Monday, September 25, 2017

Cover Story

Work in progress

 

 

That geographical distance offers perspective is an oft bandied truism. The same is eminently true of the view of terra firma from a height. The 10th floor office of Kumar Builders at Bund Garden Road offers a broad sweep of the city originally called Punyanagari, a glimpse of a ribbon like strand of a once proudly flowing river, embankment on one side, stray hills jutting out from earth in the distance, and in the foreground visuals of a modern, fast changing skyline…the contours of a mall which the real estate developer constructed a few years ago – and which incidentally is doing very well, thank you.

 

We are talking to Kruti Jain, Director, Kumar Builders KUL, of the city’s metamorphosis from laid back town to happening industrial hub to prospective metro. Is Pune a smart city? The question elicits a thoughtful response, “It’s got everything going for it – it is naturally inviting in terms of great weather, it has a cosmopolitan lifestyle; it is an education hub, so we have great minds, a sophisticated population; a remarkable industry profile which is unlike any other cities which rely on one or two industries: Mumbai has got only one, finance, while Bengaluru has got only IT. Pune thrives on 5 industries: manufacturing, IT, sunrise sectors like hospitality and retail, education on a huge scale; and we also have biotechnology and others. As regards smartness, I associate it with technology – like having traffic signals which run on solar. But I certainly will say that the city has some smart real estate. The fact that we have 2000 quality hotel rooms here, and have international brands Ritz Carlton and yoo coming in, speaks of how savvy the city is. Also because it is strong on education we have a great employment base here.”  

 

 

INDUSTRIAL AGGRO

 

With Pune emerging on the industry map of India in a very big way, the pace of development across the city has been frenetic, manifest in the form of industrial clusters – there are close to 300 German companies virtually ruling the roost  in areas like mechanical and electronic technologies, service industries, chemical and healthcare, renewable energy and automotive – gleaming IT parks housing global information technology majors like  bellwether Infosys, Wipro, Tata Consultancy Services, Zensar Technologies Tech Mahindra, Cognizant, IBM, Mphasis, Veritas, BMC Software  etc. – international hotel chains, convention centres,  multiplexes and malls, automobile showrooms, and high end real estate developments. Its position of eminence globally has been further underscored with the setting up of the World Trade Center at Kharadi to facilitate international trade.

 

Understandably therefore, with more and more companies eyeing the city as a location for business, and people from all over India choosing it as a place to reside in, real estate values have shot up sky high. The city is now pushing its limits outside its former boundaries. So much so that a recent report spoke of the Pune Municipal Corporation getting ready to surpass Mumbai as the biggest civic body in the state in terms of area thanks to the clearance of a long pending proposal to bring 34 fringe villages under its jurisdiction.

 

It can well be said that the city is in the throes of metromorphosis—its population has come a long way from their former laid back, snooze in the afternoon, small town avatar to waking up to the clangor of industry, the din of diurnal traffic and the prospect of having their own metro rail network sometime in the near future. Pune has truly evolved a lot in the last ten years in a big way. Its road network has expanded and improved tremendously.  As Dr. Mangesh Korgaonker, Director General, NICMAR, is led to say, “Much of this infrastructure addition that we are seeing today owes to the IT industry, and in some measure to the pressure exerted by the manufacturing sector, but there are certain pockets where development is needed. This development has also created two different cities within a city: a historical Pune, which would be difficult to change for a long time; and a new Pune which is fast changing and expanding. Those will create social tensions which need to be managed.” Admittedly those contradictions will have to be resolved as the city move ahead in its growth path. Despite its many other qualifications it is industry with which Pune has mainly come to be identified with.

 

The city wears many caps — leading IT destination, logistics hub and a renowned centre for the auto, design and white goods industries, amongst others. Everyone who is someone of the global and domestic industry is here. Entrepreneurial history, location, education levels, work culture and climate are some of the elements that have led to Pune beingpreferred as the first choice as a business destination. Pune has had a strong manufacturing base since the early 1960s when mechanical engineering firms like Tata Motors (formerly TELCO), Bajaj Auto, Bajaj Tempo (Now Force Motors ) Buckau Wolf (Thyssen Krupp now), KSB Pumps, Kirloskar Oil Engineers, Kirloskar Cummins (Now Cummins India), Hindustan Antibiotics, NHEC and others set up manufacturing plants here.

