Robert Bosch investing Rs 250 cr in Coimbatore SEZ

Robert Bosch India Ltd, which has been allotted 21.88 acres on lease in the first dedicated Special Economic Zone (SEZ) for IT/ITES industries in Coimbatore, will invest about Rs 250 crore in its Coimbatore facility in the first phase.

The company has signed a deal with Coimbatore Hi-tech Infrastructure Private Ltd, promoted by KG Information Systems Ltd, which is forming the SEZ at Saravanampatty on the Coimbatore-Mysore road. Already Robert Bosch had established in 2006 a development centre at KG Information facility.

Mr Friedhelm Pickhard, Managing Director, Robert Bosch, Bangalore, told Business Line that since the establishment of the centre at Coimbatore, the number of associates (employees) had grown to 550 now, and they are involved in dive rse areas such as software and hardware engineering, mechanical design and business services.

The Coimbatore Bosch facility is a BPO and an engineering centre.

Mr Pickhard said the company has planned to begin construction on the facility in the last quarter of 2007 and would inaugurate the first phase in early 2009. The company has strong focus on research.

Nature of work

The Bosch associates would work on advance technologies designing new Electronic Control Unit for diesel and gasoline engines and other automotive applications such as portable navigation systems, semi-autonomous parking systems, adaptive cruise control and Autosar, the new upcoming software standard for automotive applications, and for this, Bosch is in touch with the universities in Coimbatore. Mr Pickhard said the company would be investing about €41 million (about Rs 250 crore) in its Coimbatore facility in the first phase.

The company would be developing its facility in the Saravanampatty SEZ in two or three phases.

By 2010, he expects to have around 2,500 associates at Coimbatore centre.

Mr Ashok Bakthavathsalam, Managing Director, KG Information, said the decision of Robert Bosch would not only create job opportunities in Coimbatore but the manufacturing sector also would benefit since Robert Bosch looks for partners for bringing complimentary strength to what it does.

He said the establishment of KG Information’s one-stop solution for infrastructure support was one of the major reasons for Robert Bosch to select Coimbatore as the second city (after Bangalore) for expansion.

He added that after Robert Bosch, Cognizant Technology Solutions and Perot Systems were expected to have their facilities in the SEZ.

The establishment of the SEZ would also benefit the adjoining villages with the creation of non-IT jobs.

First SEZ for pvt IT cos coming up in Coimbatore

The first SEZ exclusively for private IT/ITES companies in Coimbatore is being established by Coimbatore Hi-tech Infrastructure Private Ltd (CHIL), promoted by KG Information Systems Private Ltd (KGISL).

The SEZ, which is coming up on a 150-acre site in Saravanampatty, will offer facilities such as ready-to-occupy incubation space (for start-ups) and leased-out land where companies can build own facilities to match their business plans.

Besides, it would have amenities for commercial and social infrastructure, including hotels, residential accommodation and healthcare.

Robert Bosch India Ltd (RBIL), Cognizant Technology Solutions (CTS) and Perot Systems India have been allotted a total of 50 acres for their own facilities, while the remaining 100-acre area is being developed at a total investment of about Rs 1,000 crore over a three-year period.

Speaking to newspersons after inking the deal with RBIL, Mr Ashok Bakthavathsalam, Managing Director, KGISL, said that CHIL would be building three million sq feet of office space over the next three years.

The special purpose vehicle has been formed primarily to build, operate and run the SEZ.

The Centre has notified and authorised it to run the SEZ up to 150 acres as a single contiguous area.

Mr Bakthavathsalam expects good response from small and medium IT companies from other centres looking to expand outside.

He added that market studies showed that IT/ITES companies prefer exclusive SEZs rather than co-exist with other sectors like manufacturing in the same SEZs.

On plans to expand the size of the SEZ later, he said that he would have to approach appropriate Government bodies to carry them out.

“But land is available for future expansion. The number of jobs created after three years may be around 30,000.”

The plug-and-play facilities are expected to be ready by July 2008.

The company owns the land where the SEZ is coming up; much of it is dry land.

It bought the land directly from owners without any outside support.

