fct 6fi1~ a:t Iget d "'6fiT 6fi I'" f~ 4(~~,~~~~)

~~ ~ afR ~ 'a1J1.l ~(':rmf ~)

'Rqfur ~, ~~, ~ ~~,~ ~-110 108

By Spl. MessengerOFFICE OF THE DEVELOPMENT COMMISSIONER

(MICRO, SMALL & MEDIUM ENTERPRISES)

MINISTRY OF MICRO, SMALL & MEDIUM ENTERPRISES

GOVERNMENT OF INDIA

Nirman Shawan, 7th Floor, Mal,llana Azad Road,

New Delhi - 110 108MICRO. SMALL & MEDlUMI!NTERPRISES,_ '1!'I""!l afh:: -q---=r <SWI'O'r

Ph.EPABX - 23063800,23063802,23063803 FAX - (91-11) 23062315, 23061726, 23061068, e-mail - dcmsmehq@nb.nic.in

11151115:No. 15(35)/CDD/31st SCM/2012 Dated: 30th October 2012

Subject: 31st meeting of the Ste~ring Committee of MSE-CDPto be held on01.11.2012 at 10:00 AM in the Committee Room No. 152, UdyogBhawan, New Delhi.

In continuation to this office meeting notice of even no. dated 19.10.2012regarding above cited subject, 31st meeting of Steering Committee of MSE·CDP willbe held under the Chairmanship of Secretary (MSME) at 10:00 AM on 01.11.2012 inRoom No. 152, Udyog Bhawan, New Delhi . Please find enclosed herewith a copy ofthe supplementary agenda notes.

2. It is requested to kindly make it convenient to attend the meeting and confirmyour participation.

Encl.- As above ~(5. K. Newar)

Dy. Director(CD)To1. AS & FA.

Ministry of MSME,Udyog Bhawan, New Delhi.

2. Joint Secretary (Shri Dinesh Singh),Ministry of MSME,Udyog Bhawan, New Delhi

3. Economic Advisor (lFW)Ministry of MSME,Udyog Bhawan,New Delhi

4. Shri Chandan Saha,Jt. Adviser, Planning CommissionR. N. 309, Yojana Bhawan,New Delhi.

5. Shri Prakash Kumar,General Manager,Small Industry Development Bank of India (SIDBI),Videocon Tower, E·1, Rani Jhansi Road,Jhandevala, Extention, New Delhi- 110055

Supplementary Agendafor 31st SCM of MSE-CDP

INDEX

Agenda Description PageNo.

31.1 Proposal for final approval for setting up of Common 1-6Facility Centre (CFC) for Starch and Sago Cluster(Phase - II), Salem, Tamilnadu

31.2 Proposal for in-principle approval for setting up of 7-14Common Facility Centre (CFC) In Steel ProductFabrication Cluster, Salem

31.3 Extension of duration of setting up of CFC in Wood 15Processing Cluster, Malappuram.

31.4 Proposal for final approval for setting up of Common .16-23Facility Centre (CFC) for Printing and PackagingCluster, Karnal, Haryana.

--_._-

•

. _---------- ------- ._-----

Supplementary Agenda No. 31.1. Proposal for final approval for setting up ofCommon Facility Centre (CFC) for Starch and Sago Cluster (Phase - II), Salem,Tamilnadu.

The 1st phase of CFC for Starch and Sago Cluster, Salem, Tamilnadu wasapproved during 2006-07 with a project cost of Rs. 160.00 lakh and Gol assistance ofRs. 120.00 lakh along with soft interventions at a project cost of Rs. 10.00 and Golassistance of Rs. 9.00 lakh under MSE-CDP. It is to mention that in view of commentsof Technical Division, 0/0 DC (MSME) Cluster Division has suggested that the proposalmay be split into two phases. The 1st phase may comprise soft activities as well assetting up of testing facilities. Rest may be planned, priorities wise for which detailedjustification may be spelt out.

2. .The total Gol of Rs. 73.305 lakh was released in two installments during FY2009-10 & 2010-11. The CFC is operationalized and SPV had informed that further Golnot required. The soft interventions have also been completed.

3. Now, Directorate of Industries, Govt. of Tamilnadu has submitted proposal forsetting up of CFC in Starch and Sago Cluster (Phase - II), Salem, Tamilnadu. Salientfeatures of the .cluster and the proposal are as follows:

1. -c Basic Information of Cluster

a. Name of the cluster Starch and Sago Clusterb. Location of Cluster Phase - II, Salem, Tamilnaduc. Products of the cluster Tapioca Starch and Sagod. No. of Enterprises 550 Units

including break up (Micro - 300, Small - 248 and Medium - 2)(micro, small, medium)

e. Turnover (Rs in crore) 2007-08 - 710.00for the last five years 2008-09 - 700.00

2009-10 - 750.002010-11 - 775.002011-12 - 800.00

f. Export (Rs in crore) for 1st year - 25.00the last five years 2nd year - 30.00

3rd year - 30.004thyear - 35.005thyear - 40.00

g. Employment in Cluster 4.70 lakh nos.h. Technological Details Low technology level.i. Whether DS conducted Yes.

and validated.j. Main findings of DSR DSR recommends following common facilities:-

(page no. 23 of DPR) • Purchase of additional laboratory equipments for thesago and starch testing laboratory purchase ofcomputer, networking,

• Software and video conferencing facilities..y~ establishment of conveyor system for

,

loading/unloading of bags in the -warehouse ofSAGOSERVE installation of packing machine forpacking sago and value added products in 500 & 1000gms retail packs.

Main Problems of cluster(page no. 55 of DPR)

k. • Lack of knowledge on modern• Cost-effective production methods lack of knowledge

of value additional/product diverslflcation of Starch andSago products lack of importance on qualityparameters of starch and sago products.

• Lack of knowledge on market and consumption patterVery low consumption of Sago Poor Quality of Starchand Sago products Product display and informationcentre Manual loading in SAGOSERVE affects thetimely delivery of starch and sago in warehouse andalso increases the wastage of the starch and sagoNon-existence-of consumer oriented packing system

2. Information about Proposed CFC

Q,escription As per proposal Remarks if anya. Location of CFC Salemb. Land for CFC (page

no. 52 of DPR)i. Weather land Yes

acquiredii. Title is in name of The Salem Starch and Sagoiii. Valuation and its Manufacturers Service Industrial

basis Cooperative Society Ltd.

iv. Land is sufficient Rs. 69.47 lakhs - book value ason 31.03.2011.

v. Change of land use Yes.

vi. If on lease, duration NAof lease

vii. Whether lease is NAlegally tenable

c. Total Building area (sq NA, existing building.ft)

d. Rate of construction of NAbuilding

e. Main facilities • Laboratory equipmentsproposed • Video conferencing facility

• Packing (Machine for packingSago and Value addedproducts in 500& 1OOOgms

?- retail packs).

2...

Description As per proposal Remarks, if any• Conveyors for

loading/unloading of bags.f. • Prod. capacity of • Rs. 1.35 lakh tone (handling

CFC capacity per annum).g. Major Outputs / Sago cluster is providing direct

Deliverables of CFC, employment to five lakh personsProjected performance (farmers, farm labourers andof the cluster after labourers in the processingproposed intervention industry). At least 50 percent of(in terms of production, the produce of sago cluster isexport/domestic sales treated through SAGOSERVEand direct/indirect (SPV) whose annual turnoveremployment, etc.) has crossed Rs. 350.00 crores.(page no. 45-46 of Any improvement in the facilitiesDPR) of Sagoserve induces the

members to trade move of theirproduce through Sagoservewhich means better price andmore returns. The farmers inturn will also get better price.

h. 'Pollution clearance Norequired or not

i. Man power in CFC 200 nos.j. Revenue generation Service charges for packaging, ---

mechanism for loading and unloading of goodssustainability of assets and packaging, Service charges(service/user charges for testing and marketingto be levied, any other- faciliti es.to be specified)

3. Information about SPY

Description 8ylA Remarks, if anya. Name and address M/s· The Salem Starch

and Sago ManufacturersService IndustrialCooperative Society Ltd.,SAGOSERVE, OmalurMain Road,Jagirammapalayam,Salem - 636 302,Tamilnadu.

