The Hindu Business Line : Enterprise reborn

The past decade saw a lot of change, so much so that the saying "Change is the only constant in the world" seemed appropriate for India and, in particular, the city of Coimbatore. It saw its main industry, textiles, battered and the other trades also reduced to a shadow of the original due to various problems, including communal issues.

Multinational companies had spotlighted Coimbatore as a potential destination for manufacturing facilities before the mid-1990s and after the slowdown the general feeling was that this was a ghost city, which had missed the opportunity and may not make the grade amongst the leading cities of the country. The New Year sees Coimbatore as busy as ever; there are six flights a day to Chennai, five to Mumbai, and all of them flying full. There is even talk of Singapore and Frankfurt being linked to the city. The hotels are full and one cannot get rooms at short notice.

Looking back

Taking a step back in history, the period 1991-1996 saw unreasonable economic growth, high inflation and high interest rates. There was a sense of misplaced optimism and the industry expanded rapidly, disregarding the high cost of funds. This was followed by a period of unstable administration. There was negative growth in economy, collapse of most economic sectors and, as a result, a strain on the population, escalating underlying tensions and fears.

The Indian industry fell into disarray, optimism gave way to dismay and the process of separating the "men from the boys" began. This is where Coimbatore came into its own.

Most of the industrial houses faced a hostile environment, the bankers become inaccessible and existing business operations became unprofitable. The town then transformed itself in many ways. Traditional industries like textile restructured, replacing costly labour with flexible contract workers; engineering industries expanded their customer base by venturing overseas. Those that could not restructure were either sold or closed down.

The traditional groups looked afar to expand operations; the result was engineering colleges rising from 12 to 28 within a decade. The number of hospitals went from 70 to 130. This led to creation of talented manpower, which in turn moved the industry and employment opportunities towards soft skills and technology-based units. The town became the most sought-after for technical education, overtaking traditional locations like Chennai and Bangalore. Similarly the burgeoning healthcare facilities are drawing patients from various parts of the country.

Testing the mettle

Software companies have also arrived, thanks to the efforts of some of the traditional groups in the healthcare and engineering fields, and more software and engineering-based manufacturing units are expected. Most of the engineering units have export orders and have diversified into sectors beyond textile and auto.

In retrospect, the crisis brought to fore the mettle in the new generation, which repositioned itself in the changed environment. Bereft of governmental support or the blessings of benign investors and lenders, organisations learnt to manage with minimum resources to generate maximum benefit.

This transformation has brought a sense of confidence and assertiveness, which in turn is attracting capital and resources to the region. We can expect Coimbatore to see a period of growth. and It will once again rise to the top, much like the Phoenix that rises from a fiery dive to reach the heights.

The writer is Vice-Chairman and Managing Director, Sakthi Sugars Ltd, Coimbatore.