Newsletter from Kerala State Industrial Development Corporation 2 CIAL profit zooms
3 Visitors from abroad
Vol.1 Issue 6 October 2010
4 When Kerala goes shopping
KSIDC, the investment promotion arm of the State government, is setting up industry-specific growth centres at various parts of the State to promote industries in sectors as diverse as footwear, garment, biotechnology, electronic hardware and light engineering
Industrial Growth Centre
he Industrial Growth Centre (IGC) at Kinalur, Kozhikode, stands testimony to KSIDCâ€™s commit-
ment to create integrated parks that offer infrastructure facilities to industries. Set up on 308 acres of land on the foothills of the Western Ghats and about 17 km from Kozhikode, the IGC has been conceived to host industries in the footwear, sports and healthcarerelated sectors. Land has already been
allotted to as many as 43 units in all the three segments. Some units have already started functioning while some projects are at various stages of implementation. Activities on the footwear and sports-related segments have already started while investors have started showing interest in healthcareContd. on page 6
Come home to tourism Home and Tourism Minister Kodiyeri Balakrishnan visits the KSIDC stall at the Kerala Travel Mart, the biennial tourism expo.
Airways Private Ltd., a Bangalorebased aviation company, will connect Kochi and Nilakkal, near Sabarimala. The Bell Helicopter, having 5 passenger seats, would be used initially, BAPL director Sasikumar said. CIAL plans to construct an exclusive heliterminal at the Kochi airport in January and launch full-fledged operations next year. CIAL will team up with the Kerala Tourism Development Corporation for using the helicopters for tourists. The heli-taxi service proposes to connect various religious and tourist centres across the State.
CIAL profit zooms
State to rope in SCI for Vizhinjam
The State government has decided to initiate talks with Shipping Corporation of India (SCI) for development of the ` 2,500-crore Vizhinjam international container transshipment project. The SCI would form a consortium for implementation of the project, it is learnt. The government has already initiated work for the first phase which includes development of infrastructure such as road and rail connectivity. The second phase of the port, which is being proposed as a “landlord port,” involves development of the terminal. The civil infrastructure of the port is to be built by the State government through a separate EPC bid while the superstructure for port operations and terminals would be built in the public-private partnership mode. The State government has already floated Vizhinjam International Seaport Ltd. (VISL), a special purpose vehicle, for the project. Meanwhile, International Financial Corporation (IFC), advisor to the project, has suggested in its strategic options report that the port be designed to cater to both mainline and feeder vessels. It is envisaged to become a multi-purpose port that would ultimately cater to mainline vessels with capacity of up to 12,500 TEUs. 2
MNCs queue up for logistics park
The proposal of Cochin Port Trust (CPT) to set up a cargo and logistics centre at Vallarpadom International Container Transshipment Terminal (ICTT) has evoked global attention with several multi-national companies, along with Indian majors, showing keen interest. The project has become attractive as the land, located close to the ICTT, has direct access to the new highway to Vallarpadam (NH-47C), the Vallarpadom railway station and the Ro-Ro terminal. As per the proposal, CPT will lease out 57 acres of land for a period of 30 years for construction of the centre. The logistics park will be utilised for CFS activities like stuffing and de-stuffing, customs procedures and clearances, storage, cargo consolidation and segregation, value-addition and other allied activities of container handling.
First heli-taxi service launched
Kerala’s tourism sector has taken a big step forward with the launch of helitaxi service on October 10. The service, being operated by the tourism division of Cochin International Airport Limited in association with Bharat
Cochin International Airport Ltd. (CIAL), the country’s first airport built under a public-private partnership initiative, has posted a record net profit of ` 77.50 crore in the financial year 2009-10, up from ` 59 crore in the previous year. The company posted a turnover of ` 211 crore, registering 52 per cent growth. “CIAL is working towards increasing the annual passenger traffic from the current 3.88 million to 10 million in five years,” managing director Krishnadas G. Nair said. CIAL will expand the domestic terminal at a cost of ` 50 crore. The CIAL Academy would begin its aircraft maintenance engineering course shortly. “The Air Force has released two fighter aircraft and Hindustan Aeronautics has provided components and equipment needed for training purposes in the Academy,” he said.
Participants at the Indo-Taiwanese business meet engaged in discussions at the venue.