b. Nature of SPV (company Industrial Cooperativeor SOciety or Trust) Society formed under

Tamil Nadu CooperativeSocieties Act 1961.

c. Name of the _~tate Govt. Provision given forand MSME officials in inclusion of one officer

3

------- ---------------'

Description BylA Remarks, If anySPV from State and MSME-

01.d. Date of formation of SPY 21-07-1981 --e. Number of members 362 nos.f. Bye laws or MA and AoA Yes

submitted (p-9 of DPR)g. Authorized share capital Rs. 8.00 crore.h. Paid up capital as on 31S

( Rs. 7.50 crore.March 2012

i. Shareholding Pattern Members 86 percentage,Govt. of Tamil Nadu 14Percentage

j. Commitment letter for Givencontribution

k. SPV specific A/c SBI, Alc No. -00000030370940471

I. Trust' building of SPY, 30 years old industrialPrevious track record of co-operative society,co-operative initiatives promoting sago basedpursued by SPY industries and tapioca

""members need to be growers in the district ofhighlighted with support Salem and Namakkal.documentation

m. Technical Institution Sona College of --Engineering, Salem.

n. CFC may be utilized by Yes. Undertaking given.SPY members as alsoothers in a cluster.However, evidenceshould be furnished withregard to spy memberability to utilize at least60 per cent of installedcapacity. (page no. 175of DPRl

o. (a) Power requirement -for commercial! domestic 166 HPpurpose (page no. 80 ofDPR)(b) Water Only for civic purpose

(c) Gas/Oill Other utilities Nil

4

4. Implementation Arrangements

Industries Commissioner and TANSIDCO should be

Remarks, if anyDescription As per proposalAgency Director of Industries

Commerce, Govt.Tamilnadu

and Implementing Agency.of

b. Funds receivingagency

TANSloca

c. ImplementationPeriod

12 months from the date of The CFC should bereceive of sanction of grant operationalised within twounder MSE-COP. years from the date of final

approval.d. Appraisal of DPR and

mainrecommendations

OPR apprised by SlOB!. The Conditions mentioned in theproject is technically feasible appraisal should be fulfilledand financially viable. The by the SPV at differentproposed performance stages before sanction andindicators and financial during the projectposition are satisfactory. The implementation.proposed CFC component willsupport the SPV to reduce thecost of production, improveproductivity, enhance incomegeneration capacity, reducelabour problem, leads toproduct diversification.

e. Comments ofTechnical Division

As per comments ofTechnical Division theproposed interventions aretechnical feasible and theproposal seems to be inorder as per the MSE-COPguidelines.

f. Comments ofTechnical Committee

The committee hasrecommended the proposalfor consideration by theSteering Committee withoutvideo conferencing facilityi.e. VU Teleconferencing Kit- 01 nos. and VU DisplayUnit - 02 nos. andassociated accessoriesrelated to videoconferencing.

5. Financial Analysis of CFC

Description As per proposal Remarks, if anya. BEP 39.45% (3ra year - SIOBI, Erode has also

revised) examined the revisedb. IRR, payback period 24.26% (revised) financial parametersc. DSCR ~; NA submitted by SPV,d. Return on Capital employed 25% '-revised) resulting in an

5

Description As per proposal Remarks, if any(ROCE] improvement in ROCE

e. NPV Rs. 181.52 lakh froni 21 to 25%, BEP from(revised) 34 to 39% and found

acceptable (letter dated9.10.12).

f. Sensitivity Analysis At Drop in job incomeby 5% and Decrease incapacity utilization by5% all the financialratios in favour.

g. Working capital (In-principle Sagoserve uses itssanction of loan from a bank, internal fund forif applicable arrangement working capital supportmade) and has CC limit with

lOB.

6. Project Cost:

Particulars SIDBI DC(MSME)recommendation recommendation

1 t.and and building on lease 0.00 0.002 Plant & Machinery (including 187.65 187.65

electrification)3 Misc. fixed assets 67.68 59.52

Total Project Cost 255.33 247.17

7. Means of Finance:

Particulars As per SIDBI DC(MSME)Recommendation recommendation

1. SPV contribution 25.53 25.532. Grant-in-aid from Govt. of India 229.80 221.64*

Total 255.33 247.17

* As per guidelines, Gol grant will be 90% for CFCs in clusters with more than 50%micro/village industries.

8. Plant and machinery (List enclosed)

9. Misc. Fixed Assets (List enclosed)

10. Proposal for the Steering Committee: Cluster Division recommends theproposal for final approval for setting up of Common Facility Centre (CFC) for Starchand Sago Cluster (Phase -II), Salem, Tamilnadu at total project cost of Rs.247.17Iakh,Gol assistance of Rs.221.64 lakh and SPY contribution of Rs.25.53 lakh.

6

. -: 22 :- SPV-Proposal for setting up ofCFC under MSE-CDP Scheme

The weaknesses and threats are proposed to be mitigated to some extent bycombined marketing efforts and entering into tie up. Similarly sourcing of rawmaterials/other consumables in.bulk quantities on behalfof all member units andthere by effecting reduction in cost of production ..

16. ECONOMICS OF THE PROJECT

• It is presumed that the implementation .of the Phase-Il expansion cummodernization of CFC project is expected to be completed by August 2012 andwill providebetter facilities to all the member units in the Starch and Sagocluster. By establishing with modern facilities in the CFC is required forsuccessful running of the MSEs in the cluster, it will be ablg.encouragement forunits in the cluster and add to the direct benefit of further industrialisation of theState'and ..~ontribute.to the State exchequer.

" ~.. ', .. ~'..

T~e;p~~·P'9~.a~·~.at~sfi.es,the .:norms and..parameters of the modified MSE-CDPs~~e¢.eJo,r:'·~'~tt~tig).lpofCFCand is considered support-worthy.. .:"!',' .

•

.' ~.

In the. pfesent globalised scenario, MSME sector also needs to be competitiveand face theglobal market to improve their productivity and sales. To achievethis objective, Common Facility Centre would further give momentum toindustrialisation. The present initiative of the SPY I State .Govt. to undertake

'expansion cum modernization. of the existing CFC for the Sago & Starch cluster,namakkal in order ·to provide-upgraded good common infrastructure facilities tothe MSEs under MSE-CDP of GOI, appears to be.timely and need based.

The existing units in the cluster and new entrepreneurs need modern technologysupport in CFC which these units could not afford due to huge capitalinvestment. Besides, the operations of the cluster will grow manifold, whichwould result in improvement in the overall socio economic condition of largenumber of people and society, at large in this district.

The project is technically feasible and financially viable, The proposed.performance indicators and financial position are satisfactory .

..

. ,. :. ···rakil,1~aj1.·.pyeran.<view;.p.ll;rticular[yin view of the likely benefits accruing to the' .. :.·"\itinY.'ati~·.:rp:W~~;,exi;s.tii1g;'.l)rijtsin the.pluster •. theproposal is considered to be

':. ':.'.':' s~PP.~ff.'."Y:~ttliy.;)rhe,'prop:os.almay be submitted to, the Steering Committee of.·<\·::.t.< . :MSE.:Q1)P' for.its consideration for sanction' of Central Government grant of

'.229.~0'ra:kh·'Pl:1~~e-I·1tothe SPY under'Hie M'rcro& Smali Enterprises - ClusterDevelopmentProgramme (MSE - COP) for ex.pansion and modernization of theexisting Common Facility Centre (CFC) at Jagir Ammapalayam, Salem District,Tamil Nadu.

*****

-: 23 :- SPV- Proposal for setting up ofCFCunder MSE-CDP Scheme

Appendix I",,' . . ,:',." ',Termsaildconditions of sa nction

Thed.isbursem~dt of'sanc~ibned grant by Government of India (Gol) shall besubject t'o the Implementing, agency CIA) / Special Purpose Vehicle (SPY)agreeing that :

(i) The 'contribution by the SPY or the beneficiaries share shall be madeupfront.

(ii) The bye~law"of the ,SPV shall be suitably amended incorporating theprovision for CDE/CDA and one State Government official as membersof the SPY.