 

On the engineering side firms like Thermax, Praj, Cummins, Kirloskar Brothers, Alfa Laval, Atlas Copco, SKF, Forbes Marshall, Finolex, Electronica and several global construction equipment manufacturers such as Demag, Kone Cranes, John Deere, JCB, Gudel, Wirtgen, Hassia Packaging, Hyundai Heavy Industries, not to mention white goods makers such as Whirlpool, Haier and LG would set up their units in and around Pune. Add to that list automation companies like Beckhoff, Mitsubishi, Lenze, Gefran, Baumer, Baldor, Honeywell and B&R; electronics and electrical brand names like Minilec, GIC Shogini, Messung, Wika Instruments, and it is difficult not to be amazed by the emerging contours of a quietly dignified city, which on its own volition has thus far continued to evade the embarrassment of discovery, preferring to live in the umbra of the more boisterous commercial capital, Mumbai. If Pune is not getting its due it owes largely to the temperament of its denizens who have not been able to market their city’s manifold qualities like say an Ahmedabad or a Bengaluru. It has intellectuals and technology geeks in ample measure, but few marketing whiz kids to promote it.

 

Kalpesh Chitroda, Director, Maris Polymers India, underlines that failing when he says “I suspect Pune people are either not pushy enough or lazy to promote their city aggressively. Besides, most outsiders look at the city as an extension of Mumbai, which is most unfair. Unlike Bengaluru, for example, Pune does not have the advantage of being a state capital. Also we don’t have symbols of the kind Hyderabad’s Charminar or Mumbai’s Gateway of India is with which to project ourselves.”

 

But what is being missed is the fact that Pune has industry as its USP – and also its most potent symbol. The city has progressed from its more famous educational sobriquet ‘Oxford of the East’ for its numerous colleges, to being likened to Detroit because of the sheer presence of automobile and ancillary industries. It is high time now someone coined an alternate name for Pune, like say Manufacturabad – or if that seems too elongated, Industria. Indeed there is credible reason for such enthusiastic pronouncements. Witness the new industrial action taking place in Pune in just the first half of the year:

 

  • GE sets up a $200 million manufacturing facility at Chakan to manufacture aviation components to turbo machinery components to measurement and controls and wind turbines. The project is slated to start this month.
  • Czech Group Gearspect opens a plant in Pune to manufacture gear measuring equipments and gear cutting machines for the auto, aeronautics, heavy engineering, construction equipment and defence sectors.
  • Tata Cummins, a joint venture between Cummins Inc and Tata Motors, inaugurates its third manufacturing facility located at the Cummins Megasite in Phaltan to manufacture diesel engines.
  • The Switzerland based Baumer Group sets up an engineering, training and assembly operations to manufacture electronic pressure sensors..
  • Global digger manufacturer JCB announces plans to relocate production of its compaction equipment to factories in Pune
  • Linnhoff, maker of asphalt batching and concrete mixing plants, builds a greenfield manufacturing facility at Khed and outlines plans to set up a research and development centre in the same location.
  • Mercedes Benz India to begin assembly of the high-end S-500 car at Chakan

 

 

It is not difficult to see that Pune is the toast of the season, global economic slowdown notwithstanding. Even the Japanese are showing keenness in investing in the city – there are 76 Japan based companies in Pune, mostly focused on the automotive sector, a clear indication of the city’s emergence as a global manufacturing hub. Towards the end of last year, the Japan External Trade Organization (Jetro), the promotion body for trade and investment, and the Maharashtra Industrial Development Corporation (MIDC) signed a memorandum of understanding to set up an exclusive industrial park for Japanese companies in the Pune region. The park is to come up on 1,200 acres at the Supa Parner industrial estate outside the city. It is the presence of a strong local automotive parts manufacturing industry, coupled with the easy availability of high quality skilled workers which has spurred global giants like General Motors, Daimler AG, Volkswagen AG, Tata-Fiat, International Truck and Engine Corporation (ITEC), Piaggio Vehicles and Hyundai Heavy Industries to establish base in the Pune area.  

 

Emerson which is a global leader in the Climate Technologies segment, and offers services in the residential and commercial airconditioning, refrigeration and cold chain space, has chosen Pune as its hub for India operations.  Says Deepak Takkar, Senior Vice President – Sales and GM – Cold Chain, India Emerson Climate Technologies, observes “Pune’s location make it an excellent choice for industry and doing business is made easy.” 

 

Armacell specialises in the manufacture of thermal and acoustic insulation, edge protection and custom seals and gaskets for original equipment manufacturers, which it produces at its Pune based plant, which is also its hub for exports. Keshab Chopra, MD Armacell India, says, “The city offers engineering and intellectual capital like none other. Pune, we have found, is well located and is equidistant from all our markets and that has led to our preference for economies of scale.”

 

 

GERMAN OOMPH

 

But it is the German companies who have shown more aggression in terms of investing in Pune. The 450 million euros Hamburg-based Nord has a unit at Hinjewadi with a capacity to assemble 24,000 powerful drive solutions per annum for conveyor or motion control applications for various industrial verticals. “We are optimists. Despite the recent market conditions we have pinned our faith on the India Growth Story, and particularly on Pune,” avers PL Muthusekkar, Managing Director, Nord Drivesystems Pvt. Ltd. when asked about the view obtaining from Berlin. 

