Monday, October 14, 2013

Bangalore sees 12.3% rise in job generation in Q2

The new job generation in the city, the IT capital of the nation, during the second quarter of FY 2013-14 surged by 12.3% as against the previous quarter, industry body Assocham has said in a joint study.

“With over 21,000 new job opportunities created in various sectors across Bangalore during Q2 of FY14, the new job generation in city has increased significantly from over 18,700 new jobs generated during Q1,” it said.

The sector-specific analysis on ‘Job Trends Across Cities and Sectors’ was conducted by The Associated Chambers of Commerce and Industry of India’s Economic Research Bureau (AERB).

The new job generation in the city, the IT capital of the nation, during the second quarter of FY 2013-14 surged by 12.3% as against the previous quarter, industry body Assocham has said in a joint study.

“A total of over 1.36 lakh new jobs were generated in various sectors across India during Q2 of FY14 which increased from over 1.25 lakh new jobs that were generated during Q1. Top five metros like Bangalore, Chennai, Delhi-NCR, Kolkata and Mumbai together account for about 61% of these new jobs,” Assocham Secretary General D S Rawat said releasing the analysis.

“Acquiring a share of over 15% in total number of new jobs generated across cities and sectors in India in Q2, Bangalore has emerged as second-most significant employment hub after Delhi-NCR (national capital region) which remained on top with about 24%. “However new job generation in Delhi-NCR plummeted by over five% during the aforesaid period,” Rawat said.

“Information technology (IT), IT enabled services (ITeS) and IT hardware sector accounted for a lion’s share of 67% in the total new jobs generated in Bangalore as over 14,000 new jobs were created in Q2 as against over 10,600 new jobs generated in the sector in the previous quarter, over 30% quarter-over-quarter growth rate.

Among other tier I centres, registering quarter-over- quarter growth rate of over 11% and nine%, respectively, are Mumbai (14,649 new jobs) and Chennai (8,786 new jobs). They have recorded a surge in job generation during the course of past three months, it said.

Kolkata has registered a decline of about two% as over 6,400 new jobs were generated in Q2 as against 6,500 new jobs in Q1. “With over 58,000 new jobs, IT, ITeS and IT hardware sector has garnered the highest share of over 42 per cent in the new job generation…,” it said.

Electronics City tollway causing Rs 5 lakh loss daily to promoters

Pass system is leading to revenue shortfall despite increase in trips, says firm

The promoters of Bangalore’s first elevated tollway from Central Silk Board junction to Electronic City, the 9-km, four-lane road, have been registering a loss of Rs five lakh every day. 

The tollway, commissioned in 2010 to meet the requirements of the burgeoning IT industry in Electronics City whose captains wanted a freeway to reach office faster, was expected to generate Rs 29 lakh per day as per current revenue target. But, it is fetching Rs 24 lakh a day. 

If the original revenue target of Rs 34 lakh per day, decided at the time of the project launch, is taken into account, the loss is in fact higher at Rs 10 lakh per day, sources in the Bangalore Elevated Tollway Limited (BETL), which operates and maintains the tollway, told Deccan Herald. Sources added that a minimum of Rs 29 lakh should be generated each day if BETL is to meet the cost of maintaining the highway and recoup its investment.

The losses are mounting despite a jump in the number of trips on the tollway from 30,000-32,000 a day in 2010-11 to 40,000-45,000 trips per day in 2012-13. The jump in trips, however, has been primarily those of two-wheelers, the sources said, pointing out that the revenue realised from two-wheelers is lower than from cars and heavy vehicles.
A BETL official who did not want to be named said: “The average number of trips in the last three years has gone up by six to eight per cent year on year, but revenues haven’t. This is due to high inflation and rise in petrol prices. Market conditions are making it difficult to break even. I expect we will take another three to five years between 2016 and 2018 to break even provided market conditions turn favourable by then.”

Reasons for losses

The official explained the reasons for fall in the expected revenue. “There is currently a pass system which is offered at discount or which enables one to make multiple trips.

