sale and through traders. Still
some manufacturers are supplying to fixed customers for the last so many years. In
fact there has been a considerable increase in the number of units during 1985 to
1995. as the competition went up and on the other side market got saturated. Also
number of new tractors sold in the country and particularly in adjoining regions gone
down. A continuous drought for 2-3 years further cut the demand. This situation
compelled some houses to close down or scale down the production.

Efforts are required to educate the entrepreneurs to entertain quality based
competition rather than cost based at present in practice. Exploring the export
market is expected to create quality culture. If workmanship is improved , marketing
& export consortia are formed , the rivalry among the firms can be reduced.

3. Bargaining power of the raw material suppliers of Mandi is high, as rolling mills are
not interested in rolling / supplying smaller quantity. Numbers of sections / sizes
required for consumption are so many that stocking requires lot of capital
involvement . Situation is exploited by commission agents to their advantage.

But bargaining power of other items / components like tyne, spring, & shovel is low .
The prices of these items have not increased proportionately to the raw material
prices.

Diagnostic Study Report
Agriculture Implements Cluster at Karnal

60 of 77
Bargaining power of Gobindgarh rolling Mills can be controlled by forming hard
network for common purchase as well as by tapping alternate raw material market of
Muzaffarnagar or some where within the state itself.

4. As far as is concerned for the bargaining power of customer, that too has tilted in the
favour of customer due to demand gone down and with coming up of new
manufacturers at various place in the country; who procure components directly from
manufacturers and fabricate the structure and produce the implements locally.
Another factor working in favour of customers bargaining power is that due to lack of
demand, manufacturers are not getting payments regularly. This becomes more
difficult due to seasonal nature of business. So changing customers (dealer/trader)
means loosing some payment. So manufacturers are trapped in a vicious circle. This
can be reduced by forming consortium and brand Building.


Diagnostic Study Report
Agriculture Implements Cluster at Karnal

61 of 77
12. SWOT ANALYSIS

Parameter Strengths Weaknesses Opportunities Threats
M
a
r
k
e
t

1. Strong presence in
domestic market

2. Location in agriculturally
advance and rich region.

3. Major market within 1000
to 1500 km. distance

4. Developed trust and
relationship in the long run
with tractor dealers and
traders.

5. Good Transport linkage-
National Highway No, 1,
State Highway and
Railways.

6. Purchase by State Govt.
Agriculture Deptts. And
Corporations for further
supply to farmers.

7. Almost no import of the
product for farmers use.
1. Seasonal market for
different products,
therefore, longer off
seasons for majority units
that are confined to narrow
product range.
2. Sale is mainly directly
connected to the sale of
new tractors in the country.
3. Implements have normally
long life, therefore, the
replacement sale hardly to
the tune of 10 to 15%.
4. Payment are not prompt
from dealers/traders due to
stiff competition
5. . Lack of knowledge of
export marketing /
documentation.
6. Lack of brand image.
7. No effective agencies to
help in export market.
8. Lack of Internet exposure.
9. Cut throat competition on
price at the expense of
quality.
10. Inadequate information of
changing techniques of
farming.
1. Being Low-Tech product
not of much interest to
developed countries for
export.

2. Possibility of export to
neighbouring countries
like Nepal, Pakistan,
Bangladesh, Srilanka.

3. Enterprises can join
hands together for
International marketing,
Brand Building and
participation in Trade
Fairs.

4. Globalisation can usher
tremendous market
potential for the
competitive firms.

5. Quality and productivity
are the rule of the
game.



1. Competition is
increasing dfrom other
places in domestic
market.

2. Italy, Belgium & Spain
are strong in this trade
in the International
market.

3. Overseas importers are
smart enough to
change their sourcing
country.

4. ISO-9000 QMS are
necessary to adopt.

5. Survival of the fittest.

Diagnostic Study Report
Agriculture Implements Cluster at Karnal

62 of 77

Parameter Strengths Weaknesses Opportunities Threats
I
n
p
u
t
s

A
v
a
i
l
a
b
i
l
i
t
y

1. Availability of main
components i.e cultivator
tynes, springs and
harrow disc. Is local and
prompt.
2. Availability of castings
from nearby Kaithal and
other working parts for
thresher and Seed Drills
etc. from not so far away
places of Punjab.
3. Major raw material
structural steel supply
from nearby Mandi
Gobindgarh.
4. TATA & SAIL sales
offices in Delhi/Fbd an
advantage.

