Fan Industry of Pakistan

Presented By; Yousuf Hatim (SP08-BB-0137) Murtaza Asgher Ali (SP08-BB-0083)

Agenda 
         

Introduction Historical Background Figurative overview Variety Of Products Division Of Units Raw materials Manufacturing Process Major Companies Average Prices Exports Pakistan¶s Share in world Exports  

      

Regulatory Body & institutions Linkages Importance of fans Increasing demand Manufacturers viewpoint Government¶s roles SWOT analysis Problems Recommendations

What are Fans? 

A fan is a device used to agitate or move air or gas; it can be categorized into four distinct types:
Centrifugal Propeller Axial Flow Mixed Flow 

Domestic Fan
The fans that consume less than 125 watts of energy. 

Industrial Fan
The fan that consume over 125 watts of energy.

Introduction 

The fan industry is mainly clustered in the four major cities namely, Gujrat, Gujranwala, Lahore and Karachi. The industry belongs to the light engineering industry category, and is one of the industries that existed at the time of independence. 

Introduction 

Around 40% of the total sales are five large firms in Gujrat and two in Gujranwala. Fan industry is producing about seven 7 million fans per annum. Out of the total production, approximately 30% fans consist of pedestals, 7 % brackets and the remaining 63% are ceiling fans. 

Historical Background 

Electric Fan was invented in 1886 by Schulyer Wheeler. Before partition in 1944, fan manufacturing was started by M/s S.A Fans in Gujrat. In 1950s, it was declared as cottage industry and its more than 50% units still fall in this category. In 1992-93, only 200,000 fans were exported to Iraq and Yemen. In 1999, 3 million fans were produced from which 50,000 were exported.    

Figurative Overview
2000-01 Installed capacity Capacity utilization Total production Direct Employment 25000 people Indirect Employment Annual Revenue Exports Imports GDP Contribution Capital investment Rs. 2.25-2.7 billion US $3.89 million Rs. 1.5 billion 40,000 people Rs. 5.25 billion US $16.66 million US $160,000 Rs. 5 billion 5-6 million fan / year 50% 2.5-3 million fan/year 2005-06 7 million fan / year 80% 5.6 million fan / year 30,000 people

Variety Of Products 

The industry is producing a variety of products in different sizes and designs, these are:
Ceiling Pedestal Table Table-cum-pedestal fans Circumatic fans Wall bracket Exhaust fans Propellers

Bracket Fan

Ceiling Fan

Industrial Fans

Exhaust Fans

Louvre Fans

Division Of Units
Small Scale Units Units Project Cost Employment Production Revenue Generated 450 Rs. 0.5-1.0 Mn 20-25 2,000-10,000 Rs. 2.0-5.0 Mn Units Project Cost Employment Production Revenue Generated Medium Scale Units 50 Rs. 10-20 Mn 60-80 20,000-60,000 Rs. 150-250 Mn

Large Scale Manufacturing Units Project Cost Employment Production Revenue Generated 8 Rs. 250-350 Mn 200-300 60,000-250,000 Rs. 150-250 Mn Units Project Cost Employment

Vendors 1000 Rs. 0.45-1 million 5-20

Raw Materials Used In Production 

Some of the raw materials used in the manufacturing of a fan are:
Electric steel sheets Aluminium Copper wire Ball bearing Steel rod PVC

Manufacturing Process
Body Plate of Aluminum Rotor Stator Tooling & Grinding Tooling & Turning Axle Fitting Aluminum Blades

Drilling

Winding

Pressing By Dies

Fitting of Rotor Stator in Body & Nakka Checking Painting

Fitting of Blade Carrier Painting Fitting & Assembling Packing & Checking Store

Major Electric Fan Companies
BRAND NAME PAK FAN G.F.C. FAN YUNUS FAN ROYAL FAN METRO FAN COMPANY M/S Wahid Industries Limited, G.T. Road, Gujarat M /s General Fan Company(Pvt) Ltd, G.T. Road, Gujarat M/s Younas Metal Works , G.T.Road, Gujarat M/s Rafiq Engineering Industries (Pvt) Ltd, , G.T. Road, Gujarat M/s Hi Tech Industries (Pvt) Ltd, , G.T. Road, Gujarat

Average Price (Rs)
2003
Millat Fans Pak Fans Royal Fans Younas Fans Parwaz Fans G.F.C Fans

2007
Rs. 1850 Rs. 1750 Rs. 1650 Rs. 1600 Rs. 1600 Rs. 1600 Rs. 1675

2009
Rs. 1900 Rs. 2050 Rs. 1850 Rs. 1825 Rs. 1850 Rs. 1850 Rs. 1890

Rs. 1625 Rs. 1470 Rs. 1563 Rs. 1512 Rs. 1391 Rs. 1282

Average Price Rs. 1474

Exports
Year 2003-2004 2004-2005 2005-2006 Exports (US
$ Million)
50 45 40 35 30 25 20 15 10 5 0 Exports (US$ million) 2003-04 2004-05 2005-06

11.8 14.2 16.66

Pakistan·s Share In The World·s Exports
EXPORT OF DOMESTIC FANS Country Pakistan Singapore Uk Taiwan China Thailand Germany Usa Italy Spain Japan Other Shares 0.1% 1% 1% 20% 44% 6% 5% 3% 2% 2% 2% 13% France Netherlands Sweden Korea Canada Uk Italy Usa Japan Germany Taiwan EXPORT OF INDUSTRIAL FANS Country Pakistan Shares 0.02% 2% 3% 3% 1% 5% 4% 9% 14% 19% 33% 7%

