Policy Engagements and Blogs

Dhampur Diary 2: Changing Industrial Structure of a Small Town

Pushpa Pathak

August 29, 2024

CONTEXT

Four decades ago, I studied industries of Dhampur, a small town of about 29,000 inhabitants located in the rich agriculture region of western Uttar Pradesh, for my doctoral research. I revisited Dhampur in early 2024 with the intention of starting a longitudinal study of the same small town, which now has a population about 1 lakh and an area of 3.87 sq km. I was curious to know: How has the industrial structure of Dhampur town changed over 40 years? Have the industries in the town evolved in response to the change in demand and technology? Is there greater diversification in industrial production than before?

INDUSTRIAL LANDSCAPE

Industries often locate in the rural-agricultural areas adjacent to urban settlements, predominantly to get cheaper and larger parcels of land and also to benefit from the infrastructure and services of the town by remaining in close proximity to it. Therefore, I had considered industries located within the municipal area as well as in the rural areas falling within 5 km radius of the town as the industries of the Dhampur town at both points of time.

After extensive survey of industries conducted in Dhampur in the first half of 2024, it became clear that the industrial landscape of the town has gone through major transformation over the four decades. The fact that the total number of industrial units located in Dhampur increased from 43 in 1979-80 to 63 in 2023-24 didn’t appear to be a surprise. The new units being established in keeping with the increasing population size of the town conforms to an expected pattern of positive change over time. What was the real revelation is that, only 4 of the currently functioning industrial units have been in existence since 1979-80 and 59 are newly established units, which excludes some industrial units that may have opened and closed down during this long span of four decades that we do not have a record of. Such a large number of industrial units closing down and even a larger number of new units being set up is clear indicator of industrial vibrancy of a small town, which indicates the presence of a significantly large group of entrepreneurs who are able take risk to venture into new types of industrial production responding to the market demand as well as technological changes.

INDUSTRIAL STRUCTURE

The major changes in the industrial structure of Dhampur town over four decades are summarized into the following four broad categories: industrial expansion, industrial decline, industrial transformation and emergence of new industries:

  1. Industrial Expansion: There are four groups of industries that show a notable increase in the number of units of production although the nature of manufacturing and processing that existed at these two time periods is significantly different. A part of this increase can also be contributed to some family-run businesses getting split into two independent units after division of joint families and their assets in the succeeding generations:

    i. Manufacture of food products: In 1979-80, 4 of the 9 food manufacturing industrial units were involved in grain and oil milling. In addition, there were 3 sugar and Khandsari (unrefined sugar and Gur making) units, and 2 ice factories. In 2023-24, of the 16 food producing industrial units, sugar and gur making continued to have a significant share of manufacturing space with 4 units, including the Dhampur Sugar Mills Ltd., which also has Green Power, Ethanol, and Ethyl Acetate as its major allied products. Of the new industries that have come up in this category, 3 are making ice cream, 3 bakery products and Puri Namkeen making packaged snacks. All 4 of the earlier grain milling units have closed down whereas 2 new oil mills have come up, namely Bharat Food Products and Himalaya Enterprises. Other new kinds of food products include glucose syrup making by Gulfro Starch Sugar Pvt. Ltd., cashew nuts processing by Odisha Food Products, and animal feed processing by Kisan Agro Foods.

    The Dhampur Sugar Mills Ltd. established in 1933 continues to be the leading industrial unit in the town. It also increased its annual sugar production manifold from 0.29 lakh tons in 1979-80 to 3.06 lakh tons in 2023-24, while bringing the number of workers employed on a regular basis down from 1268 in 1979-80 to 1181 in 2023-24 by investing in labor saving modern technology. Its transformation also includes closing down two of its subsidiary units producing Craft Paper and Straw Board that used its waste material or bagasse and diversification into the production of ethyl acetate and ethanol, bagasse-based production of renewable power, and country liquor at the present time.

    ii. Manufacture of metal products and parts: The number of industrial units in this group have increased from 7 to 15 during this period and which produce a range of iron products, such as utensils, other household items, large commercial pots and pans, door and window frames, parts of sugar crushers and mills machinery and agricultural implements. Increase in the number of units in this industry is also because of some families and businesses splitting and engaging in the production of the same kinds of goods as they have the required traditional skills to do so.

    iii. Manufacture of chemicals and chemical products: In 1979-80, there was only Dhampur Yeast Company that produced a chemical product. Of the 5 units currently producing chemicals, Dhampur Chemicals, a standalone subsidiary of Dhampur Sugar Mill, is the largest unit that produces Country Liquor. In addition, there are 2 soap and detergent making units, 1 fertilizer making and ARHL Chemical Works producing assorted chemicals.

    iv. Manufacture of wood and wood products except furniture: This type of industry is engaged in sawing and planing of wooden logs. In 1979-80, there was only one such unit by the name of Lala Janaki Sharan. This unit was split into two family-owned enterprises which are currently owned by his descendants Sushil Kumar and Sunil Kumar. One new unit has also been established called Shahid Hasan and Sons.

    2. Industrial decline: The groups of industries that have completely disappeared or significantly declined in number are:

    i. Manufacture of paper, paper products, printing and publishing: All 5 units that were found to be there at the earlier time of the study have closed down. These included the two sub-units of the Dhampur Sugar Mills Ltd. producing Craft Paper and Straw Board as well as 3 printing presses, namely, National Printing Press, Singhal Press and Copy Manufacturing, and Bharat Press.

    ii. Manufacture petroleum and coal products; The 3 units involved in making coal cakes predominantly used as domestic fuel for Anghithis (coal cooking stove) have closed down, most probably due to easy accessibility to cheaper and cleaner gas stoves.

    iii. Manufacture of non-metallic minerals products: The number of units coming under this category has declined significantly from 7 in 1979-80 to 3 in 2023-24. Dharam Prakash Aggarwal & Sons making bricks continues to be in operation in present time. The only micro abrasive unit as well as all 3 lime producing units and 2 refined Sulphur rolls making units that existed in 1979-80 have closed down. The two newly established current units are: Surya Microns Pvt. Ltd. producing micro abrasives and Creative Concrete producing concrete blocks, and precast compound walls and cement grills.

    3. Industrial transformation: Though Manufacture of textiles shows a stable existence during this period in terms of almost the same number of operating units, but it has transformed in character from 5 small handloom producing units to 4 large cooperative structures subcontracting spinning, weaving to a number of household-based producers in the nearby villages, including Shri Gandhi Ashram Kendriya Vastra, Maanvi Khadi, Khadi Gramodyog Vikas Mandal and Khadi Gramodyog Ashram. Another example of industrial transformation is shifting from making traditional iron tools and cane crushers to manufacturing of other machinery and equipment including turbines, namely HR Engineering Works and MS Engineering Works. These two firms are also an example of the metal’s unit owned by Hazi Kadar Baksh Imamuddin in 1979-80 becoming two independent engineering works owned by their successors.

    4. Emergence of new industries: Of the 14 new types of industrial units that have been observed to emerge in 2024 survey, 4 are making wooden and steel furniture, 3 are manufacturing beverages, 2 are plastic bag making, 2 are rubber footwear making, 1 is making E-Rickshaws and parts, 1 is making electronic speaker and 1 is making electric bulbs and fans.

The industrial structure of Dhampur has indeed undergone a major transformation over the four decades, which further reinforces the industrial vibrancy argument of a small town.

Tags