(Iii) Nosingle unit/member will hold more than 10% in the equity capital (orequivalent capital contribution of the SPY).

i'e;

(iv)Escalation in the cost of project above the sanctioned amount due to anyreason shall be borne' by the SPY. The Central Government shall notaccept-any financial Iiability arising out of operation of CFe.

, User charges for services of CFC shall be close to prevailing marketprices.as.decidedby the Governing Council of the Spy. '

(v)

, ,

,The'S,PV members shall be able to utilise atleast 60% of the installed,'cap'~citY;ofeFC. '.' . ,,:.::,; ";-' " , ' .. -~

, 'I:.

****; "

: .,I'

_,__ ... _.. _ .. _.M_..I __ .•. __ .•.•.•.. _ .... _. ..• ._._ .•..... ... _." ...._..

~ ~"~Z"=~'~Mt"""" _.. .:•.... ---------- ------_ .._-----.,.......----,

•

SPV~ Proposal for .setting up ofCFC under MSE.-CDP Scheme

." ~..'.; -: 12:-

'7.1 Equipments(.181.65.lakh )

The details of equipments proposed to be acquired by the Spy is furnishedbelow:INDIGENOUS'

;"', .

.S.No. Description - Quantity Supplier Total

Cost C.lakh)

1 Cyberscan Bench PH meter I The Precision Scientific 1.89

2 UV cabinet with 1 short VV, 1 long ICo., Coimbatore

0.08UV tube & 1 normal white

3 Muffle Furnace (1000 deg.C) 75 I 1.65samples + Tray

4 Heating Mazntle(30 samples 1 0.29capacity) .

; 5 Olympus inverted-phase contrast and I 9.50. -flurorescence microscope model .·CKX41 (D~gital·Adv:Microsc~e)

: . A.::,.:':. :Ji'or:'~1i..oquip~ents SubTotal 13.41.' ~.: .:;:;:i..~::::'~('··Gp~:V~y1)r.~ystelll..;(1. Nos. )..~ , .{jrumidil1g l\1'-obileBe1t Conveyor" 20 1 Tarns Conveyor 1.55,.:- .-''. ; . FeetLon& Company, Hosur,.

Fixed Belt Conveyor - 255 feet.long 1 14.28with divertersMobi!e'Belt Conveyor - 20 feet long 8 -..: 11.60

Mobile Belt Conveyor - 30 feet long 4 7.40

Mobile Truck Loader- 20 feet long 4 10.20

Bag transfer drum - 273 rnrn dia x 2 0.15300 mm long for 2 godowns

45.18

For 6 Nos. 135.54

Conveyor System for one godown G

Unloading Mobile Belt Conveyor - 20 I Tarus Conveyor 1,55Feet Long CompanyFixedBelt Conveyor - 200 feet long 2 22.40· with diverters

i Mobile Belt Conveyor - 20 feet long 4 5.80'. .Mcibile.B'eJtCony.cyo.r -3.0.Jeet long' 2 3.70

." -. . , .

., Mobile: ,\ru9KJ"oader." 20 feet long 2 ·5.10,.

Bagtrl.U1sfer'~r).lm:~·273mm dia x 0.15. ',,', 2r. •. ! ·300 mmIong.' .: '. Total for 1 Godown 38.70

'.-t.

Total Cost for conveyor system ForB 7 godowns 174.24

TOTAL COST OF INDIGENOUSA+B EQUIPMENTS - 187.65

'J .'

c·

The SPY has analyzed. the various suppliers of the equipment suppliers for the

6c

/'

6-ue

., .' ,.i",~':':;:".'" .' "

j :.j, ;~""I""~ .:~; •• _.' "\':~:~:~"~·-~_'·i.,..'·~;.::, ". . _ ., {. ,1.'1 ,Mlsceu.tineous"FtX~(/.Asset, (.67.68,~kh)

- ,·t',

The d~tails, of new, miscellaneous, fixed assets (indigenous) proposed to be• d b th f . hed b 1acquire IY e company are, urrus eow:

S. Description , Quantity Supplier Total CostNo. (' lakh)1 Lenovo(IBM) T.Jlin!tCentre. 25 lnfotek Computer 10.00

, 'Desktop Services, Salem2 ' WIPRO LQ 5235 136 Column 10 1.95

, 24 Pin Printer3 HP ,1020+ A4 Laser Printer 5 0.35

"

4 NetworkingModern & i 1.50Accessories '

5' .r V,Guard 5 J.(VAUPS with 3hrs I 3.72Bac~up

6. ,W:l:eleconfer:enc;ingKit 1 ,,' 5.30.',.;7- ~Y.U'~lspla:YUnit', 01- 2.86,:,$":: ~,i§'~~~~',~Psr.aQetQ>INet & 1 'Concave Soft .. 30:00

I" '". ' :,~N~(ij>~9.1r~I))1l~nt,' Solutions, Salem":" ....' ".' of •.• " i ~'. ' I ~"'. ' " , . '

,9" ,'A.i~~9:tr!(Lti¢.raqldngMachine- 1 ,Pearl Packaging 12.00:F..u~lt:~ut~~Vc ~rSMachine .Coi mbatore

;,~iih PLC. control, Coil ar.type,.ModelNo.PP;30,lTotal Cost of'M!1' As 67.68

•

I~vIi

I

•

• -.\;Wi

ill£) I11;)11~~m~tcIi

~ ~~* . SMALL INDU.STRIES DEVELOPMENT BANK OF INDIA''(1-8~1 ~~I"'I.;)11 "fl SIOBI EOBO No 379 !MSE-COP ~ October 9, 2012

The Deputy DirectorMSME - Development Institute65/1,GST Road,GuindyChcnnai - 600032.

~ ~ I Dear Sir.

Proposal for CFC (PhasetlI) in Starch and Sago Cluster, Salem_ Examinations and Comments of Technical Division· Ov,"f ~~

Please refer to the letter No.CDD/SAGOSERVE/8S12006-Pt. dated August 29, 2012

from the Dy. Director (CD), Office of The DC(MSME), New Delhi to your office seeking

certain clarifications/ information. An endorsement of the said letter has. been marked to

SIOBI for the clarifications relating to the financial parameters as required under MSE·COP

scheme. A copy of the above letter has been sent to us by The Managing Director & Special

Officer of SAGOSERVE, Salem vide his letter Rc.No.1l88/Sec/2011 dated September 10,

2012 with a request to endorse the revisions made in the financial parameters made by

SAGOSERVE in their reply to the queries raised by the Office of the DC(MSME) as

mentioned above.

In this connection, we would like to inform to you that the changes made by

SAGOSERVE in their financial parameters resulting in an improvement in Return on Capital

Employed [ROCE] from 21% to 25% and revision in Break Even Point [BEP] from 34% to

39% has been examined and found acceptable to us. The revised parameters in respect of the

above project are given in the annexure.

T"(j<:ff ~ ~ ~ Please acknowledge receipt.

~. Yours faithfully,

~[:5IR ~ R Ramesh]

~ ~t'ICP Asst. General ManagerEnc1 : As above

JW:I <1<ffi. -murr ffi'!. 10/3. ~ ~ Us. ~ ~ J1"l\3C.", om ~ <T;BllR. tm". 638 011. ~ : 0424 -2221522Om Towers, Ground Floor. 10/3, Nalli Hospital Road, Annamalai Layout, Opp. Bus Stand, Erode - 638011. Telefax: 0424 - 222 1522

SIDBI - Erode

CFC (Phase-ll) in Starch and Sago Cluster, Salem

Revised Financial Parameters

.- .---

i SI.i No.

Ratio Value Norms!f--i

I Should be more than,1 IRR 24.26%!

LI 10%I

I

II 2 NPVatRS.181.52Iakh Should be +ve

i 10%

! I Should be more than, 3 ! ROCE 25%! 25%-

Not applicable as thereShould be more than4 DSCR is no term loan

component3

Should be below 60%5 BEP 39.45% of the Installed

Capacity

,

Supplementary Agenda No.' 31.2 - Proposal for In-principle approval for setting upof Common Facility Centre (CFC) in Steel Product Fabrication Cluster, Salem.

