Pondicherry fast becoming a hub for hardware, automotive industries

The exhibitors of Index 2006 foresee the emergence of a strong vendor base for Pondicherry's information technology (IT) hardware industry, which produces over 60 per cent of IT hardware in the country. Index 2006 is a three-day vendor development exposition and business meet organised by the Confederation of Indian Industry.

With Chennai becoming a major automotive belt, Pondicherry is poised to emerge as the auto ancillary sourcing base of South India. The union territory is expected to attract investments and business orders from larger units in the neighbouring states, according to exhibitors of Index 2006.

Apart from the auto components sector, IT hardware sector represents an untapped captive market for the supply of accessories of electrical and plastics. According a CII press statement, Pondicherry has all the right ingredients like proximity to Chennai, uninterrupted power, skilled workforce, a strong industry base and a proactive government, which are essential for becoming a successful sourcing destination of South India.

"With Chennai getting more and more congested and the cost of real estate and infrastructure in the city increasing rapidly, Pondicherry can emerge as the ideal and cost-effective expansion base and sourcing destination for the large automotive and auto component industries," said, A Natarajan, vice-president, Sundram Fasteners (Zhejiang) Limited.

Sundram Fasteners, for instance, has been continuously expanding its operations in Pondicherry since its inception. The monthly turnover of the company, which was Rs 40 lakh in 1994, has grown to Rs 10 crore last year.

A L Shah, partner, Leo Fasteners and the chairman of Index 2006, said that many ancillary units, faced with the challenge of scaling up operations, were willing to subcontract their work to units in Pondicherry. Hence, the vendors should focus on expanding their operations with a right balance of product mix.

He added that most units in Pondicherry were producing low-margin components in high volumes but they had to innovate newer products of high risk and high margin category, without compromising on the cash flow and profitability.

He urged the Pondicherry units to come up with innovations in the areas of production process and cost management in order to sustain growth.

Umesh R Shoney, executive director, Purelec Carbon India (P) Ltd, an SME manufacturer of light engineering components, said that Pondicherry's location provided effective logistic solutions for the procurement of raw material and supply of goods to national as well as export markets. The physical proximity of the government departments and the proactive approach of the officials meant smooth interfacing with government and bureaucracy.

However, the biggest challenge lies in finding ways to exploit the union territory's potential. Natarajan urged the government to form a core team representing the manufacturing sector to come out with a blueprint for the future growth of Pondicherry and market it as a sourcing destination, both within and outside India.

The industry also feels that Pondicherry needs social infrastructure such as convention and recreation centres, entertainment avenues, etc to attract young and middle-level executives.

Index 2006, which concluded on Sunday, showcased the industrial potential of Pondicherry and has attracted a large number of business visitors from companies including Ashok Leyland, BHEL, Delphi TVS, Toyota Kirloskar and Wheels India. The one-and-a-half day 'Sourcing Forum', organised as part of Index 2006, has given the opportunity for the units in Pondicherry to understand the requirements, vendor selection procedures, quality of products, etc of the large industries based out of Pondicherry.

Over 25 small and medium enterprises (SMEs), representing auto components, light engineering, IT hardware and other manufacturing sectors in Pondicherry, are participating in the exhibition.