Chennai's growth clouds Coimbatore's attempt to be IT hub

Coimbatore has always been touted as an alternative to Chennai for companies to invest in. However, in recent years, Chennai's rapid growth has clouded Coimbatore's attempt to become an attractive IT destination, reports CNBC-TV18.
Perot Systems is expanding its Coimbatore facility so that it can double its existing headcount. The company, which has offices in Noida, Bangalore and Chennai, apart from Coimbatore, says its experience here has been as good as any of its other Indian centres.
"Our experience has been so good, which is why, we are substantially ramping up operations. This has, primarily, been possible because of great manpower availability,” said Srinivasa Rao, Chief Financial Officer at Perot Systems.
This availability stems from the fact that Coimbatore has three universities, 21 Engineering colleges and over 65 Arts and Science colleges. Apart from Perot, Robert Bosch and Cognizant are the only other big IT companies here, which means that attrition rates, the IT and BPO industry's biggest bugbear, are much lower. That along with lower staff and real estate costs, means that Perot saves about 25% by working from Coimbatore. In spite of this, Coimbatore's overall perfomance as an IT hub is still lagging behind.
On a 29-acre parcel of land, a new proposed IT park will come up. On adjacent plots, Wipro and TCS’ campuses will come up. But after a rather quick land acquisition process, work has almost ground to a stand still. This concerns the local IT industry, which believes that, unless this IT park comes up, Coimbatore's nascent IT industry will never boom.
Experts say IT in Coimbatore has still not taken off as expected because Chennai is still not overcrowded and its old Mahabalipuram Road is emerging as Tamil Nadu's IT Highway. But as cost savings become obvious and the new IT park comes up, Coimbatore could well be Tamil Nadu's next IT boomtown.

RAK Investments in Coimbatore IT SEZ

Ras Al Khaimah (RAK), the fourth largest of the seven emirates forming the United Arab Emirates (UAE), has identified Tamil Nadu for mega investments, and is expected to invest Rs 20,000 crore in developing infrastructure and feeder townships.

The Ras Al Khaimah Investment Authority (RAKIA), a semi-governmental agency set up by the government of RAK to promote investments in RAK and abroad, has identified two projects - one each at Coimbatore and Kadalur in Kancheepuram district - to invest about Rs 20,000 crore in residential township projects.

RAKIA is expected to invest about Rs 2,000 crore in the initial phase. The land for the two projects is being purchased privately by the promoters.

A memorandum of understanding was signed recently by S Ramasundaram, chairman and managing director, Tamil Nadu Industrial Development Corporation (Tidco) and Khater Massaad, chief executive officer of RAKIA, in the presence of Tamil Nadu chief minister M Karunanidhi for implementing the above projects, according to a government release.

The Coimbatore project would come up in an area of 1,000 acre and would have an IT SEZ supported by an integrated township, which will have social infrastructure including a golf course, shopping malls, a resort hotel, wellness spa, and single and multi-family homes with international standards. The project, which is expected to be completed in five years, will have about five million sq. ft of IT space and generate job opportunities for over 50,000 people.

RAKIA’s other project, which will come up on a 500-acre area in Kancheepuram district, will have water sports, leisure, entertainment and high-end residential and world class golf course. This project would provide job opportunities for over 15,000 people.

Coimbatore is emerging as the next major destination for the manufacturing sector. While several IT firms are looking at Coimbatore for future expansion, a number of manufacturing companies have also set up shop here due to availability of skilled labour.

Engineering and construction giant Larsen & Toubro has made Coimbatore its high-tech manufacturing hub. It has set up two facilities on over 300 acre in Coimbatore for the manufacture of high-end industrial valves and switchboards to cater to domestic and international markets.

Germany's Robert Bosch has also set up its engineering centre in Coimbatore to support its high-end technology products and services.

Air Deccan plans foray into cargo services

Can a consumer hope to get seasonal fruits from far off production centres sooner than he does now, that too at a relatively lower cost?

That possibility appears imminent as the low cost domestic airliner, Air Deccan which set a trend in introducing the `no-frills' air travel three years ago is planning a repeat, this time in offering low cost cargo services by taking advantage of its fast growing network of air services linking regional airports.

