multiskilling certification centre for fabrication · assistant director (training, employment,...

Setting up a Multiskillingand Certification Centre forFabricationSkill DevelopmentGovernment of Gujarat

Contents

Project Concept 3

Market Potential 5

Growth Drivers 6

Gujarat – Competitive Advantage 7

Project Information 8

- Location

- Infrastructure Availability / Connectivity

- Manpower Requirement

- Key Players

- Potential Collaboration Opportunities

Project Financials 10

Approvals & Incentives 11

Key Department Contacts 13

Project Concept

FabricationFabrication applies to the building of machines, structures and other equipment, by cutting, shapingand assembling components made from raw materials by using various mechanical processes suchas welding, soldering, forging, brazing, forming, pressing, and bending. It is a value-added processthat involves the construction of machines and structures from various raw materials. A variety ofproducts come from the metal fabrication sector. These range from steel beams and panels used inmajor construction to boilers and tanks. Large fabrication units employ a multitude of value addedprocesses in one facility including welding, cutting, forming and machining. These units offeradditional value to its customers by providing them a one-stop shop.

Metal fabrication jobs usually start with shop drawings including precise measurements, then moveto the fabrication stage and finally to the installation of the final project.

Fabrication SectorThe fabrication sector forms a sub segment of the engineering industry. This is a highly fragmentedand labour intensive sector with medium & small scale industries. Since the demand for fabricationsector comes from the engineering sector, especially capital goods, the growth of fabrication industrylargely depends on the industrial scenario.

The fabrication industry mainly caters to the following sectors:

AutomobileAutomobilecomponents

Construction Aviation

Electrical Machinery Railway DefenceManufacturing

Ports & Shipping

Mahatma Gandhi National Institute for Skill Development & Entrepreneurship (MGNISDE) nearAhmedabad is being developed as a premier national level institute for skill development andentrepreneurship and will take advantage of the collaboration through affiliations and partnershipswith international / national institutes, industry and academia in India and China. It will act as thehub for skill development in the State. The Skilling and Training Unit for fabrication at Surat will actas one of the spokes to the MGNISDE. The Unit will be set up on a PPP mode partnering withindustries pertaining to fabrication to impart world class technological training, research andcertification. The courses will be market-driven and of long and short duration.

Project Concept

Proposed Training Programmes

Material Cutting Cleaning Assembly Machining

1. Rawmaterial2. Transport

1. Metalpieces2. Machinery3. Lubricants

1. Metalshapes2. Acids &solvents3. Water

1. Castings2. Labor3. Weldingwire4. Fasteners

1. Assembledproduct2. Labor3. Equipment

Fabrication Industry

3%

Engineering & fabricationsector’s contribution to

India’s GDP (2015)

>4 m

Semi-skilled andskilled workers

employed

USD 71 b

India’s Fabrication exportsin FY 2014-15

Machinery

Name of the Process List of Major Equipments Needed

Welding Miller 650 AMP Wire Feed and Stick Welders, Miller Syncowave351 TIG Welder, Oxy-acetylene Welding and Brazing, RingWelding Machine, CNC Profile Cutting Machine, MIG WeldingMachine, Gas Welding Machine

Cutting 65 Ton Iron Worker, 200 Ton Vertical Press, Armstrong AutomaticSaw, Saber Saw

USD 150 b

Expected market size ofFabrication sector by 2017

Gujarat Engineering Industry

30

1310

7

6

17

Industrial Clusters

Engineering

Textiles

Food Processing

Chemicals

Minerals

Others

� Gujarat houses 83 product clusters; out of which30 are engineering product clusters

� Engineering sector of Gujarat contributes around18%to state’s total industrial production

� Engineering sector in Gujarat comprises morethan 300 units in large sector and 75,00 units insmall and medium (SMEs) enterprises

Market Potential

Incremental Human Resource Requirement

It is expected that incremental human resource requirement required for manufacturing ofengineering goods during the period 2017-22 will be as follows:

Skilled Semi-skilled

Minimallyskilled

>5300 >21000 ~27000

Market Forecast

41

125

0

50

100

150

FY14 FY17

� Increasing industrialization and economic developmentexpected to drive the capital goods and engineeringindustry to grow at a CAGR of 74.9% between FY14 andFY20