Members of the Japanese business delegation which visited Kochi.
Foreign trade delegations choose Kerala for investment meets
t seems foreign investors and potential trade partners have caught the positive signals that Kerala emanates. They either visit Kerala or receive delegations from Kerala and initiate talks on investment or joint ventures. In a landmark development, a 50-member delegation of 38 companies from Taiwan visited Kochi and interacted with industry and trade at a B2B meet organised by KSIDC in Kochi on September 17. The visit was organised jointly by the Taipei Economic and Cultural Centre (TECC) and Taiwan External Trade Development Council. The Taiwanese team was led by David Hsu of TECC and comprised representatives of electronics,
From MDâ€™s Desk
Change we can KSIDC is primarily mandated to act as a development financial institution that assists investors and entrepreneurs to set up enterprises and create jobs and wealth for society. When we started 50 years back, all that entrepreneurs needed was money, and it was a sellerâ€™s market. No State went after them and offered sops and incentives. But the rules of the game have changed now. States vie with one an-
Members of the Kerala delegation in front of the Kerala pavilion at INDEXPO MUSCAT-2010.
machinery manufacturing, automobile components and hardware industries. T Balakrishnan, IAS, Additional Chief Secretary (Industries and Commerce) and Alkesh Sharma, IAS, Managing Director, KSIDC, led the Kerala delegation which had more than 140 members. Participants also had one-to-one interactive sessions at the meet, which was inaugurated by Industries Minister Elamaram Kareem. Business proposals to the tune of ` 2,500 crore were discussed. Meanwhile, a Japanese delegation representing construction, metallurgy and electric equipment industries visited Kerala and interacted with industrialists with similar interests. The Jap-
anese team comprised Hiroshi Shino Zuka, president, and Masura Shino Zuka, director, Fujihiro Co Ltd; Atsushi Kojima, president, Chiyodo Building Management Ltd; and Motooi Kojima, CEO, Sumitomo Trust. A high-level delegation from Kerala held discussions with Oman-based industrialists on sourcing investments to the State at a Business-cum-Investor Meet, organised at the Indian Embassy in Muscat. The delegation was led by PK Mohanty IAS, Additional Chief Secretary, and Alkesh Sharma. A Malini, DGM, KSIDC, made a presentation on the investment opportunities in Kerala. The delegation also attended INDEXPO MUSCAT-2010. Over a dozen institutions and companies exhibited their products and services at the Kerala pavilion at the expo.
other to woo investors. They are in a competition as to who can place a more attractive offer on the table. Investors are no longer content with incentives alone; they demand proper infrastructure so that they can come, invest in plant and machinery, and start production at the earliest. We at KSIDC also have realised this changed paradigm, and hence our efforts to create such facilities. KSIDC has set up four IGCs in the State and is in the process of setting up more industry-specific hubs. While the IGCs are conceived as multi-product parks, the others will try and attract investment in sectors with high-growth potential such as electronic hardware, light engineering and bio-technology. These parks are at various stages of implementation. While some have
fully functional units, the others are on the drawing board. We consider the money we spend on these parks as investment for our future generations. I am sure that once they become operational, they will act as engines of growth for the Kerala economy. This edition has a report on Grand Kerala Shopping Festival, another programme with focus on the future. My experience as Director of Kerala Tourism has convinced me of the long-term benefits of such visionary projects. It is up to the trade and business community to come forward and take it up as their own and make it a grand success. For, it too is an investment for the future. I solicit your feedback at firstname.lastname@example.org Alkesh Sharma 3
When Kerala goes shopping Grand Kerala Shopping Festival is a celebration of the State’s status as a retail paradise. With new attractions being added every year, it is set to become a trendsetter
hen Kerala government started marketing its tourism spots in a big way in the eighties, not many people foresaw the pleasant turns that awaited the campaign on its route. The aim was to project Kerala as an international tourist destination. It was unique in many ways, especially in that the government was spending money for marketing products which were by and large offered by the private sector. Today, Kerala Tourism is one of the super brands. The Grand Kerala Shopping Festival (GKSF) looks to be the next big ticket campaign in that line. Started in 2007 to make Kerala an international shopping destination, the GKSF, the 45-day shopping extravaganza, is in its fourth edition this year. It will be launched on December 1 and go on till January 15; it is expected to boast a participation of more than 10,000 shops and institutions. “There is lot
more acceptance to the idea of GKSF now among the trading community and people at large,” said T Balakrishnan, IAS, Additional Chief Secretary (Industries & Commerce), General Convenor of GKSF (see interview).