The Bangalore-based airline is poised to enter into domestic cargo services shortly. To facilitate this the board of Air Deccan has already approved floating a new subsidiary that would run a low cost domestic air cargo services, according to Air Deccan officials.

Indications are that the new service from the airline will take off within a month or so.

"We are actively strategising to begin low cost cargo operations with the conviction that transporting apples from Kashmir to Chennai at a lowest possible cost will give a much needed boost to our primary economy,' an Air Deccan communication has said.


Air Deccan's proposed entry into freight service is backed by the projected market outlook, as the growth for dedicated air freight service, as projected by Airbus Industries' survey, is expected to go up from the present eight to 165 services a day by 2026. Going by the demand surge for air cargo service, the Civil Aviation Ministry itself has estimated the country's need for dedicated cargo plane to touch 500 in 10 years' time.

In the meantime, the low cost airlines' agenda of widening its air network to cover more tier-2 cities of economic and historic/cultural importance is expected to get further boost as Air Deccan is to soon launch flights linking Bodhgaya and Jamshedpur to Kolkata, Ludhiana and Kangra to Delhi and new long sector flight connectivity between Chennai and Jammu (via Madurai) and Kolkata and Jaipur (via Delhi). The airline is also planning to link Salem in Tamil Nadu with Bangalore, the closest metro airport, which can happen much before its proposal to run flight service from Chennai to Salem.

Coimbatore, among the earliest regional airports to attract Air Deccan has turned out to be its strong forte with the airline flying approximately 35,000 passengers to and from the city every month and it runs 15 flights daily. Its daily flights linking Coimbatore with Mumbai and Chennai run with a passenger complements at 80 per cent and above.

Spheris India may double headcount in Coimbatore

`Currently hiring is the biggest challenge for the industry'

Aiming high
Spheris India is preparing itself to emerge as the largest player in the medical transcription space within the next 3 to 5 years.
The company is scouting to establish its presence in a third location, preferably in a tier II city next year.



Spheris India Pvt Ltd is preparing itself to emerge as the largest player in the medical transcription space within the next three to five years.

The company works with over 400 hospitals in the US. "While the medical transcription business volume is growing at 10 per cent, the number of medical transcriptionists in the US is falling by 10 per cent every year. There is, therefore, a dire need for the US to look to outsourcing this service. The industry is witnessing a 50 per cent year-on-year growth in India," said the CEO and Managing Director of Spheris, Mr Suresh Nair.

Doubling headcount

With about 2,500 people on its rolls at its locations in Bangalore (2,000) and Coimbatore (500), Spheris India transcribes about 300 million lines every year. The company is planning to double its headcount in Coimbatore by 2007.

Mr Nair was in the city to witness the employee outreach programme — `Spheris Family Day' — a get-together of the 500-plus Spherians and their family, celebrated for the first time in Coimbatore on Sunday. The company expends close to Rs 1 crore every year on such events to motivate its employees, their kith and kin.

In an informal chat with media persons, he said, "We are in a capacity-driven market. There is no shortage of work, but only capacity. We are seriously looking to build our capacity in India," he said.

Besides doubling its headcount here, the company is also scouting to establish its presence in a third location, preferably in a tier II city next year. "We intend to widen our reach by adding a centre every year over the next two years," he said.

Cash rich

And the company is not looking at strengthening its presence in India alone. "We are evaluating the Phillippines too, but it is still early," Mr Nair added.

The establishment cost of a unit has been put at $2.5 million and according to Mr Nair, the company is cash rich at this juncture.

He, however, conceded that currently hiring is the biggest challenge for the industry. "While the opportunities are huge, the conversion rate is pathetic. It is just about 6 per cent and the industry attrition rate is about 15 per cent," said Mr Surya V. Ciryam, Vice-President (Human Resources).

To bridge the gap, the company has initiated discussions with colleges in Bangalore and Coimbatore for running medical transcription training programmes. "We would possibly tie-up with two colleges (one in each of the cities) for imparting the necessary training. The colleges would give the necessary training with our support."

The company wants to ramp up at least 1,000 people out of such programmes every year.