78

Chapter 4 Sports Goods Industry in Meerut

4.1 Introduction

Meerut is an ancient city, located 56 km (34 miles) north-east of

New Delhi and the administrative headquarters of the Meerut Division

consisting of the districts of Meerut, Bulandshahar, Gautam Buddha Nagar,

Ghaziabad and Baghpat.

It is a city and a municipal corporation in the state of Uttar

Pradesh. It is not only the 16th largest metropolitan area but also the 25th largest

city in India, ranked 292 in 2006 and 242 in 2010 in the list of largest cities and

urban areas in the world. It is the fastest developing city of Uttar Pradesh after

Noida and Ghaziabad, spread about 172 square km area. The total metropolitan

area is 198 km which is third in Uttar Pradesh after Lucknow and Kanpur.

Meerut also has one of the major army garrisons.

Meerut district consists of 1,025 villages with a population of

around 3.44 million according to the 2011 census. Meerut has an average

literacy rate of 74.80 percent, marginally higher than the national average of

74.04 percent with male literacy at 82.91 percent and female literacy at 65.69

percent. Meerut has one of the largest Muslim populations among the major

cities of India (close to 45percent). There is also a significant Christian

population.

4.1.1 Climate

Meerut has very hot summers and very cold winters. Temperature

in summers reaches upto 48 degree celsius on contrary lowest temperature

79

recorded is 0.5 degrees. Rainfall is good and about 80 cm to 100 cm per annum,

which is suitable for growing crops.

4.1.2 Geography

Meerut lies between 28.2 latitudes and 77.7 longitudes in the

northern plains of India. The ground is not rocky and there are no mountains.

Land is suitable for growing crops. Meerut lies between plains of rivers Ganga

and Yamuna, there is no water scarcity as ground water is present.

4.1.3 Economy

Meerut is a famous industrial city. It has a rich agriculture area.

Being in the proximity of Delhi, it is ideal for industry. Existing industrial

clusters are textile, transformer, sugar, distillery, chemical, engineering, paper

and sports goods.

Uttar Pradesh State Industrial Development Corporation (UPSIDC)

has two industrial estates in Meerut, namely Partapur and Udyog Puram.

Mohkampur industrial area is a private initiative. Paschimanchal Vidyut Vitran

Nigam Ltd. (PVVNL) has unrestricted power at Partapur, Udyogpuram and

Mohkampur industrial areas.

Bhur Baral industrial area, at National Highway 58, is under

development. Another industrial area has been identified by UPSIDC at Gagol

Road adjacent to Delhi Road. 1200 hectares of land is available for industrial

development. Identified industrial areas are at Shatabdi Nagar, Delhi Road,

Baghpat Road, Roorkee Road, Mawana Road, Parikshitgarh (Kila) Road, Garh

Road and Hapur Road. Further 2000 hectares land is being proposed for

80

industrial development near Delhi-Meerut expressway. Investment from outside

Meerut has started pouring in as Delhi -Mumbai Freight Corridor (DMFC) and

East Freight Corridor (EFC) will be intersecting very near to Meerut making it a

cost effective destination for setting up industry.

The infrastructure segment of Meerut is currently going through a

boom phase with many new projects coming up in and around the city. There

are many new buildings, shopping complexes, malls, roads, flyovers and

apartments coming up.

The gold market of Meerut is one of Asia’s largest. It employs over

25,000 skilled craftsmen and around 60 kilograms of the precious metal is

processed here every day.

Meerut is the largest supplier of sports goods in domestic as well as

international market. Also has a big musical instrument industry. According to

the statistics compiled by the Income Tax Department, Meerut contributed a

handsome Rs.10, 089 crore to the national treasury in 2007-08, outperforming

Lucknow, Jaipur, Bhopal, Kochi and Bhubaneshwar like cities.

4.1.4 Transport

The nearest airport is the Indira Gandhi International (IGI) Airport

which is about 80 km away. An international airport is proposed by the state

government in the city to reduce pressure at Delhi airport.

By road Meerut is well-connected to major cities like Delhi, Noida,

Faridabad, Ghaziabad, Sonepat, Karnal, Moradabad and Haridwar etc. Two

national highway (NH-58 and NH-119) pass through Meerut. An expressway

81

from Delhi to Meerut and Upper Ganga Canal Expressway which passes

through outskirts of the city are under development. There are two main bus

terminals and seven railway stations in Meerut.

4.1.5 Tourist destinations

Meerut, with its imminent history and luxuriant picturesque

backdrop, has a well-developed tourism sector. The notable tourist destinations

include Jain Temples (Hastinapur), St. John’s Church, Augarnath (Kali Paltan)

Temple, Jama Masjid, Martyr’s Memorial (Shaheed Smarak), Gandhi Bagh

(Company Garden), Suraj Kund, Chandi Devi Temple and Bale Miyan ki

Dargah (both at Nauchandi Ground), Mansa Devi Temple, Shahpeer Sahab ki

Dargah, Basilica of Our Lady of Graces (Sardhana Church), Parikshitgarh,

Lakshagrah (Barnava) and Balmiki Ashram etc.

4.1.6 Sports arena

Meerut has given many international players to many sports.

Praveen Kumar (aka PK), Raman Lamba and Bhuvnesh Kumar the Indian

cricket team players, belong to Meerut. There are three sports stadiums in

Meerut namely Kailash Prakash Sports Stadium, Kulwant Singh Stadium

(Meerut Cantt.) and Victoria Park (Bhama Shah Park) Cricket Stadium. Kailash

Praksah Sports Stadium boasts of a national level synthetic basketball court and

swimming pool.

4.2 Evolution and status of sports goods industry

Meerut is known for many types of industries. It is the second

largest supplier of sports goods in India. Based on a recent Census of India-

2011, conducted by the District Industry Center (DIC) Meerut, there are about

82

1250 registered and 2100 unregistered big and small sports goods

manufacturing units, providing direct and indirect employment to

approximately 1,70,000 persons. Supporting organizations have also grown to

supply adequate quantity of raw materials to the sports goods industry and also

provide training to the workers.

The sports goods manufacturing activity found in and around five

villages and five localities of Meerut city. About Eighty percent of the workers

belong to Scheduled Caste (SC) community.

As per the statistics, there are around 3350 sports goods

manufacturing units in Meerut city (Sports complex, Suraj Kund Road, Victoria

Park, Jail Chungi and Lal Kurti etc.) and the villages around it namely

Abdullahpur, Jangethi, Mohkampur, Nai Basti, Maliyana and Daurala etc. Three

kinds of establishments are usually found in the segment:

a. Big Establishments: They are generally geared to exports besides

catering to the domestic market and are registered as Medium or Small

Scale units (like SS Sports, SG Sports and BD Mahajan) in figure of

approximately 15 to 16 and employ around 15,000 to 20,000 artisans.

b. Small Establishments: They usually manufacture sports goods for the

domestic market. Both the big establishments as well as the small

establishments are registered either under the Factories Act, 1948, or

under the Shops and Establishment Act of the state of Uttar Pradesh. The

registered enterprises are around 1200 in figure.

c. The Unregistered Units: These units are found particularly in the urban

pockets of Meerut and are mostly small home-based, which are usually

run by the family members, but at times with the help of a couple of hired

employees. These units do not have a direct access to market. The official

data related to these enterprises is scare and unauthentic.