1. Local non-availability of
sufficient casting parts
and moving parts like
gears/shafts and sub
assemblies.
2. Cluster is solely
dependent on Mandi
Gobindgarh for supply of
structural steel that to
through commission
agents.
3. No incoming inspection of
raw materials and
components.
4. No structured system of
quality control exist.
1. Competition going to
make availability of
inputs cheaper and
sufficient.

1. Off and on price
escalation in steel for the
last three years.
S
k
i
l
l


&

H
R

1. Semi skilled workers
needed .
2. Most of the work is easily
learnt on the job.
3. Non presence of any
other strong major engg.
Segment, where worker
can migrate.
1. No skill development
training programme /
facility for workers in the
line .
2. Cluster usually depends
on under qualified Tool
and Die makers having
no facility / Ability to
upgrade their knowledge
for newer materials and
techniques.
1. Increased awareness
likely to increased skill
base of workers.
2. Unemployed youth can
be trained easily.

1. Skill base needs up-
gradation to adapt new
techniques.

Diagnostic Study Report
Agriculture Implements Cluster at Karnal

63 of 77



T
e
c
h
n
o
l
o
g
y

1. Medium Investment &
low accuracy
machinery.
2. Technology
Infrastructure
available.
3. Labour intensive & not
high-tech.
4. Demonstration effect
very easy.

1. Low level of
technological
development.
2. unscientific method of
heat Treatment of
tooling.
3. Problems with quality,
aesthetics & finish
(Consistency).
4. Weak presence of BDS
providers.

1. Lot of scope for
technology up
gradation.
2. Creation of
technological
awareness among
entrepreneurs will
create Technology base
to enter into new areas.
3. Possibility of
establishing Common
Facility Centre.

1. Low level of technology
development.
2. Cost effectiveness is
must with modernization.
3. Technology is ever
changing process.
I
n
n
o
v
a
t
i
o
n

c
a
p
a
c
i
t
y

1. Ability to develop
(copy) the new products
as per customer
requirement.
2. Flexibility in choosing
other products in the
range due to similar
manufacturing
operations.
1. Hardly any significant
change in design ,
marketing methods.
2. Low level of development
in process.
3. Traditional method of
production.
1. Presence of ICAR
institute like IARI, DWR ,
Sugarcane Research
Centre, HAU Regional
centre, PUSA institute,
PAU and Pant Nagar
University, NIT and
Local Engg. College
may provide opportunity
in design , Technology
and process implement.
1. Innovation required in
every facet of business
operation
2. Advent of newer
methods and
technology of farming.




Parameter Strengths Weaknesses Opportunities Threats
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

64 of 77



Parameter Strengths Weaknesses Opportunities Threats
B
u
s
i
n
e
s
s

E
n
v
i
r
o
n
m
e
n
t

1. Medium investment in
plant & machinery

2. Stable business till
1995, therefore a good
scope for improvement
for future too.

3. Weak presence of other
industries, ,
entrepreneurs interested
in manufacturing activity
finds no easy alternate
for investment.

1. Competition is
increasing from the local
fabricators /
Manufacturing at other
places.

2. New generation not
interested in labour
intensive and toiling
working conditions

3. Unprofessional way of
Management .

1. Progressive and
innovative enterprises
have the ability to grow
and meet requirement
of export market as the
developed countries
may not like to enter in
the low tech segment.
1. The changing business
environment is always a
problem for less
enterprising firms.

2. New generation don’t find
the line fascinating due to
labour intensive and
toiling working conditions.

3. There are more
attractions / alternatives
assuring easy / better
return on investments like
real estate, properties ,
trading etc.
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

65 of 77
13. PRESENT CLUSTER MAP
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

66 of 77
14. CLUSTER VISION


Keeping in view the present status of Technology, Quality, Quality & Management
Systems in the cluster, following vision has been found suitable for this cluster.

