CESTA

Promotion of Bicycle and Tricycle Use in El Salvador

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PRODUCTION OF BICYCLES AND TRICYCLES

The general objective to be achieved in this area is:

To develop a Salvadorean bicycle industry

The development strategy of the bicycle industry takes into consideration the technical characteristics of bicycle production as well as the social, economic and technical conditions of EL Salvador. Both aspects are thoroughly discussed in chapter 9 of the reference book and are the basis for the industry development strategy followed in this area of the program. The four steps required for the development of the bicycle industry are:

1. Development of small workshops to assemble and repair bicycles
2. Development of small workshops to produce tricycles and pedal power mechanisms
3. Development of frame factories
4. Development of factories of bicycle parts

1. Development of workshops to assemble and repair bicycles

   Bicycle production will start with the development of small workshops to assemble and repair bicycles. This production will take place under a franchising system where CESTA will provide the central support and services required, and the assembly of the bicycles will take place in decentralized family workshops.

   Some of the centralized activities under the responsibility of CESTA are:

   1. To choose the bicycle types that will be produced in El Salvador
   2. To import the bicycle parts to assemble the bicycles
   3. To import or promote the production of assembly tools
   4. To train the future workshop owners in the assembly and repair activities as well as the managerial tasks
   5. To provide each workshop with the tools required for the assembly and repair of bicycles
   6. To mantain a continuous supply of bicycle parts to the workshops
   7. To give technical, administrative and financial assistance to the workshops
   8. To keep a quality control of the bicycle
   9. To carry out the bicycle promotion

   The workshops are going to be family enterprises where a person working 8 hours a day and using only hand tools assembles a bicycle per day (240 bicycles per year). Another person takes care of the repairs and administrative duties.

   CESTA is going to give technical assistance to the workshops to obtain the investment capital for equipment, tools and training, as well as the working capital for the bicycle parts. The goal is that in 3 years the worker is the owner of a workshop well equiped to assemble and repair bicycles. Then in 3 or 4 more years the worker should have his or her own working capital.

   The final goal is to develop a network of assembly and repair workshops disseminated throughout the country, all of them owned by the workers and producing good quality bicycles.

2. Development of workshops to produce tricycles and other pedal power mechanisms

   Once the decentralized assembly of bicycles is a stable activity, the manufacture of other pedal power mechanisms will be promoted. This manufacture will take place in small decentralized family workshops developed for that purpose.

   These special pedal power mechanisms include tricycles, bicycles with special loading or transport characteristics, vehicles for handicapped, and stationary mechanisms that can perform small jobs at home, in the industry or in commercial activities. The chapters 4, 5 and 6 of the reference book illustrate some of these tasks.

   To develop these workshops a franchising mechanism similar to the one that will prevail for the assembly workshops will be established. In these workshops for special pedal power mechanisms, besides the asembly activities, the frame or main structure of the mechanism will be manufactured. CESTA will provide the raw material, know how and technology in a similar way as in the assembly workshops.

   Here the final goal is to have also a network of family workshops disseminated throughout the country, all of them owned by the workers and producing a wide range of pedal power mechanisms.

3. Development of frame factories

   Once the bicycle assembly process has its own growth and development dynamics, the production of bicycle frames is going to be started. With the production of frames it is possible to increase the supply of models and types of bicycles, since frames for racing, tourism, women or children bicycles could be built.

   The bicycle frame can be manufactured in several ways and scales of production, although in El Salvador the production of frames in workshops or small factories will be promoted. The goal with the frame factories is to satisfy the national demand of bicycle frames and reduce the import requirements to the rest of the bicycle parts.

   CESTA is going to supervise the production process and give the required technical and economic assistance so that the frames produced are comparable in cost and quality with the imported frames. The factories however, are going to be independent units owned by the workers.

4. Development of factories of bicycle parts

   When the production of bicycles frames reaches a certain level of development and becomes an activity with its own dynamics of growth, the manufacture of bicycle parts will be promoted in order to substitute imports and continue with the local building up of the bicycle industry in El Salvador.

   The development of the industry to manufacture bicycle parts is going to take into consideration the following aspects:

   1. The growth of bicycle demand
   2. Capital and technology availability in El Salvador
   3. The technical and economic characteristics of the production process of each part

   The first task will be to promote the manufacture of those bicycle parts that can be produced with the technological facilities already existing in the country. For instance a wire factory could perhaps produce the wire for the brakes if the proper raw material is supplied. Then, the idea is to continue with the manufacture of those bicycle parts that require specific factories to be produced and have yet to be developed.

   The criteria for the development of factories for bicycle parts is to start first with those parts that can be produced economically in small quantities, so that the national demand of parts can absorb the production of the factories and there is no need to look for additional markets. If the demand of bicycle parts is very large and the parts can be manufactured in a wide range of scales of production, the prefered alternative will be to pronote several small factories.

   Enteprises like a chain factory that in order to produce a good quality low cost chain, must mantain a level of production much higher than what could be absorbed by the national demand, will be promoted only when the supply of parts to neighbor countries (additional foreign markets) can be guaranteed or the same factory could produce parts for other industrial uses in the country. For instance a chain or a tyre factory could perhaps produce chains or tyres for a multiplicity of uses.

   These factories will be independent units owned by the workers: nevertheless, the production process will be supervised by CESTA to make sure that the bicycle parts are produced with the appropriate levels of quality and cost.

   In the long run the production of bicycles in El Salvador is going to have an industrial organization model where the bicycle parts will be manufactured in a region and collected by a central unit that will distribute them. These sets of bicycle parts are the raw materials for the numerous decentralized family workshops where the bicycle is going to be hand assembled. The theoretical framework for this industrial model can be found in chapter 9 of the reference book.