The Hindu Business Line : CII lays stress on developing SME clusters in Vizag

SMEs plan
There are 2.3 lakh SMEs in AP contributing Rs 4,800 crore to the State's economy and accounting for 35-40 per cent of exports
CII's plan to help SMEs in the Visakhapatnam zone to form into clusters will enable them to take advantage of investments in both private and public sectors

VICE-ADMIRAL Suresh Mehta, Flag Officer Commanding-in-Chief, Eastern Naval Command, and Mr Y. Sivasagara Rao (second from right), Chairman and Managing Director of Visakhapatnam Steel Plant, releasing a souvenir at the CII conference on SMEs in Visakhapatnam on Friday. Dr G. Vivekananda, Chairman of CII AP chapter, is in the middle. - K.R. Deepak

Visakhapatnam , Sept. 1

The Confederation of Indian Industries has promised to extend all help to the small and medium enterprises (SMEs) in the Visakhapatnam zone to form clusters.

This would enable them to develop themselves and take advantage of the huge investments in both private and public sectors.

At the inaugural session of the one-day seminar on SME development (Linkage-2006) organised by the CII here on Friday, Dr G. Vivekananda, the Chairman of the CII, Andhra Pradesh, said the cluster approach would be the best for developing SMEs.

"The first SME cluster has been formed in Hyderabad. We want more such clusters in the State," he said.

He said there were 2.3 lakh SMEs in the State contributing Rs 4,800 crore to the State's economy and accounting for 35-40 per cent of exports. In view of their employment generation potential, he said, the Government and the bigger units should assist the SMEs.

`SMEs crucial'

Mr Y. Sivasagara Rao, the Chairman and Managing Director of the Visakhapatnam steel plant, said the SMEs would have to play a critical role, if the country were to achieve double-digit growth rate as China had achieved.

He said liberalisation had exposed the SMEs to competition and therefore they would have to upgrade their technologies to achieve economies of scale. In that endeavour, the bigger units would have to help them out, "as we are doing at Vizag Steel. Two hundred smaller units are attached to us. We have a special cell for their development."

Defence's contribution

Vice-Admiral Sureesh Mehta, the Flag Officer Commanding-in-Chief, Eastern Naval Command, in his presentation outlined the role of the defence establishment in promoting industrialisation and the emerging opportunities. He said the private sector would have to play a crucial role, unlike in the past, and the smaller units as well as the big ones would have a chance to provide components for the defence equipments.

He said the new defence procurement procedure, being implemented from September 1, would provide a level playing field to the Indian industry and promote indigenisation in the defence sector in general and the Navy in particular.

Referring to Vizag, Vice-Admiral Sureesh Mehta said the Naval establishment was contributing Rs 600 crore per annum to the economy of Vizag directly or indirectly. In general, more than 5,000 companies were contributing 25 per cent of the components required by the defence establishments required in the country.

The market size roughly was of the order of Rs 25,000 crore and it would grow by leaps and bounds in the future, he added.

Mr Mahesh K. Desai, the convener of the CII, SME panel, spoke on ancillarisation and the problems faced by the SMEs due to the delay in placement of orders by the bigger units and the delay in payments.

Mr H.S. Chhatwal, the Director, Commercial, Visakhapatnam steel plant, and several others also spoke during the seminar.