GKSF was launched with an intention to make it a full-fledged event within 5 years and raise it to the level of major international events such as the Dubai Shopping Festival. GKSF targets a unique combination of two strengths Kerala has — tourism and retail, and introduces the concept of ‘shopping tourism’. Retail is perhaps the largest growing segment in Kerala, creating more jobs than any other segment of Kerala’s economy. And tourism is one of the largest revenue earners — revenues from tourism last year crossed ` 16,000 crore. In the first two years, GKSF’s target was domestic consumers. But it has now shifted to non-resident Indians and Keralites living abroad. The season is chosen in such a way that it would be an attraction for the national and international tourists who flock to the State during the Christmas-New Year season. Encouraging Kerala’s industrial
Interview: T Balakrishnan, IAS
‘This is investment phase. Returns will FOLLOW’
he Grand Kerala Shopping Festival is the brain child of T Balakrishnan, IAS, Additional Chief Secretary (Industries & Commerce). The rich experience in directing the 4
course of Kerala Tourism helped him fix the paths GKSF will take. Having seen how the tourism industry benefited from the sustained campaign, he says GKSF offers great opportunities to Kerala businesses. “We want more of them to come forward and reap the benefits,” he told Update in an interview. Excerpts:
cepted the concept. In the beginning, there was a lot of resistance from the trade. They had many doubts about the whole idea, all of which have been cleared now. There is a lot of involvement from them. They put forward a lot of new ideas and positive suggestions. We may not have reached the position we aimed for when we designed it four years back, but we are in the right direction. The progress is highly satisfactory.
What has been the response to GKSF till now? This is the fourth year and the public, the media and the trade have ac-
How successful have you been in attracting shoppers from outside? The long-term objective is to re-position Kerala as a shopping destination,
sector by way of showcasing its various products was also a key focus of the event. GKSF has the uniqueness that traders from every nook and cranny of the State can participate. The organisers claim this to be the largest shopping festival in terms of area as it covers the whole of Kerala. Season 4 comes with much more new schemes than the previous one. It enables even small-scale traders to participate in the festival. Online shopping facility is also made available this time. People from any part of the world can register on the website and shop
products online. Organisers plan for a big campaign this year so as to attract people from other States in addition to foreigners for the event. The government would spend `25 crore for this season of GKSF. The participants fall under three categories -- Gold, Silver and General. And the prize structure has become more attractive in 2010; the Mega Draw offers 100 kg gold (it was 40 kg last year) to one lucky shopper. That the trading community looks up to the festival with a lot of hope is evident from the near doubling of numbers every year. As many as 2,400
in addition to being a tourist destination. For this, we have introduced two new programmes specifically targeting shoppers from outside Kerala. The first is the partial reimbursement of advertisement cost to the “Gold partners.” They can advertise to their target audience outside the State and bring in more business. The second is the partial refund of VAT to customers from outside the State when they pay using credit cards. We are introducing this offer for the first time. We hope these initiatives will create more interest among shoppers from outside the State.
suggestions from the trade and made several changes in the prize structure. Apart from the huge hike in the mega prize, shoppers have the chance to win up to 2 gm of gold using scratch cards this year.
What about the prize structure? We have been very responsive to the
What has been the response from the sponsors? It has been good; this is perhaps one government initiative in Kerala which has attracted maximum number of sponsors. But I think there is a lot more to come. Business houses are yet to fully comprehend the message of GKSF. There is no other festival which is so focused on the target group, the buyer. They must understand and appreciate the opportunity GKSF
shops participated in the event in 2008 and the number more than doubled to 5,008 in 2009. GKSF authorities hope that going by the trend in registration, it will cross 10,000 this year. “Onam was the only shopping season for the people and traders in Kerala,” says K M Abdulla, Chairman of the Kerala Chamber of Commerce and Industry. “GKSF has provided us with a second option. The response from the trading community has been awesome. People look forward to this shopping season which comes with a lot of promotional offers, schemes and discounts. We await Season 4 with great hope.” Regular participants feel the festival results in increased sales. “We offer special schemes for dealers during the festival,” said K Susanth, deputy general manager (marketing), V-Guard Industries. “And the benefits are reflected in the increased sales year after year.” He said the government should take initiative and ensure participation of more shops in the festival. Ravinath Mohandas, managing director, H Venkatesh Naik Jewellery group, said the event helps increase sales as it happens in the tourist season. He welcomed the government’s decision to refund VAT. “The tourists are used to getting VAT refund, and it is a welcome step on the government’s part to introduce it here also,” he said, and added that such steps will have a greater positive impact in the coming years.