83

4.3 Sports goods cluster of Meerut

The Meerut district sports goods cluster is spread across a radius of

approximate 10 km. The cluster produces a large range of sports goods and

about 60 percent of the total production is being exported to Australia, South

Africa, England, America, West-Indies, New Zealand, Zimbabwe and

Bangladesh etc., and the remaining products are sold in the domestic market

across India.

Apart from the Small Manufacturing Units (SMUs), there are

approximately equal numbers of semi finishing units in the cluster, which are

serving the industry with their skills to produce good quality products to

compete in the national and international markets. These semi finishing units

are producing sports goods only for SMEs and they are not getting the normal

profit because they do not have proper way to use their skills and about 80

percent work is executed manually and only about 20 percent work is

mechanically done.

The study has been carried out in Meerut and its suburban areas to

analyze the different operating and performance parameters in sports goods

cluster. Approximately 64 industrial entrepreneurs (as a sample size), dealing in

sports goods were randomly selected from the list available from concerned

local associations, internet, government departments and other resources as

telephone directory and yellow pages etc. With the help of structured interview

schedules, industrial entrepreneurs were surveyed while pertinent literature and

information were collected and compiled. An attempt has been made to analyze

the Indian sports goods sector with the help of Strength, Weaknesses,

Opportunities and Threats (SWOT) analysis as mentioned under:

84

4.4 Strength

This part of the chapter states the strength factors of the industry,

which are also the drivers to carry the business on. The government has taken

major steps to help the industry financially as well as technically. In order to

serve the purpose government has established different institutes to fulfill the

financial and entrepreneurial requirements of the micro, small and medium scale

enterprises (MSMEs).

4.4.1 Location

Meerut is a city having abundant history, limited present but

potentially prosperous future. The historical background of the city has always

been its Unique Selling Proposition (USP). However, a clear understanding of

urban growth, clarifies that it is not the city that made history but history that

made the city gain importance.

Due to its geographic location and nearness to the National Capital

Delhi, with incredible sports goods quality marks it as one of the “Vibrant” city

in India. A latest report by a renowned financial services firm Morgan Stanley

(USA), “Alpha wise City Vibrancy Index: A Guide to India’s Urbanization,”

lists India’s top 200 cities according to their “vibrancy” level which is done by

measuring things like infrastructure, job opportunities, modern consumer

services and the city’s ability to mobilize savings - all seen as key drivers of

urbanization and economic growth, reports that Meerut is a city of around 3.4

million people in India’s state of Uttar Pradesh, classified as a “vibrant” city,

Mumbai is rather lagging behind. The locations (intra city) of different sports

goods industry are as per table 4.1, mentioned under:

85

Table 4.1: Location of sampling units

S. No. Location No. of units % of units

1 Urban 53 82.5

2 Semi- urban 8 12.5

3 Rural 3 5

Total number of units surveyed 64 100

Source: Field Survey

Table 4.1 clarifies that most of the sports goods industry found

located in urban areas (87.5 percent) and enjoys the better communication,

marketing and transportation facilities etc. Only 12.5 percent units are located in

semi- urban areas. This also highlights the migration of labour from rural to

urban area.

4.4.2 Infrastructure

According to Jawahar Lal Nehru Urban Renuality Mission-

JNURM (2006), Meerut is a major city of National Capital Region (NCR) on

the basis of its industrial and geographic location. NCR Board is playing a

major role in strengthening the financial aspect by proving funds and loans for

the development of the city. The main emphasis by the board is on the proposal

of Ghaziabad - Meerut Express way for improving the road connectivity.

Further consideration of proposing Inter State Bus Terminus (ISBT) and Rapid

Rail Transport System (RRTS) is also under process for improving the

connectivity and accessibility of Meerut city.

The NCR in its Regional Plan- 2021 has recommended the

construction of following projects with regards to Meerut:

Four laneing of Meerut- Ghaziabad- Delhi segment of NH-58 (Phase I)

86

Rapid Rail Transit System for Ghazaibad- Merut segment (Phase II)

Upgradation of Meerut Hapur Grid Road (Phase II)

Proximity to National capital Delhi, efficient road and rail network,

rich tourism and cultural heritage, linkages of the surrounding areas and large

number of active NGOs are some of the prime core strengths of the city, which

directly or indirectly affects the working culture of sports goods cluster.

All these factors indicated the strong infrastructure, facilities and

work environment in the sports city of Meerut including its nearby areas. As a

result of these factors different sub- clusters have developed over the period of

time as under:

Table 4.2: Sports items manufactured by sub-clusters /pockets

S.

No

.

Sub- Clusters/

Pockets Sports Items Manufacture

1 Surajkund and around Shuttle- Cock, Tennis Ball, Racquet, Foot-

Ball, Carom- Board etc.

2 Phool Bagh Colony

and around

Shuttle- Cock, Tennis Ball, Racquet, Foot-

Ball, Carom- Board, Hockey Stick etc.

3 Victoria Park and

around

Shuttle- Cock, Cricket Ball, Other Balls,

Carom Board, Track Suit etc.

4 Abdullahpur and

around

Batting Gloves, Keeping Gloves, Helmet,

Wickets etc.

5 Jangeti Batting Gloves, Keeping Gloves, Helmet,

Athletics and all types of nets etc.

87

6 Shobhapur Batting Gloves, Keeping Gloves, helmet,

Wickets etc.

7 Maliana Leather work, Foot Kits, Boxing Gloves

and other protective equipments

8 Sports Complex About 45 units are manufacturing all type

of sports goods and other accessories

Source: Field Survey

4.4.3Government initiative

The government has taken considerable initiatives to promote

sports goods cluster of Meerut as under:

4.4.3.1 Institutional setups

In order to assist the sports goods cluster of Meerut, government

has established certain institutional setup as under:

a. Directorate of Industries, Uttar Pradesh

The Directorate of Industries is a state government department

dealing with administration and policy related matters of small scale industries

(SSI), having both technical and administrative officials. This government body

supports the cluster in every respect by providing training and technical support

etc.

b. Process cum Product Development Centre (PPDC)

PPDC is an autonomous organization under Ministry of Micro

Small and Medium Enterprises (MSME), registered under society’s registration

act 1860. It provides R&D (Research & Development) support to the sports

goods industry and implements central schemes. It also conducts training

program in coordination with the state government. New designs are being

developed and supplied on nominal rates to the industry.

