Rajkot, the fourth largest city of Gujarat, occupies the heartland of the Saurashtra region and the Kathiawar peninsula. It is undoubtedly a darling of the manufacturing industry, not only in India, but for various overseas companies too. Interestingly, while it is the 35th-largest urban agglomeration in India, and despite being a heavily industrialised area, it bagged the ninth position for being the cleanest in the country. According to a survey conducted by a global think tank on urban affairs, the City Mayors Foundation, Rajkot is the 22nd-fastest-growing city in the world, and the sixth in line in India.
Historical background from the industrial perspective
Between April 15, 1948 and October 31, 1956, Rajkot was the capital of the state of Saurashtra. In 1956, it was merged with the Bombay State, only to be reincorporated into Gujarat later in 1960. Today, Rajkot forms the central, and a high premium, industrial area in the Saurashtra-Kutch region.
Since decades, Rajkot has remained the leading producer of submersible pumps and diesel engines, which are still manufactured in the city, marketed throughout the country, and exported to the rest of the world.
“Rajkot has remained the hub for manufacturing and industrial development since the last 70 years,” says Parag Tejura, President of the Saurashtra Vepari Udyog Mahamandali (SVUM), a young and energetic association of entrepreneurs striving for their own multi-faceted development. He adds proudly, “Rajkot manufactured many necessary metal and engineering items of which diesel pumps and forging items created a name for themselves. Today, the medium and small scale industries have so multiplied and diversified that Rajkot delivers to almost every industrial manufacturer in India. Especially, in the automobile industry, every single manufacturer worldwide uses spares and components manufactured in Rajkot.”
Explains Ankit Kakadiya, Manager, Shree Gopal Forge and Member of the Rajkot Engineering Association (REA), “Till the 1980s, diesel engines were the most famous engineering products that came from Rajkot. It had a market all over India. The manufacturers started diversifying around the same time as they noticed that the diesel pumps could be tweaked around and put to use for various other purposes, such as for irrigation, to pump out water from the wells, in hydro – to produce electricity, and so on.”
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Locational and comparative advantages in Rajkot
Located on the banks of the Aji and Nyari rivers, Rajkot is situated 245 km away from Gandhinagar, the state’s capital. Figuratively, this seems to have distanced this city of extremely talented craftsmen from the state’s political ironwill, affecting the city’s ease of doing business. From Mumbai, through which most of its international business still happens, Rajkot is 683 kilometre away by road.
The city has a huge potential for export and import businesses owing to the proximity of the Gulf of Kutch in the north, which hosts the all-weather port of Navlakhi on one end and the port of Mandavi on the other. The Gulf also has one major port, the Kandla, which enables international ferrying.
Rajkot has its own airport that provides air connectivity with Mumbai and Delhi. However, travelling to any other major cities of the country, or offshore, has to be via Mumbai.
The Alang shipyards that recycle almost half of the world’s salvaged ships are located 50 kilometres southeast of Bhavnagar, on the Gulf of Khambat. It offers a tremendous advantage for metal and engineering products manufacturers in the region by providing scrap metal ingredients at very effective costs.
Infrastructure and connectivity
Infrastructure is something most of the Rajkot residents and manufacturers are quite depressed about. It’s only very recently that the city got its double freighted railway tracks, connecting it to Surendranagar, a neighbouring manufacturing region.
The airport is a small one and provides connectivity to Mumbai at a very high cost. It is with great difficulty and after mammoth efforts, a flight to Delhi has been started. It is not cost effective inform the leaders of the industrial associations. The Vice President of the Rajkot Chamber of Commerce and Industry (RCCI), Shivlalbhai L Patel says, “If we travel to Delhi or Mumbai from Ahmedabad, the ticket costs something around Rs 3000, but from Rajkot, Jet Airways exercises a monopoly and charges anything between Rs 8,000 – 15,0000.”
The highways are nothing much to talk about but the major problems around roads lie within the city – even the industrial estates are not fortunate enough to tackle this problem effectively.