Principal Secretary, Micro, Small and Medium Enterprises (D1) Department, Govt. ofTamilnadu has submitted a proposal for setting up of CFC in Steel Product FabricationCluster, Salem. Salient features of the cluster and the proposal are as follows:

1. Basic Information of Cluster

,

a. Name of the cluster Steel Product Fabrication Cluster

b. Location of Cluster Salem, TamilnaduProducts of the cluster Fabrication of window, grills gates, truss work and panel(page no. 12 of DPR) board manufacture, variety of laundry equipment such

as washing machines, hydro-extractor and tumble drierfor the textiles and garments sector.

c. No. of Enterprises 1000 units (Micro - 900 and Small - 100)including break up(micro, small, medium)(paae 10 of DPR)

d. Turnover (Rs in crore) 2007~08 350for the last five years 2008-09 400(page 14 of DPR) 2009-10 525

2010-11 5752011-12 625 .

e. Employment in Cluster 37000 nos. (Direct - 12000 and Indirect - 25000)(page no. 14 of DPR)

f. Technological Details Using hand cutting tools for cutting smaller sections and(page no. 30 of DSR) conventional shearing machine for other section etc.,

punching and folding done manually by hand tools,pressing is done by locally fabricated hydraulic basisand for polishing and electroplating they are usingconventional methods.

g. Whether DS conducted Yes.and validated.

h. Main findings of DSR DSR recommends following common facilities:-(page no. 19 of DSR)

(i) Establishment of raw material pipe/tube and sheetprimary processing facilities, testing and tool roomfacilities addressing critical technology and value-chain gaps.

(ii) The lead potential value-adding firms in the clusterare essentially micro-sized fabrication units.

i. Main Problems of cluster • There has been a relatively poor level of technology(page no. 36 of DPR) upgrading in the cluster.

• Inadequate equipment and micro-sized nature of firmsaffect the ability of cluster firms to tap the growingS.S. product market.

• Resource constraints have been limiting thecapabilities of cluster firms in terms of investing innecessary pipe making, deep draw press/qualityshearing and cutting as well as other advanced pressequipment.

• Cluster firms are at the mercy of raw material traders,some of whom even supply spurious material.

2. Informationabout ProposedCFC

•

b. Landfor CFC (pageno. 83 of DPR)i. Weather land Yes.

acquired Agreement for lease of land hasii. Title is in name of been entered into by the SPV.iii. Valuation and its

basis

Descriptiona. Location of CFC

iv. Land is sufficient

v. Change of land use --vi. If on lease, duration

of leasevii. Whether lease is

legally tenable

As per proposal Remarks,if anyKarukkalvadi Village in Salem,Tamilnadu

Land lease space of 1.50 acre(amounting to Rs. 25.00 lakhand Rs. 15.00 lakh for sitedevelopment) is to be providedby the SPV.Required

c. Total Building area (sq 26,810 sq. ft.ft)(Page - 83 of DPR)

d. Rate of construction of 603.13 per sq.ft.building

e. Mainproposed(p-59 of DPR)

facilities

f. Major Outputs IDeliverables of CFC,Projected performanceof the cluster afterproposed intervention(in terms of production,export/domestic salesand direct/indirectemployment, etc.)(page no. 15 of DPR)

• Job-working rawprimary (S.S.processing facility.

• Job-working rawprimary (S.S.processing facility.

• Testing facility.• Tool room.

materialpipe)

materialSheet)

• Enabling cluster firms to evendouble operating capacityfrom the present barely 50percent of installed capacitiesand increase their productmix in terms of moving intomore value added S.S.based product fabrication.

• Increase in profit margins byeven 50 percent.

• Cluster turnover could morethan double in about a 5 yeartime frame and additionalfresh manpower of about5000 persons provided jobsin the same period.

Registered sale deedof land withpermission to use forindustrial purpose isrequired.

8

Description As per proposal Remarks, if any

g. Man powerCFC(page no. 93DPR)

in 71 nos.of

Description BylA Remarks, if anya. Name and address Steel Cluster Services

Salem Private Limited.Sri Malola Apartments,3rd floor, New No. 174G(Old no. 93G), T. Nagar,Chennai - 600017(Tarnilnadu)

b. Nature of SPY (company Private Company Spy registered underor Society or Trust) Companies Act 1956 as

private limited company.c. Name of the state Govt. ----- Provision for inclusion of a

and MSME officials in representative of the StateSPY Govt. of Maharashtra and

MSME officials shall be made.d. Date of formation of SPY 7.05.2012 --e. Number of members 36 nos. (Details of

(page no. 65-68 of DPR) individual member unitsgiven)

f. Bye laws or MA and AoA Yessubmitted

g. Authorized share capital The authorized sharecapital of the company isRs. 10,00,000/- dividedinto 1000 equity sharesof Rs. 1000/-.

h. Paid up capital as on The minimum paid upshare capital of thecompany shall be Rs.1.00Iakh.

h. Revenue generationmechanism forsustainability of assets(service/user chargesto be levied, any other-to be specified) (pageno. 109 of DPR)

Estimates of income are--projected on the basis of usercharges to be levied forprovision of various inputs andservices to SPY member unitsand other cluster firms.Revenue generation proposedtowards user charges from S.S.Tube Development Facility(Primary process and Valueadded products development),Decoiling and Slitting Line, ToolRooms and Testing Lab.

i. Estimated net profit for1st & 2nd year (aftertax). (page no. 113 ofDPR)

1st year - Rs. 423.87 lakh ---2nd year- Rs. 448.28 lakh

3. Information about SPV

9

Description By IA Remarks, if anyi. Shareholding Pattern Given None of member has more

(page no. 65-68 of OPR) than 10% of in the equitycapital of the SPY.

j. Commitment letter for Givencontribution

k. SPY specific Alc Not given. SPY bank account no.required.

I. Trust building of SPY, Trust already developed,Previous track record of SPVformed.co-operative initiativespursued by SPYmembers need to behighlighted with supportdocumentation

m. Technical Institution (p- OIC, Salem --73 of OPR)

n. CFC may be utilized by Evidence of uses has Consent to utilize atleast 60%.SPV members as also given. of installed capacity required .others in a cluster.However, evidenceshould be furnished withregard to SPY memberability to utilize at least60 per cent of installedcapacity. (Annx- XII ofDPR)

o. (a) Power requirement 528 KVAfor commercial! domesticpurpose (page 98 ofDPR) ---(b) Water

---(c) Gas!Oil! Other utilities

4. Implementation Arrangements

Description As per proposal Remarks, if anya. Implementation The Tamil Naud Small

Agency (page no. Industries Development135 of DPR) Corporation (TANSIDCO)

b. Implementation 12 months upon receipt of Should be 24 months after. Period (page no. final approval of grant-in-aid final approval.129 of DPR) assistance from Govt. of

India.c. Appraisal of DPR ---- SIOBI appraisal is required.

and mainrecommendations

d. Comments of ---- Approval of TechnicalTechnical Division Committee is required.

