Pondy, a hub for auto parts

‘With Chennai becoming a major automotive belt, Pondicherry is poised to emerge as the auto ancillary sourcing base of South India attracting investment and orders from large mother units from the neighboring states,’ say the exhibitors of IndEX 2006 -the 3-day that concluded yesterday focused on Vendor Development Exposition and Business Meet organised by the Confederation of Indian Industry (CII) here.

The exhibitors are also foreseeing the emergence of a strong vendor base for Pondicherry’s IT hardware industry that produces over 60 per cent of IT hardware in the country.

According to them, Pondicherry has all the ingredients for success such as proximity to Chennai, quality power, skilled workforce, industry base, proactive government, etc to become the sourcing destination of South India.

‘With Chennai’s the real estate and infrastructure cost skyrocketing and the city getting more and more congested, Pondicherry emerges as the ideal and cost-effective expansion base and sourcing destination for the large automotive and auto component industries, says 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 faced with the challenge to scale up operations, many ancillary units are willing to subcontract their work to the units in Pondicherry. Hence, the vendors should focus on expanding their operations with a right balance of product mix.

He said that most units in Pondicherry are producing low-margin components in high volumes but they have 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 innovate the production processes and cost management that would result in savings for the customers, in order to sustain growth.

Umesh R Shoney, executive director, Purelec Carbon India (P) Limited, a SME manufacturer of light engineering components, said that Pondicherry is strategically located and provides 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.

Apart from the auto components sector, the prospect of the vendor base for IT hardware in Pondicherry appears to be impressive. The IT hardware sector represents an untapped captive market for the supply of accessories of electrical and plastics.

However, the biggest challenge lies in finding ways to unleash the Territory’s potential. Natarajan suggests the government to form a core team representing the manufacturing sector to come out with a blueprint for the future growth and market Pondicherry 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 is showcasing 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 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 three-day exhibition.

Some of the key exhibitors at Index 2006 include Chemin Controls & Instrumentation Pvt Ltd, Cooper Bussman India Pvt Ltd, HCL Infosystems Ltd, Fine Automotive and Industrial Radiators, Leo Fasteners, Nilkamel Crates and Bins; Pondy Die Castings, Pondy Polymers Pvt Ltd; Sundram Fasteners Ltd, Supreme Automech, Ucal Fuel Systems among others.