The Hindu Business Line : ‘Infrastructure development key driver of growth’

Coimbatore, Jan. 6 If India wants to come out of the economic slump quickly, it should focus on infrastructure development to kickstart the economy, said the President of the Coimbatore District Small Industries Association (Codissia), Mr K. Ilango.

Speaking to Business Line on Tuesday, Mr Ilango said the country should take a leaf out of the book of the US President-elect, Mr Barack Obama, who has said he would focus on infrastructure development to kick-start the economy. As India is also facing a slowdown, any boost given to infrastructure development would give a stimulus to the economy, Mr Ilango said.

On its part, Codissia is organising a buyer-seller meet here on Wednesday in association with National Small Industries Corporation Ltd. The association intends to help the entrepreneurs here so that they are able to identify new markets and access easier sources of finance, said Mr Ilango.

Economic impetus

Mr Obama thinks that investment in infrastructure, which is fairly developed in the US, would provide an impetus to economic development.

Mr Ilango said that it was time for India to take recourse to such a measure because the growth of Indian economy would accelerate if the Government makes substantial investment in infrastructure development, especially when sectors like IT and automobile are facing recession. The move would benefit several core industries such as steel, metals, cement, transportation and construction.

Coimbatore factor

Mr Ilango said Coimbatore has been historically a key player in engineering industries and now several major players in this segment, like L&T and Suzlon, have either made Coimbatore a home for manufacturing or are in the process of doing so.

The Railways has planned to establish a coach building unit at Palakkad in Kerala, which is near the city. Engineering giant BHEL, which is likely to benefit immensely from the stimulus to the power sector, is looking for vendors and such companies could “transform the economic scenario of Coimbatore whose forte is basic engineering”.

What these major engineering conglomerates need was fabrication, casting and machining – all of which are available in Coimbatore, he pointed out.

Mr Ilango said the Coimbatore SMEs could change product profile, from meeting the requirements of textile and automobile industries to that of infrastructure companies.

Coimbatore engineering industries have been major suppliers to Railways, with their cumulative order book being around Rs 1,000 crore a year.

He felt that the buyer-seller meet being organised by Codissia and NSIC would help the SMEs, who have the expertise and capacity but no business in the current environment, to expand their product range.

Asked whether shift in production required significant investment, the Codissia President said other than fine-tuning the end product, many entrepreneurs would require little or no investment.

The companies that cater to construction companies still get orders here but there was a delay in payment.

The city’s advantage was its strategic location and it has superior back-up industries such as foundries, machine shops, fabricators and assemblers, he said.

Every industrial hub would have enough business once infrastructure development is given a thumbs-up by the Government, he stressed.

The Codissia President said power, including non-conventional energy, railways, buildings and shipyards were some of the sectors that would provide a fillip to Coimbatore’s economic development.

The present industrial scenario in Coimbatore is different from what was experienced in the early part of the decade, when the country witnessed tremendous development in core sectors such as automobiles, textiles, construction, and the vendors here were content with serving the orders pouring in. But today’s situation is so different that industries are made to hunt for business opportunities. The infrastructure growth provides a tremendous opportunity to the local industries as momentum is likely to stay, he said.

On the role Codissia would like to play, Mr Ilango said the body intended to “hand hold” the entrepreneurs.

From January 21 to 25, an expo called Fabtec 2009 would be organied here to showcase equipment that would help industries in Coimbatore upgrade. Several German companies are participating in the event. Codissia would help the entrepreneurs identify potential customers and manufacturers wishing to source products from them and bring together financial institutions and the companies concerned.

The buyers participating in Wednesday’s meet are Southern Railways, BEML (Bangalore), L&T, Neyveli Lignite Corporation, SAIL (Salem Steel Plant) and Cochin Shipyard.

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