10

5. Financial Analysis of CFC (page no. 123 of DPR):

Description As per proposal Remarks, if any

a. BEP 25.83% As per ouldelinesb. IRR, payback period 25.07% and 3 year 6 months As per guidelines

with grant-in-aid assistancefrom Gol

c. DSCR Not applicable (non- --availability of term loan in thisproject)

d. Return on Capital 27.72% As per guidelinesemployed (ROCE)

e. NPV NPV is positive and high (Rs. As per guidelines1093.91 lakh) at aconservative project life of 10years.

f. Sensitivity Analysis BEP -27.53%(page no. 127 of ROCE - 25.41%DPR) IRR-22.30%

NPV - Rs. 877.40 lakhg. Working capital (In- Copy of In-principle sanction In-principle sanction for

principle sanction of note for necessary working working capital is required.. loan from a bank, if capital submitted.applicablearrangement made)

6. Project Cost: (page no. 88 of DPR):

Particulars As per SIDBIRecommendation

a. Land of 1.5 acres (@ Rs. 25 lakh) and site 40.00development (@ Rs. 15.00 lakh)

b. Building and civil works (26,810 sq. ft. shed type 161.70structure or @ about Rs. 603.13 per sq. ft.

c. Plant & Machinery and accessories and related 1216.87equipment (including 5% electrification relatedexpenses on total cost of Rs. 1158.93 lakh)

d. Misc. fixed assets 15.00e. Preliminary expenses 16.00f. Pre-operative expenses 14.00i. Provision for Contingencies 64.07j. Working Capital for margin money 5.10

Total Project Cost 1532.74

lJ

7. Means of Finance: (page no. 89 of DPR):

Particulars %age As per SIDBI Recommendationa. SPV 16.64% 255.03

contributionb. Grant-in-aid 83.36% 1277.71

from Govt. oflridiaTotal 1532.74

8. Plant and machinery:

s. Name of the machine Specification Qty Unit Price Total

NoI SS TUBE DEVELOPMENT FACILITY1 Tube Mill for stainless To manufacture SS round 1 8032042 8032042

steel complete plant pipes ,15.87 mm to 63.5mm/sqwith welding line - pipe 0.8mm to 3.6 mm; Lenghtwithout wed ling of pipe 4 mts to 7 mtsmachineBead Rolling system Tube size 19.05 mm to 114.3 1 1290455 1290455

mmTube straightening Skew rolltyp-tube size 15mm 1 3962063 3962063machine to 76mm; Max thickness -6mmInvertor based TIG 500 DC V 500 amps with 1 582015 582015welding machine accessories

13866575

2 Tube Mill for stainless To manufacture SS round 1 4615417 4615417steel-complete plant pipes 9.5mm to 3R1mm/sqwith welding line- pipe 0.5mm to 2,5mm. Lengthwithout welding of pipe 4 mts to 7 mtsmachine,Bead Rolling system Tube size 19.05 mm to 50,80 1 1057287 1057287

mm<-Tube straightening Skew roll typ-tube size 8 mm to 1 2374964 2374964machine 40mm, Max thickness-4.0 mmInvertor based TIG 500 DC V 500 amps with 1 582015 582015welding machine accessories

8629683Primary processing Sub total (1+2) 22496258

1\ De-coiling & Slitting Facility3 SS Coil Slitting line- Coil width 500mm to 1550 rnm, 1 10955520 10652148

15MT Thickness OAmm to 3,5 mmSub total 10652148

III SS Sheet Development Facility4 CNC Press Brake MB8- Working lenght 3200 mm; 1 4961110 4961110

250/3200 Capacity MS 6mm and SS4mm

5 CNCShearing Machine Cutting size 8x3200-250 MT 1 1370238 1370238QC12Y-8x 3200

6 Laser cutting machine 4KW 1 40344750 403447507 15 HP Air Compressor 71 cfm-coupled to 11 Kw (15 1 863103 863103

with Integrated type air HP) sq. Cage motor .dryer

8 Hydraulic triple action 63 tonnes/stroke 310 mm; Cap 1 1480447 1480447stretching press 0.5 to 2,5mm

9 Hydraulic triple action 120 tonnes/stroke 360mm; 1 2740402 2740402stretching press Cap" 0.5 to 4mm

10 Hydraulic triple action 200 tonnes/stroke-420mm; 1 4246048 4246048stretching press Cap 0.5 to 4mm

11 Four column deep draw 500 tonnes stroke 900 mm 1 7654227 7654227press table size 220 x 1600

Sub total 63660325

J2

•

S. Name of the machine Specification Qty Unit Price TotalNoIV Tool Room

12 Heavy duty lathe 7"'length 1 220676 220676machine

13 Pedestal drilling 1" dia 1 41580 41580machine

14 Surface grinding Max. Heigth from table to 1 186900 186900machine 225 x 450 grinding wheel 275mm

15 3 hp bench grinding Std. Size 1 6300 6300machine

16 Universal Milling Mlc model JF-163T 1 341250 341250machine

17 All geared lathe Bed length 7' model y2k-53 1 755147 755147machine

18 All geared shaping Shimato BS 36 1 821100 821100machine

19 Power Hack Saw EIFCO HP 300 1 267750 267750machine

Sub total 2640703V Physical Testing Equipments20 Spectrometer ARL 3460- Optical Emission 1 7920054 792005421 Universal testing Computeraised Testing mach 1 690173 690173

machine (40T) of 400 KN22 ~ MSM Rockwel superficial hardness 1 56064 56564

test mach23 Dial vernier 8" Std. Size 2 6813 1362624 Dial vernier 12" Std. Size 2 8645 1729025 Height Gauge 12" Std. Size 1 20209 2020926 Height Gauge 18" Std. Size 1 44426 4442627 Granite suface table Std. Size 1 36160 36160

1000x100028 Micrometer 1", V block Std. Size Ass 13248 13248

with std clamps I orte100mm, feeler gauge d0.05-1 mm, L.sq6/8/12", SS scal8/24/40", Calipersinsideloutsie 6/8/10/12"

Sub total 8811750VI Support Systems29 125 KVA -100 KW DG TA water cooled model 2 676708 1353416

set30 3 ton diesel fork lift Fork height of 3000 mm 1 1292491 129249131 30 TON capacity, 9M D.G. EOT CRANE 1 2625615 2625615

Span, 7M lift32 5 TON capacity, 21M S.G. EOT CRANE 1 1210375 1210375

SPAN, 7M LIFT~3 Transformer 500 KVAl22KV 1 1000000 100000034 3 Computers & 2 1 150000 150000

Printers (for testing lab& Admin)

Sub total 7631897Grand Total 115893081

13

9. Shortcomings:-a. SIDBI appraisal.b. Registered sale deed of land with permission to use for industrial purpose.c. SPV specific bank account details.

•

10. Proposal for the Steering Committee: Cluster Division recommends theproposal for 'In-principle' approval so that complete proposal as per guidelines includingSIDBI appraisal is submitted by the State Government within six months, failing whichthe proposal shall be dropped. Steering Committee may consider the proposal forsetting up of Common Facility Centre (CFC) for Steel Products Cluster, Salem,Tamilnadu.

*****

14

Supplementary Agenda No. 31.3 Extension of duration of setting up of CFC inWood Processing Cluster, Malappuram.

The project was approved in the 14th meeting of Steering Committee held on1.10.2007. Administrative Approval was issued on 2.01.2008 1st installment of RSd96.00 lakh was released to KBIP vide sanction order dated 4.01.2011 and 2"installment of Rs. 48.20 lakh vide sanction order dated 27.9.11.The cost of project and means of finance are as follows:

•

S. N. Component of Cost AmountlRs. in lakh)1. Land and its development 17.252. Building and other civil works 28.003. Plant and machinery 175.004. Preliminary & pre-operative 2.005. Working ca~tal 16.65

Total 238.90

Means of finance:

1. Govt. of India contribution 160.232. Govt. of Kerala contribution 45.783. SPV contribution 32.89

f.:;. Total 238.90

2. This office has so far released Gol contribution of Rs. 144.20 lakh and thesame has been fully utilized by KBIP and utilization certificates in this regard alsoreceived. The remaining Gol contribution of Rs. 16.03 lakh (Rs. 160.23 lakh - Rs.144.20 lakh) is being considered for release. Directorate of Industries and Commerce,Govt. of Kerala vide its letter dated 27.08.12 has informed to this office that CFC inWood Processing Cluster, Malapuram established by Mis Valluvanad WoodConsortium (P) Ltd., (SPV) has been commissioned and Commercial Productionstarted on 25.07.12. A completion certificate has also been received from state govt.

3. As per the provision of guidelines of MSE-CDP, duration of the CFC project iscompleted by 2.1.2010. The delay in implementation of the project is due to therevision in the project cost, delay in finalization of plant and machinery throughtendering and late completion of infrastructure facilities. Since, this office is required torelease the remaining Gol contribution of Rs. 16.03 lakh to the Implementing Agency,extension of duration of time up to 31 .12.12 is requested to get all the necessarydocuments like Utilization Certificate, expenditure statement and completion report inthe required format from the Implementing Agency. In this regard, IF Wing hasalready desired approval of extension of duration of time by the Steering Committee.

