SMEs in UP to form purchase co-op

In an attempt to procure raw material at better prices, small and medium enterprises (SMEs) in Uttar Pradesh are planning to come together to form a "purchase co-operative".

This co-operative will pool the requirements of its members to improve its negotiating power with suppliers.

"The idea behind such a co-operative is to put together the demands of these small industries as a cumulative order to procure their requirements," said DS Verma, executive director of Indian Industries Association, an organisation of SMEs in Uttar Pradesh.

Small and medium enterprises in the state lost out to large enterprises because of their inability to get good prices from suppliers of raw materials, said Verma. Such a co-operative would go a long way in adding to their competitiveness, he added.

To establish the co-operative, a survey will be conducted to know the demands of various industries. The data will show the relevant statistics on raw material requirements, finances, health of the organization, investment level and also identify the products and marketing of the same.

"This co-operative will be a public-private partnership, The government has already expressed interest," said Verma, adding, "We also need the government's assistance to collect data on the huge number of industries."

Uttar Pradesh has over 500,000 registered small and micro industries, while 3-4 times this number is still unregistered, thus making the overall figure around 1.5-2 million.

A concept paper for the co-operative is already approved by the central committee of the Indian Industries Association.

Verma, the convener of the meeting, said the first project advisory committee was scheduled for March 29. Once this co-operative is in place, the association proposes to follow it up with a sales co-operative of a similar kind.