An economic resurgence

Print edition : March 24, 2006

Coimbatore by night. The dark period is over and the local people's enterprise is reasserting itself. - PICTURES: K. ANANTHAN

Coimbatore is a fast emerging metropolis.

IT is boom time in Coimbatore. The textile industry, foundries, agriculture, poultry farming, real estate and Information Technology, among other sectors, are touching new highs in growth. The gloom that engulfed Coimbatore from 1995 to 1999 in the wake of the recession and the high interest regime that hit the textile and foundry industries hard, the slump in tea prices, the bomb blasts and the collapse of retail trade has vanished. The city's tradi tional entrepreneurial spirit has re-asserted itself. Coimbatore is an emerging metropolis today, eager to cast off its tier-II city status.

The entire "Kongu Nadu" region with Coimbatore as the hub is witnessing an economic resurgence. Manufacturers in Coimbatore have stopped exporting yarn because they get a better price for it in the domestic market. Tirupur, the garment town, is doing good business. Karur, the city of home textiles, is brimming with export orders. Salem is doing well in fabrics. As for the adjoining Nilgiris district, tea prices are ruling high.

Coimbatore has a long history of manufacturing textiles, pumpsets and castings. What is important is it has achieved the leadership in textile and engineering industries even though it has no public sector undertakings. Its industrious and enterprising citizens have helped Coimbatore gain a reputation as an industrial hub.

Nandini Rangaswamy, chairperson, Confederation of Indian Industry (CII) (southern region), Coimbatore zone, and managing director, Chandra Textiles Limited, Coimbatore says that the textiles industries in the Coimbatore region alone had plans to invest Rs.3,000 to Rs.4,000 crores last year after the quota regime was dismantled in 2004.

D. Balasundaram, managing director, CPC (P) Limited, described the concentration of textile-related activity in the Coimbatore region, which included Tirupur, Karur and Erode, as "the highest in the world".

Super Spinning Mills Limited is one textile company that is expanding its capacity in spinning and garment production. According to its executive director K.R. Seethapathy, it will set up another spinning unit near Coimbatore. "We are set to expand weaving and processing also. We have 1.40 lakh spindles and we are outsourcing another 60,000. We also have a unit for manufacturing knitted garments," Seethapathy said. The unit supplied T-shirts to prestigious brands such as Park Avenue, ColourPlus and Arrow. It also exported garments to leading labels such as Boccacio, Links and Pebble Beach.

Sharadha Terry Products is another textile company that is doing very well. Its 100 per cent export-oriented unit, with sophisticated machinery, is located at Mettupalayam, 40 km from Coimbatore. It manufactures a range of terry products including bath towels, bathrobes and institutional towels under the brand name "Micro Cotton". Micro Cotton bath towels, woven from the finest 100 per cent cotton and priced between $20 and $45, are a big hit in the West. "Micro Cotton has become a well-recognised brand in the U.S. and the U.K.," said G. Kannappan, the company's chairman and managing director. "Next year we will make a foray into Japan."

Jayakumar Ramdass, vice-chairman, CII (southern region), Coimbatore, and managing director, Mahendra Submersible Pumps Pvt. Ltd., said: "Foundries and pumpset and valve production are areas where we have scored." The region met 48 per cent of the country's pumpset requirement. Many foundries that manufactured castings for the domestic market now export them. New companies have come up to produce automobile components for tier-I manufacturers. .

Larsen and Toubro (L&T) plans to set up an engineering facility in Coimbatore. According to CII officials, it is likely to shift several of its engineering facilities from Mumbai to Coimbatore.

Pumps made at Aquasub Engineering Ltd.-

According to R. Kumaravelu, managing partner, Aquasub Engineering, there are about 200 pumpset manufacturers in the Coimbatore region. "The competition is fierce. We try to concentrate on quality by using good material," he said. Kumaravelu has five units that manufacture borewell submersibles, domestic pumps, agricultural pumpsets, electric motors and so on.