Proposal for Steering Committee: Steering Committee may kindly approve theextension of duration of the project up to 31st December 2012.

1. Basic Information of Cluster

Supplementary Agenda No. 31.4 - Proposal for final approval for setting up ofCommon Facility Centre for Printing & Packaging Cluster, Katnal, Haryana

Commerce & Industries Department, Govt. of Haryana has submitted aproposal for setting up of CFC in Printing & Packaging Cluster, Karnal. The proposalwas also discussed in the so" Steering Committee Meeting held on 20.6.2012 underthe Chairmanship of Secretary, MSME. The Committee has accorded in-principleapproval. This office has conveyed the in-principle approval vide letter dated24.8.2012. Salient features of the cluster and the proposal are as follows:

Name of Cluster: Printing & Packaging ClusterLocation of Cluster: HSIIDC Estate, Sector-3, KarnalMain Product: Visiting cards, Marriage cards, corrugated boxes, books,

calendars, diaries, magazines, paper cups, mono cartonsetc.

No. of Enterprises including Micro :300 Small: 0 Medium: 0break up(micro, small,medium) :Turnover(Rs in Crore) for the last five years: 180fDPRTurnover first year: 226Turnover second year: 260Turnover third year: 300Turnover forth year: 360Turnover fifth year: 452Exports(Rs in Crore) for the last five years: Nil 16 of DPREmployment in 6000 directly and indirectly 160fDPRCluster:Technology Details: Currently the packaging technology is based on 300fDPR

3 ply Corrugated Boxes, CTP facility in pre-pressis not available in the cluster. The technologyupgradation required in the cluster are PrePress, post press operations, value additionprinting operations, finishing and packagingoperations.

Whether OS Yes, DSR was conducted by Karnal Print N Pack 20 of DPRConducted: industries Association.Main findings of DSR • Gaps in the design development, value- 20 of DPR

added printing, packaging and finishing front.• Appropriate sourcing of raw material and

inputs in terms of price, continuously developmanpower skills, ensure access to workingcapital and capital for fixed investment.

• It is essential to appropriately exploit localdemand, particularly, industry demand whichcould considerably enhance cluster turnoversand performance,

• Evolve economies of scale and bargainingpower among micro enterprises throughconsortia/SPV based joint-action.

IG

Gaps in the design development, value-added 20 of DPRprinting, packaging and finishing front. Thesegaps are evidently constraints that meritestablishment of relatively capital-intensiveequipment. Appropriate interventions couldenable development of better quality designearlier, better quality images in plates; and betterquality finish in printing and better qualitypackaging material with greater burstingstrength. A common facility Centre is a direneed.

Main Problems ofCluster:

2. Information about Proposed CFC

Description Proposed by Implementation .Agency Comments(IA)

(a.) Justification for There are constraints in the cluster in terms Satisfactory.CFC of use of conventional design equipment Technical

and software and Computer to Film (CtF) Division hasthan Computer to Plate facilities. There are also agreed tolimitations in terms of digital printing and the proposal.UV coating facilities. There are limitationsin terms of value-adding quality packagingfacilities, in terms of die-cutting andcorrugation. With regard to post-press andfinishing operations the cluster has averitable gap in terms of the range ofequipment required for quality finishing.Essentially there is need to upgradebusiness practices as well as equipmentand technology through joint action bysetting up a CFC.

(b.) Location of Plot No. 1,2 & Part of 3, Sector - 37,CFC Kamal(c.) Land for CFCWhether land HSIIDC has allotted land measuring 4050acquired sq. mtr.ii. Title is in name of Regular letter of allotment is issued by Registered

HSIIDC in the name of SPV. Lease deed leaselsale deedyet to be registered in the name of SPV. is reguired.

iii. Valuation and its Rs. 2,26,80,000/- (@ 5600 per sq.mtr) ..,.basisiv. Land is sufficient Yes.v. Change of land Land allotted in Industrial Estatel Area byuse HSIIDC.(d.) Total Building 26,136 Sq.ft (57 of DPR)area(sq ftl(e.) Rate of Rs 570 per Sq.ftconstruction of (65 of DPR)building(f.) Main Facility Design studio, Value added Printi'lg, Value

Proposed added packaging and Value addedFinishing (30 of DPR)

Consentestablishrequired

tois

(g.) Prod capacity 25 machines proposed in the CFC, eachof CFC having a interlinked production capacity.

(64 of DPR)(h.) Major In the next 5 yearsOutputs/Deliverable • Output to increase from 452 crores tos of CFC, Projected 1500 crores.performance of the. Direct employment increases by 2000cluster after persons in the next 5 years.proposed ·Increase in profit margins in sale throughintervention (in reduction in lead time by 10%.terms of production, Scope of double capacity utilisation andexport/domestic profitability of Micro size Cluster increases.sales anddirect/indirectemployment, etc.)(i.) Pollution Requiredclearance requiredor not0.) Man Power in 72 (65 of DPR)CFC(k.) c Revenue Rs 681.26 lakh (p 78 of DPR)generationmechanism forsustainability ofassets( service/usercharges to belevied,any other-tobe specified)

3. Information about SPV

Description Proposed by Implementation Agency (IA) Comments(a.) Name and Karnal Print & Pack Cluster Private ·Address Limited 127, Sector 3, HSIIDC, KarnalP 97 ofDPR 132001, Haryana.

(b.) Nature of Private Limited ·SPV( company orSociety or Trust)(c.) Name of the state Shri.T. L. Satya Prakash, Director of Provision forGovt. and MSME Industries & Commerce, Haryana inclusion oneofficials in SPV ShriVijay Kumar, Director, MSME 01, state

Karnal government andMinistry ofMSME officialshould be madein AOA.

(d.) Date of formation September 2011 ·ofSPV(e.) Number of 25 membersMembers

~------------------------------------------------------------

(f.) Bye Laws or MA Yes, Articles of Association and ·and AOA submitted memorandum are submitted with the DPR(g.) Authorized Share 3 crore ·Capital(h.) Shareholding There are 25 members in the SPV, each ·Pattern member has less than 5 % shares in the49.ofDPR SPV.(i.) Commitment letter Applications for share contributions have ·for contribution been received by the SPV. The share1080fDPR subscription given.0.) SPV specific Alc Account has been created in Union Bank Account no. is

of India, Kamal required.(k.) Trust Building of Several trust building initiatives have ·SPV, Previous track been carried out by the SPV such as jointrecord of co- visit to China, printing fair at Shanghai,operative initiatives corrugation fair at Bangkok, Monthlypursued by SPV meetings on common problems faced bymembers need to be the units, training modeules on export inhighlighted with co-ordination with MSME-DI, training onsupport ISO certification with MSMI-DI, designdocumentation clinic diagnostic workshop with NID and

MSME-DI, workshop on packaging withc Indian Institute of Packaging.

98 of Annexure(I.) Technical Kurukshetra University, Kurukshetra ·Institution1160fDPR(m.) CFC may be 100 percent utilisation of the CFC is ·utilised by SPV envisaged. Evidence of usage andmembers as also demand is provided on a user basis in theothers in a cluster. DPRHowever, evidenceshould be furnishedwith regard to SPVmember ability toutilise at least 60percent of installedcapacity. 109 of DPRPower requirement Connected load 527 KVA and Drawn ·for Power 290.88 KWHcommercial/domesticpurpose 660fDPRWater 20 KL per day or 6000 KL per annum

12 months Should be24 months

4. Implement Arrangements

Investment Promotion Centre, Department off-::-'''7-::~--------I Industries, Haryana

19

from thedate of finalapproval.

(d.) Appraisal of DPR SIDBI has provided a favourable appraisal ·and main report. The present initiative appears to beRecommendations timely and need based. The project is

technically feasible and financially viable.The proposed performance indicators and.financial position are satisfactory. Theproposal is considered to be support worthyfor sanction of grant of 1117.76 lakh .

(e.) Comments of Technical Division has supported the ·Technical Division proposal.(f.)·Approval of After deliberating all the aspects the ·Technical Committee Committee recommended the proposal

under MSE-CDP.