19

45

0

10

20

30

40

50

FY15 FY20

� Engineering research and design segment revenueexpected to grow at a CAGR of 18.4% between FY15and FY20

2.9

22.7

0

5

10

15

20

25

FY15 FY20

� Construction equipment market expected to grow at aCAGR of 50% between FY15 and FY20

� India’s engineering exports stood at USD 70 b in FY15

� With 100% FDI allowed, major international players such as Cummins and ABB have enteredthe Indian engineering sector because of growth opportunities

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Growth Drivers

The demand for the fabrication sector largely comes from the engineering sector. Fabricationsector mainly caters to sectors such as railway, shipping, construction, defence, aviation, andautomobile.

� The long-term strategic plan of the Ministry of Railways is to construct 6 high-capacity, high-speed dedicated freight corridors along the Golden Quadrilateral andits diagonals

� The sector runs 22,300 train carrying over 23 m passengers daily and connectingmore than 7137 stations

� In-principal approval has been granted for building rail connectivity to the ports ofJaigarh, Dighi, Rewas, Hazira, Tuna, Dholera, Astranga, Chara and Nargol underthe Participative Model Policy of the Indian Railways, amounting to INR 40 b

� The Government of India is in the process of launching a new urban developmentmission. This will help develop 500 cities, which include cities with a population ofmore than 100,000 and some cities of religious and tourist importance

� India has an estimated urban housing shortage of 18.8 m dwelling units

� Opportunities to avail defence offset obligations to the tune of approximately INR250 b during the next 7-8 years

� FDI up to 49% investment is allowed under the government route� The MAKE procedure, which aims to promote R&D in the industry with support

from the government and the placement of orders is being revised to make thesector more attractive and unambiguous for the private sector

� A growing working population and an expanding middle-class are expected toremain key demand drivers

� Increasing disposable incomes in the rural agri-sector� Global car majors have been ramping up investments in India to cater to growing

domestic demand

� Government has granted INR 4,000 crore subsidy to the shipbuilding industry to bepaid over 10 years. The step would make India's ship building industry morecompetitive globally. This will lead to an increase in demand for fabrication

Gujarat – CompetitiveAdvantageStrong Fundamentals

� A strong demographic profile - population of 60 m with more than 60% of the population

between the age group of 15-59 years as per census 2011

� One of the highest urbanization levels (as per census 2011) – 43%

� Witnessing a high and growing literacy rate of 79%

� In the state budget 2015-16, Gujarat government announced to invest USD 458 m for the growth

of the industrial sector of Gujarat

� The engineering and automotive sector comprises more than 300 units in large enterprises sector

and over 75,000 units in small and medium enterprises

Industrial Infrastructure

� As of July 2015, Gujarat had seventy nine SEZs; of which, eighteen are operational, twenty six

are notified, thirty one are formally approved and four have in-principle approval

� The state’s manufacturing industry is supported by more than 0.6 m MSMEs employing nearly

3.9 m people in Gujarat

� Infrastructure plans over next 5-7 years will lead to an increased demand:

� 7 new industrial cities planned

� 18,637 kilometer of new expressways

� 24 cities are currently in various stages of planning metro rail

� Port sector capacity addition to the tune of 1 b tons is planned in the next 7 years

Male literacy rate is85.80 percent

Female literacy rateis 69.70 percent

Project Information

Location

Surat

Connectivity

� Well connected by broad gauge� The metro rail project is expected to be

completed by 2017-18

� NH-8 Bharuch-Surat road is completed� Bus Rapid Transport System is under

construction� The major highways passing through

Surat are the Udhana-Mumbai Highwayalso known as Udhana-Navsari Highway,Surat-Ahmedabad Highway

� Surat airport has direct air connectivitywith Delhi and Mumbai

� With the installation of 2 aerobridges inDecember 2015, it has now increased to1500 pax/hour

� Planned improvements at the airportinclude a capacity to handle up to 7 jets ata time, extending the runway to 2905meters

� The nearest port is now in the Magadallaand Hazira area of Surat MetropolitanRegion

� There are over 41,300 small and medium industriesfunctioning in the district

� Some of the main industries are textiles, chemicals,diamond processing, and engineering and relatedactivities (including manufacturing machines &equipments)

Land identification at Surat is in process

Project Information

Manpower Requirement

Position Number

Director 1

Advisor 1

Assistant director (training, employment, admin, finance) 4

Programme facilitators 6

Training officers 12

Subject matter experts & content developers 8

Other staff (peon, security) 6

Total 38

Major Players

Larson & Toubro Kirloskar Oil Engines Ltd. JSW Ispat Steel Ltd

Crompton Greaves Cummins India Ltd.