88

c. Uttar Pradesh State Industrial Development Corporation (UPSIDC)

UPSIDC is a statutory body under State Government of Uttar

Pradesh. It works for the development of the industry by providing necessary

infrastructure to the new units.

d. Other Financial Institutes

The government supports the small and micro level industries

through institutions other then the mentioned in previous sections. It can be

classified as:

i. Government of Uttar Pradesh wholly owned Financial Institutes

Uttar Pradesh Finance Corporation (UPFC)

Uttar Pradesh Power Finance Corporation (UPPFC)

State Financial Corporation (SFC)

State Industrial Development Corporation (SIDC)

ii. Government of Uttar Pradesh and Government of India Collaborated

Financial Institutes

Export- Import Bank (EXIM Bank)

Industrial Credit and Investment Cooperation of India (ICICI)

Industrial Development Bank of India (IDBI)

Industrial Finance Corporation of India

Industrial Investment Bank of India

Infrastructure Development Finance Cooperation (IDFC)

National Small Industries Corporation

Small Industries Development Bank of India (SIDBI)

Investment by Insurance Companies

Unit Trust of India

89

Figure 4.1: Financial Institutions

e. All India Sports Goods Manufacturers Federation (AISGMF)

AISGMF is an organization Registered under society registration

Act 1860. It serves and represents the sports goods industry, since 1950, by

supplying the information, technology and technical training to the industries. It

also arranges the raw material for the industries. Apart from the supply of the

raw material, training cum workshops on the technical and managerial issues

related to the sports goods industry is organized for effective linkages.

f. Financial incentives

Some of the financial incentives provided by the government, for

the promotion of small and micro level industries are as under:

Exemption from stamp duty as 100 percent on purchase or lease of the

land for the establishment of the projects;

Financial Institutes/ Banks

Sports Goods Manufacturers helping agency

Local Panchayat

Chemical & raw material Traders

Colours, Paints, Packaging Suppliers

Wood, Leather and Plastic Unit Local Traders

Parts & Accessories

Local Market

Agent/ Exporters

Directorate of Industries

E.P.B

DIC UPEPC AISGMF

AISGEA SGEPC UPSIDC PPDC

90

Interest free loan for pioneer units up to 15 years;

Capital subsidy to small industrial units;

Interest free loan to new large industrial undertakings;

Unlimited power supply to 100 percent export oriented units.

Some of the commodities for which the government assists the

industry are mentioned in table 4.3.

Table 4.3: Financial Assistance from Government Institutions

S. No. Heads under which finance has been released Percent units

1 Raw Material 57

2 Machinery and Equipment 39

3 Marketing and Sales 4

Source: Field survey

Raw Material57%

Machinery and Equipment

39%

Marketing and Sales

4%

Figure 4.2: Financial assistance under different heads

4.4.3.2 Schemes and Policies

The schemes and policies designed by the state government for the

up gradation of sports goods cluster of Meerut are as follows:

91

a. Exemption in stamp duty

Exemption in stamp duty up to 50 percent, while purchasing land

to establish a manufacturing unit is declared by the government under new

Industrial Development Strategy (2004) to promote the industrialization in the

MSME sector.

b. Transportation and Distribution Facility

It facilitates the entrepreneurs while participating in the exhibition

with in or outside state as it bears 50 percent of the total expenditure or

maximum Rs. 5000/- (once in a financial year) made by the enterprise in

account of transportation and logistic charges.

c. Financial Assistance for Technology Up gradation Scheme

Micro and Small Enterprises (SMEs) are facilitated with financial

assistance by the government as under:

SMEs can be funded under this scheme, for upgradation and

improvement in existing technology, for the purchase of latest

technological facilities from the government recognised agencies or the

research centers at 50 percent of the total cost or Rs. 2.5 Lakh (which

ever is maximum).

Subsidy on bank loan is granted if it is purchased for the improvement in

existing technology and thereby increasing the productivity to compete in

the international market with the global giants.

50 percent of the total expenditure or maximum Rs. 2 Lakh is granted for

ISI (Indian Standards Institute) or ISO (International Organisation for

Standardization) accreditation of an enterprise.

SMEs can avail 90 percent of the total expenditure or maximum Rs.

50,000/- against the productivity skill and/or marketing skill refinement

consultancies from the government recognised agencies.

92

Table 4.4: Incentive schemes availed by manufacturing units

Categories Scheme availed by the industry

(percent)

Duty Drawbacks 76

Duty Entitlement Passbook (DEPB) 2

Advance License 2

Export Promotion Capital Goods 1

Service tax refund 11

Export Credit 2

Others 6

Total 100

Source: Field Survey

Export Credit 2%

Duty Drawbacks 76%

Duty Entitlement Passbook (DEPB)

2%

Export Promotion Capital Goods

1%

Advance License 2%

Service tax refund 11%

Others 6%

Figure 4.3: Incentive schemes availed by manufacturing units

d. Honour to corporate houses encouraging sports

‘Rashtriya Khel Protsahan Puruskar’ was introduced from 2009,

awarded by the President along with the National Sports Awards, with a view to

93

encourage the contribution made for the sports development by entities other

than sportspersons. The award is in the form of trophy (designed as a torch),

which is a celebration of life and continuous human endeavor for high

achievements in sports.

4.4.4Employment generation

The cluster provides employment to the weaker section of the

society; particularly the craftsmen belong to schedule cast community. The

segment is highly labour intensive, due to low mechanization; hence there is a

vast scope of handmade articles, which could be prepared easily in any

household or cottage industry. It is beneficial to the physically constrained

people as well as female workers. Low investment is also a point of attraction to

the Below Poverty Line (BPL) families. It has become a good source of income

and they can smoothly run their living hood.

Table 4.5: Area wise employment generation

S.

No Areas

Distance

from

Meerut

No. of

units

working

Nature of unit People

Employed

1 Surajkund Nil 350 SMEs 6000

2 Phool Bagh

Colony Nil 200 SMEs 4500

3 Victoria Park Nil 30 SMEs 700

4 Sports Complex Nil 50 SMEs 2300

5 Lal kurti Nil 75 Micro and Semi

finishing 1000

6 Abdullahpur 10 KM 125 Micro and Semi

finishing 500

94

7 Jangethi 09 KM 130 Micro and Semi

finishing 700

8 Shobhapur 09 KM 140 Micro and Semi

finishing 650

9 Maliana 10 KM 150 Micro and Semi

finishing 560

Source: District Industries Centre, Meerut (2011)

Figure 4.4: Employment generation

Figure 4.5: Area wise units

95

4.4.5 Imparts quality within limited resources

According to field survey, cricket accessories manufacturing units

in Meerut are relatively better organized and give more attention to quality with

in the confined and constrained resources. Quite a few industry export

substantial volume to all over cricket playing countries in the world and have

established their brands such as SS, SG, SF and BDM etc. Meerut is not only

well known for its cricket sports gears but also hockey sticks, tennis and

badminton racquets etc. Some units produce latex based football bladder,

equipments for gymnastic and athletic sports in an organized way and produces

standard quality goods in large quantity using continuous/ semi-automatic

process.

4.4.6 Foreign currency generation

Different entrepreneurs on this issue viewed that the sports goods

industry of India generates the foreign currency of approximately Rs. 125

Crores from the different countries of the world. Year wise trend can be better

understood by table 4.6.

