Engineering Ahmedabad’s Next Industrial Chapter

AEMA President Ashwinkumar Patel on modernising Ahmedabad’s engineering SMEs.

For more than six decades, Ahmedabad’s engineering industry has been built on a familiar combination of entrepreneurship, technical ingenuity and accumulated manufacturing experience. That foundation remains formidable. But the economics of running an engineering business are changing.

Raw-material volatility, energy costs, skilled-manpower shortages and relentless pressure on margins are making productivity less a matter of managerial choice than commercial survival. At the same time, automation, artificial intelligence, advanced manufacturing and new investments across Gujarat are beginning to redraw the competitive landscape.

For the region’s thousands of traditional engineering SMEs, the question is therefore not whether manufacturing will change, but how quickly and pragmatically they can change with it.

Ashwinkumar S. Patel, President of the Ahmedabad Engineering Manufacturers’ Association (AEMA), speaks to SME Communities about the case for incremental modernisation, the emerging manufacturing skills gap and the opportunity for Ahmedabad’s engineering companies to graduate from strong local businesses into competitive suppliers to Indian and global industry.

SME Communities: AEMA was established in 1959. Ahmedabad’s engineering entrepreneurs have therefore lived through several industrial cycles. What has allowed this traditional engineering base to remain relevant for more than six decades?

Ashwinkumar Patel:

Ahmedabad has always had a very strong culture of entrepreneurship and engineering.

Many of our member companies started small. They developed their businesses through technical knowledge, hard work and close relationships with customers. We have strong capabilities in areas such as foundries, pumps, machinery, components and general engineering.

Another important factor has been quality. AEMA has worked closely with organisations such as the Bureau of Indian Standards for many years, because we believe that quality and standardisation are very important for the engineering industry.

Today the market is changing again. Our experience remains an advantage, but experience alone will not be sufficient. We now have to combine our traditional engineering strengths with modern technology and better productivity.

SME Communities: You have previously identified raw-material prices, skilled manpower and energy costs as major pressures on engineering MSMEs. Have these structural pressures made productivity improvement an economic necessity rather than simply a management ambition?

Ashwinkumar Patel:

Definitely.

For an engineering MSME, margins are always under pressure. Raw-material prices can change very quickly. Power and manpower are significant costs, and customers are also very conscious about price.

There is a limit to how much of these additional costs a manufacturer can pass on to the customer.

Therefore, the answer has to come partly from inside the factory. We have to reduce wastage, improve production, control rejection, use energy more efficiently and get better output from our machinery and manpower.

Earlier, productivity improvement may have been considered desirable. Today I think it has become essential for competitiveness.

SME Communities: Automation, AI and digital manufacturing dominate conversations about the Factory of the Future. For the owner of a conventional engineering SME, however, where should modernisation actually begin?

Ashwinkumar Patel:

Every factory is different, so there cannot be one answer for everybody.

An SME should first identify its major problem. It may be high rejection, shortage of skilled labour, energy consumption, machine downtime, production planning or quality control.

Technology should then be used to solve that particular problem.

We should also not create the impression that modernisation means replacing an entire factory. Many SMEs cannot make very large investments at one time. They can modernise gradually and measure the benefit from each investment.

If a ₹10 lakh or ₹20 lakh investment can improve productivity, reduce energy consumption or increase capacity, the entrepreneur can see the return himself.

Technology adoption for SMEs has to be practical and commercially viable.

SME Communities: Ahmedabad possesses deep manufacturing knowledge, but the next generation of factories will need very different skills. Is the skills gap becoming as important a constraint as access to capital or technology?

Ashwinkumar Patel:

Yes, skilled manpower is already one of the important problems faced by our members.

And as machines become more sophisticated, the requirement will also change. Industry will need people who understand machines as well as electronics, automation, software and data.

But we should also remember our existing workforce. Upgradation of their skills is equally important.

Industry associations, ITIs, engineering colleges, technology companies and government need to work together. Training should also become more closely connected with what is actually required inside factories.

We cannot create modern factories unless we simultaneously create modern manufacturing skills.

SME Communities: Gujarat is attracting investment in semiconductors, electronics, automobiles and advanced manufacturing. How can Ahmedabad’s established engineering SMEs ensure they become suppliers to these new industries rather than spectators to their growth?

Ashwinkumar Patel:

This is a very important opportunity.

Whenever large manufacturing investments come to Gujarat, many opportunities are created for local engineering companies components, fabrication, machinery, tooling, maintenance and many other services.

But large companies, particularly multinational companies, have very strict requirements for quality, delivery, documentation and consistency.

Our SMEs therefore have to upgrade themselves to meet those requirements.

They should also look beyond their existing customers. Ahmedabad engineering companies have the capability to supply nationally and internationally if they continuously improve quality, technology and productivity.

The next opportunity for our members should be to move from being good local engineering companies to competitive suppliers for Indian and global manufacturing.

SME Communities: AEMA has historically worked closely with standards bodies and government. As manufacturing becomes more sophisticated, does an industry association’s role also have to evolve from representing problems to helping members navigate transformation?

Ashwinkumar Patel:

Both roles are necessary.

There will always be issues where an association has to represent industry before government taxation, pollution control, labour, infrastructure, power or policy matters. That is an important responsibility of AEMA.

But members today also require knowledge. They need to understand new technologies, government schemes, quality standards, export opportunities, financing options and changes taking place in industry.

An association can bring experts and manufacturers together and create awareness. We cannot make the investment decision for an entrepreneur, but we can help him understand the options available.

I believe the future role of an industry association will increasingly be to connect its members with knowledge, technology and opportunity.

SME Communities: AEMA is supporting the forthcoming Manufacturing Reimagined – Gujarat Factory Modernisation Summit in Ahmedabad on 18 September. What would you like an engineering entrepreneur attending the conference to take back to his factory the following morning?

Ashwinkumar Patel:

I would like him to take back one or two practical ideas which he can actually implement.

There are many discussions today about AI, automation, robotics and the Factory of the Future. But an SME entrepreneur naturally asks: what does this mean for my factory and my business?

That is where I believe Manufacturing Reimagined can be useful.

The conference brings together different aspects of manufacturing technology, productivity, energy efficiency, workforce skills, quality and assurance, finance, resilience and opportunities to reach larger markets. A manufacturer can understand what is changing and interact directly with people who have expertise in these areas.

For AEMA, this is important because many of our members are traditional engineering MSMEs. They have tremendous engineering experience. If we can combine that experience with appropriate new technology, better skills and investment, they can become much more competitive.

I would therefore encourage our members to attend with a very practical question in mind:

“What can I do differently in my factory tomorrow that will make my business stronger three years from now?”

If the conference helps entrepreneurs find some of those answers, it will have achieved something worthwhile.