Both are money-losing propositions. In the first, if two trips cost Rs 100, a pass is being offered at Rs 65 for the same. So, we lose Rs 35 for every pass bought. In the latter, if one makes 60 trips on average to office, back and forth, the monthly pass system allows one to make any number of trips over 60, but the car driver pays only for the two trips a day or 60 trips. Is this good economics?”

Tollway officials also say that the NICE road has no pass system at all: One has to pay for each trip separately at whichever point one enters or exits. The officials want the pass system for the tollway cancelled or seek a pass system that allows only two trips at any time, and for further trips, a new pass would have to be purchased. “Let us just follow the NICE system for the tollway too. Revenues will improve automatically. Except for categories of vehicles which are exempted, all others have to pay without discounted passes,” BETL officials proposed. 

National policy

The government, however, is not keen on this. It is the National Highways Authority of India (NHAI) under the Ministry of Transport that fixes the rates and decides on the pass system. NHAI fixes rates on a national basis, in which, tollway rates in different cities would be the same. Under this policy, each city is not permitted to have its own rates.

There is no autonomy for the contracted agency to decide rates and the controlling authority for the tollway is the NHAI itself. NHAI’s argument has been that people would use the tollway only if rates are discounted in the initial phases.

The Hosur Road, on which the tollway has been built, sees 80 per cent traffic under the tollway, while the tollway itself sees 20 per cent. While half of the traffic on the tollway is towards Hosur, the other half is into Electronics City. The tollway sees a 50-50 share in the Hosur-Electronics City destinations vehicles travel to. This will have to increase several fold to up revenue or the number of trips each vehicle makes has to go up.

Friday, July 5, 2013

Singapore’s L&W Construction acquires land in Bangalore for Rs 100 cr

International property consultants Jones Lang LaSalle has facilitated an outright purchase of 25 acres prime land at Devanhalli, Bangalore.

L&W Construction Pvt Ltd, a 100 per cent subsidiary of Singapore’s Lee Kim Tah Woh Hup Pte Ltd, has acquired the land from a Bangalore-based industrial group.

The transaction value is Rs 100 crore and the Singapore company has picked up this land parcel to develop a high-end residential project.

Mayank Saksena, Managing Director – Land Services, Jones Lang LaSalle India, said: “This is an extremely strategic acquisition for L&W Construction Pvt Ltd, and one of Bangalore's largest land deals of 2013 to date.”

“The location of this land on NH7 at Devanhalli is among Bangalore’s most promising growth corridors by virtue of its proximity to the Bangalore International Airport,” he added.

Friday, June 28, 2013

TE Connectivity going ahead with expansion despite labour woes

Deutsch is a provider of connectivity solutions for harsh environment applications. The company has invested close to Rs 600 crore in India. Last October, another investment of Rs 300 crore was announced for a new manufacturing facility.

TE has five manufacturing plants in Bangalore and two in Pune. Despite labour issues, the company is continuing with its expansion plans.

“We are constructing an integrated manufacturing plant at the Aerospace Park, Yelahanka in Bangalore, which is expected to be operational by 2014,” said Handu.

At the new plant in Bangalore, he said, TE would design and manufacture next-generation connectivity solutions for multiple industry verticals including automotive, aerospace, defence and marine.

Karnataka eyes for $7 bn investment in aerospace sector

Karnataka government expects an investment of about $6-7 billion during next four to five years in aerospace sector that is coming up around Devanahalli International Airport.

"Let me make it very clear in the next 4 to 5 years we are expecting an investment of about USD 6 to 7 billion in the aerospace sector that is coming around International Airport. This will be the first aerospace park in the country," Principal Secretary - Commerce and Industry Government of Karnataka MN Vidyashankar said.

Karnataka was the first state to announce the aerospace policy in the country, he said at an event of Federation of Karnataka Chambers of Commerce and Industry. He also said that state is taking steps to meet the requirements of water and power in this area.

"Devanahalli area is coming out to be a major hub for knowledge based industries, as water is an issue in this area we are taking around 60 million liters of tertiary treated water. There is IT investment region, Software Park and Aerospace Park coming up in the region."

Illustrating on the other major investment projects coming up in the state Vidyashankar said Kolar and surrounding region is being developed as auto and auto auxiliary hub. "As Kolar is a dry area we will be supplying 60 million liters of tertiary treated water by drawing waste water from a place called Bellendur in Bangalore," he said.