5. Financial Analysis of CFC (96 of CPR)

Parameter As per proposal Comments(a.) BEP 47.73 percent As per(b.) IRR, Payback period 55.50 percent, Payback period of 1 guidelines

~ year and 9 months with grant-in-aidassistance from Gol.

1c'} DSCR N.A(d.) Return on Capital 52.31 percentem~loyed (ROC E)(e.) NPV Positive at Rs 605.48 Lakhs(f.! DER N.A(g.) Sensitivity Analysis With the decline in user charge by

5%, ROCE is 42.94, NPV is positiveat 452.78, IRR is 45.50, BEP is57.19.

6. Total Cost: The total cost of the CFC is as follow:(Rs. in Lakh)

Particulars Proposed Revisedlproject RecommendedCost project cost

(1.) Land and its Development 177.00 226.80(2.) Building and other Civil Constructions 148.98 148.98(3.) Plant & Machinery (including 1064.54 1064.54electrification)14.1 Misc. fixed assets 20.01 20.01(5.) Preliminary & Pre-operative expenses, 58.73 30.00maximum 2% of project cost(6.) Contingency (2% building and 5% on 56.19 56.19plant and machinery)(7.) Margin money for Working Capital 7.53 7.53Total Project Cost 1532.98 1554.05

2..0

8. Plant and machinery (with Brief Specification)

7. Means of Finance: The suggested means of finance are as follows:

Particulars Amount (Rs. in lakh)(1.) SPV contribution 286.29(2.) Grant-in-aid from Govt. of Haryana 150.00(3.) Grant-in-aid from Govt. of India 1117.76

Total 1554.05

S.No Name of the Specification Nos Amount Total AmountMachine per unit(no

of units)Design Studio1. CtP (with work flow Max plate size: Line 44,00,000 44,00,000

software and offline 1030x800 mmthermal plate productivity of 2 (printprocessor; violet) per size) PPH at

28X40" plate size;(Server, UPS and Processor + SoftwareAc)

2. PC's (Macintosh) Software 10,50,000 10,50,000and (Typical capacity of 3 Online(HPJDell); designs per dayJ 8 UPS(including printers hour shift)and UPS)(Coraldraw, Illustrator, In-design

SUb-Total 54,50,000.00

Value-adding Printina facility1. Digital Press (with Size of paper: 12"*18"; 1 32,00,000 32,00,000

dedicated UPS, . 300 gsm fullywith creo print automatic back toserver) back printing; copying;

speed 71 papers perminute of A4 size;Operating capacity of2000 prints per day of8 hour shift.

2. Fully Automatic 28x40" print area; 1 76,00,000 76,00,000cylinder press with capacity of 2500drier impressions per hour

3. Semi-automatic 15" x 20" print area 1 6,00,000 6,00,000screen printing with capacity of 800

sheet/hour4. Full Coater (with width30" size; 1 6,00,000 6,00,000

UV and infrared capacity: 2000 sheetscuring) per hour

5. Flexographic 6 colour press; 10" 1 1,80,00,000 1,80,00,000printing press press with UV, onlinemachine die cutting, clod foil

stampingSUb-Total 3,00,00,000.00

Value-adding Packaging facility1. 5-ply heavy duty NC (Numeric Control) 1 line 2,80,00,000 2,80,00,000

combined cut of size 62"; speedcorrugating plant 60 mts per minute; 20(with fingerJess tonnestwin flute singlefacer, shaft lessmill stand)

2. Support Capacity: 3 TPH 17.5 1 60,00,000 60,00,000eguipment kg/cm square pressureSteam boiler withaccessories andpipe line

3 Automatic Flatbed Capacity 5000 1 1,37,00,000 1,37,00,000dye cutting and impressions per hourcreasing machine 1040x730 mm

dimension paperSub-Toted 4,77,00,000.00

Value-aej Jing Finishing facil!!y1 Line 0 Matic Machine size: 91 cms 1 22,00,000 22,00,000

ready width: paper reelsize of 40 cms min and

I91 cms max; speed 150

" mts/min depending oncapacity and gsm of

i paper;paper production of 3-4tonnes per day on 3shift basis

2 I Automatic paper Max sheet size 28"x 40" 1 26,00,000 26,00,000. folding machine Minimum GSM is 45; and up to 170 GSM

3 ; Thread Sewing 4,00,000 4,00,000. I ['jlachine

4 Perfect binder Max spine length13 1 7,50,000 7,50,000(with all standard inch; min thickness=22accessories) mm and max is 80mm

5 High speed off line Max book size: 440 mm 1 25,50,000 25,50,0003 knife trimmer x 300mm min book(cutter) with size: 80 mm x70mm.randard speed 20 cycles perC1ccessories minute

6 / .utomatic cutting 45 inches cutting 1 16,00,000 16,00,000Machine machine; speed of 60

cuts per minute(operating speed of 10cuts per minute)

7 .ase making (2 Maximum size of paper 1 6,00,000 6,00,000'id) or board 32 inches;

paper thickness

Ibetween 10 mm till 250gsm

8 i Thermal Sheet size of 32" width; 1 15,00,000 15,00,000t.amlnation max. speed of 40

sheets per minute

10. Proposal for the Steering Committee: The proposal was discussed andin-principle approval was given in the 30th SCM of MSE-CDP held on zo" June 2012.Cluster Division recommends the proposal for final approval for setting up of CommonFacility Centre (CFC) for Printing & Packaging Cluster, Kamal, Haryana at total projectcost of Rs.1554.05, Gal assistance of Rs.1117.76 lakh, State Government contributionof Rs. 150.00 lakh and SPV of Rs.286.29 lakh, subject to condition registered lease/saledeed of land in the name of SPV.

SUb-Total 1,22,00,000.00

Supporting Equipment1 Strapping Machine 1 2,50,000 2,50,0002 DGSet 300,75,30 3 23,00,000 23,00,0003 AC (CtP, testing, 25 ton 1 8,00,000 8,00,000

UV coatingequipment)

4 Compressor 4,50,000 4,50;0005 Transformer 500 kVA + Related 13,50,000 13,50,000

Equipment6 Servo stabilizer 5,85,000 5,85,0007 Semi-automatic 43 inches cutting 1 3,00,000 3,00,000

cutting Machine machineSub-Total 60,35,000.00

Total 10,13,85,000.00

9. Shortcomings:(i) Registered lease/sale deed of land.(ii) Consent to establish from State Pollution Control Board.

'.•

I-••~

,.-'••-•

••-Ii .Ii

Ii

Ii

••-•Ii-

••

••-

••

••-••-••-,.••

..•-••

••-••..•

Proposal for setting up a CFC atKarnal, Haryana under MSe=cOp scheme

besides protecting employment and livelihood for a large number of traditionalmanufacturers. The facilities would add to the direct benefit of further industrialization ofthe State. The proposal satisfies the norms and parameters of the modified MSE-CDPScheme for setting up of CFC and is considered support-worthy.

17. CONCLUSION AND RECOMMENDATION

• The printing and packaging cluster of Karnalls a micro-enterprise led cluster with a mixof off-set press and screen printing units as well as packaging units. Cluster firms havebeen successfully catering (largely) to local and district level industrial demand forprinting and print-packaged products and services. Cluster firms suffer in terms of abilityto upgrade in terms of ca ital intensive nting as well asequipment.

• The proposed CFC could help cluster firms double capacity utilization and..er.g@~?.i!ity,

~{~~:~~fi!ih~~e~I~Th;6r~!T~~~W5e~~~e~~~e d~:~p~~e :;~n~~~:~;;~~~~r~~II~~ ~1~~~7;good and other industries. It is expected that the turnover will rise to '1500 crore during

2015-16 from the existing turnover of '452 crore for the period 2010-11. Thus theexpected turnover after the envisaged intervention is about three times as of now. Moreimportantly the envisaged common facility will help existing MSEs move up the value-chain. Further, the proposed project shall foster co-operative efforts amongst clusterenterprises as to help them reap the benefits of joint-action in terms of establishingcritical industrial infrastructure, pursuing joint procurement and marketing .

