A tradition of industry

Print edition : January 30, 2004

Besides traditional industries, such as automobile components, textile machinery and pumps, Coimbatore's entrepreneurs now run poultry farms, BPO centres and a whole range of new industries.

ENTERPRISE and resilience are a part of Coimbatore's contemporary culture. The Coimbatore entrepreneur has shown remarkable ability to survive crises by adapting and innovating. This, most people agree, is the prime reason for Coimbatore's success.

The state-of-the-art machine shop of AquaSub Engineering.-

According to official figures, the district has 3,333 registered factories, 299 large- and medium-scale industries, 30,414 small-scale industries and 4,587 cottage industries, besides several village and agro-based units. The district contributes 9.5 per cent of the State's gross domestic product.

One striking aspect of many of the multi-crore industrial units is their humble beginnings. For instance, the Rs.250-crore Elgi group, which has in its fold 14 companies in the automotive, engineering, transport and textile sectors, started out by operating a few buses in the 1930s. Now it manufactures, among other things, air compressors, diesel engines, hydraulic lifts, industrial and automotive chains, pre-cured tyre retreading systems, textile machinery and accessories, electrical motors and pneumatic control elements, besides building bus bodies. Pushed by recession, which seems to be ending at long last, and the urge to innovate, the group has started on new products, moved the production chain to include forward and backward linkages, and increased exports.

The Elgi group was the first to come out with a `farm-to-textile' integrated link, both for value addition and for self-sufficiency. For instance, as a step in forward integration it makes T-shirts (over 600 pieces a day) and high-end garments (it is the sole supplier to the premium Color Plus brand). It is also setting up dyeing and knitting units. In backward integration, the group has started `contract farming' in cotton by tying up with farmers in the Valukuparai area near Coimbatore. It has provided the farmers with high-yielding hybrid cotton varieties (medium staple and long/extra-long staple) that it developed in-house. This helps the company source contamination-free cotton.

Apart from concentrating on the export of yarn and farm equipment, the group is developing several new products. For instance, the "Ozone Generator", an ultraviolet application that can clean air, sewage water and industrial and hospital wastes, remove textile dyes, kill bacteria in fish hatcheries and aquaculture farms, and launder clothes (it reduces the use of detergents and chemicals by half). Trials in aquaculture farms have proved it worthwhile: the water becomes clean, the fish survive and the fertility rate of eggs rises to 95 per cent against the usual 30 per cent. The Elgi group's other products include biomass power plants, 100 per cent sound-proof PVC (polyvinyl chloride) windows and multilingual, multi-tasking computer platforms. Elgi Equipments is today the leader in compressor and garage equipment production.

One of its group companies, Elgi Ultra started to make wet grinders in 1992. According to B. Balakrishnan, Director (Operations), the company, which sells 70,000 grinders a year and has an annual turnover of Rs.40 crores, is readying to release a new model after two years of research and development.

Not satisfied with its precision in fields as diverse as industrial machinery and wet grinders, the 75-year-old Elgi group is now trying its hand at software development. Its eSTEL, formed by consolidating several independent IT-enabling units, integrates capacities in the design and development of customised hardware for a range of commercial and industrial applications. It provides end-to-end solutions in multi-format convergence.

Another big Coimbatore group that started off on the road to success by operating buses is the Sakthi chain of companies. It now touch the lives of almost every person, with operations in sugar, alcohol, tea, soft drinks, soya foods, synthetics, gems, textiles, transportation, finance and foundry. The group's annual turnover exceeds Rs.1,200 crores and it employs over 15,000 people directly and 10,000 indirectly.

In 1964, the group started the ABT parcel service and emerged as the biggest operator in South India. In 1994, the group clinched several Maruti dealerships, also under the ABT umbrella, and now sells over 600 cars every year. Last year it started cargo and courier services. While the company is modernising fast and moving towards a more efficient system of vehicle tracking, it plans to go global with its courier service.