According to Vidyashankar, the plan is to spread manufacturing plants across north and central Karnataka and depute knowledge based industries in and around Bangalore.

In the north Karnataka region there is a large engine making plant coming up in Kittur, being developed by an automobile giant with an investment of 10,000 crore, he said. "In addition to engine making plant there will be about 45 to 50 vendors coming up around the same place to supply spare parts for them. So we are expecting an investment of around 15 - 20 thousand crores in the next two to three years time around Belgaum, Hubli and Dharwad region," he added.

There is also a proposal from a large oil company to set up India's biggest refinery in Mangalore who are in requirement of 2,000 acre area, with an intention to investment 36,000 crore and generate 13-14 thousand employment opportunity. "The issue is about environment clearances considering Mangalore being a coastal area, talks are on to look at other alternatives as well," he said.

He added that there is also a proposal to set up leather cluster in Kanakapura region. Stating that there are investment enquiries from several foreign countries he said "Taiwan is looking for an investment in hardware sector in partnership with local companies, Israel is looking at R&D in aerospace sector."

Mayor of San Francisco will be in Bangalore with his delegation of investors by the end of this year, with key are of interest being investment in R&D sector, software sector, startup segment, he added.

Vidyashankar said as part of 2013-14 budget, government has come up with three major initiatives one being separate allocation for promoting R&D, secondly a major venture capital initiative in manufacturing sector and last one being cross border entrepreneurship to support startups.

Tuesday, May 28, 2013

Honda opens plant in Kolar for 2-wheelers

Auto And Ancillary Facility To Employ 8,500 People 

Honda Motorcycle & Scooter India (HMSI),a wholly-owned subsidiary of Honda Motor Company,Japan,has opened its third manufacturing facility in the country at Narsapura Industrial Area in the Kolar district of Karnataka,at an investment of Rs 1,350 crore.

This is the companys first manufacturing facility in the south,and for Bangalore this is the second Japanese auto manufacturer to open shop,the first being Toyota in the late 1990s.

Seventeen vendor partners of HMSI have invested an additional Rs 1,700 crore in the Narsapura Industrial Area.The total job creation between the vendors and the manufacturing facility is expected to be 8,500.HMSIs facility has the capacity to produce 12 lakh units per annum,which the company will ramp up to 18 lakh units by the end of this calendar year.Initially,the facility will manufacture two of the companys popular brands -- Dream Yuga and Activa.Production of the Dream Yuga will commence in June followed by the Activa.

Through this third facility HMSI increases its annual production capacity in India by 64% to 46 lakh units per annum.The companys two other manufacturing units -- at Manesar in Haryana and Tapukara in Rajasthan -- have a combined production capacity of 28 lakh units.

In the fiscal year ended March,the company sold 27.55 lakh units,a 31% growth over the previous year.The overall industry reported growth of just 2.4%.Keita Muramatsu,president & CEO of HMSI,said that with the third facility,the company would touch a sales figure of 39.3 lakh units at the end of the ongoing fiscal,a 41% growth.

The expanded production capacity will be supported by aggressive growth in the sales network to 2,500 outlets and rapid new product introductions as we aim for market leadership, added Muramatsu.Earlier this year HMSI overtook Bajaj Auto to become the second largest two-wheeler manufacturer by volume in India.Hero MotoCorp is the largest
In the current fiscal year,Hondas global two-wheeler sales growth is expected to increase more than the previous years and is headed to new heights because of its operations in India, said Yoshiyuki Matsumoto,managing officer,Honda Motor Co.He added that India was one of the most important markets for Hondas overall business.

Matsumoto said that out of the total 4,500 jobs at the new facility,nearly 90% were being offered to local youth.


Mass production of Dream Yuga,in the 100-110 cc motorcycle segment,will commence in June at the Kolar facility This will be followed by production of Activa Bangalore has the highest market demand for two-wheelers among all cities in India,says Honda Government spending Rs 190 crore in getting 60 million litres of water to the three industrial clusters of Narsapura,Malur,and Vemgal in Kolar district by June next year.