FAN INDUSTRY

Submitted To: Sir Afaq Ali Khan

Tabinda Afzal Fa09-bb-0083Beenish Habib Fa09-bb-0017

Introduction:• Fan is a daily use item.

• Its utility increases, especially in the summer season.

• Industry has a capacity of 7 million fans but producing about 4 to 5 million fans.

• Fan industry has emerged as one of the fastest growing industry.

• Fans export was restricted to Saudi Arabia, Dubai and other Middle East countries,Srilanka and Bangladesh.

• The fan industry is mainly clustered in the four major cities namely, Gujarat, Gujranwala, Lahore and Karachi.

• There are 300 units; Gujarat 75 units, Gujranwala 210 units and other 15 units.

• The industry is producing a variety of products in different sizes and designs.

• The industry supplies quality products to the local markets.

TOTAL PRODUCTION DISTRIBUTION:

• 30 percent fans consist of pedestals• 7 percent rack etc• 63 percent ceiling fans

History:• First electric fan was manufactured in 1832.

• When we go through the history of fan manufacturing industry a reality comes in our view, that Sheikh and Mughal families which dwell in Gujarat-Gujranwala, have played a very significant role in the progress of this industry.

• Sheikh gets spare parts and Mughal make fans and trade them.

• Fans have been manufactured in Pakistan since its inception in1947 and all of the fan manufacturing is in the private sector.

• 1939 establishment of NATIONAL METAL WORKS in Gujarat.

• The industry belongs to the light engineering industry category and it is one of the industries that existed the time of independence.

• In early 1950s it was declare as cottage industry and its more than 50%units are still fall in the category.

WHY IT IS CALLED COTTAGE INDUSTRY?

• It is because majority of the units does not have full facilities of production under one roof.

• Most of the units are simply assembling units; therefore do not gives brand names to their products.

Fans are used in…• Typical applications include climate control, vehicle

and machinery cooling systems, personal comfort (e.g., an electric table fan), ventilation, fume extraction, winnowing (e.g., separating chaff of cereal grains), removing dust (e.g. in a vacuum cleaner), drying (usually in combination with heat) and to provide draft for a fire. It is also common to use electric fans as air fresheners, by attaching fabric softener sheets to the protective housing. This causes the fragrance to be carried into the surrounding air.

Types Of Fans:

• Ceiling fans.• Pedestal fans.• Table fans.• Table-cum-pedestal fans.• Circumatic fans.• Louvre fans.• Wall bracket fans.• Exhaust fans.• Propellers.

CEILING FANS:• A ceiling fan is a device suspended from the ceiling of a room, which employs hub-mounted rotating paddles to circulate air.

•The first ceiling fans appeared in the early 1860s and 1870s, in the USA. At that time, they were not powered by any form of electric motor. Instead, a stream of running water was used, in conjunction with a turbine, to drive a system of belts which would turn the blades of two-blade fan units.

•The prices around PKR 2,000 – 2,700

EXPORT Of Ceiling Fans:

• Year Ceiling fan :(000 Rs)• 1989-90 134• 1992-93 81,762• 1993-94 18,636• 1998-99 2,552• 1999-00 15,689• 2000-01 59,259 • 2001-02 208,963• Source: Federal Bureau of Statistics.

Pedestal fans:

• An electric, oscillating fan supported by an adjustable, detachable stand

• Easily portable.

• Prices vary from around PKR 3,500 – 4,200.Prices vary from around PKR 3,500 – 4,200.

EXPORT of Pedestal Fans:• Year Pedestal fan :(000 Rs)• 1989-90 1,289• 1992-93 1,826• 1993-94 15,137• 1998-99 32,432• 1999-00 66,370• 2000-01 161,554• 2001-02 183,613• Source: Federal Bureau of Statistics.

Table Fan:

• Electric Table Fan is one of the common electric appliances used in houses, offices, shops and business establishments

• Prices around PKR 2,500 to 2,800

EXPORT of Table Fans:

• Year table fan: (Million Rs.)• 1998-99 1.1• 1999-00 --• 2000-01 --• 2001-02 0.9

Circumatic fans:

• Circo fans help you stay cool with precision-focused, high velocity air movement to bless you with cool blow of air

• Around PKR 2,300 to 2,600

Bracket Fan:

• This is also a type used commonly

• Around PKR 2,200 – 2,450

Louvre Fans:

• Mostly used in offices, schools, colleges and universities

• Prices from around PKR 2,150 – 3,500

Exhaust Fan:• A fan that moves air out of an enclosure

• Around PKR 1,400 to 3,200

EXPORT of Exhaust Fans:

• Year Exhaust Fans. (Million Rs.)• 1998-99 0.1• 1999-00 0.1• 2000-01 0.1• 2001-02 --

Fan Development Institute (FDI):

• FDI was established in Gujarat 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 ‘Training Centre’ for the fan industry and also fulfils the laboratory testing requirements of the industry

Raw Material:• Steel sheets

• Aluminum

• Steel rod

• Enameled copper wire

• Ball bearing

• PVC

Electric Fan Industry:

Total Production       8 million Fans / year

Direct  Employment       30,000 people

Indirect Employment       40,000 people

Annual Revenue       Rs. 5.25 Billion

Exports ( 2005-06 )       US $16.66 Million

Imports (US $ Million )       0.16

Total capital investment 5 billion

Installed capital 7 million fans per year

GDP Contribution 1.5 billion Rs.