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Gujarat Industrial Development Corporation (GIDC) was in 1962 to accelerate industrialisation in the state. It began by identifying locations for industrial development and creating necessary infrastructure in these areas. This led to the formation of industrial estates. The intention was to provide facilities such as roads, drainage, electricity, water supply, factory sheds, and other infrastructural amenities etc in a way that manufacturers can straightaway focus on their work at hand. “The first industrial estate in India, Umakant Pandit Undyog Nagar, came up in Rajkot, in September 1955,” says Tejura, and it became a huge success.
Industrial estates played a particularly positive role in developing the industrial activity and prosperity in the country per se. Yet, for Rajkot, government supported industrial estates haven’t been such a nice experience. “Government initiatives, be it in providing land for manufacturing, water for industrial purposes, or supportive policies for the manufacturers, have been dismal.
Industrial estates are a failure when it comes to the government owned ones. The privately managed ones gets things done but suffer due to lack of infrastructure – roads, drinking water, etc. The villages in which some of the largest estates are located don’t have Nagar Pallikas but Gram Panchayats, reducing their budget allocation for development. There is absolute lack of political will and the bureaucracy makes it worse, when it comes to infrastructure in Rajkot,” says Patel.
Anilbhai P. Bhoraniya, Vice President, Shapar Veraval Industrial Association, one of the largest in the region, explains that Shapar and Veraval came together and combined their resources to jointly develop the area for the manufacturing industry. It hosts some important large scale and medium scale manufacturing units including that of Mahindra & Mahindra and employs about 2-2.5 lakh wage earners.
“We recently got permission and financial support for constructing an over bridge across the highway dividing Shapar and Veraval. This is estimated to cost around Rs 40 crore and was long due to remove the bottleneck created by traffic issues and lack of proper roads. We are now working to solve drinking water issues, to install our own fire brigade station, and a government supported pharmacy for the people employed in the estate,” informs Bhoraniya.
Mohit Dobaria of Accurate Technocast Pvt Ltd, which is a medium scale auto component manufacturing unit in the Shapar Veraval Industrial Estate considers himself fortunate to have his unit here. “Drinking water is a major problem in these areas but we get a lot of support from the association in solving imminent problems that creep up during the daily running of business. We don’t have to worry about power and electricity, skilled workers are easily available, and there’s camaraderie among the same industry manufacturers that helps us tackle any short term problem. It is so convenient to have your unit located in one of these estates, why would anyone want to have it outside, and be all on your own,” he opines.
Industrial estates were conceived to promote small-scale industries by providing infrastructure and other amenities, by improving operational efficiency through common facilities and knowledge accumulation, and through collective interest of entrepreneurs on the same interest area. In Rajkot, all these and more have been provided by private industrial players, rather than by government initiatives.
Availability of workers and skilled labourers
It is the inherent nature of the Rangila Rajkotians to take the plunge into entrepreneurship and commerce. “Working for others is not in our blood,” says Kakadiya. “This makes it difficult to find daily wagers from around the place, although the rural neighbourhood does supply some”.
The workforce for these industrial cores actually comes from UP and Bihar, people who migrate for work, he explains. “When the government started the 90-day employment for all policy, it made life a little easier for us to get ready labour, but the issue remained that by the time they got trained, they were ready to leave. After the 90 days engagement, they’ll prefer to go back to their villages to take care of their crops and household. For us, the demand and supply of labour becomes hard to match,” says Kakadiya.
Over the last few years, manufacturers have moved to advanced machineries that are less labour intensive. The CNC machines need one operator while the lathe machines needed four. Although the CNC machine operator demands four times the salary of the lathe machine operators, they are also willing to work the extra hours during times of high demand, enabling an amiable solution to sickening labour unavailability.
