State Of The Economy 2017

Far From Frenetic

Engineering, ancillary units struggle as demonetisation throttles demand and squeezes cashflows in Chakan

Soumik Kar

 

Chakan has many things going in its favour. About 30 kms from Pune, the cluster is also well connected to Mumbai and Nashik, thus giving it an enviable geographical advantage. It has about 100 large-sized units, 150 mid-sized companies and 7,000 small and medium enterprises (SMEs). Considering its size, a combined turnover of Rs.100,000 crore employing over 300,000 people, Chakan has huge economic implications for the region. Home to automotive OEMs such as utility major Mahindra & Mahindra, Bajaj Auto, Mercedes-Benz, General Motors, Jaguar Land Rover and Volkswagen, the cluster also doubles up as a strong ancillary hub. Bosch, Lumax Industries, the Minda Group, the Varroc Group, Endurance Technologies and Autoline Industries are some of the auto ancillary companies that have a presence in Chakan.

Having the big guys around has proven to be a boon for SMEs in more ways than one. Not only are they forging long-term partnerships with the best names in the automotive industry, but also imbibing their best practices when it comes to manufacturing. “We have learnt a lot from our parent company in terms of production techniques. We have improved our processes and reduced the inventory cycle, thus bringing down our costs. Today, in fact, the situation is such that when our Indian employees go to Italy they are able to suggest a change or two,” says Kamal Wadhwa, executive director at Dell’orto India, which is the local venture of Italian firm Dell’orto that specialises in manufacturing carburettors.

“Any company that set up shop here would like to have their suppliers or vendors to be as efficient and productive as they are. Once that happens at a mass scale, it becomes the norm and a key advantage for the clusters such as Chakan where productivity skills are already embedded,” adds Anant Sardeshmukh, director general and member of exe

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