IT companies are eyeing Coimbatore as a tier II town for investment. Elnet Technologies Limited (ETL) is building an IT park at Peelamedu in Coimbatore in two phases. The first phase will use up 8,00,000 square feet of space. The Tamil Nadu government has earmarked 12 hectares of land behind the Government Medical College in Coimbatore to build an IT park, modelled after Tidel Park in Chennai. The State government-owned ELCOT will build this.

Cognizant Technology Solutions has set up a software unit in Coimbatore. KG Information Systems Private Limited (KGISL) has already set up an IT Park and an institute of information management (KGISL-IIM). Tata Consultancy Services (TCS) has come in a small way. WIPRO is showing interest. The CII has been lobbying for an IT Park in Coimbatore and the project will be up in a year or two, Nandini Rangaswamy said.

What is sustaining Coimbatore in this burgeoning expansion is its strong educational infrastructure and the skilled manpower it produces. Coimbatore is an important centre for technical education in the country. There are 25 engineering colleges and 90 to 100 Arts and Science colleges in Coimbatore and the Nilgiris districts. The Sardar Vallabhbhai Patel Institute of Management, an autonomous institution under the Union Ministry of Textiles, provides manpower to the textile industry in technology and management. Universities and private engineering colleges are signing memoranda of understanding (MoUs) with universities in the U.S. and the U.K. to enable students do research in frontier fields of science and technology. They are also setting up centres of excellence in nano-technology and micro electro-mechanical systems (MEMS).

In recent years, Coimbatore has made a name for itself in the field of health care. There are six multi-speciality hospitals, each with 300 to 800 beds. Medical tourism is on the rise. Patients, especially from the eastern parts of the country and from Sri Lanka, Bangladesh, West Asia, the U.S. and the U.K., come in large numbers to these hospitals for treatment. The hospitals offer services in areas such as cardiology, orthopaedics, laparoscopy, infertility, intervention radiology and plastic surgery. There are eye hospitals that provide quality care at affordable cost and in some cases free of cost. Big players have entered contract poultry farming. Under such arrangement, a company supplies farmers new-born chicks and the feed and veterinary care for them. The farmers take care of the chickens and hand them over to the company when they are 40 days old. The company then sells the broilers to retailers. The farmers are paid "conversion charges" for this. "Contract poultry farming was taken up for the first time in India at Udumalpet," said B. Soundararajan, managing director, Suguna Poultry Farm Limited. According to him, contract farming in poultry has ensured a regular income for farmers. R. Krisshnamurthi, managing director, Shanthi Fortune (India) Private Limited, whose prime business is poultry farming, said, "Poultry farming is growing at a rate of 10 per cent every year. This is big growth."

The availability of basic infrastructure is what attracts investors to Coimbatore. Its self-sufficiency in water and power is a plus point. "But the power sector has to keep pace with the growth of the city. A lot of companies want to set up shop in Coimbatore. Hence the generation of electricity has to be geared up," Jayakumar Ramdass said. Telecommunication facilities, too, have not kept pace with the demand.

The industrial buoyancy and the foray of IT firms, however, have "fuelled artificially hyped rates" for real estate, said Nandini Rangaswamy. She said the prices at which land was available now were not sustainable. "It is a big, big bubble out there, which will burst," she said. The roads in Coimbatore, including its arterial Avinashi Road, are in a terrible shape.

The trading terminals at Coimbatore Capital Ltd.-

The city has an apology of an airport. Although the number of flights landing at and taking off from Coimbatore has gone up from eight to 22 in a year, passenger terminals have not been made spacious. "A bigger airport, an international one at that, will definitely give a big boost to trade and industry here," Kannappan said. Land is being acquired to lengthen the runway.

Although Coimbatore is an important railway tri-junction with trains to Kerala and Karnataka passing through it, the railway station has only four platforms. No adjoining land is available for the station expansion.

The hospitality industry has not developed well as yet. The situation may ease when some hotel chains, which have bought property in the city, build hotels.

"The boom is visible in all sectors. The Coimbatore-Tirupur belt has become the focus area of business," said M. Krishnan, chairman and managing director, Sri Krishna Sweets. Non-resident Indians are prepared to invest in the city, he added.

The CII's aim is to develop Coimbatore in a holistic, well-planned manner - create a Greater Coimbatore.

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