 

Admittedly Pune, for the firms from Deutschland, is home turf not just because of the comfort they draw from numbers. It is because of the relations established with the city since the early sixties when an Indian subsidiary of Buckhau -Wolf (later taken over by Krupp Industries) set up base. Pune is a sister city to Bremen in Germany – there is even a Bremen Chowk here as a tribute to the relations with the European industrial port city.

 

Zubin Kabraji, Regional Director, Indo German Chamber of Commerce further underlines the confidence German firms have in Pune when he says, “That there are so many German firms operating out of Pune is indicative of its attractiveness. What are the qualities that attract them? I would say the presence of large German companies leads smaller firms to gravitate towards Pune. The other factors that propel them are the presence of a skilled workforce, good education facilities, entrepreneur base which permits absorption of high technology brought by the Germans; also the fact that it is a great melting pot for culture and is a very friendly city.” But for how long this? – remains the zillion dollar question.  On the requirements side, infrastructure like road linkages and power remains a constant sob story. While the general condition of roads is good, it is nothing to write home about. The paths leading to Hinjewadi, which is Pune’s hub for the IT sector and other industries, come in for particular criticism for being far too narrow, a lament also echoed by KUL’s Jain, “No wonder IT real estate business in the city has remained stuck at 3 million sq ft for so many years. Hinjewadi is a joke. It has 3 lakh people working there and you have a 12 metre road entering it,” she says acidly.  

 

It is easy to understand the developer’s concerns. KUL, which has a township project located within Hinjewadi, has had to chalk out plans to connect the IT hub with the help of a rope bridge on the lines of Mumbai’s Bandra-Worli Sea Link. The company is now planning an initial investment of Rs 7 crore on the bridge. Ironically enough at a time when the Pune Municipal Corporation is struggling to implement the long-drawn metro rail project in the city, its civic standing committee has proposed a light railway project which will connect core city areas to locations having high concentration of Information Technology (IT) companies like Hinjewadi. Among the other common grouses – read requirements – are sewage disposal. Much of the city’s filth gets deposited in the Mula-Mutha rivers.  A long standing demand with the government has been the riverfront development project but not much headway has been made on it. A major plus though is that the city is extremely conscious from a green building and sustainability point of view in terms of adoption of best practices like rain harvesting – Pune actually out scores others urban centres. If Pune, which has so much to offer is not taking off as expected, it is also due to the absence of an airport of global standards. While connectivity has been bolstered with more flights between Pune and Germany and a few other places, the upgradation and expansion of the airport has been too long in coming. 

 

Sanjeev Nimkar, Vice President & Business Head, Power, Industrial & Service, Kirloskar Oil Engines Ltd, sounds a note of warning, “Pune was the darling of investors 20 years back. It still is, but that position can alter anytime. Already other cities like Jaipur, Ahmedabad and Coimbatore are coming up very fast and offering a lot more facilities, they are emerging as challengers. We need to have a robust approach to infrastructure at the earliest if we have to cope up.” 


Harpreet Singh Wahan, General Manager, Sales & Marketing, India, FW Murphy – Enovations Controls India, says, “Pune has a lot going for it from a manufacturing perspective. It could well fritter away that advantage by neglecting infrastructure.”  Adds Dr. Subash Cipy, Managing Director, Cipy Polyurethanes Pvt. Ltd., “The government needs to take a very proactive role when it comes to city infrastructure.”

 

While that is a common refrain, Pune’s citizens too would do well to market their city aggressively.  There is a story, perhaps apocryphal, doing the rounds  of the peths which goes something like this: A certain Shivajirao Gaikwad, aka Rajanikant, the Tamil movie icon, famous for his ability to do impossible things, landed up outside the famous Laxminarayan Chiwda shop at Pune’s Bhavanipeth on a Sunday. Only to return empty handed! 

 

That tale though farfetched is cautionary, indicative of the need for Pune to shed some of its ‘We are like this only’ spirit if only for the sake of progress. It has a wealth of intellectual capital embedded in its DNA, also the wherewithal in terms of a solid industrial backbone, and indeed pushes itself well enough to survive on its resources, but loses out on the importance stakes only because of its inability, an outcome of its learned reticence, to push Mumbai and New Delhi hard enough.      

 

Pune definitely needs a change of avatar – or else some of that old laid back spirit could actually be seen as arrogance, or indifference, or sheer laziness to seize the moment of glory. Such a moment may now have come in the form of political representation. After a gap of almost two decades the city is being represented in the Union Cabinet by Prakash Jawadekar, who was recently sworn in as Minister of State for Information, Broadcasting and Environment in the Narendra Modi government. And there is hope yet for Punyanagari.

 

But right now it is just a work in progress.

 




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