Table 4.6: Year wise foreign currency generation

S. No. Financial Year Export (Crore Rs.)

1 2005-06 76.55

2 2006-07 92.37

3 2007-08 115.23

4 2008-09 115.09

5 2009-10 120.43

6 2010-11 122.85

Source: National Productivity Council (2010) and Field Survey

96

Figure 4.6: Year wise foreign currency generation

4.4.7 Substantial turn over

All the units of the cluster fall under the category of Micro and

Small manufacturing units and imparts the annual turnover as under:

Table 4.7: Segment wise turnover

Annual Turn Over Segments Total Enterprises (%)

Less than 10 Lakhs 30.0

10 - 30 Lakhs 37.5

30 - 50 Lakhs 25.0

50 - 70 Lakhs 5.0

70 Lakhs to above 1.0

Source: Field survey

30 - 50 Lakhs25%

50 - 70 Lakhs5%

70 Lakhs to above1%

Less than 10 Lakhs30%

10 - 30 Lakhs39%

Figure 4.7: Segment wise annual turnover

97

4.4.8 High workmanship

The field survey estimates that 80 percent of the industry depends

on labour and rest on the machines. Hence the sports goods cluster of Meerut is

found to be highly labour intensive. The bifurcation of skilled and unskilled

work force can be represented by table 4.8, as mentioned under:

Table 4.8: Skilled and unskilled labour across the cluster

Years Skilled labour (Percent) Unskilled labour (Percent)

2004-05 60 40

2005-06 58 42

2006-07 59 41

2007-08 58 42

2008-09 59 41

2009-10 59 41

2010-11 60 40

Source: National Productivity Council (2010) and Field Survey

Figure 4.8: Skilled and unskilled labour

98

4.4.9Awards and Honours

According to the news reported by Hindi Daily ‘Dainik Jagran’ (9th

April 2012), Meerut based sports goods companies have been honored by the

Sports Minister Mr. Ajay Makan with three Brand Promotion Awards out of

five in the award ceremony organized by Sports Goods Export Promotion

Council (SGEPC) in New Delhi on 8th April 2012. The sports city has proven its

determination for excellence again, in the field of cricket sporting goods, table

tennis and athletics products etc.

Meerut sports goods cluster has won total of 21 awards out of 81 in

different segments. In the ceremony Meerut based Stag International has won 4

awards, SG and Bhalla International 3 each, Nelco India and K. L. Mahajan and

Sons, one each, in track and field segment.

The promoter of Stag International, Mr.Rakesh Kohli viewed that

their company is winning ‘Best Exporter Award’ continuously for last ten years;

it is a matter of great pride for whole of the Meerut sports goods cluster. It will

motivate the other members to perform at their best.

4.4.10 Other factors

As per field survey, some of the Other Factors that strengthen the

cluster are:

Innovation in the present products with in the available resources

Linkages with traders of nearby markets or middleman of exporter

Cohesiveness among manufacturers is visible

Handmade products

Easy availability of skilled labour in and around the cluster

99

A ready-to-use sports goods complex equipped with all facilities.

Strong presence in the local market.

4.5 Weaknesses

The sports goods cluster of Meerut reflects the following

weaknesses:

4.5.1 Scarcity of raw material

According to a report published by Hindi Daily ‘Dainik Jagran’

(19th April 2011), that it is expected to have a rise in demand up to 40 percent of

Indian sports goods, in consecutive quarters of financial years 2011-12,

specially for cricket bat, as Indian Cricket Team has won the Cricket World

Cup- 2011 after 28 years but improper supply and low quality Kashmir Willow

is the cause of anxiety for Meerut based cricket gear manufacturers. The valley

is suffered from heavy rainfalls, almost daily, which cause moisture contents in

the raw material (Willow wood). According to an estimate, 181 countries of the

world are playing cricket, out of which 53 countries are affiliated with

International Cricket Council (ICC). Meerut supplies approximately 25 percent

of the total demand. The market is expending to the countries like Hong Kong,

USA, China, Thailand, Brazil and Afghanistan etc. at a pace but according to

Mr. Anil Sareen, CEO of SF “The Meerut based manufacturers are facing lot of

problems in procuring raw material required for bat manufacturing, as J&K

Government has banned the export of willow as a raw material but it can be

imported in semi- finished form, which unnecessary increase the cost of the

product. The problem has risen to the Ministry of Commerce and Industries but

nothing has been done in this issue except assurance”.

During field survey it has also been identified that cluster faces

100

many hurdles in procuring some of the other essential raw materials such as

rubber, cane, threads and steel etc., for manufacturing of various sports

equipments. Though raw materials are available within the country, due to

interstate restrictions in goods movement, it can’t be easily transported from one

state to another.

There has been a decrease in availability of many of the materials

needed for craft manufacture and a decline in quality in many of the still

available materials. The sports goods industry facing the most severe shortage

today is wood, cane, scrap and virgin metal. The costs of some of these are

rising at a pace.

Small enterprises usually face problems due to allocation system

for scarce raw materials and imported components. In village industries, raw

material accounts for more than 60 percent of the total cost of the products. New

enterprises face problems in obtaining raw material in the absence of a proper

and equitable policy of raw material distribution.

Table 4.9: Shortcomings in raw material availability

S. No. Factors Shortcomings

(Percent)

1 Inadequacy in availability of raw material 23.68

2 Untimely availability of raw material 7.90

3 To cover long distance 47.37

4 High prices of raw material 13.61

5 Fluctuation in quality 5.26

6 Others 2.63

Source: Field Survey

101

High prices of raw material

14%

Fluctuation in quality

5%

To cover long distance

46%

Untimely availability of raw material

8%

Inadequacy in availability of raw

material24%

Others 3%

Figure 4.9: Shortcomings in raw material availability

4.5.2 Labour laws and regulations

According to the Department of Industrial Policy and Promotion

Report (2011), the labour laws are also creating problems for small and medium

enterprises. Since the manufacturing units require employment of casual

workers for short periods, depending on orders/demand. The labour laws need

to be made more flexible for undertaking such engagements.

4.5.3 Low automation

Dubey and Singh (2011), taken the reference of International Trade

Centre (ITC) Report regarding India’s share in world market of sporting goods.

It viewed that it is marginal up to 0.4 per cent, placing it at 33rd position

globally. Only a handful of enterprises in the cluster are able to tape

international brands while most enterprises cater to the less sophisticated

domestic market or the low-end export market. The major reason identified

behind this weakness is technological stagnation, which is responsible for

optimum performance of Indian exports in International market. The industrial

mechanization can be better understood by table 4.10.

102

Table 4.10: Segment wise automation of the cluster

S.

No. Product/ Equipments No. of units engaged

Machinery used

(percent)

1 Cricket bats 750 30

2 Foot Ball 175 None

3 Cricket Ball 900 20

4 Athletics Equipments 375 40

5 Nets 400 15

6 Volley Ball 325 None

7 Health Equipments 150 30

8 Sports wears 275 40

Source: District Industries Centre, Meerut (2011)

Figure 4.10: Segment wise automation

4.5.4 Lack of product development

With the evolution of many sporting events and their

commercialization such as Indian Premier League, Big Bash League of

Australia and English Premier League of England etc., the demand of

103

sophisticated and user’s friendly sporting goods have increased rapidly. Most of

the old school sporting goods have now in the category of obsolete. Majority of

the sportsmen are of the opinion that the sporting gazettes should have great

strength but light weight.

Graphite shafts in golf sticks, fiber glass in skis, different types of

polymers in basketball shoes, PU (Poly Urethane) in inflatable balls, Kevlar in

sail boats and hockey sticks, etc. are some of the examples of latest material

used in western countries. Research on some of the other alternate materials is

under progress.

