For GBPL Industries, which produces auto bulbs in Dehra Dun, the recession seems good news. GBPL registered a 25 per cent growth this financial year despite the slowdown in economy and auto sector in particular.
After a turnaround two years ago driven by heavy tax breaks currently available in Uttarakhand, this auto bulb industrial unit is now enjoying the benefits of slowdown in auto sector as it is mainly producing replacement bulbs only.
"Sales in the auto sector have taken a nosedive during the past one year. So it is natural that our bulbs will be used in old vehicles," said Rajiv K Agarwal, managing director of GBPL, which situated at the Patel Nagar industrial area in Dehra Dun.
Other auto bulb units located in Dehra Dun gained as well. Nearly 30 to 40 such small-scale units and dozens of others in the unorganized sector are manufacturing bulbs for autos, torches and decoration items. Agrees Pankaj Gupta, president of the Industries Association of Uttarakhand, "There is 10 to 15 percent growth in auto bulbs in the country due to slowdown in the auto sector."
Prior to the period of tax breaks, the overall picture in the bulb industry was very gloomy.
During the past decade, over 200 bulb units shut shops. Most of the manufactures found other businesses like schools more lucrative. Cheap Chinese products flooded the market, creating a death knell to the bulb industry. But, despite the onslaught of Chinese bulbs, some of the manufacturers carried out substantial expansion to take the benefit of tax breaks and make profit. Moreover, the euphoria of Chinese bulbs also faded away with the passage of time.
There are other interesting stories in the Rs 25 crore (Rs 250 million) Doon bulb cluster. Rajiv Berry, who owns Anand Industries having a turnover of Rs 3 crore (Rs 30 million), has now stopped manufacturing Indolite brand of torch bulbs. "Due to various constraints, we switched over to railway signal lamp business," said Berry. He said the torch bulbs lost its sheen in the face of light emitting diodes, which are being produced in China and Japan. "LEDs are far better substitutes to torch bulbs. So we switched over to railway signal lamps," said Berry.
The saga of miniature bulbs in India began in 1958 when A C Jain set up the first factory in Dehra Dun to manufacture Comet bulbs. Since then, there had been a mushroom growth of the bulb industry in and around Dehra Dun with 250 more units coming up in the next 40 years.
Experts said nearly 5,000 persons got jobs in the bulb industry. With the passage of time, more industries came up in places like Delhi, Mumbai, Indore and Pune that gave a tough time to Dehra Dun's units. After 1998, severe recession plagued the industry.
The final blow came when Chinese products invaded the Indian market that led to the closure of nearly 200 units in the Doon valley. Sadly, the first Comet factory was also closed down three years ago not because of the recession but mainly due to labour unrest. "My grandfather (Jain) was the pioneer in the miniature bulb industry. He was the first person to start this business in India," said Agarwal of GBPL Industries.
"Now that our business is profitable, we are expanding our business further," said Agarwal. But despite getting the benefits of tax breaks, the overall scenario in the industry is not very rosy. "The industry is facing tough time because there is no government support. The separation of Uttarakhand from Uttar Pradesh also led to the decline," said Gupta.
Nevertheless, there is still a ray of hope. With top-notch auto industries to the likes of Tata Motors, M & M, Hero Honda and Bajaj Auto setting up shop in the state, experts said the bulb industry must gear up to fulfill the need in Uttarakhand which is fast emerging as a big auto hub.