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Come to Tamil Nadu where the action is...

TN Global Investors Meet - Curtain Raisers

“It took around 12 months to bring Ford to Tamil Nadu. The company had 43 parameters to evaluate on investing in a region. Chennai was competing with other industrialised states and countries; but our efforts succeeded. With Ford and Hyundai, the true automobile revolution began. The strong support of the state government was the critical factor in achieving this,” said Velmurugan.

With the entry of giants like Ford and Hyundai, who brought several of their vendors along with them, auto component manufacture in the state grew bigger and attained a critical mass. This soon became an attractive base for several automobile majors like Renault Nissan, BMW, Yamaha, Daimler,... to set up shop in Tamil Nadu, he said.

 

Not just incentives attract investments...

“Until 2004, Tamil Nadu didn’t have a single electronics company of size. That was the time when Nokia announced of plans to open a manufacturing facility in India. Immediately the state government constituted a core team and we met the CEO in Delhi. He was surprised, as we had come the day after the announcement. We satisfied several criteria stipulated in quick time, Nokia’s plant opened in 2005 was a major breakthrough heralding the electronics revolution of Tamil Nadu. The investor-friendly support of the state government was cited as the most critical factor that tilted Nokia in favour of Tamil Nadu,” said Velmurugan.

The investment climate is the result of several factors - quality infrastructure, mature eco-system, availability of skilled manpower, port logistics, ease of doing business, track record of industrial relations and above all, strong support from the state government.

It is not just incentives,” said Velmurugan.

 

Strong communication infrastructure...

Though Chennai caught up late with the ICT wave, several of the government’s initiatives have helped to catch up for the time lost. Today Chennai ranks third in the country in software exports. The Siruseri IT Park developed over 1000 acres, is the largest IT park in Asia and the Old Mahabalipuram Road (OMR) is home to several IT majors. Chennai has three submarine cables connecting other countries with a total bandwidth of 14.8 terra bits per second (tbps). “We are using not even 10 – 15 per cent of it now and it is available to us for the next 25 years. That’s why Chennai is leading in back office operations which requires 24 x 7 live communication infrastructure,” pointed Velmurugan.

World Bank’s only back office outside Washington is in Chennai. This soon attracted CitiBank’s card operations, Standard Chartered’s virtual headquarters for more than 100 countries, ABN Amro, HSBC and Royal Bank of Scotland.

 

Go for whale hunting, not fishing...

“In the Guidance Bureau we have a saying: when you go for investment promotion, you always go for whale hunting and not fishing. You can create an impact only when we get the blue whale and small fishes come along with it. Guidance Bureau under state government does a lot of whale hunting,” pointed Velmurugan with understandable pride.

Companies like Michelin, Saint Gobain, Apollo Tyres, Daimler... have opened plants here. Feng Tay Enterprises Co Ltd, a shoe manufacturing company in the Cheyyar SEZ that employs  17,000 in a single factory is the single largest supplier of sports shoes, said Velmurugan.

A student of economics who holds a M Phil from the Glasgow University, Velmurugan was the1980 batch topper in Indian Economic Services. From 1995 he has been at the Guidance Bureau helping to change industrial horizon of the state. Guidance Bureau has acted as the single window clearance for projects of the state.

 Global Investors Meet is yet another whale hunting: “we have set a modest target of Rs 100,000 crore but with 100 per cent germination rate; in several other states, the germination rate is just around five per cent,” said Velmurugan.

 

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