presents and come forward and make use of it. That the sponsors see merit in aligning with GKSF is evident from the fact that almost all sponsors who were with us last year are still there, with an increased budget. And new offers — some real big — are coming. That means there are businesses that have assessed it correctly and decided to benefit from it. What direct benefit does the State government get from the event? Does it improve tax collections? It must. But at this stage, we are not looking at tax collections. This is an investment phase and the returns will come eventually. 5
Future in Footwear
V Noushad eather and footwear industry is one of the most labour-intensive sectors of the economy and hence has great relevance in a country like ours. This sector holds great promise for Kerala which is the largest producer of natural rubber, one of the most-needed raw materials for the industry. Our studies prove that the footwear industry will have good times ahead as it has a big domestic market, and a huge potential for exports. At present, production in Kerala can hardly meet half the demand in the State. The market in other states is also expanding, given the rapid economic growth our country is making. China dominates the world market with 65 per cent of exports, whereas India’s share is less than three per cent. At present, our products have very good acceptability in the Gulf market, and we would be able to make our presence felt in other markets too with more value-added products. Given the rising value of the Chinese currency, the opportunity is just knocking on our doors. However, we are unable to exploit these favourable market conditions. At present, we are in such a position that we cannot accept a big foreign order. The most important factor that prevents us from making the most of these opportunities is the lack of proper infrastructure. We hope that the Footwear Park at the KSIDC Industrial Growth Centre will help us overcome the problem. As the first step, the consortium of footwear manufacturers has opened a Footwear Design and Development Centre. It has already trained more than 100 people, and is planning to train more. The consortium has commissioned a study on the feasibility of setting up a synthetic leather plant at the Park. We believe that such a plant will address the issue of raw material availability for producing value-added products. Once we get these facilities ready, we would be able to showcase them to big-time buyers and grab more orders. We hope the Park will grow into a hub of footwear manufacturing and related activities. The writer is president, Consortium of Footwear Manufacturers, Kozhikode
related industries. The Footwear Park consists of a manufacturing area, a training centre and a standard design factory (SDF). In the first stage, companies such as VKC International, Dimesco, Fortune and Aishwarya will set up manufacturing plants. Among them, VKC International’s project for manufacturing footwear and employing close to 100 people is nearing completion. “We have been selective in the allocation process to ensure that the firms in the Park have high potential for growth and can uplift the economy of the region through the multiplier effect,” said an officer in charge of the Park. The Footwear Design Development Centre (FDDC) at the Park aims to produce trained manpower required by the industry. The centre, which has been recognised by the Central Leather Research Institute (CLRI), is an added attraction for the industry. Set up by a consortium of manufacturers, the FDDC trains people from nearby areas on footwear upper closing technology. They are also trained in stitching and weaving, and given theory classes. On finishing the one-month course, the trained workforce is either absorbed by local footwear units or encouraged to set up one on their own as a cottage industrial unit. The training centre also provides consultancy services in footwear design and technology to other local units. Says Santha Kumari, a trainee at the centre, “The training has given me confidence to stand on my feet.” She has undergone training for one month and has already got a job offer from one of the units in the district. Having started operations in July 2010, the centre currently trains 60 students in one batch. The faculty members are trained in footwear design and stitching. It has inked an MoU with IL&FS, a financial management firm, to incorporate their training modules into the course. The FDDC provides support and materials for practice to the women training at this centre. Functioning from a 10,000-sq.ft. area in the main
administrative block, the FDDC has plans to expand the training facilities as and when the industry requires it. “We are also mulling diversification into manufacturing,” said V Noushad, president, FDDC. A working women’s hostel with 1,000 beds is being set up at the Park to provide accommodation to women who come for training and jobs. The presence of the training centre and the availability of manpower have brightened the prospects of the units being set up here. Investors have welcomed the idea of a park for the footwear industry. “Being in a cluster helps us to set up common facilities needed for the industry economically,” said VKC Mammad Koya, chairman of footwear maker VKC International Limited. Kerala Industrial Infrastructure Development Corporation (KINFRA) is also setting up a food processing park on 50 acres of land at the IGC. Kinfra, which runs several successful food parks across the State, hopes to attract food processing units by creating the infrastructure. Usha School of Athletics has also set up its training centre on a 30-acre plot allotted to it in the IGC.