“ Technology up-gradation through Process improvement and
Standardisation with an eye on Quality enhancement and value
addition of the product.”


Strategy: In the Agricultural Implements Cluster at Karnal there is an ample of
scope for strategic interventions in certain key areas as described here under :-

• Technology Up-gradation
• Standardisation & Design improvement
• Personal Counseling / Training
• Networking
• Trust Building

As mentioned in “Analysis of Business Operation”, the process of manufacture has
almost remained traditional. Newer methods of production / assembly need to be
introduced along with methods of fuel / energy conservation and waste minimisation.

Standardisation is key to quality improvement and interchangeability enhancement.
All above mentioned actions are impossible to be taken without personal counseling
/ training of the entrepreneurs. Only personal counseling will make the networking
possible for common buying and exporting by avoiding only cost based competition.
Emphasis is to be aid down for all round effort to improve the quality of the product of
the cluster so as to gain an international recognition. Assistance of BDS providers
will be an important factor.






Diagnostic Study Report
Agriculture Implements Cluster at Karnal

67 of 77
15. PROPOSED PROGRAMMES / ACTIVITIES

The Agricultural Implements Industries at Karnal has got good potential for
growth in domestic and export market provided strategic and technological
interventions are made in the important areas identified through analysis in the
chapters Analysis of Business Operation, Reality Trees, Industry Structure
Analysis and SWOT Analysis. An indicative list of Programmes / activities needed
to undertaken in the implementation phase, to achieve the vision evolved, is
given below:-

1. Organising meeting with Cluster Actors.
2. Study on understanding the present manufacturing process and identifying
scope for improvement.
3. Training Programme on Marketing Challenges.
4. Workshop on needed Technologies.
5. Exposure to International Marketing through workshop (Internet).
6. Organising Exposure visit to developed cluster.
7. J oint participation in National/International Exhibitions/Fairs.
8. Workshop(s) on Export Procedures & Documentation.
9. Personal counseling for solving Technical problems.
10. Product Design/Quality Standardisation.
11. Programmes on Energy Conservation
12. Energy Audits.
13. Awareness Programme(s) on ISO-9000 QMS.
14. Educational Programme(s) on ISO-9000 QMS.
15. Promoting the importance of maintaining product quality for survival in the
long run against competition.
16. Initiating Action for establishing CFC Test Lab.
17. Initiating Action for establishing CFC Prototype Development shop/Design
center.
18. Networking with supporting Institutions.
19. Workshop on importance of observing better health and safety measure.
20. Initiative for cluster newsletter.
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

68 of 77
21. Initiative for common website.
22. Hiring common market consultant.
23. Financial Institutions Meet, SIDBI, NSIC, HFC Banks.
24. Formation of Consortia for common buying.
25. Developing alternate source of Structural steel.
26. Initiating Action with HSIDC for allotment of Industrial plots to Cluster
members.
27. Preparing data bank of BDS Providers.
28. Development of BDS providers in various fields such as Product /
aesthetic designing,
29. Strengthening the Association by having a secretariat, Magazine/ News
letter, Library, Website & Linkage with other associations, NGOs,/ Govt.
institutions.
30. Delegation to international markets.



















Diagnostic Study Report
Agriculture Implements Cluster at Karnal

69 of 77
16. MAJOR TECHNOLOGICAL INTERVENTIONS REQUIRED

The general manufacturing process involved here are Welding / fabrication,
machining, forging, rolling, casting etc. The secondary process involves machining
like turning, boring, drilling, Besides, some amount of heat treatment is involved in
the manufacture of components. An in depth study needs to be carried out in the
enterprises in order to understand the basic manufacturing process, quality control
methods and trial and treating of plants and equipments. However, the following
technological gaps are identified during the preliminary observations.

1. Testing of raw material: The incoming material for the production system
need testing in terms of chemical composition. Hardness, Finish, geometrical
dimension and micro structure. The entrepreneurs are not aware of the
methods and procedures adopted for inspection of their raw material and
therefore an in depth intervention is required through training, workshops/
This will ultimately create awareness among entrepreneurs.