Potential Collaboration Opportunities

Engineering ExportPromotion Council (EEPC)

Federation of EngineeringIndustries of India

Indian Machine ToolsManufacturer Association

Society of Indian AutomobileManufacturers Builders Association of India

Skill Development Councils – Construction, Automotive

Project Financials

Project Cost (Capex only)

Assumptions:� Accommodation for 50 male & 20 female trainees� Computer center with 50 systems� Plant & equipment cost has not been included

Project components & specifications Cost (INR Cr)

Building (classrooms, library, laboratory, admin area,canteen, cafeteria, restrooms)(Built-up area: 4,500 sq meter,Average rate: INR 34,000 per sq meter)

15.30

Hostel (accommodation for 50 male & 20 female trainees,each being given an area of 14 sq meter)(Average rate: INR 25,000 per sq meter)

2.45

Site Development (internal roads, lighting, waterdrainage system)(Total area: 5 acres,Average rate: INR 1,200 per sq meter)

2.43

Computer center 0.22

Fixed assets (furniture, computer, printers) 1.50

Total 21.90

Preliminary and pre-operative expenses (@12%)(Company formation, interest during construction, etc.) 2.63

Project engineering and consultancy charges (@5%)1.09

Contingency (@10%) 2.19

Indicative Project Cost 27.81

Note : Indicative Project Cost may vary as per the Scale and requirement of the Project.

Approvals & Incentives

Approvals� Interested party may submit their application / proposal or any other query to Director, Directorate

of, Directorate of Employment & Training, Government of Gujarat.

1. Agency name Assistance

National SkillDevelopmentCorporation

� Provides assistance for creation of skills infrastructure and / orworking capital requirement for skill development activity for first 3years

� NSDC may provide funding in the form of loan, equity, preferenceshares, debentures and grant. However, NSDC will prefer toprovide funding in form of loan

Incentives from Government of India

Scheme Name � National Skill Development Corporation (NSDC) Funding

Financial Assistance

� Funding would be up to a maximum of 75% of the investmentrequirement

� Promoter Contribution shall be to the tune of minimum 25% of theinvestment requirement


Directorate General ofTraining, Ministry of SkillDevelopment andEntrepreneurship

� Period of training for various courses varies from six months to twoyears

� About 70% of the training period is allotted to practical training andthe rest to theoretical training

� Dual System of Training Industrial Training Institutes (ITIs) wasintroduced in June 2016 – theory portion and basics about safetyand tools, equipment along with practical will be conducted at ITIs

Scheme Name � Craftsmen Training Scheme

Incentives


Directorate General ofTraining, Ministry of SkillDevelopment andEntrepreneurship

� To support youth who wish to go through skill training programmesin the country

� Banks will pay tuition fee directly to the training institute

Scheme Name � Craftsmen Training Scheme

Financial assistance � Loan will be in range of INR 5,000 to INR 15,000

Incentives from Government of Gujarat


Directorate ofEmployment & Training

� Certify existing skills of experienced but unqualified workers who donot have a formal certificate and do not need any further training intheir field

� Award skill certificates after upgrading and updating skills of semi-skilled / unskilled workers by short term training

Scheme Name � Apprenticeship Training Scheme (ATS)


Directorate ofEmployment & Training

� Training includes basic training, and on-the-job training� Students enrolled in these Centre may get stipend by Employer

during the entire period of apprenticeship training

Scheme Name � Skill Certification by State Government

This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope.It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision.

Directorate of Employment & TrainingPhone: +91 79 23253805

Email: [email protected]

Gujarat State Portal

www.gujaratindia.com

Gujarat Industrial Development Corporation

Directorate General of Training

www.gidc.gov.in

http://www.dget.nic.in/content/

Directorate of Employment & Training

http://employment.gujarat.gov.in/

Ministry of Skill Development And Entrepreneurship

http://msde.gov.in/

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