Standard Design Factory KSIDC has constructed a standard design factory with 3,888-sq.m. built-up area on 3.13 acres of land to accommodate small and medium enterprises. Roads: The industrial zone is well connected to the city of Kozhikode. Internal roads having a width of 10 metres and length of 3 km within the Centre have also been constructed. Power: Work is fast progressing on setting up a dedicated 110 KV substation to meet the growing power requirements at the Centre. KSEB has allotted the required HT/LT power connections to the IGC. Water: The IGC has its own source
of water in the form of a pond developed in the growth centre. Construction of an overhead tank, a 1.10-MLD water treatment plant, pumping station as well as electrification of the water treatment plant have been completed. Buildings: The administrative block building with an area of 1,964- sq. m. has been commissioned. Factfile: Area: 308 acres Nearest airport: Kozhikode International Airport - 50 km Nearest railway station: Koyilandy Railway Station - 22 km Nearest port: Mangalore Port - 175 km; International Container Transshipment Terminal, Kochi - 200 km
Electronic Hardware Park
erala is a pioneer in the electronic hardware industry; it set up KELTRON in 1973. It created such a momentum that many other States followed suit. The State still has close to 50 units in the medium and large-scale sectors, producing primary and second-
ary products. OEN Connectors, FCI OEN, NeST, Keltron, Tyco and CII Guardian are the major players now, supplying components mostly to their global clients. KSIDC is trying to return to those golden days and develop Kerala into an electronic manufacturing hub by setting up an Electronic Hardware Park at Mulanthuruthy, off Kochi. The Park, proposed to be set up on 334 acres of land, will offer world-class facilities including pre-constructed factory units and developed plots for original equipment manufacturers, contract manufacturers, R&D firms and ancillary units in the electronic sector. It will also host non-processing areas consisting of service facilities and residential complexes. A separate sub-station to ensure steady supply of quality power, a water supply and distribution system, an effluent treatment plant, solid waste treatment and disposal facility, and fire-fighting facility are also part of the project. KSIDC estimates that the project, to be implemented at a cost of ` 300 crore, will attract investment worth ` 5,000 crore. Many global majors have already evinced interest in the project, said an officer in charge of the project. The State government has already is-
sued a notification to start land acquisition procedures. KSIDC is banking on the many advantages it can offer industries to make the project a success. The proximity to the Vallarpadam International Container Trasnsshipment Terminal — at just 20 km — is a key attraction, as also the fact it is just 5 km off NH-49. That the location is sandwiched between two State highways adds to its connectivity. The site is contiguous, sparsely populated and has abundant water supply. KSIDC conceived the project of an exclusive electronic hardware park as the segment is the fastest growing manufacturing industry in the world. The market for electronic goods is growing rapidly in India too. The share of the electronics hardware in India’s GDP is just 1.75 per cent, compared to 5 per cent in the world’s GDP. India’s share in global production of electronic goods is still low at 0.83 per cent, with the country importing most of its requirements. The Electronic Industries Association of India (ELCINA) expects the market for electronic products in India to grow at 30 per cent per year. This growth has attracted global players to India, with many of them setting up manufacturing and R&D centres here. With the ICTT providing manufacturers direct access to markets around the world and the high density of science and technology personnel meeting critical demands of the industry, KSIDC hopes to catapult Kerala to the league of manufacturing locations for the industry. Factfile Planned Area: 334 acres at Mulanthuruthy Nearest airport: Cochin International Airport - 40 km Nearest railway Station: Mulanthuruthy Nearest port: Cochin Port/ICTT- 20 km
Life Sciences Park
he last century is considered to be that of information technology, while the present one is expected to belong to biotechnology. Biotechnology is already a multi-billion dollar in7