Coimbatore is best known for the manufacture of automotive parts. Regardless of the vehicle you drive - from a Tata Motors truck to a Mercedes car - chances are that you will be using a made-in-Coimbatore horn. Roots Industries Limited, one of the eight companies under the Roots group, has been making electric horns since it started operations in 1970 as American Auto Service. Besides a variety of horns, the Roots group now manufactures various auto accessories, including halogen headlamps and fog lamps and parking and reversing sensors. Its clients include such big names as DaimlerChrysler, Mitsubishi, Mahindra and Mahindra, Toyota, Tata Motors, TVS Motor Company and Piaggio. Roots products find their way to the United States, Europe, West Asia and Africa. It is the first horn manufacturer in Asia to obtain the QS 9000 and VDA 6.1 certification and the first in the world to win the ISO/TS 16949 certification.

Thriving on high-end research and diversification, the Roots group also manufactures a range of non-automotive products, including cleaning equipment, castings and precision tools. According to its managing director Dr. G. Ranganathan, the group is constantly innovating and developing original technology. The technical collaboration with Bosch SA for auto products in 1995 set the group on the path of sustained technical growth. It also has collaboration agreements with other German companies for non-auto products - with Hako for multicleaners and Zinser for textile machinery.

The Roots group's obsession with technology is evident from the range of the state-of-the-art tools it uses for R&D - solid modelling, hard prototyping, drafting and graphics. Its metrology laboratory is a comprehensive calibration-cum-consultancy centre that offers electrical, mechanical, pressure and vacuum calibration. It also offers specialised CAD/CAM consultancy services for a range of products and industries.

According to Ranganathan, Roots has several new products in the pipeline. Says director (marketing) N.V. Krishnan: "Toyota has given us `white card' status, which means that our products can be accepted directly without any check." A pioneer in the pressure die-casting of magnesium, the Roots group has concentrated on aspects of safety (in automotives) and hygiene (in consumer products). Significantly, the group is working on 180 projects for cost reduction and energy saving.

Coimbatore is the headquarters of one of the biggest component suppliers - The Premier Instruments and Controls Ltd. Popularly known as Pricol, it produces much of all the precision components for the automotive industry - passenger car, two-wheeler, tractor, commercial vehicle - and for defence requirements. Since its inception over two decades ago, Pricol has focussed on developing products independently. All its products - oil pumps, electronic counters and controls, products for defence needs, industrial pressure gauges, disc brakes for two-wheelers, and engine components such as gears, sprockets, oil level sensors or valves - have been developed in-house. Product quality and the company's ability to respond to change with innovative solutions have attracted as customers over a dozen international companies.

Another auto component link for Coimbatore is provided by L.G. Balakrishnan & Co, founded by the late L.R.G. Naidu in 1960 to make timing chains for two-wheelers. Sold under the brand name `Rolon', it has a 65 per cent market share. The company has an annual turnover of Rs.200 crores from its seven manufacturing units, all with ISO 9001 certification. The company also makes transmission chains, sprockets, tensioners, cogged belts and rubber products, mainly for two-wheelers. The company holds over 40 per cent of the market for industrial chains. LGB exports to over 10 countries and has exclusive distributors in many of these destinations to liaise with foreign customers.

In top gear is Shanti Gears. Started in 1971, it has created a niche for itself with its quality products. The company also sells abroad. According to senior vice-president P.K.R. Kurup, the company now exports 5 per cent of its production and plans to raise this to 50 per cent in the next five years.

COIMBATORE'S industrial revolution began with pumps and even today it is the main source of supply to much of India; 60 per cent of the country's requirement of pumps is met by Coimbatore. Fisher Pumps Private Limited (part of the Sharp Tool group, started by K.K. Ramaswamy in 1967), with an annual production capacity of three lakh units, is the largest producer of domestic pumps in the country. The company produces over 40 types of pumps, including mini mono-blocks, centrifugal submersibles and jet and special pumps for open wells. The company pumps out new products every year. Fisher pumps are sold all over India and also in Dubai, Muscat and Sri Lanka. The factory follows the `Just in Time' and `Part Pull Card' methods, which help avoid maintaining huge inventories, and the Pokoyoke method in the assembly line, by which every system is recorded and recognised by remote sensors.

Another major player in the pump industry is AquaSub Engineering, which makes the Texmo brand of domestic and jet pumps and borewells and submersibles. Also popular are the Aquatex brand of agricultural mono block pumps, open-well submersibles and electric motors. The company also has an international brand `atx'. AquaSub bagged the national export award in the last three years.