2. Design of products: Normally the enterprises do not have drawings and
designs of products needed for various stages. However, they manufacture
products based on old and outdated tools and dies. The business
development service provider as a specialist in product design will be visiting
the enterprises and ensuring correct design of assembled products and
individual components through a drawing covering plan. Elevation, sectional
views, material of construction and various other technical parameters.

3. Manufacturing process: The enterprises do not have a written standard
process for manufacturing of the products/tools and therefore they depend on
the skills of the operations supervisors for manufacturing processes through
various demonstrations. The BDS should develop a manufacturing process
standard in appropriate sequences so that the product follows a particular
production process.

Diagnostic Study Report
Agriculture Implements Cluster at Karnal

70 of 77
4. Quality plans: The products manufactured in the cluster need appropriate
inspection and quality control system at every stage of production in order to
improve productivity and quality. This system of quality plan can be developed
so that the products are produced as per desired technical specifications. The
entrepreneurs need training in use and application of measuring instrument
and testing machines needed for production of right quality of products.

Improvement in design and manufacturing: In order to manufacture the
products, the enterprises use tools like jigs, machining fixtures, press tools,
cutting tools, assembly fixture, and various other type of testing fixtures. The
design of the tools is mostly outdated and therefore needs modification and re-
manufacturing in order to meet the quality standard of products.

Improvement in the manufacturing process: As mentioned above there are
various manufacturing processes; each of the manufacturing process required
detailed study in order to identify the scope of improvement in productivity and
quality and reduce rate of rejection. Therefore the following could be the targeted
intervention manufacturing processes.

• Welding: Manual Electric arc welding is major operation being utilized
for the manufacture / fabrication of agricultural implements. Though
some of the manufacturers have up graded to MIG welding, still latest
developments / techniques in the field of welding are un-known in the
cluster. Some of the units are using tacking & welding fixtures, but
these are very rough /outdated type. Use of welding aids / positioners
etc. is not popular. Concept of testing of welded joints is not known.
The process requires thorough study by a Welding specialist who
should identify the areas for improvement.
• Forging: The cluster mostly adopts Press Forging or Closed Die
Forging technique for the manufacture of Cultivator Tyne . The major
problems observed are (i) not manufacturing the forged component as
per open tolerances to Indian Standards. (ii) high rate of flash
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

71 of 77
generation, (iii) scale formation due to higher temperature and (v) high
degree of formation of iron oxide.

In order to produce quality forged product, the process of forging needs
modification in terms of (i) Selection / design of forging machine, (ii) design of
forging dies, (iii) atmosphere control while forging the component, (iv) control of
temperature during the forging operation. All these technologies require
improvement depending upon the type of action needed to the enterprises.

Before taking the component to the forging press, some of the units heat the
blanks in a tunnel type furnace. These furnaces are usually not designed properly
for uniform temperature throughout the tunnel. Many a times these furnaces do
not have any temperature regulation and control instrument in order to establish
uniform temperature in the zone where the blanks are passing through the
temperature prior to forging. The technology of design and manufacturing of the
kind of furnaces need up-gradation in order to improve quality of forging and
minimising the power cost.

• Trimming: The flashes produced in the forged blanks goes through an
operation known as trimming. A special type of die known as trimming die is
used for removal of the flashes. Most of the times improper removal of the
trimmed portion of the forged blank deteriorates the aesthetic value of forged
component; belt sanding operation if opted for will increases the cost. The
technology of trimming needs un-gradation by appropriate design and
manufacturing of products and also design of the system to make it semi-
automatic.
• Normalising: Normalising is an earlier operation prior to machining and after
the forging. The operation improves the microstructure while relieving the
internal stresses and improving the machinaility of the materials of
construction. In the absence of the technology, the materials remain hard after
forging and therefore cause drilling problem at the time of drilling. The
technology adopted by enterprises in the cluster does not follow the
temperature time cycle for the purpose of reducing the hardness (stresses)
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

