Growing an industry

Sixteen years ago, Narayan Pandurang Phalke8217;s future was confined to growing wheat on his father8217;s 10-acre farm at Moi village in Khed taluka.

Sixteen years ago, Narayan Pandurang Phalke8217;s future was confined to growing wheat on his father8217;s 10-acre farm at Moi village in Khed taluka. Today, this Class X farmer is a successful entrepreneur in the flourishing auto component business, with a monthly turnover of Rs 20-25 lakh from his manufacturing unit Sachin Enterprises. What8217;s more, he has set up his own joint venture company with an initial investment of Rs 40 lakh.

Like Phalke, Balasaheb Khando Jaid also found the manufacturing sector a more viable option and sold his farmland a few years ago. Now, he runs his own manufacturing unit with a monthly turnover of nearly Rs 5 lakh.

Phalke and Jaid both represent a new generation of farmers in Dhanore village near Alandi that has broken with family tradition and ventured into business. They have now set up their own units that supply parts to Alandi-based gear manufacturing company Involute Technologies Private Limited.

It all began in 1992 when a labour strike coupled with fast changing demands of a competitive automobile market forced the management to switch over to an alternative organisational model, which involved scouting for entrepreneurial talent among farmers and unemployed youth, and helping them with machinery, training and funds to set up their own units within the company premises.

8220;Through this, we attempted to achieve a sort of flat organisation wherein these individuals can become co-owners of the company, thereby ensuring greater accountability for the performance of the components,8217;8217; say sources at Involute, which manufactures 12 lakh gear components with an annual turnover of over Rs 50 crore.

These entrepreneurs, while working as subsidiaries to Involute, retain 100 per cent of their own profits, and handle finances independently. Most of these farmer-entrepreneurs are even investing in independent businesses, and are procuring bank loans for ultimately owning these machines.

Today, these farmers supply parts worth Rs 3.71 crore to Involute, and recruit around 350 employees. Involute assures the farmers a steady market for their products through their multi-national clientele, including Tata Motors and John Deere. The auto parts are exported to companies in the US, UK and Europe.

Story continues below this ad

Apart from facilitating greater cost effectiveness, this model has helped the company react better to changing market demands, since it can now produce greater varieties of components, instead of the earlier system of mass production of the same components. Currently, Involute produces components with different technical specifications in smaller batches, thereby making it possible to supply for a wide variety of car models.

For the farmers, this foray into the manufacturing sector signifies, first and foremost, a sense of security. 8220;As a farmer, one is dependent on the vagaries of monsoons, and most of the times, the farms do not yield sufficient crops. While I could not think beyond two square meals a day earlier, I now own a house and a vehicle and can support my family,8221; says Anand Pawar, who runs a unit with a turnover of Rs 3.5 lakh. 8220;Despite having failed my Class X examination, I am a manager-director in my own unit. I have 22 people working under me, all of whom are more educated than me.8221;