CII Future Ready Series Seminar at V U Nagar - 29th July 2017, as part of the CII - State Council Panel and CGZC-Vadodara to Engage with Industries in Vitthal Udyognagar - Anand. The recording of the presentation is uploaded as well. https://youtu.be/a0sh4I30mcg

1. Remodelling the
Manufacturing Business for MSMEs
in India
MANISH KOTHARI, MANAGING DIRECTOR | STATE COUNCIL MEMBER
RHINO MACHINES PVT LTD | CII - GUJARAT
1
CII GUJARAT
FUTURE READY SERIES
1500-1800 hrs | 29 July 2017, Saturday | Elecon Hall, Vitthal Udyognagar Industries Association, Anand

2. 2
The MSME Manufacturing Sector
The MSME Contribution
•More than 6000 products traditional to hi-tech
•38% Contribution to the GDP in manufacturing
•40 to 45% Contribution to the GDP in Exports
•Sustained Annual Growth Rate – 10 %

3. 3
Why Remodelling?
Unlimited Opportunities – Limited Resources
Unlimited Opportunities
• Made in India & Make in India push
• Automobile Hub – pushing metal industry, electronics
• Increasing Domestic Demand from Defence, Rail, Road, Infrastructure
Limited Resources
• Adequate Trained Workforce
• Affordable Technology
• Finance accessibility
• Handling complex documentation

4. 4
Understanding the Models
Model 1: MSME's sharing business
The Working
• Similar Industries of Small Capacities
• One industry takes the order, distributes the same with other manufacturers of similar product
Advantage
• Meets the volume and time demand without having a large capacity
Typical Examples
• Coimbatore Pump Mfg, Agra Leather Mfg, Jalandhar Tools & Sports, Howrah Foundries…..
Challenges
• Few of the industries grow bigger, and start competing with each other
• Each Industry has invested in each activity, duplicating machinery & human capital, looses competitiveness in
global scenario

5. 5
Understanding the Models
Model 2: Ancillary Manufacturing Cluster
The Working
• One main or few large industries building up vendors and suppliers and creating a cluster
Advantage
• Each workshop is a profit centre, better competitiveness, better operational efficiencies
Typical Examples
• Pune, Sanand, V U Nagar, Tatanagar, Vadodara, Pithampur… (a more successful model)
Challenges
• If the large industries get limited to 1 or 2, the cluster goes up and down with them
• Limited industry sector and client is always a risk for small businesses

6. 6
Understanding the Models
Model 3: MSME Cluster - Vendor Centric
Approach
The Working
• Similar to Model 2, but with MSME’s creating business opportunities
• Similar Industries and Similar Minds come together to grow together
Advantage
• Larger spread of industry sectors and client base, reduced business risk
• Better Competiveness and efficiencies with business owners working together
Typical Examples
• V U Nagar, Rajkot, Pune…
Challenges
• Trust and Loyalty are key factors, and are very much related to the local culture
• Needs clarity in business and money sharing

7. 7
Understanding the Models
Model 4: Dissimilar Industries - Similar Minds
The Working
•A new growing concept of connecting MSME business owners from distinctly different industries, joining hands to leverage
each others businesses and/or create new businesses together
Advantage
•Brings synergy of MSME business owners, experiences across sectors, and expertise of varied industries
•Allows horizontal growth of business, creating white spaces and creating new businesses
•Minimizes Risk of growing vertically in one sector and yet grow turnover & sustainability.
Typical Examples
•Rhino’s working with Meemansa (Garment mfg), Ecolibrium (Internet of Things), SkillSonics (Skill Development), Tiino
Automation (Weighing & Electronics), Avant Garde Innovation ™(Wind Turbine), Composite Solutions (Business
Management)….
Challenges
•Limited knowledge of the other partners skillset & sector
•Trust & Loyalty in partnership

8. 8
Why Model 4 for MSME’s!
Establishment Period (5 to 7 years)
• Establish Product/Process
• Create Customer Base
• Generate financial stability
• Put together at Team
Growth & Stabilisation (Year 7 to Year 15)
• Finding the Right Market
• Building Assets – Man, Machine & Finance (we feel all is set)
What Next???? – the Dilemma starts
• Vertical or Horizontal Growth?
• Retention of Team?
• Tackling New Entrants & Competition?

9. 9
Concluding Note for MSME’s
Leveraging your Strengths
Sharing increases your Strength
• Your income with your employees, workers & partners
• Your knowledge with your customer and supplier
• Your resources & network with your stake holders
Join & Complement Businesses
• The faster way to grow is to align with an existing business and leverage your strength
• Create a market as 1 + 1 = 11
• Like minded MSME’s of dis-similar businesses are stronger than dissimilar thinking
and similar business partnerships

10. 10
Summary of the partnerships
Fondarc – foundation for
Rhino’s growth
Fata – added product range,
access to corporates
Spread Risk
Leverage
Finance &
Management
Resources
Leverage
Soft Skills
& Training
Ecolibrium
Recurring
Income
Larger
Network
Value addition
ACEF
Sustenance
Quality
Improvement
Sustainability
Joy of Giving
MSME
Branding
Govt Policies
Social Need
Thank You