Wednesday, July 16, 2008

MoneyControl's View on Coimbatore and Its Improvements

Popularly known as the Manchester of South India, Coimbatore's fame as a textile hub of the country is a well-known fact. But what's lesser known is the silent change that the city is undergoing in the IT-BPO sector.

One can say that what Pune is to Mumbai, Coimbatore is to Chennai. It has a host of educational institutions, traditional yet cosmopolitan crowd and great weather. All these ingredients make Coimbatore an irresistible destination for the IT companies to set up their shops.

From textile to BPO

Coimbatore's charm lies in its location. With the mighty Western Ghats overlooking the city, Coimbatore is a paradise for nature-lovers. But do not let the city's silent charm fool you. It is blessed with a strong entrepreneurial culture and the most well-known icon from Coimbatore is the textile mill. The city is the largest producer of cotton yarn from the South. And now, Coimbatore is slowly but surely making its mark on the IT radar.

A NASSCOM and AT Kearney Report on IT-BPOs has rated Coimbatore as one of the challengers to Chennai and Bangalore. The city was recognized for its BPO potential when Cognizant Technologies System set up their facility in 2005.

Vishnu Potty, Operations Head, Cognizant Coimbatore, said, "When we moved in, we wanted to look at the local talent. Now we want to attract more people here and the way we are growing here, this does not look impossible."

Cognizant's belief in the Coimbatore market caused other players to follow suit. Today, the IT software export from Coimbatore is close to Rs 150 crore. The biggest factor for this is the low attrition level in the IT companies as compared to other metros.

Coimbatore also offers the industry a strong pool of talent to choose from. The city boasts of over 25 well-known engineering colleges and over 50 graduate colleges.

The PSG campus of Coimbatore is rated as one of the best engineering college of the country. PSG Coimbatore has a host of educational institutes that is known for its quality education and it is this factor that has been attracting companies across sectors to this city, more so in the IT sector. IT companies tell us that almost 10-15% of their total recruits come from Coimbatore's institutes.

The city produces close to 10,000 engineering graduates every year. But the most striking factor is that the graduate colleges are training the students according to the IT industry's needs.

Most of these institutes have set up finishing schools to make sure that their students are in no way below the industry standards.

D Nadarajan, Dean, PSG Institute of Technology, said, "As far as PSG College is concerned, there is no gap between curriculum and job requirement. Apart from that, we provide additional training to the students required by the industry. In that way, our students are saleable in the market."

It was not an easy task for this textile industry driven city to sell itself as an IT destination. The place had the potential but there was little infrastructure in place. The government was also late in realizing the potential of the city. Thanks to the city's powerful lobby of entrepreneurs, it managed to kick off the BPO wave.

It was in 1998 that the first IT campus was developed by the KG Group. When the group started the project, they not only had the responsibility of putting up an IT campus. They also had to develop the supporting infrastructure.

The result was that in ten years, this campus houses over ten big IT companies. Developing an IT campus from stratch was a huge challenge for the KG Group and they met their goals. Today, the KG Group is one of the largest IT campus developers in the city. In fact, the SEZ developed by the KGISL is the only operational SEZ in Coimbatore.

B Jayamurali,VP, KGISL, said, "We decided to develop infrastructure for our own business. In the process, we realized that there is potential to get into the infrastructure business. In the process, we will attract more IT companies which is very important because as an IT company we need healthy competition and healthy IT business happening for the growth."

Close to six more SEZs are being planned in Coimbatore. The current occupancy rate of IT space is a mere 60,000 square feet. Looking at the pace the city is growing, the Industries Association in Coimbatore says the government has to pull up its socks, especially in terms of infrastracture.

Coimbatore has all the potential to be the next IT hub of the country. It might not replace Chennai or Bangalore but will definitely emerge as a preferred alternative. Taking a critical look, the city needs to put its basic infrastructure in place and offer better connectivity to attract more players.

Coimbatore is the only tier two city in Tamil Nadu that has an international airport. In fact, the city is strategically located. So, you can drive down in a matter of hours to other IT states like Karnataka and Kerala. But there are connectivity issues in the peripheral areas of Coimbatore.

It is this factor that may dampen investor's spirits in Coimbatore. Moreover, real estate, which was one of the competitive factors, has also shot up in the last few years. This has not gone down well with IT companies.

B Jayamurali said, "The government needs to take a re-look at Coimbatore." Another deterrent to Coimbatore might be its slow pace of life. The city is yet to catch the retail bus and this has not gone well with the young crowd.

The RS Puram DB road of Coimbatore is considered as the shopping hub of the city. It is strange that with a booming IT sector, the retail is yet to catch the pace.

This is a big disappointment for the young crowd. They say they have very little options to splurge their money. The city has no malls or multiplexes. Most of the proposed malls will take at least two years to get completed.

Pubs and night hangouts are a rare sight in the city but the city's youth is optimistic that once the retail boom kicks off, Coimbatore will give Bangalore and Chennai a run for its money.

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Felcy said...
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