More than numbers, the leaders of the industrial associations are worried about the potential of the workers. “There is an acute need of training and education among the people here. There are over a 1000 units manufacturing auto components here in Rajkot and they export their products to big companies but our colleges do not have a single curriculum running on automobile engineering. The same goes for ceramic engineering, leather and textile industry faced courses, and so on.” It is imperative that the educational institutions in Rajkot are motivated to start industry facing courses to educate and train the young force looking forward to join the family business.
The People – Rajkot’s greatest resource
Despite all the infrastructural problems around the town, and more than any other resource possessed by the region, it’s the human resources of Rajkot that yields gold. The people of Saurashtra and Rajkot region are known for their hard work, honesty, and talent in workmanship. According to the 2011 census, the urban area of Rajkot has a total population of 1,286,678 and the average literacy rate is 87.80 %, which is higher than the national average (82.20%).
Patel exclaims that Rajkot is like mini-China; every single item that any industry needs is manufactured here. People in this region are extremely hardworking and have a knack towards craftsmanship. Although the general education among the people here is only till the 11 or 12th grade, innovation is more rampant in this part of the country, and even goes unnoticed.
Tejura echoes the mood. “Show us any new piece of engineering, and we will make it in less than 10 days,” he says exuberantly. Yet these small and middle class manufacturers do not get the reward they deserve for their talents because of their lack of education, awareness, and government support. To show an example, Tejura speaks of the three wheeled tractor innovated by a small time agricultural equipment manufacturer, which is being used in the farms in the state for the last ten years with great success. “While normal tractors would cost you anything above Rs 5 lakhs, this three wheeled tractors cost less than Rs one lakh; yet the government is not awarding it the due registration as a tractor because traditionally tractors have four wheels. Hence, this product is still not in the market and the innovator cannot have any kind of recognition. Instead of coming forward and promoting this kind of technology and innovation and help develop the core sectors in the country, the government is sitting on the files and the paper works for the last ten years”, he adds.
Speaking to several proprietors of the small and medium sized manufacturing units in the region makes one thing clear – they are concerned about the work – the quality and the quantity of it, the orders they receive, the process of production and delivery. The fringe aspects of marketing, or promoting their products, advertising and creating brand values, streamlining processes of production and management, and even for that matter, crafting wise pricing policies are often neglected.
“The people here are too honest. They live by their words and the quality of their works. This is one reason we are trusted all over the world”, claims Patel. Look at this from a different angle, and you will see how the same manufacturers get exploited, says Tejura.
He cites an example when he asked one of the traditional jewellery manufacturers cite double the price to a foreign client, who felt the deal was still so very cheap. “This is true of all the industries in Rajkot. Smarter process management can further reduce the manufacturing cost and there is so much scope to export and cater to a wider market, to earn a better price for the products,” he says.
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Skill development and getting smarter
Tejura and his team, through SVUM, helps entrepreneurs and manufacturers open up to the day’s competition with the adoption of smart technological processes, appropriate management philosophies, knowledge in marketing and financial management, and more.
“We do not want to depend on government actions and their sloth bureaucratic ways. We go to the roots, reach the local people and teach them how to adopt good and efficient practices for a smart business. Most manufacturers here push their relatives to do the money counting. We convince them to employ professionals and enjoy the benefits. We teach them how we can use the ports to export our products directly to foreign countries and not accept the traders’ rates,” Tejura says.
Once again, this is an area Patel agrees to Tejura promptly, saying “Whatever the manufacturers here have achieved, they have achieved by virtue of their hardwork and skill. The government has given us zero support when it comes to policies and infrastructure. The manufactures get around and solve their own problems and scale heights before the government gets to consider our requests.”
Key industry sectors present
According to the District Industrial Profile of Rajkot district, created by the Government of India’s Ministry of MSME, there are 20, 431 registered MSME units in the district of Rajkot alone. It is India’s 2nd largest solar water heater and auto-parts manufacturer. Manufacturing of engineering products occupies a large part of the industrial activity.
This includes manufacturing of agro machineries, machine tools, machineries for food processing and packaging industry, textile equipment, and so on. Foundry and forging industries producing dyes, cast, and other equipment take a prominent position as it has some of the largest CNC machine and auto parts manufacturers and about 500 foundry units.
