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Address by Mr. Manoj Verma, Chairman Indian Fan Manufacturers Association

Nineth Annual General Meeting 21 September 2009 at Kolkata


On behalf of the Indian Fan Manufacturers Association, I wish you all a warm welcome to the Nineth Annual General Meeting of the Association at Kolkata.

The global economic turmoil that initially started off in 2008 as a financial crisis has by now become an established reality. Markets and economies across the world had got adversely affected including those in India. The slowdown in the economy, triggered by decreased levels in consumer purchases and subsequently reduced levels in production had an adverse impact on all industries including the Indian Fan Industry, although the negative effects of the global economic recession in India were less pronounced than in many other countries across the world.

The IFMA comprising of eight leading fan manufacturers from the organised sector in the country contributes atleast 60% of the fan production in India, while the balance being accounted for by a large number of smaller units from the unorganised sector. During the financial year 2008-09, IFMA members achieved a consolidated production figure of 20.93 million fans that translates to a growth of just 0.74% over the previous year, with domestic sales recording a growth of 2.30% over the previous year. Exports had registered a double digit negative growth similar to the negative growth registered during 2005-06. The production, exports and domestic sales statistics of the member companies since 2002-03 is presented in the table below.

Year % age Growth
  Production Domestic Sales Export
2002-03 12.30 15.30 (-) 7.50
2003-04 14.10 10.00 48.00
2004-05 25.50 23.90 35.30
2005-06 9.10 13.20 (-) 14.2
2006-07 19.60 21.20 7.50
2007-08 15.86 17.90 (-) 0.92
2008-09 0.70 2.30 (-) 14.60
CAGR 13.90% 14.53 % 7.82 %

Like in all previous years, IFMA had actively pursued a number of initiatives with the expectation of furthering the cause of the industry and stimulating the growth to match its true potential.

Our Association had continued to be actively involved with the Bureau of Indian Standards to review and upgrade the quality standards of all electric fans sold in India. IFMA members were in dialogue with BIS to finalise the minimum service value for ceiling fans in India. While the existing service value recommended by BIS was 4, IFMA had suggested a minimum service value of 3.20 since majority of the fans presently manufactured and sold in India had a service value less than 2.50.

IFMA had also been simultaneously working with the Bureau of Energy Efficiency to formulate appropriate guidelines for the star rating program suggested by BEE. The Association had participated in various discussions with BEE to bring in awareness and develop consensus amongst all stakeholders in the implementation of the star rating program. The program requires establishing efficiency standards and test procedures across all fan categories. A higher service value means a better energy efficient fan. The star labelling program is expected to not only give an opportunity to all end users to make informed choices at the time of purchase, but also result in savings of approximately 30,000 MW of electricity during the next five years.

To address the various issues of commercial trade practises affecting the Indian Fan Industry, the last IFMA Executive Council had submitted a representation on 17 June 2008 to the Department of Industrial Policy & Promotion under the Ministry of Commerce and Industry. The representation had dwelt on issues like high incidence of VAT and excise duty, lower abatement, lower export incentives [DEPB rate] and procedural problems in getting refund of 4% additional customs duty. IFMA hopes that the Government would accept all the recommendations submitted and help the industry to move forward.

IFMA strongly believes that growth in exports can act as an image makeover for the industry and establish India as the best manufacturing hub of electric fans in the world. Unfortunately the growth numbers on the export front had been quite dismal. Appropriate support from the Government by way of increasing the DEPB incentives can act as a catalyst to spur exports.

To control and stem the menace of manufacture of spurious and duplicate fan products of established brands of the members, IFMA members had pooled in resources to engage various enforcement agencies to conduct raids and take legal action against the offenders. During 2008-09 a number of raids were conducted by the enforcement agencies wherein 118 exhaust fans, 102 ceiling fans, 600 regulators, 108 ceiling fan motors and accessories of duplicate make were confiscated and the offenders had been booked.

I feel privileged to be a part of and lead this Association and extend my sincere thanks to all the members and the Sub-committees for their participation, cooperation and support.

Thank you.

Manoj Verma Kolkata 21 September 2009.