The Japan External Trade Organisation (Jetro), Chennai, has proposed a model of ready-to-operate factories on rent, as an option for the Japanese small and medium enterprises (SMEs) to commence their operations in Tamil Nadu.
Rent factories, operational in countries like China, would help SMEs especially in the auto ancillary manufacturing industry in setting up their operations in India with lesser initial investment.
“We have discussed the model with the state government and they are looking into it,” said Shinya Fujii, director general, Jetro, Chennai. He was speaking to reporters on the sidelines of a seminar on ‘Auto-component Industry in South India – Exploring sourcing opportunities from Japan,’ jointly organised by Jetro, Automotive Component Manufacturers Association of India and the Confederation of Indian Industry. Jetro has also brought a delegation of around a dozen Japanese automotive component firms to explore business potential in the state.
Further, the proposed township developed by Ascendas and Japanese consortium near here would also have a factory-on-rental space available. Under the rent factory model, the government would invest money to develop ready-to-use area and hand it over to the companies on fixed rents.
It would also reduce the time taken for starting operations in a factory compared with the time consumed for opening a conventional factory. “For SMEs, time is very important. They cannot take more time in setting up a facility, when compared to larger firms,” he said. In Japan, companies with around below 100 employees are considered as SMEs while very very small companies would have 10-50 employees.
Japanese companies are keen on setting up operations in India and are looking at the overall scenario in the country, said Kensuke Ichahara, director general of manufacturing and environment industry department, Jetro-Tokyo.
The present annual output of Tamil Nadu’s automotive sector is estimated to be $3 –3.5 billion and the sector contributes 7-8 per cent to the GSDP, said P S Rajamani, wholetime director of Simpson and Co Ltd and co-chairman of International Networking Forum, CII southern region.