The Gujarat Industrial Development Corporation (GIDC) and Gujarat State Financial Corporation (GSFC) support and encourage the heavy and small scale industries in the region. Diesel engines, pumps, bearings, kitchenware, watch components, automobile components, and the forging and casting industries form the strong base of the medium and small scale industries.
Some of India's leading snacks manufacturers also come from Rajkot.
Some of the prominent industries are:
Construction Industry Equipment: One of the most important indicators of a developing nation is its well developed infrastructure, which translates to roads, flyovers, bridges, buildings, houses, dams, tunnels and more. Rajkot delivers high quality construction machinery to the country’s fast growing construction industry.
Imitation Jewellery: The market for imitation jewellery has emerged as one of the rapidly growing business segments of the Saurashtra-Kutch, accelerated by their low cost, innovative designs, and opening up of new markets, and scope for exports. In its latest report “India Imitation Jewellery Market Outlook 2018," RNCOS suggests that the imitation jewellery market in India is anticipated to grow at a Compound Annual Growth Rate (CAGR) of around 20% during 2014-2018.
Pharmacy and medical equipments: From Rajkot, formula based drugs are exported to Asianand African countries, such as in Philippines, Sri Lanka, Thailand, Nigeria, Kenya, and Ghana. Bulk drugs are also being exported for EU and US. Rajkot is also well known for orthopedic equipment and supplies like Rehabilitation Products and Aids. Manufacturers of hospital scrubs and linens, medical furniture and disposables, Autoclave and sterilizers, physiotherapy and dental equipment in the region have great potential.
Engineering products: Principal engineering products manufacturers in Rajkot mainly deal in diesel engines and pumps. There are about 375 functional manufacturing units in the concentrated area that has a cumulative turn over of Rs 200 crores. It earns something around Rs. 40 crores through exports and the cluster of industries employs 7500 skilled labourers.
Foundry: The group of industries in the foundry area manufactures grey iron castings for oil engines, automotives, textiles, machine tools, pumps, valves, as well as graded casting. Around 20000 workers are engaged in 505 functional units in the cluster with a turnover of Rs 2700 crore. The value of exports stands at 350 crores.
Automobile parts: Connecting rods, pistons, crank shafts, cam shafts, liners, sleeves, air cooled block, spares and more are manufactured in around 303 auto component manufacturing units in Rajkot. The turnover is at 750 crores, with value of export recording Rs 400 crores. Approximately 9500 wage earners are employed here.
Pump sets: Submersible and centrifugal pump sets are manufactured in around 161 units that collectively has a turnover of Rs. 300 crore. Value of exports stands at Rs. 55 crores and around4700 people are employed.
Service Industries: Rajkot also has a prominent service sector and the potential and scope of development in this sector is fast improving. Retail trade and small businesses, transport operators, laundry and dry cleaning, repairing of electronic gadgets and automobiles, computer based services and hardware maintenance are the notable ones.
Future Prospects and Conclusion
Rajkot is a name extremely esteemed and trusted among the manufacturing industries of the world. The government needs to take note – set aside their political differences and channel more resources here. The entrepreneurs though are not waiting for that to happen. They are carving out their own destinies. What they need, as support, is from their own fraternity.
Says Tejura, “It’s high time the auto industries should set up shops here. We give them every component. The completed automobiles should run out from here. And this goes for the big names in several other industries.” He also informs that Rajkot has a huge scope to develop the textile industry. The readymade garments industry can have a big boost in the region. The Coconut Development Board has joined hands with the locals and has started coconut farming in the 1600 kilometer long coastal area. This will lead to the development of coir production, and relevant industries, as well as production of toiletries and cosmetics, which already occupies a good spot.
The current trend of industrial growth is towards the engineering and auto ancillary sector. Exports in the area of machine tools, CNC machines, agro products, and ceramic products can easily be pumped up.
The author is a Vijayawada based freelance writer.