A sleeping estate awakens

A sleeping estate awakens
The Hindu Business Line

Peenya Industrial Area is all set to ride the manufacturing boom as India powers ahead.

Several medium and large industries, as well as ancillaries units in the auto and engineering sectors in the Peenya Industrial Area are showing good growth prospects. South East Asia's largest industrial estate, it has the potential to correct the much-debated imbalance between the manufacturing and IT sectors.

The 1,800-acre industrial estate located on the northern tip of the city, abutting Yeshwantpur, started on a low key with small and tiny units serving as ancillary vendors to the public sector companies. Over the past five years, many of the units faced closure in the face of competition and their inability to upgrade their technology. However, those who overcame the challenge and quickly re-oriented their strategies are now reaping the benefits of India's integration into global markets.

Today, with about 2,000 small, medium and large units churning out a wide array of products for both domestic and global companies, the estate accounts for an estimated Rs 10,000 crore turnover. The Union and the State governments earn an annual tax revenue of about Rs 1,500 crore.

Peenya has also attracted sizeable international business, says G.R. Ramanath, Secretary General of the North Bangalore Industries Association (NBIA), which was set up in 1970 to mobilise medium and large-scale units to turn the area into a big manufacturing hub.

However, deteriorating infrastructure facilities remain a concern, to address which the Peenya Industries Association (PIA), representing the small-scale units, and NBIA got together. Though some leading MNCs set the trend for expansion in line with the country's economic progress over the last three years, some homegrown units like Steer Engineering, Ace Designers and Dynamatics, which manufacture niches products such as extrusion equipment, machine tools and aircraft components, worked in tandem with MNCs such as ABB, Kennametal Widia and Ingersoll-Rand to accelerate the manufacturing sector's growth in Bangalore.

Says Satish Padmanabhan, Director, Steer Engineering and a member of the Peenya Industries Association, "We have changed the mindset that only Germany can make precision and quality engineering products. Today, Steer itself has emerged as a source for many countries in a highly specialised single screw extrusion equipment and components for polymer industry."

Since the industries remained focused on their priorities it was difficult for them to mobilise basic amenities for PIA with its four lakh workforce, says Sudhir Kant, President of Millipore (India), a specialised bio-process and bio-science products company.

Kant, who was president of the Peenya Action Task Force (PATF), formed by the PIA on the lines of the Bangalore Agenda Task, says PATF helped organise the donation of an ambulance, motorcycles for the local police station and stepping up the traffic warden force for the enclave.

However, he adds, "We need the government's push to establish world class infrastructure."

To focus on the long-term needs of the industry, the Peenya Industrial Area and the Machine Tool Manufacturers' Association (IMTMA) together set up two special purpose vehicles to implement the infrastructure development plan. A Rs 26.3-crore project is planned under the Industries Infrastructure Upgradation Scheme (IIUS) with grants from the Union and State governments and a minimum 15 per cent contribution from industrialists in the area. The project envisages setting up a Centre of Excellence by the IMTMA near the industrial area. One of the SPVs, the Peenya Infrastructure Corridor Upgradation Project would be responsible for roads, street lights, green initiatives, solid waste management, bus shelters, working women's hotel, common tool room, common testing laboratory, common material testing laboratory, centre of entrepreneurial excellence and information and marketing assistance centre.

Peenya's development into an integrated industrial park is expected to significantly contribute to the state government's targeted growth of 10-12 per cent in two to three years.

Meanwhile, Peenya's industrialists look forward to the proposed move to accord it an industrial township status. The PIA has suggested additional clauses to give Peenya a say in the planning and implementation of transportation service, housing projects and communications infrastructure such as broadband.

Though Karnataka contributes only 5.5 per cent to India's GDP, its IT production accounts for one-third of the national production, and has a 36 per cent share in India's software exports. But its share in the country's overall exports is only seven per cent. But in the last year export of engineering products have almost doubled to Rs 3,021.35 crore.