Regulatory Body & Institutions

PEFMA 
  

Pakistan Electric Fans Manufacturers Association. PEFMA was incorporated under the companies ordinance 1984 on 12th December, 1989. The area of operation covers the whole of Pakistan including Azad Jammu & Kashmir. There are about 148 registered members PEFMA was providing the following facilities to its members. Quality Awareness seminars Information provision regarding the international trade fairs Arrangement of trade delegations through TDAP Settlement of disputes among members Meeting platform to conduct meetings with several stakeholders Organize courses regarding technical education with FDI 

Fan Development Institute (FDI) 

FDI was established in Gujrat in 2001 by the joint efforts of Trade Development Authority of Pakistan (TDAP) and the Ministry of Science & Technology (MOST). The institute possesses the role of µTraining Centre¶ for the fan industry and also fulfils the laboratory testing requirements of the industry. 

Gujrat Fan Cluster 

In collaboration with Ministry of Science & Technology (MOST) and Pakistan Electric Fan Manufacturers Association (PEFMA). In November 2001

Others 

Other Institutions are;

Chamber of Commerce & Industry, Gujrat (GtCCI) Banks /Financial Institutions Small and Medium Enterprise Development Authority (SMEDA) Trade Development Authority of Pakistan (TDAP) Technical Educational and Vocational Training Authority (TEVTA) Punjab Small Industries Corporation (PSIC) Pakistan Council for Scientific & Industrial Research (PCSIR) Pakistan Standard Institution (PSI)

Linkages 

Backward Linkages
Steel industry Wire manufacturing Ball Bearing Paint industry Plastic industry Transportation Labor 

Forward Linkages
Machine manufacturing Construction industry Air conditions Exports Banks & financial institutions

Importance of Fans 
          

Made life comfortable Avoid mosquitoes Improvement in hygiene Enhance the energy Improvement in educational environment Used in cars for cooling Ventilation Cheaper product Consumes low energy More use in rural areas; (60% are used in rural areas) Air condition is expensive Used in different industries

Increasing Demand 
   

  

Due to increase in population Migration of people towards big cities Increase in exports Local demand for quality product is increasing Climate of Pakistan People are becoming quality conscious Per capita income is increasing Electricity projects in rural areas

Manufacturers Viewpoint 

Fan manufacturers have enhanced the prices of fans by 20 per cent due to a µ100 percent¶ increase in raw material prices. Manufacturers could not afford to continue the policy of lifetime guarantee in the wake of continuous hike in input prices. The exporters of fans and allied goods could not survive if they do not have sufficient stocks of imported raw materials as well as finished goods so as to fulfill the demand of the domestic as well as international buyers.  

Government·s Role 

To avoid the mis-declaration, accommodate the inputs of industry and to facilitate the capital goods industry around 96 new tariff lines have been created. The duties on imports have been cut down to 0%, 5%, and 10% from 5-25 percent. Provides every opportunity to the businessmen to participate in various international fairs and helps them to move forward  

SWOT Analysis

Strengths 
    

Presence of large manufacturers; Fan product: durability & performance; Availability of raw material; Presence of specialized vendor industry; Local machinery manufacturers; Presence of Fan Development Institute.

Weaknesses
Lack of proper marketing techniques;  Low marketing budget;  Old technology;  High wastages;  Monopoly of raw material providers;  Non-standardization of parts;  Exploitation by the distributors & retailers;  Labor not trained from any technical training institute;  Less technical assistance available;  Low working capital;  Load shedding of Electricity & Natural Gas during the peak manufacturing season. 

Opportunities 

Threats   

New and unexplored international markets; Unutilized production capacity; Product/material diversification.   

Quality standards and certifications; Competitions with international manufacturers like China & other countries; Fan products more light weight, less priced, attractive; Dependency on Imported raw material.

Problems 

The competitive products in the international market were light weight, plastic bodied, attractive and low priced. The immediate concern of small manufacturers was the problem associated with the µDistribution channel¶, especially in the domestic market. The labor is not trained from any technical institute, and the seasonality effect had also reduced the productivity and efficiency of labor. Most of the small & medium manufacturers were using old technologies in their production facilities, which was a major reason for increased costs and lower productivity.   

Problems (cont..)   

Role of PEFMA as a representative body of Gujrat fan manufacturers had been largely diminished over the passage of time. The association was hardly meeting its expenditures because of having no other source of income. Late dissemination of information and palming only the selected few were the usual dissatisfaction remarks about GCCI. The need of a specialized industrial estate was highlighted during the interactions. The entrepreneurs even exhibited keen intentions to invest for the purpose.

Recommendations 
        



Provision of Fan market information (Local & International). Exposure visits of potential markets. Participation in Trade fairs/exhibitions. Advertisement at network level (Local). Seminars on Quality standards.. Awareness workshops on training. Strengthening of the role of FDI: meeting platform; introduction of customized training courses. Seminar on increase in productivity level through technology upgradation synergies. Meetings with stakeholders to solve financial problems linked with procurement of more expensive technologies. Domestic market exploration on Industrial fans usage. Information provision regarding the World trade on various types of fans with different materials.

THANK YOU

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