Small and Medium enterprises are the back bone of sports goods

cluster of Meerut. These units can not invest in the development of alternate

materials in such a fashion that the international giants can. Poor initiation of

government in Research and Development of such a material and equipment

designing are also one of the major drawbacks.

4.5.5 Lack of indigenous brands and marketing strategies

Different surveys reported that the sporting goods market is

relatively small and split into several layers. The organized segment of the

market is confined to the limited companies such as BDM, SG, SS, SF, Nelco

and National Sports etc. These companies have been stepped up their

investments in the equipment segment in the last years but most of the

enterprise faces several problems including the market risk bearing capacity.

That is why these small players focus their production either for international

brands or for the low- end domestic market, rather than establishing their own

brand.

104

4.5.6 Dependence on import of quality Raw Material

Raw materials like wood, cork, cane willow, fine grade plastic and

leather form the basic inputs to production of sport goods. Sports goods cluster

heavily depends on import either due to non-availability of the raw material or

low quality of available materials. Changing consumer’s requirements and

demand for sophisticated equipments is catered only by the imported raw

material. This raw material is imported in India through different channels as

under:

Table 4.11: Channels of raw material import

Categories Occurrence Percentage

Direct import from foreign sellers 29

Through buying house in India 3

Through agents in India 12

Others 56

Source: Field Survey

Through buying house in India

3%

Through agents in India12%

Others56%

Direct import from foreign sellers

29%

Figure 4.11: Channels of raw material import

105

4.5.7 Involvement of child labour

The exposure of child labour, engaged in sports industry of Meerut

city and its surrounding regions, was highlighted by an Indian NGO, Bachpan

Bachao Andolan- BBA (2009).

Kailash Satyarthi, Chairperson of BBA viewed that big branded

companies outsource work to small contractors, who take unfair advantage of

the poor in villages and small towns like those around Meerut, who then employ

little children to churn out footballs and other sports gears at the cost of their

health and education. Children as young as six are employed in the football-

manufacturing industry right across Meerut city and adjacent villages. The

gender wise status of child labour can be presented by the table 4.12, as

mentioned under:

Table 4.12: Gender wise status of child labour

Village

Children

(6- 17 age

group)

Both

working

and school

going (%)

School

going (%)

Only

working

(%)

Boys Girls Boys Girls Boys Girls Boys Girls

Kamalpur 43 44 44 57 86 68 9 23

Buddh Vihar 21 24 52 62 86 63 9 17

Dabathua 21 23 48 61 81 65 9 17

Siwal Khas 14 13 21 38 86 71 7 8

All 19 104 43 57 84 67 9 18

Source: Bachpan Bachao Andolan (2009)

106

According to Bachpan Bachao Andolan (2009), even after a full

day's work the children can only produce a maximum of two footballs and earn

at best Rs. 3-5 per football, which is 40 times less than its retail price. They are

paid a pittance for their labour. If a stitch comes undone, the contractors deduct

the repair cost from the laborers’ wages.

4.5.8 Disparity in sponsorship

It is the social responsibility of indigenous corporate houses to

come forward to support the young and evolving talent in sports. It not only

enhances the sports culture in the country but also encourage the budding sports

persons to perform at their best at national and international level as well.

But these houses show more affinity towards foreign players. Stag

International, a pioneer corporate house in the field of sports goods, is

sponsoring Peter Calson, the Table Tennis ace of Sweden and the world

champion for last twenty years. Not only this, Pakistani player Saleem Abbas is

also being endorsed by the same company since 2004. ‘Nelco’ is associated

with Thrower World Champion John Badina and Gert Canter.

If to emphasis on Indian players endorsement, Meerut based

companies are relying only on the star players. Discuss thrower Krishna Poonia,

Vikas Gowda and Thrower Digvijay Singh are being sponsored by Anand Track

and Field Company. ‘SG’ is sponsoring cricket stars Virendra Sehwag, Suresh

Raina and Rahul Dravid where as ‘SS’ and ‘SF’ has number of West Indian,

Bangladeshi and Sri Lankan players. ‘Khanna Sports’ is relying on Indian

Football star Bychung Bhutia.

According to Alka Tomar, the only Women Wrestler in Olympic

2012 represented India “Meerut has evolved the number of promising talent in

107

sports to the international level but the matter of disappointment is that no

Meerut based company has initiated to sponsor either of them”.

According to a report published in a pioneer Hindi Daily ‘Dainik

Jagran’ (26th June 2010), localite sports person Garima Chaudhary is one of the

evolving star at martial arts arena, who has proven her identity by qualifying for

Olympic 2012 at Asia level, still looking for sponsorship.

At this disparity, Lokesh Vats, Director of Vats Sportswear said

“Glamour of cricket has snatched the right of several evolving players of other

fields. We are working out a scheme, so that it could be equally beneficial to

all”. Puneet Khanna, an entrepreneur, associated with a football manufacturing

company said “It would happen till the glamour of cricket retains.”

4.5.9 Unsatisfactory financial assistance

The road to success seems to be comparatively tough for small

scale or rather house hold unit owners. If rely on some reports, it could be

expected that some segments of sports goods would perform well in the near

future. These segments include fitness products, athletic products, table tennis,

health equipments and cricket goods etc. But to cater this high demand the

cluster should be well prepared with it’s all the recourses. Capital is one of the

major issue for small scale industries. The small unit holders complained that

they don’t have sufficient funds to fulfill even a fraction of demand created in

the market. They are manufacturing goods for big brands. Banks and other

financial agencies do not look at them but always ready to finance the big

enterprises.

108

Table 4.13: Shortcomings in financial assistance

S.

No. Factors

Faced by industry

(percent)

1 Lack of awareness of financial

assistance schemes 8.45

2 Difficulties faced in getting financial

assistance 38.03

3 Corruption involved in getting

assistance 39.44

4 Requirement of personal approach 12.68

5 Any other 1.41

Source: Field survey

4.5.10 Other factors

Some of the issues related to the weaknesses of sports goods

cluster can be list as under:

Highly fragmented cluster

Lack of availability of funds at low interest rates and formalities

Very little or rather no market research

No space or vision to organize cluster oriented trade fairs

Red- tapism and slow working in government departments

Unexpected inspections by government officials

Fixed mindset to sell only in the domestic market

Erratic power supply

Weak association and union

Poor working conditions

109

4.6 Opportunities

The sports goods cluster of Meerut has the opportunities as under:

4.6.1 Increasing demand of sports goods

The demand of sports goods in India is expected to be increased in

the consecutive years. The market magnitude of different sporting goods, such

as athletic goods, hammer, discuss and javelin etc are expected to be increased

by 15 percent where as foot ball, ruby ball, soccer ball, table tennis related

equipments by 20 percent and cricket related equipments and accessories by 40

percent. The experts estimate this boom in cricket due to the outstanding

performance of Indian Cricket team in ICC Cricket World Cup- 2011 and

different Indian Premier League (IPL) teams.

Table 4.14: Extant of demand for sports goods

Characteristic Demand (percent)

Increase 42.50

Decrease 7.50

Stagnating 20.00

Constant 30.00

Source: Field Survey

Decrease8%

Stagnating20%

Constant30%

Increase42%

Figure 4.12: Demand of sports goods

110

4.6.2 Productivity improvement

Productivity improvement in sports goods cluster has a vast scope.