• In the present globalised scenario, MSME sector also needs to be competitive and facethe global market to improve their productivity and sales. To achieve this objective, theintervention of Government of India in terms of grant in order to set up Common FacilityCentre would further give momentum to industrialisation. The present initiative of theSPV / State Govt. to establish new CFC for the printing & packaging Cluster in order toprovide upgraded good common infrastructure facilities to the MSEs under MSE-CDP ofGOI, appears to be timely and need based.

• The envisaged project will complement the rapid growth of the cluster in terms ofmanpower as well as upgrading and finishing needs. The CFC would helpthe cluster~.r!T.:l,:5,dou.ble c9P~S;i!}t,..y!.iHzC3tionand profitability ana" peneTrafe--'p-re'miurii'm~lrketsegments. It is expected to increase net earningsofprinfing & packaging sector as aresult of the common facility and related interventions.' ,",.,"

•••

••

.~)

~

Besides, the operations of the cluster will grow manifold, which would result inimprovement in the overall socio economic condition of large number of people andsociety as a whole. r

ic~I~~~~~~e proposed performancel\ii , representatives from various

institutions, agencies would look after the overall implementation of the project at regularintervals.

- 30 -

•

_ ..._-----------------,..,..."'--,,--

Proposal for setting up a CFC atKarnal, Haryana under MSE-COP scheme

Taking an overall view, particularly in view of the likely benefits accruing to the micro andsmall existing units in the cluster, the proposal is considered to be support worthy. Theproposal maybe submitted to the Steering Committee of MSE-CDP for its consideration

for sanction of Central Government grant of'1117.76Iakh to the Karnal Print & PackCluster Pvt. Ltd (SPV) under the Micro & Small Enterprises - Cluster DevelopmentProgramme (MSE - CDP) on the terms & conditions mentioned at Appendix I for settingup of a new Common Facility Centre (CFC) at Dist. Karnal, Haryana for the printing &packaging cluster at Kamal.

•

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- 31 -

Appendix I

Terms and conditions of sanction

The disbursement of sanctioned grant by Governmentof India (Gol) shall be subject to theImplementing Agency (IA) I Special Purpose Vehicle (SPV) agreeing that:

[i) The contribution by the SPV/State Government or the beneficiaries shall bemade~t. .

f1

•,,,,•t

••

•

(ii)

(iii)

(iv)

(v) ••

(vi)

(vtl)

(viti)

(ix)

(x)

(xi)

(xii)

(xiii)

(xiv)

(xv)

Proposal for setting up a CFC atKarnal. Haryana under MSE-CDP scheme

The State Government shall provide firm commitment for its contribution towardsthe above project and the contribution should be made upfront, else the amountshould be raised upfront by SPV from own sources.

The contribution of the SPV should not be less than 10% of the .eroject cost andshould be made upfront. Formal-reTter-1ro;;, ---flie-- 'iTien;bers agreeing forcontribution, along with Certificate of Incorporation, Articles of Association etc.should be furnished.

The entir~,gg§Lq.fJ.~DSLgnd buildin9 for CFC shall be met Q,u'lof contribution fromSPV/StC!t~ Government without reso~in~t? G91. grant.

the Articles of Association of the SPV shall be suitably amended incorporatingthe provision for CDE/CDA and induct one State Government official as memberof the SPV. "',,,~-. .' -" '._.>'".' " ..• ---~-,----, ..... __ .-.-,-_ .• -_ ... '.-

Tile Article of Association of the SPV shall suitably be amended to incorporatenecessary clauses regarding usage otCfCJpgJI1!tE1,~J~YJJQ.n.!~!l~mber~_:.

No single unit/member will hol~_ more than 1o.~,i~.t~2<~E!il~. c.~pital (orequivalent capital contribution of the SPY}: '-- .,-

The CFC shall be operationalised within 2 years from the date of final approval.

Escalation in the cost of project above the sanctioned amount due to any reasonshall be borne by the SPVi State Government. The Central Government shall notaccept any financial liability arising out of operation of CFC.

User charges for services of CFC shall be close to prevailing market prices asdecided by the Governing Council of the SPV.

The SPV members shall be able to utilise atleast 60% of the installed capacity ofCFC.' .'

SPV shall obtain 'consent to establish' Jrom.Haryana PollUtion ControlBoard~l,;;If,gJ~J.alongwith other necessary approvals from Government and otherstatutory authourities before obtaining grant from the Central/State Government.

SPV shall obtain 'consent to operate' from HPCB for the operation of the SPVwithin 3 months from the date of commencement of commercial operations.

In case of non availability of Grant from State Government, SPV has to makenecessary arrangements to bridge the shortfall. ---.----

SPV shall furnish quotations from the machinery suppliers and other serviceproviders before availing grant from State/Central Government and satisfy the.disbursement approving authority about reasonableness of the cost of Plant &Mach.nery & MFA.

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(xvii)

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(xix)

(xx)

(xxi)

(xxll)

(xxiii)

(xxiv)

(xxv)

(xxvi)

(xxvii)

(xxviii)

Proposal for setting up a CFC atKarnal, Haryana under MSE-CDP scheme

SPV shall devise a suitable mechanism for utilization of CFC facilities by itsmembers.

The minimum number of members of the SPV shall at no time be less than 20MSE cluster units.

SPV shall ensure allotment of 1 acre of land from HSIIDC for setting up the CFCat Karnal and furnish documentary evidence and also arrange to get the titlesearch carried out, prior to release of grant.

SPV ~hall apply for and obtain necessary !nwer c2~nectio~"~.~~,~:~~~ C?j>y ofsanction letter before release of final 25% 0 Fie granr- .

The SPV shall obtain necessary approvals which are incidental to projectimplementation from State Government.

SPV to open project specific account in a Schedule A bank, as outlined in MSE-COP guidelines~~-"'-'"'' ,.,.•.....•~,~''''' '"''''''''''-''''~''''''''--'"'"'''"'-~~.-'''''L.---~--".-----.:--'""-~,.Disbursement of last 20% of the grant shall be made on submission of the actualinvoices/receipts towards preliminary & pre-operative expenses andmiscellaneous expenditure by the SPV.

SP~ ...~bi1I1,,2btC3inPl.ant & Machinery/MFfc5rming a Committee with proper rep •."'•..·"'nt,

The paid up capital should not be more than 30% of the authorized capital. Theauthorized capital of the SPV should accordingly be enhanced suitably the SPVshall furnish documentary proof for enhancement in the authorized/paid upcapital of the company.

A Project Monitoring Committee preferably constituting GM, DIC, Kamal;representatives of Union Bank of India; representatives of KurukshetraUniversity; Department of Printing Technology, Anna University &representatives of the SPV shall be formed which will directly oversee effectivemonitoring and implementation of the project

The SPV shall submit the approved building plan and estimates of constructioncost before availing grant from Government under the scheme.

Submit affidavit from Sh. Sanjeev Kumar that he is not associated with GanapatiPolytubes (P) Ltd, Mahesh Dairy Products Pvt. Ltd., Ganga Polytubes (India) Pvt.Ltd, Indigo Traders Pvt. Ltd, Tulsi Traders & Quality Inn and is not involved in anyhousing loan irregularities and has not defaulted to any oanklFl. ,~.-.--~ .

Submit affidavit from Sh.Vlrender Kumar that he is not associated with GopalRice Mills & Gopal Rice & Gen Mills and has not defaulted to any banklFI.

(xxix) The SPV shall furnish a certificate/confirmation from the competent authority that.r;

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Proposal for setting up a CFC at.fuirnal, Haryana under MSE-CDP scheme:9

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more than 50% of the units in the cluster are micro enterprises.

(xxx) MOA of the Spy shall be suitably amended so that non members may be able toavail the facilmes W~houtsubscribing to the necessal)' capital base of the SPY.

(xxxi) Large mother finns (whether in pubic or private sector), other major buyers of thecluster MSE Products, commercial; machinery suppliers, raw material suppliersand business development service (80S) providers eligible to contribute upto49% for the SPY, provided management of the Spy remains clearly with theintended benefiCiary SPV.

For procurement of land, the Spy shall enter into a lease agreement for durationof 15 years or acquire the land for the CFC to the satisfaction of theimplementing agency.

(xxxn)

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