Exports projected to rise after 3 years as dollar depreciation benefits the cluster.
The financial slowdown has affected most industrial clusters in Punjab. However, bicycle and bicycle part manufacturers in the state have actually been able to buck the trend. Most units in the state are making full utilisation of their capacity as demand for bicycles and bicycle part exports has actually risen this year, after having declined for three years.
The depreciation if the rupee has worked in the bicycle units’ favour. Owners of these units expect that this depreciation, by around 20 per cent over the course of the year, will push exports. This has partially been in evidence too. Increased expenditure on education by the state government and by various other state governments is also expected to boost domestic demand.
Exporters say the export earnings for this financial year would touch Rs 800 crore against 746 crore last year.
“We hope that this fiscal year, export would be over Rs 800 crore, compared to Rs. 746 crore in 2007-08. The increase in exports is mainly due to dollar appreciation against rupee,” Satish Kumar Dhanda, vice-chairman, medium industry development board, Punjab, said.
He added that cheaper imports from China were of concern and did affect the domestic industries. However, the weakening rupee against dollar had made imports expensive and thus the threat was on the wane. Rising steel price around June 2008, had also hit the bottomlines of Chinese manufacturers and their global competitiveness. This led to increased headroom for domestic manufacturers to take control of the domestic markets, he added.
The bicycle cluster in Punjab is centred in Ludhiana and a small cluster also developed around Lalru in the Patiala district. The cluster has developed over the past two decades.
More From This Section
Over 200 SMEs are engaged in bicycle parts manufacturing business in the state providing employment to thousands of workers.
Dhanda said state governments around the country were expected to purchase about 2 million bicycles in next fiscal year (2009-10) as compared to 500,000-600,000 bicycles in 2008-09. The Karnataka government has ordered about 700,000 bicycles, Uttar Pradesh
(800,000 bicycles), Madhya Pradesh, Chattisgarh & others had ordered around 500,000 bicycles each.
To meet the expected demand, bicycle manufacturing units have borrowed from banks . Banks in the region did confirm to Business Standard that increased credit had flown to units in the bicycle cluster.
So, the bicycle cluster have actually been able to slowdown and in the season of deepening gloom, the other clusters in Punjab do have a reason to hope for a change in fortune.