There are many areas and avenues which can be improved by providing

required assistance. Many new sports goods can be added to the current basket.

It will not only increase the magnitude of industry in this segment but also the

employment opportunity to many local people. The cluster can be benefited

immensely if a proper technical up gradation of machines and equipments etc. is

done.

Ministry of Micro Small and Medium Enterprises (MSME) in

order to enhance productivity of Indian industries, particularly Foundry industry

of Agra and Sports Goods Industry of Meerut, promoted ‘Lean Manufacturing

Competitiveness Technology’ with the help of Government of Japan. Only 20

percent of the total expenditure would have to be borne by the enterprise and

rest by the government.

Upgradation in the skills of workers is another area of

improvement. Proper training can help in improving the productivity of the

workers, thus improves the productivity of the industry as a whole. Greater

scope lies in diversifying to newer sports segments, thus there is huge scope for

promotion of productivity in this cluster.

Table 4.15: Capital and Labour Productivity

Year Capital Productivity

(Earnings Per Re. Invested)

Labour Productivity

(Rs. Per Person Employed)

1995-96 1.51 28853

1996-97 1.09 27850

111

1997-98 0.95 18624

1998-99 1.07 25399

1999-2000 1.14 31631

2000-01 0.52 26670

2001- 02 0.62 27070

2002-03 1.21 18871

2003-04 1.26 21724

2004-05 1.78 20412

2005-06 2.47 19307

2006-07 1.42 15380

2007-08 1.26 16987

2008-09 1.07 20156

2009-10 1.10 17825

2010-11 1.15 21010

Source: National Production Council Report (2010) and Field Survey

Figure 4.13: Capital Productivity

112

Figure 4.14: Labour Productivity

4.6.3 Commonwealth Games- 2010

According to the Institute of International Trade (2010), Common

Wealth Games- 2010 (CWG-2012) are expected to result in an overall economic

impact of US$ 4.9 billion on India’s GDP during a period of four years (2008-

12) and create an employment opportunity for approximately 2.5 million

people. This figure is almost three times the economic impact the Common

Wealth Games- 2006, Melbourne, had on the Australia’s GDP, Meerut is not an

exceptional. Some of the other opportunities that sports goods manufacturing

segment of Meerut could avail by CWG-2010 are as under:

Attract Foreign Direct Investment (FDI);

Development of sporting culture;

4.6.4 Cricket World Cup and other mega events

Other than Commonwealth Games- 2010, different mega events

have also been organized by the different sports associations/ boards in the

113

country. ICC Cricket World Cup- 2011, Chennai Open Tennis and Formula- 1

Race etc. are some of the most adorable sporting events. The development of

new sports infrastructure across the country has also sparked off renewed

interest among the youth to play the games with greater intensity. Alongside,

there is a mushrooming of sports clinics and coaching camps that draw a very

large number of players to hone their skills. All these factors can contribute to a

rapid increase in the demand for Meerut based but high quality sports gears in

the country.

According to the Hindi Newspaper ‘Dainik Jagran’ (2nd February

2011) several Indian and foreign players could be seen playing with Meerut

sports goods, particularly bats. According to Jatin Sareen, the owner of Sareen

Industries, “Company is sponsoring different players of Sri Lanka, Bangladesh,

Zimbabwe and Netherlands. Sri Lankan skipper Sangakkara and West Indian

player Kerron Pollard are some of the big names among them”. The Stanford

Company (SF) has sponsored the whole Canada team and some of the Kenyan

players. Company’s Business Executive Vyapak Mehra said “We have endorsed

big West Indian players like Ram Naresh Sarwan and run factory Kris Gayle”.

It was expected that during and after this mega event the demand of cricket

goods would rise by 20 percent but according to the different sources it has

tremendously raised up to 40 percent.

Indian Premier League (IPL) is another avenue of interest for

cricket fans. Mumbai Indian’s star player and God of cricket Sachin Tendulkar

played with Meerut based Premier Companies bat. The company owner Sunesh

Agarwal said “It was a great moment for us by seeing our bat hold by Sachin.

Divvy Jacob, the opener of the same team, also used our bat. It reflects the faith

of these players in our products. It definitely boosts up our confidence”.

114

4.6.5 London Olympics- 2012

Meerut based companies are few of the handful companies across

the world that provide sports equipments like shot put and javelins etc. that

confirms to the guidelines set by The International Governing Body for Athletes

Federations (or IAAF).

According to the report published by The Economic Times (16th

January 2012), city based companies- Nelco sports, Bhalla International and

Anand Track and Field Equipment Private Limited- are going hammer and

tongs to supply equipment of international standard at the mega sporting event.

They are providing shot puts, discus, hurdles and hammers for the track and

field events. These companies provide a variety of implements in the mega

event which is expected to be Rs. 3, 64,000.

4.6.6 Growing employability

“Coming five years would be remarkable for the employability of

sports goods sector particularly in retail” said Stag International’s chief Rakesh

Kohli. Stag International is one of the pioneer companies manufacturing and

exporting various sports goods, now diversifying the segment as the retail

outlets chain. The company has collaborated with world leaders- Milan

(Germany), Tunturi (Finland), Victor (Germany) and Skills Training Equipment

(USA). The company has planned to invest Rs. 100 Crores and expecting a

handsome annual turn in the consecutive years. In its initial phase the company

has opened its retail outlets- one each in Meerut, Indore, Chandigarh and

Dehradun and two in Banguluru.

According to The Economic Times (22nd August 2012), “The latest

report of ASSOCHAM (2012) has shown better job index for Meerut as

115

compare to Kanpur, the pioneer industrial city of Uttar Pradesh. The

employability in Meerut has increased by 38.5 percent, in the recent years, as

compare to 23 percent in the same tier cities”. The report also highlighted that

the job market is expected to be boomed by 50 percent in the coming years as

large number of retail outlets including sports goods would register their

presence. But the picture unveiled during the field survey is as under:

Table 4.16: Employment contribution

Years Artisans Employed

2004-05 67187

2005-06 67260

2006-07 67260

2007-08 67020

2008-09 67050

2009-10 67188

2010-11 67320

Source: Laghu Udyog Samachar (2010) and Field Survey

Figure 4.15: Employment growth

116

4.6.7 New innovations and upgraded technological input

The new innovations and advancements through research are keen

to change the shape and nature of different sports goods and accessories. Cricket

bat is one of the highest selling products of Meerut Sports Goods Cluster

(MSGC) to the world, which usually made up of English willow or Kashmir

willow. According to M.K. Sareen, the member of Melbourne Cricket Council

(Dainik Jagran, 1st February 2011), the willow is a natural product and is

depleting fast because the demand of cricket bats are increasing continuously.

Hence in order to maintain the ecological balance and fulfill the market demand

the search of alternate material becomes inevitable.

Anil Sareen, CEO of SS, a pioneer cricket gear manufacturing

company on this issue said “The extensive research work is being carried out in

The Netherlands and New Zealand to find out the alternate material for cricket

bats and hockey sticks. Graphite has been evolved as a new material which can

replace willow and we are ready to make changes as soon as ICC approves it”.