72 of 77
and improving the microstructure. The technology up-gradation of this process
will be addressed through some practical solution. Different material needed
by the cluster required different cycles of heat treatment.
• Machining: The components requiring machining are not of very high
dimensional accuracy. Therefore not much care is taken for surface finish,
However, the productivity can be increased during machining by using right
speed, feed and depth of cut. These factors will definitely contribute to
productivity and therefore technological interventions is needed to increase
the productivity while maintaining the tolerances of IT 8 to 14. The technology
therefore demands various kinds of machining fixtures as well as
modifications in the machining . Suitable technology according to the type of
products and machining operation needs to be transferred to the
entrepreneurs.
• Heat treatment: Most of the enterprises in the clusters are not aware of the
process of hardening, quenching, tempering and other heat treatment
techniques and their effect on the heat treated part. The entrepreneurs require
training in these technologies and a few implementations can raise their
confidence as well.
• Painting: This most neglected area in agricultural Implement manufacturing.
No importance is imparted to surface treatment / preparation before painting.
Painting is done in the open / dusty atmosphere. Shortage of space and size
& weight of the product to be painted are some of the reasons for this neglect.
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

73 of 77
17. FUTURE CLUSTER MAP











Diagnostic Study Report
Agriculture Implements Cluster at Karnal

74 of 77
18. CDP (Agri. Imp. At Karnal) ACTION PLAN / Budget for the YEAR 2005–06




























This is a Road Map Not the Blue Print


Sl.
No
Particulars Total Amount Reqd.
(Rs. In Lacs)
Funds Required From
DC (SSI) (Rs. In Lacs)
Remarks
Market Development 0.21 0.17 Detail as per Annex-1
Technology Up gradation 2.10 1.85 Detail as per Annex-1
Common Facilities creation 0.50 0.50 Detail as per Annex-2
Capacity Building of Cluster Actors 2.80 2.30 Detail as per Annex-2
1
Other activities 1.00 0.75 Detail as per Annex-3
2
OE / POL / Taxi /Stationary
0.25 0.25

3
TE Expenses
0.35 0.35

4 Laptop Computer +Printer.for CDE

0.90 0.90

5 Furniture, Book Shelf, Pin-up Boards

0.25 0.25

6 Contingencies/ Escalation/ Misc.
Expenses
0.40 0.40

TOTALfor the year 2005-06 8.76 7.72
Projected Budget for the year 2006-07 15.00 12.00
Projected Budget for the year 2007-08 25.00 20.00
Total For 3 years 48.76 39.72
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

75 of 77
Annex-1


Source of Funds
(Rs. In Lacs)
C
a
t
e
g
o
r
y

S.
No.

Activity
O
b
j
e
c
t
i
v
e

D
u
r
a
t
i
o
n

&

T
i
m
e

p
e
r
i
o
d

Net-
working /
Collaborati
on
Total
Fund
Reqd.
(Rs. In
Lacs)
DC(SSI) SSIs SI / Fin
Inst

Benefici
ary
Expected

Outcome
1 Training Programme on
Marketing challenges

Strategic
Activity
Q-4;
3 days
Asson/
BDS / EDI
0.15 0.12 0.03 SMEs Better
Market
2 Awareness Prog. on
Marketing through Internet

-do- Q-4;
I day
Asson /
BDS /
0.06 0.05 0.01 SMEs Export
Inquiries I
.

M
a
r
k
e
t
i
n
g

3 Appointing NSIC as Selling
Agent for South Africa

Find out
scope of
Export
Q-3 NSIC - - SMEs Export
Market Info
1 Engineering Drawings
Reading / Interpretation
course (4 Nos)

Standardisa
tion
Q-2,Q-
3;
5 days
each
Asson./
BDS
4X 0.1
=0.40
0.40 SMEs Use of
Drawings by
SMEs
2 Awareness Programme on
Energy Conservation

Awareness
about
Enegry
Q-3;
I day
Asson/
NPC /
PCRA
0.10 0.10 SMEs Awareness
3 Study of present
manufacturing process &
identifying scope for
improvement
Process
improveme
nt
Q-2;
2
months
EDII / BDS 0.50 0.50 SMEs Technology
Improve-
ment
4 Energy Audit

Fuel Cost
Reduction
Q-3; 2
months
PHDCCI
SMEs /
BDS
1.00 0.75 0.25 SMEs Fuel
Economy
I
I
.

