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UNIDO DST Cluster Project

Trichy Engineering Industries Cluster Development Project Supported by the UNIDO and the Department of Science and Technology, Government of India

Equipped with the rigorous UNIDO expertise and Cluster Development Methodology and good resource support from DST, TREC-STEP initiated a number of initiatives jointly with Trichy Engineering industry community and other institutions. A diagnostic study of the cluster was carried out by the ‘Cluster Development Cell’ of the TREC-STEP. Thrust remained at institutionalization of a range of activities as also in evolving a cluster wide governance framework.

One of the successful actions, under the cluster development initiatives, is the Energy Audit and dissemination of best practices on energy consumption across the 300 energy intensive industries of the cluster. Pilot activities in terms of power consumption study and energy audit of a small sample of enterprises, were pursued by TREC-STEP. Options for energy conservation were documented and disseminated by means of circulars circulated amongst members as well as through special meetings. Public and Private Service Providers such as the Petroleum Conservation Research Association (PCRA) and Enercon, were inter-twined into the cluster. Very high levels of Energy saving was achieved by the Trichy cluster due to this.

As was envisaged by the stakeholders and UNIDO, in the second year of intervention, the industry progressively assumed greater responsibility for intervention. The major cluster interventions, include:


Common negotiation and cost optimisation - QMS


Certification under ISO 9000:2000 related initiatives were launched by TREC – STEP jointly with BHELSSIA and the quality department of BHEL. Due to this focused intervention more than 75 cluster units, have achieved ISO 9000 certification at that time, providing noticeable quality improvement.

Common negotiation and cost optimization – Energy conservation


TREC - STEP also initially facilitated conduct of an energy survey. The initial power costs for units were even as high as about Rs.128 lakhs per annum with many in the Rs.50 lakhs per annum range. Two midsized units were randomly selected for energy audit. Installation of inverters was a critical suggestion recommended by the auditors. The two units invested in inverters. The Petroleum Conservation Research Association (PCRA), helped conduct energy awareness seminars, focusing on energy saving strategies to enhance productivity. Energy Audits pursued by PCRA in a few more units also recommended discontinuing usage of the generator type welding machines and adoption of inverters, for reducing power costs. Thereupon, support was leveraged by ushering in NSIC to offer collateral free loan to purchase inverters. The association (BHELSSIA) members again, jointly negotiated with 4 vendors and cost of inverters were reduced. A ten percent reduction in annual power cost of enterprises is being achieved, successfully.


Common negotiation and cost optimization - Common transportation arrangements


BHELSSIA took the lead to curb rising transportation charges by transporters networks. Vehicle shares among cluster members for shipping ensured considerable, reduction of costs on transport. Total number of vehicles used were also reduced from 90 to 40 by cluster SMEs. Manpower rationalization was also possible. It is to be noted more than 50000 truck loads are currently operated by the cluster. Any reduction in transport will provide substantial CO2 reduction and thus vehicle share is a great low carbon initiative as far as this cluster is concerned with its heavy logistic requirement.


Institutional linkages for Capacity Development of technology skills


Welders training interventions are being pursued at the Government Polytechnic with faculty support from the WRI. DST through TREC-STEP, has supported the training of about 300 welders and BHELSSIA contributed to about 50 percent of the expenditure. WRI has organized similar programmes, again through another DST support, for upgrading skills of welders on-the-job, are also organized. Qualified welders also ensure process and energy efficiency in the energy intensive fabrication process of the cluster.

In addition to this many strategic action initiated under the project have ensured greater process efficiencies in general and more specifically energy efficiency, thus ensuring low carbon performance for the cluster as a whole. Now, the cluster initiative has taken a giant leap further with greater investment for common facilities and placing Trichy Energy Cluster on the global map as a energy industries hub. Thus the seeds sown by UNIDO DST Cluster Development Programme had ensure multi-fold benefits for the region