With over 650 models and 750 dealers, everything is in-house at AquaSub - from R&D to casting to motor stamping. According to general manager V. Krishna Kumar, the drought-like situation across the country is bound to generate good demand for submersible pumps. "But the heavy excise, sales and customs duties make Indian pumps uncompetitive in the international market," he says. This apart, over 50 per cent of the demand for pumps is catered to by the unorganised sector. According to him, as the company is into making water pumps and not industrial pumps, it has managed to survive the recession.

Coimbatore's entrepreneurs are also looking beyond the traditional industries. For instance, poultry. Suguna Poultry, started in 1986, makes two million broilers a week and reports an annual turnover of Rs.500 crores. Under a contract system, which protects farmers from price fluctuations, the company provides the inputs - chicks, feed, medicine and supervision and training - and buys the birds. The only requirement is that the farmers should have an area of at least 5,000 sq ft. While the buying price from the farmer is Rs.2.50 a kg, the market price is Rs.28-29 a kg.

Poultry farming is a 45-day cycle with a 15-day cleaning period. All cleaning is mechanised. With production centres in five States, 90 per cent of the company's sales are in the domestic market. The company exports broilers worth over Rs.50 crores. It provides direct employment to 1,300 people, 5,000 farmers and 20,000 farm workers. Suguna is moving into processed broilers primarily for three reasons: to increase the shelf-life of broilers; to brand the products; and to offer a variety of products (marinated, cooked, portions and so on). According to managing director B. Soundararajan, over 20 per cent of broilers in India come from Coimbatore.

From the stables of the UMS group (founded by the late G.D. Naidu) comes Water Tech. Started in 1997 to manufacture plumbing fittings and bath accessories, Water Tech collaborates with Water Tech Malaysia, a pioneering sanitaryware unit with a presence in almost all South Asian countries. Made of engineering polymer, the company's products are an excellent alternative to metal fittings. The company is the first in the country to use industrial polymer that does not leak as the seal (washer) is made of elastic polymer, which prevents sand particles from getting embedded. Besides, it is resistant to heat up to 80 C and ultraviolet rays, which prevents the fading of colours. The washers are tested for two-lakh cycles of operation, which translates into a lifespan of 15-20 years.

Coimbatore is home to India's largest manufacturer of paper conversion and recycling machines. K.U. Sodalamuthu and Co. Pvt. Ltd., an ISO 2000 company that pioneered the machinery to make paper cones and tubes, composite cans, fibre drums and pulp-moulded products, was set up in 1970. The company has won several national awards, including the Outstanding Export Performance award for 11 consecutive years and the prestigious Jamnalal Bajaj Award for fair business practices. It exports more than 75 per cent of its production to over 25 countries under the brand name Sodal Tech and offers a total package, from in-plant training to market guidance and after-sales service.

One of the most inspiring stories from Coimbatore is of N.S. Kumar, a first-generation entrepreneur who developed an eco-friendly machine to make paper bags. In a span of two decades he grew - from dealer to manufacturer to exporter to teacher - and made a mark on the industrial map of Coimbatore. His company, YenYesKey Machine Tools, makes a range of machines for various requirements - film lamination, paper flexo printing, paper gum tape plant, paper slitting, heavy and special paper bag making and so on. The paper carry-bags can hold weights of up to 25 kg and can be made in two and even four colours. The capacity of the machines varies from 1,000 to 10,000 bags an hour. The main advantage of the machines is that the bag-forming, printing and tube-forming units can work concurrently.

The company has now established a two-month training module in production - to produce paper carry-bags from different raw materials - and managerial skills. According to Kumar, his eco-friendly machine is one of its kind in the world. Exporting machines to over a dozen countries, YenYesKey Machine Tools has bagged several awards, including the Tamil Nadu government's `Outstanding Industry Award' in 1988. Says Kumar: "Experience is the greatest teacher." From a dealer - he used to buy and sell machines - (since 1978) to a manufacturer (since 1985) to an exporter (since 1990), it has been a long, hard journey for Kumar, who sets store by innovation, resilience and consistent hard work.

Resilience and enterprise are the mantras of every Coimbatore businessman, who goes on regardless of recession, slump, competition and adverse policies. Coimbatore's product profile may have changed over the years, but not so the entrepreneurial spirit of its people.

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