Volume of export $ 4 million

Cont.

Exports:

• Over the last four years exports from the sector have increased by about 120% to around US $30 million. This number is expected to rise further

YearExports

(US $ Million)

2003-2004 11.8

2004-2005 14.2

2005-2006 16.66

2008 Over 17.1

LARGE SCALE UNITS

      UNITS       8

      PROJECT COST       Rs. 250-350 Million

      EMPLOYMENT       200-300

      PRODUCTION       60,000-250,000

      REVENUE GENERATED       Rs. 150-250  Million

MEDIUM SCALE UNITS

      UNITS       50

      PROJECT COST       Rs. 10-20 Million

      EMPLOYMENT       60-80

      PRODUCTION       20,000-60,000

      REVENUE GENERATED       Rs. 150-250  Million

SMALL SCALE UNITS

      UNITS       450

      PROJECT COST       Rs. 0.5-1.0 Million

      EMPLOYMENT       20-25

      PRODUCTION       2,000-10,000

      REVENUE GENERATED       Rs. 2.0-5.0  Million

VENDORS

      UNITS       1000

      PROJECT COST       Rs. 0.45-1.0 Million

      EMPLOYMENT       5-20

Top 5 Brands in Pakistan:

• PAK FAN

• MILLAT FAN

• ROYAL FAN

• GFC FAN

• YUNUS FAN

Major Fan Producing Nation:

• Japan, Korea, Taiwan, Hong Kong, India and China

• Japan is in the High-Quality Segment

• Korea, Hong Kong are in the Middle-Quality Segment

• Pakistan, India, Taiwan, China are in the Low-Quality segment

In The World:• China is the biggest producer of fans

• Pakistan is the 12th biggest producer of fans

• Other top fan producers are Germany, Japan, U.S.A, Taiwan etc

World Exporters (DOMESTIC FANS):

COUNTRY COUNTRY SHARES SHARES

PAKISTAN PAKISTAN 0.1% 0.1%

SINGAPORE SINGAPORE 1% 1%

UK UK 1% 1%

TAIWAN TAIWAN 20% 20%

CHINA CHINA 44% 44%

THAILAND THAILAND 6% 6%

GERMANY GERMANY 5% 5%

USA USA 3% 3%

ITALY ITALY 2% 2%

SPAIN SPAIN 2% 2%

JAPAN JAPAN 2% 2%

OTHER OTHER 13% 13%

World Exports (INDUSTRIAL FANS):

COUNTRY SHARES

PAKISTAN 0.02%

FRANCE 2%

NETHERLAND 3%

SWEEDEN 3%

KOREA 1%

CANADA 5%

UK 4%

ITALY 9%

USA 14%

JAPAN 19%

GERMANY 33%

TAIWAN 7%

Pakistan Exports:

• Pakistan exports fan, worth $ 30 billion annually

• Pakistan exports to the Middle East, Kenya, Afghanistan, Saudi Arabia, UAE, Srilanka, Sudan, South Africa, Bangladesh etc

Pakistan Exports:

COUNTRY INDUSTRIAL FANS DOMESTIC FANS

BANGLADESH 44% 48%

SAUDIARABIA 14% 19%

UAE 25% 17%

OTHERS 17% 16%

Exports of Pakistan's Fan

17%25%

14%

44%

16%17%19%

48%

0%10%20%30%40%50%60%

BANG

LADE

SH

SAUD

I ARA

B UAE

OTH

ERS

% a

ge

Other Fan

Fan under 125 Watt

Backward Linkages:

• Wire manufacturing

• Steel industry

• Ball bearing

• Paint industry

• Plastic industry

Forwards Linkages:

• Banks and financial institutions

• Construction industry

• Exports

• Air conditioners

STRENGTHS:

• Availability of labor.• Capacity of Production.• Fans of better quality and durability can be produced.• Presence of Fan Development Institute.• A large vendor industry is supporting this industry.

SWOT Analysis

WEAKNESSES:

• Unskilled labor.Unskilled labor.• Weak research and development.Weak research and development.• Old technology.Old technology.• No innovation in designs.No innovation in designs.• Load shedding of electricity.Load shedding of electricity.• No policies from governmentNo policies from government• Export cost much higher than other countries.

OPPORTUNITIES:

• Environmental changes.Environmental changes.

• Increase in demand with increase in population.Increase in demand with increase in population.

• Unutilized production capacity

• Possible future large investment.

THREATS:

• Increase in cost of doing business because of which many small units are closing down.

• Low cost of fans in  foreign markets by China and Taiwan.

• Lack of research and development (R&D).

• Lack of educated labour

Research departments should be established within the factory premises for innovation and to improve designs of fans according to the requirements of international buyers.

Fan industry has been a neglected sector by the government and it should be fully recognized like any other export-oriented industry of Pakistan.

Strict action should be taken against smuggling.

RECOMMENDATION

Conclusion:

• Fan industry has a great export potential but needs recognition from government.

• 50,000 more people can benefit from this industry.

• The recommendations should be implemented.