dustry; its products are already revolutionising agriculture and healthcare. It finds application in a large number of healthcare products like therapeutics, vaccines, diagnostics and nutraceuticals. Biotech products are used in a range of industries from leather, detergents, textiles, food and beverage and cosmetics. Kerala, rich in biodiversity, is a natural place for biotech companies to grow. Its unique eco-system hosts many endemic species of plants and animals. The long coastline is home to many aquatic species too. The State has a strong tradition of Ayurveda and its widespread use. The State has also developed a sound information technology base and has skilled personnel and a research back bone needed to create products in this area. Academic institutions like the Rajiv Gandhi Centre for Biotechnology, Regional Cancer Centre, various agricultural research institutions, etc., conduct research in this field. This confluence of biodiversity, information technology, skilled personnel, traditional knowledge and research institutions make Kerala an ideal home for biotech companies. Biotechnology has the potential to enhance and add value to products like spices and other plantation crops, medicinal plants; forest wealth and marine 8
products - major sources of income for the State. It is in this backdrop that KSIDC proposes to develop a Life Sciences Park at Thiruvanathapuram. KSIDC has already identified 260 acres of land in Veiloor village, and is in the process of acquiring it. The Park would be a geographical cluster of industry, research institutions and academia. It would address the needs of the rapidly emerging life sciences industry. It will host biotech companies, drug discovery companies, contract research outsourcing firms, bioinformatics centres, agri-business firms, super-speciality hospitals and research institutions. It will also have an incubation centre for start-ups. KSIDC will provide the required infrastructure like developed plots, buildings, roads, electricity, and communication facilities in the Park. Other facilities such as dry and wet labs, technology transfer cell, computational biology labs, IT centre, digital imaging centre, central instrumentation centre, virtual reality centre, business centre, bio-IT software and database library, administrative centre and an intellectual property cell will be there in the Park. It will be built in the private-public partnership mode, with equity partnership from the government and private players. The project proposes to attract huge investments, both domestic and foreign, in the park.
Heavy Engineering Park
he IGC set up by KSIDC at Pallippuram, near Cherthala, is attracting investors from far and near. The IGC set up on a 278- acre plot, is easily accessible by road and is well connected to the Cochin Port and the ICTT, located just 35 km away. The IGC focuses on the heavy engineering industry in addition to traditional industries like coir and seafood. As many as 122 acres of the total land available in the IGC has already been allotted to 10 units. A unit of Malabar Cements and the LBS College of Engineering, under the Institute of Human Re-
sources Development, are located in the Park while the other units are under construction. A 60-acre plot in the Centre has been transferred to Kerala State IT Infrastructure Ltd. The IGC has all the facilities required for setting up a business. The Park is well connected with two approach roads – Cherthala-Arookutty Road and MLA Road. Internal roads inside the IGC have been laid out. Power will be supplied through an independent 110 KV, 25 MVA substation. Water from the JBIC-assisted water supply project of Kerala Water Authority is available in the IGC. Factfile Planned area: 278 acres Nearest airport: Cochin International Airport - 50 km Nearest railway station: Cherthala Railway Station- 10 km Nearest Port: Cochin Port - 35 km
Light Engineering Park
erala has the infrastructure facilities and excellent human resources required for developing and sustaining a light engineering industry. In order to tap the full potential of the sector, and make use of the presence of the proposed railway coach factory, BEML unit and Instrumentation Limited, KSIDC is developing a light engineering industrial park on 35 acres of land at Palakkad. It will have all industrial infrastructure facilities such as power, water and human resources. Work on the park is progressing fast, and it is expected to be completed in a couple of months. The work relating to construction of the compound wall, plot demarcation, infrastructure like power, water, etc., is also progressing fast. Investors in the park will be offered • Land on lease for 90 years • Dedicated power • Potable water • Industrial gas • Rail & road connectivity • Single-window mechanism for clearance of all licences and approvals.
For private circulation only. Prepared by Independent Media (+91 484 2423331) for Alkesh Sharma, Managing Director, Kerala State Industrial Development Corporation Ltd, Keston Road, Kowdiar, Thiruvanathapuram-695 003. Executive Editor: K G Ajith Kumar. The opinions expressed in these columns need not necessarily reflect those of KSIDC.