Cluster Based SME Development · Cluster Development · Light Engineering Clusters of Bangladesh · SME Cluster Development · SME Cluster Development in Bangladesh

Tapping potential of light engineering clusters

Tapping potential of light engineering clusters

Md. Joynal Abdin

The Financial Express on August 29, 2015

Light engineering is known as the mother of heavy industries. There is no universal definition of light engineering industry. It usually refers to the small and medium enterprise (SMEs) with comparatively lower capital investment and operating with manual to semi-automated machineries. There are about 40,000 light engineering entities in Bangladesh with about US$ 14.28 billion investment. About six million people are directly or indirectly dependent on this sector.

Bangladesh’s light engineering enterprises can be divided into three major categories i.e. foundries, machine shops and repair workshops. Foundries are mainly producing irrigation items like metal casing of pumps, liners for engines, different components of engines, pumps and power tillers, etc. agricultural product processing equipment like rice hullers, oil expellers, paddy threshers, etc. and various types of small spare parts for different engines including automobiles and other industrial machineries. Machine shops cast iron as basic materials and do the machining jobs. Repair workshops are doing different types of repair jobs required by agricultural, industrial or transport sector.

There is no universal definition of cluster. Different countries, international organisations, and experts have defined it differently based on the socio-economic conditions of respective community / country. Michael Porter, who is recognised as the founder of industrial cluster concept, defined the cluster as ‘geographic concentration of interconnected businesses and associated institutions in a particular field’. For the first time in Bangladesh, the SME Foundation has defined cluster as ‘a a concentration of 50 or more enterprises producing similar products or services and is situated within an adjoining geographical location of around 5 km radius and having a common strengths, weaknesses, opportunities and threats’. Based on the above definition, the SME Foundation has identified 31 light engineering clusters located in 18 districts of Bangladesh with about 7,500 enterprises.

Light engineering SMEs are not only located at the clusters but also are scattered all around the country, especially beside all bus stations in all district and upazila towns of Bangladesh. As we have limited resources, we could go for developing 31 light engineering clusters for increasing their role in GDP growth, employment generation as well as poverty alleviation of the country.

The following light engineering clusters have been located: Dakkhin Chakbazar, Barisal Sadar, Purbo Medda, Brahmanbaria, Pathantuli – Badamtoli, Chittagong, Pathantuli-Kalabagan, Chittagong, Muradpur-Panchlaish, Chittagong, Pahartoli Shoraipara-Colonel Hat, Chittagong, Sitakund, Chittagong, Anderson Road, Cox’s Bazar, Station Road, Comilla, Old Sunagaji Bus Stand, Feni, Lalpul, Feni Sadar, Jatrabari, Dhaka, Lalbagh and adjacent areas, Wari and adjacent areas, Dhaka, Narinda, Dholaikhal, Dhaka, Tipu Sultan Road and adjacent areas, Sutrapur, Bonogram, Dhaka, Faridpur Sadar, Nagua and Hybatnagar, Kishoreganj, Madaripur Sadar, Jessore Sadar, Jhenidah Sadar, Khulna City Corporation, Railway Market, Bogra, Naogaon Sadar, Madrasa More, Chakrampur, Natore, Pabna Sadar, Vodra- Talaimari, Rajshahi, and Baniyachang, Habiganj.

It is stated that Dolaikhal and Jinzira could produce anything (if given sample) could be used in rickshaw to airplane. Actually they are producing import-substitute spare parts for almost every industrial / service / household sectors. Light engineering enterprises are producing and repairing thousands of instruments / machineries.

Huge amount of metals are used by the light engineering clusters as raw materials like MS Bar, SS Bar, Cast Iron, Sheep breaking iron, Copper, Brush, Aluminum, Chrome, HI carbon, Rubber, Glow, CI plat, SS Plat, MS Plat, Welding Rod, Zink, Pig Iron, Bearing, Carbon Cell, Plastic Glow, Plastic Nylon, Steel, Nickel, and lead etc. Most of the raw materials are basic metals and are using old machineries imported from India, China and even Japan before 10 – 25 years. As a result, productivity and quality are low here. Major machineries used in light engineering clusters are lath machine, milling machine, shaping machine, grinding machine, planner, power press, shaper, drill, hydraulic press, matron steel, leveling machine, diesel engine, and white beat, etc. There are a few factories which use modern machineries like CNC machine, rectifier etc.

Major challenges of light engineering sector of Bangladesh are as follows:

  1. Limited ability / inability to select appropriate metals / metal composition,
  2. Limited ability to provide appropriate treatments on the products,
  3. Limited ability / inability to produce / design mold and dye required for other sub-sectors like plastic,
  4. Absence of modern technological knowledge and appropriate machineries to increase productivity and product quality,
  5. Absence of product design, research and development centre,
  6. Complex process of getting electricity, gas connection and load shedding during production hours,
  7. Free entrance of imported substitutes with under-invoiced price,
  8. Import dependency of raw materials,
  9. Scarcity of skilled / trained manpower, and
  10. Absence of a modern laboratory to ensure quality of manufactured products.

Light engineering clusters have potential to contribute more in terms of increasing GDP (gross domestic product) growth, employment generation and reducing import expenditures. Therefore, following steps have to be taken for promotion of light engineering industries as soon as possible:

  1. Establishing common facility centres in all light engineering clusters,
  2. Setting up specialised institute / training centres to train up light engineering entrepreneurs / workers on metal selection, composition, different treatments, and mold dye designing etc.
  3. Financial assistance could be given to facilitate modern machinery adoption.
  4. Undisrupted electricity connection could be ensured to increase productivity of these clusters.
  5. New markets for light engineering products could be explored in neighbouring SAARC countries including India, Nepal and Bhutan.
  6. Light engineering entrepreneurs could be trained up for maintaining international standards of products and searching export market for their products.
  7. Duties on raw materials (all basic metals) could be zero to reduce import dependency of other dependent sectors.
  8. Modern testing laboratory could be established to inspire light engineering entrepreneurs for producing international standard products.
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One thought on “Tapping potential of light engineering clusters

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