According to the report of Hindi Newspaper ‘Dainik Jagran’ (1st

February 2011), in 1980 the famous Australian cricketer Dennis Lilly played by

aluminum bat, which had created a debate. Later his countryman Ricky Ponting

experimented with some metallic bat in the first class cricket and indicated his

support towards alternate material.

It is expected that the cricket bats and the hockey sticks so

manufactured would be more durable. In this sequence Meerut based Stag

International has developed bullet- proof TT table top with the help of German

Technology, by virtue of which this game could change its nature from indoor.

This table can now be used at sea beaches as well. Stag International’s Vice

President Vivek Kohli said “This bullet- proof table is made up of multi layered

117

special wood top called ‘comprez’, by virtue of which it could withstand up to

4000 kg of weight. This table top incorporates the strength of steel, quality of

wood and durability of plastic. This material is frequently used in public

transport system of Germany. This table is also admired by different countries

including USA, UK and France and so far more than 5000 table tops have been

exported to these countries. Latin American countries are also demanding for it.

‘Transparent arena’ is also a new innovation in Beach Table Tennis. It is a thin

wall made up of transparent plastic foil and can be rolled and ported when

desired. However the material ‘comprez’ is not so easily available still the

research on the cheap and easily available alternate material is carried out”.

Fitness equipments are another avenue of high- tech sports goods

segment. A reliable source by taking the reference of ‘Edelweiss’ (2012), a

prominent economic survey company, said that by 2020 the fitness market of

India would be of 30,000 crores and people would spend on it about 35 times as

today. Hindi daily Dainik Jagran (17th February 2011) reported this figure as Rs.

73000 crores per annum. There are number of big and small companies in

Meerut, manufacturing fitness equipments. Stag International is one of the

pioneer company dealing in various sports goods including fitness equipments.

According to the report published in Hindi News paper ‘Dainik Jagran’ (2012),

Stag International in collaboration with German counterpart Milan, has

developed an automated gym which is operated by smart card. This machine

resets according to the length and weight of the person while applying smart

card. According to the officials of Stag International this gym is also admired by

different Bollywood film stars in an exhibition in Mumbai and Pune and it is

expected that this gym would be exhibited in a large budget film in the near

future. According to Dainik Jagran (6th January 2012), the same gym is used by

famous film star Karina Kapoor in her film ‘Bodyguard’.

118

If to switch towards ‘Discuss’, the different companies of the world

manufacturing the ‘discuss’ of 85- 90 percent ring weight by steel and brass.

Meerut based Nelco International has developed new ‘discuss’ which contains

95 percent ring weight, made up of poly carbonate. Being aerodynamic in shape

this ‘discuss’ would retain in air for more time and can be projected for larger

span. The change in metal ratio is so designed that imparts better weight to

balance relationship. This discuss has been appreciated by the American World

Champion Discuss Thrower Nick Petrecy and Indian athlete star Vikas Gowda.

The company has applied for its patent and would start its regular production as

soon as they get approval from International Athletics Federation (IAF). The

company claims that this discuss would improve the performance of players.

4.6.8 Initial investment sources

According to the field survey findings, most of the investment is

managed through availing credit from banks, government subsidy and

government loans while significant proportion of investment is mobilized by the

entrepreneurs themselves. The table mentioned below can better explain the fact

as:

Table 4.17: Average Initial Investment

Sources of Finance for Initial Investment Percent

Self 5.38

Friends 16.15

Government Subsidy 26.15

Government Loans 24.62

Banks 27.69

Source: Field Survey

119

Government Loans

25%

Banks28%

Self5%

Friends16%

Government Subsidy

26%

Figure 4.16: Average initial investment

4.6.9 Other factors

Field survey highlighted other opportunities too, in their studies

that MSGC can avail as under:

Vast scope for skill up gradation

With the advent of information technology and communication

technology new products and designs can be made available easily

New machines and tools are now available to financially sound units

New products for higher income groups can help in creating new market

Some of the Indian brands may expand the market horizontally and

vertically

Huge untapped domestic and international markets

Potential for product diversification

Global trend can usher tremendous market potential for the units who will

go for ISO-9000

4.7 Threats

The sports goods cluster of Meerut is encountered with following

threats:

120

4.7.1 Trade competitiveness

As Jalandhar and Meerut are the major sports goods clusters in

India. Jalandhar contributes approximately 75 percent where as rest is

contributed by Meerut. Due to confined proportion, MSGC is more threatened

by Asian counterparts like Japan, China, Taiwan and Pakistan etc. It pays

comparatively high tariffs as compare to Pakistani city, but with moderate

productivity. Chinese and Japanese companies are more technologically

advanced as compare to traditional Meerut cluster. It can be better understood

by the following table:

Table 4.18: Trade competitiveness

S. No. Factors that appeal retailers Percent retailers

1 Price 45

2 Quality 55

3 Quantity 0

4 Others 0

Source: Field Survey

Quality55%

Price45%

Figure 4.17: Market appealing factors

121

According to the report published in Hindi Daily ‘Dainik Jagran’

(4th March 2011), the government, in addition, is making the way more

complicated by imposing Goods and Service Tax (GST) for sports goods

industry. An excise duty of 1 percent is expected to be imposed soon by the

government. According to the manufacturers it would unnecessarily increase the

cost of sports goods and cheap Pakistani as well Chinese products may acquire

their segment.

4.7.2 Entry of global brands

According to Mukherjee (2010), with the growth of modern

retailing, foreign brands have entered the Indian market. The proliferation of

brands has increased brand-consciousness and Indian consumers are now more

inclined to buy branded products.

The growing Indian retail market, consistently high GDP, rising

per capita income, large consumer base among others has also attracted foreign

retailers to India, especially retailers from developed countries who are facing a

saturated market at home. For three consecutive years, (2005 to 2007), India

ranked first among 30 emerging markets for foreign retailers. In 2008, it was

ranked second after Vietnam but in 2009 it again regained the first position in

the AT Kearney Retail Development Index.

Both traditional and modern retailers have pointed out that the

Indian manufacturing sector has not focused on strong brand development.

There are only a few strong Indian brands and hence they have no options but to

market foreign brands.

Different surveys found that foreign brands have entered the Indian

market through multiple routes. For instance, Nike initially entered the market

122

in 1995 under a seven year exclusive licensing agreement with Sierra Trading

Enterprise (STE) and in 2003 established its wholly-owned subsidiary. Brands

such as Reebok, Puma and Adidas have wholly-owned subsidiaries in India.

They source products from India both for domestic and foreign markets and

have an integrated operation encompassing sourcing, distribution and retailing.

Since they are incorporated in India they are considered as Indian companies.

Other like Technogym has entered through a distribution

agreement, whereas Lotto entered through a licensing agreement, which gives it

the right to manufacture, source locally and distribute products. Some retailers

are entering through joint ventures- for instance; Dama Paul and Shark has a 50-

50 joint venture with Reliance Brand, where as Canadian brand Trio Sports

Wear (P) Ltd. have entered through the single-brand retail route. Others like

Lacoste enter through franchisee agreements.

Some have a mixed model of licensing and distribution agreement

or franchising and distribution agreement.

