The Evolution and Structure of Value Chain Clusters of Soap Industry; A Diagnostic Study of Faisalabad (Pakistan) Soap Manufacturing Clusters

Abstract

This paper focuses on two aspects of the evolution and structure of cluster in soap manufacturing firms of Faisalabad, Pakistan namely what gives rise to cluster and what benefits are associated with clustering for small and micro firms. Around 26 soap manufacturing firms were studied by the researcher through personal interview with the owner of the firms. These firms include micro, small, medium and large scale setups. The major benefits studied and observed of value chain clusters from the secondary data are specialization, better procurement, technology up gradation and firms ability towards innovation (through R & D). Unfortunately, Faisalabad soap firms are hardly enjoying these benefits because of old orthodox approach of production. Access to skilled labour in these firms is not reported to be a significant factor from the research.