T
e
c
h
n
o
l
o
g
y

U
p

g
r
a
d
a
t
i
o
n

5 Awareness Programme on
ISO 9000 QMSs
Quality
Improvement
Q-4 BDS/
Asso.
0.10 0.10 SMEs Better
Quality
System
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

76 of 77
Annex-2
ACTION PLAN / Budget for the YEAR 2005–06 (continuous from the previous page)


Source of Funds
(Rs. In Lacs)
C
a
t
e
g
o
r
y

S.
No.

Activity
O
b
j
e
c
t
i
v
e

D
u
r
a
t
i
o
n

&

T
i
m
e

p
e
r
i
o
d

Net-
working /
Collaborati
on
Total
Fund
Reqd.
(Rs. In
Lacs)
DC(SSI) SSIs SI /
Fin.
Inst
Benefici
ary
Expected

Out come
1 Feasibility Study for CFC
(Testing)


Q-4 BDS
(PDTC or
RTC)
0.25 0.25 CDP Feasibility
I
I
I
.


C
o
m
m
o
n

F
a
c
i
l
i
t
i
e
s

C
r
e
a
t
i
o
n

2 Feasibility Study for CFC
(Proto Shop)


To find
out the
feasibility
of
CFC Q-4 BDS
( HAU or
NRFMTTC)
0.25 0.25 CDP Feasibility
1 Exposure Visit to
Developed Cluster
Trust
Bldg.
Q-3;
6-7
days
Asson. /
Sucsessful
Cluster
1.10 0.80 0.30 Cluster Trust Bldg.
2 Workshop with supporting
Institutes (Technology)

Q-4;
1 day
0.20 0.15 0.05 Cluster
3 Workshop with supporting
Institutes (Technology)
Exposure
to better/
alternate
Technolo
gies
Q-4
1 day
PDTC /
IIW /
NISST/
EDII 0.20 0.15 0.05 Cluster
4 Workshop with supporting
Institutes (Product Design)

Info. on
New
Designs
Q-4
1 day
HAU/
DWR/ EDII
0.20 0.15 0.05
Cluster
Awareness
on Better
Technologie
s / Designs
5 Seminar on Benefits of
Consortia Approach &
Meeting with RM Suppliers
Trust
Bldg
Q-3;
2 day
BDS/ EDII 0.30 0.25 0.05 Cluster Networking
I
V
.


C
a
p
a
c
i
t
y

B
u
i
l
d
i
n
g

6 Computer, Fax, Printer,
UPS for Asson.
Capacity
Bldg
Q-2 Asson 0.80 0.80 Asson Function
Better
Diagnostic Study Report
Agriculture Implements Cluster at Karnal

77 of 77
Annex-3
ACTION PLAN / Budget for the YEAR 2005–06 (continuous from the previous page)



Source of Funds
(Rs. In Lacs)
C
a
t
e
g
o
r
y

S.
No.

Activity
O
b
j
e
c
t
i
v
e

D
u
r
a
t
i
o
n

&

T
i
m
e

p
e
r
i
o
d

Net-
working /
Collaborati
on
Total
Fund
Reqd.
(Rs. In
Lacs)
DC(SSI) SSIs SI / Fin
Inst.
Benefici
ary
Expected

Out come
1 NDA services for Asson. /
liaison & implement. Work

Better
Imple-
mentatio
n of CDP
Q2 to
Q-4
Asson 1.00 0.75 0.25 Asson Asson
Function
better
2
Compiling Data Base of
BDS providers

Info
base
Q2 to
Q-4
EDII - -- - Cluster Information
to SMEs
3
Prog. Monitoring & Review
Meetings (3 Nos).

Monitor
-ing
Q-2,
Q-3,
Q-4
CDCC Cluster CDP on
Right Trac
4
Cluster News Letter

Capacity
Bldg
Q-4 Asson - - Cluster Information
Sharing
V
.

O
t
h
e
r

A
c
t
i
v
i
t
i
e
s

5
Networking with Public
BDs Provider
Capacity
Bldg
Q-3 EDII / SES 0.10 - 0.1
(Asson)
Cluster