Table 4.19: Most demanded brands

Sports apparel: Adidas, Reebok, Nike, Puma and Nivia

Sports footwear and shoes: Adidas, Nike, Reebok, Puma, Lotto and Ace

Sports goods: Reebok, Yonex, Cosco, Adidas, Nike, Wilson and Puma,

Fitness goods: Aerofit and Telebrand

Source: Market survey

123

This situation not only affects the economy of the country but also

that of Meerut as it is one of the major stack holder of sports goods industry in

India.

4.7.3 Coping/ piracy of brands

It is a known fact that very few entrepreneurs have strived towards

branding of their products like BDM, SS, SG, HRS, Nelco, Anand Track and

Field Equipments and Bhalla International etc. and some others among the

global giants. Still many small and medium manufacturing units market their

sub standard products with big names and earn the handsome profit. During

field survey almost all the local giants’ complaint that it is due to the poor

government regulations of duplicacy/ piracy and bureaucratic practices.

4.7.4 Price hike in industrial land

According to the prominent English daily- The Times of India (24th

March 2011), the escalating land prices have frozen the plans of expansion of

many small scale industries in Meerut and nearby districts like Ghaziabad and

Noida. It has affected the chances of many companies who are doing reasonably

well at their units but the revenues they generate are not sufficient enough to

purchase the land and expand their operations.

Industries in Meerut are suffering immensely because of this

problem. According to some sources the government has not developed any

industrial area after Udyog Nagar that was 15- 20 years back which has

aggravated the problem. The player has to pay a hefty price to buy a land

elsewhere.

124

4.7.5 Compromised quality and price tag

Retailers are said to be the first customers. Field survey identifies

that quality and price are not the only factors that could attract majority of

retailers. Very few retailers show cases the original and branded products as

barely professional and elite class customers demand for it where as majority is

least concern about it. The Other Factors that retailers usually desired from a

product are as under:

Table 4.20: Factors that customer demands

S. No. Factors Percentage

1 Quality 4

2 Price 2

3 Packaging 11

4 Branding 5

5 Availability 9

6 Choice/ variety 13

7 Credit 18

8 Advertising Effect 7

9 Long shelf life/ durability 15

10 Rebate 16

Source: Field Survey

Price2%

Credit18%

Advertising Effect7%

Choice/ variety13%

Availability9%

Branding5%

Packaging11%

Quality4%

Long shelf life/ durability

15%

Rebate16%

Figure 4.18: Factors as per customer demand

125

4.7.6 Impact of recession

Global recession strikes the world and impact adversely in 2007-

08. No segment left untouched and so the sports goods cluster of Meerut. The

cluster faced a remarkable melt down of the market from compound annual

growth rate of 23 percent (2006-07) to 10 percent at the end of the financial year

(2008-09), refer table 4.21.

To overcome this melt down the sports goods manufacturers found

the new avenues in exports. Being good availability of skilled men force,

Meerut based sports goods cluster could be in the position to supply fit-in-

pocket sports gear to the global brands like Puma, Kookaburra, Slazenger, Gunn

& Moore, Mitter, Reebok, Nike and Adidas etc. Recession has had a significant

impact on the manufacturing facilities due to high overheads, high labour cost

etc. of these brands and, therefore, Meerut has become their cost-effective

manufacturing stop.

Table 4.21: Impact of recession on turnover (Crore Rs.)

Year Total CAGR (Percent)

2004-05 111.38 -

2005-06 124.77 0.12

2006-07 153.80 0.23

2007-08 179.87 0.17

2008-09 198.60 0.10

2009-10 209.10 0.05

2010-11 228.77 0.09

Source: National Productivity Council (2010) and Field

Survey

126

Figure 4.19: Impact of global recession on annual turnover

Figure 4.20: Impact of global recession on CAGR of annual turnover

Table 4.22: Foreign currency earning

S. No. Financial Year Export (Crores)

1 2005-06 76.55

2 2006-07 92.37

3 2007-08 115.23

4 2008-09 115.09

5 2009-10 120.43

6 2010-11 122.85

Source: National Productivity Council (2010), Dainik Jagran (2010) and Field Survey

127

Figure 4.21: Impact of global recession on export

Rather, Meerut Sports Goods Cluster has found a way to overcome

the effect of global melt down still it can not be assumed as a final avenue as

sub- contractorship is not the optimal option. As soon as big brands found the

alternate sources they will switch to them and leave Meerut based companies

abundant.

4.7.7 No Meerut product in Common Wealth Games- 2010

Rather, Meerut has lot of credentials in its pocket like-

Export of sports goods to approximately 143 countries due to superior

quality.

According to the report published by The Economic Times (16th January

2012), city based companies- Nelco Sports, Bhalla International and

Anand Track and Field Equipment Private Limited- are going hammer

and tongs to supply equipment of international standard at the London

Olympic- 2012.

Other companies such as Vinex and Stag International supplied their

products to various mega events including Men’s and Women’s Table

128

Tennis World Championship, Euro- Asia Cup, Youth Olympic and

European Youth Championship etc.

Yet the organizing committee of Common Wealth Games- 2010,

New Delhi, has not asked even a single product from the Meerut based

companies. Rakesh Kohli the chief of Stag International claimed that they had

offered their services for the mega event by supplying table tennis products free

of cost but no attention had been drawn on their proposal. They further added

that it could cut down some of the cost in organizing such a big event and the

Indian sports goods clusters could be promoted at international level. In brief,

Meerut sports goods cluster in particular has missed a lot as this event could

have a lot of impact on its economy being closer to Delhi.

4.7.8 Poor quality system

Perhaps the most neglected area of the industry is this. Having

laboratory and carrying out quality control check is exception (very few units

have) in this industry. Practically, there is no check for incoming raw material

and some cursory check is with finished product is carried out- mostly visual,

weight and sometime hardness. Infrequently some tests are carried out at PPDC

Lab by some of the units and not pay much attention to understand significance

and importance of such tests.

4.7.9 Technical Manpower

Equally neglected area is recruitment of qualified technical

manpower. There is hardly qualified Polymer Technologist (PT) in the industry,

especially in the middle level like supervisor and lab chemist etc., who could

follow proper processing and technology required for the manufacture of the

product.

129

4.7.10 Declination in growth of units

Despite the growth potential, entrepreneurs could not plan to

expand their businesses due to bottleneck in industrial growth. The basic

problem and factors for unsuccessful growth of the industry is shown in Table

4.24. Low returns, market competition, low investment, lack of finance, limited

demand and inferior quality of products etc. are some of the important factors

for unsuccessful growth of industry.

Table 4.23: Factors that lead to declination in growth

S. No. Factors Industry’s Perception

(Percent)

1 Lack of finance 44.62

2 Limited demand of products 13.08

3 Low returns 56.92

4 Inferior quality of products 6.92

5 Competition in marketing due to low

cost Chinese products 100.00

6 Any other 85.38

Source: Field Survey

4.7.11 Other factors

Different findings report that there are some other factors that

threaten the sports goods industry are:

Reluctance of artisans towards learning of new skills and group activities

Highly dynamic business environment

Low literacy level of few artisans to use the latest gazettes of information

technology and communication

130

High cost and scarce availability of latest technology and tools.

Costly transportation

Low pace of quality upgradation programmes

Fixed mindset and inability to innovate as required in every process

No linkages with the large buyers

Slow or zero adaptation to the international standards

Increasing global competition