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.

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.

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.

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.

RIDING IN 

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.

Blackstone scans realty market for investment

Private equity giant Blackstone, which manages assets worth $210 billion globally, is upping the ante in the Indian property mart. The firm, which has invested $1 billion in the country's commercial and residential assets in just two years, is again on the prowl for investment targets. 

On the table are two properties - the Express Towers in Mumbai and the Mantri Mall in Bangalore - both of which are valued at under Rs 1,000 crore each, said multiple sources aware of Blackstone's real estate play. While Blackstone has its India head office located on the fifth floor of Express Towers and has a bird's eye view of what's on offer, a detailed due diligence was carried out on Mantri Mall a couple of months back. 

Sources cited earlier told TOI that Blackstone has put the Mantri deal on simmer as it is working on a possible structured debt transaction through its NBFC arm to invest in the 1.7 million sq ft mall, which has been in operation for three years. If the Mantri deal does go through, it would be Blackstone's maiden retail real estate play in India. 

Sources told TOI that while senior executives of Blackstone have been presented with a brochure on Express Towers, toplevel executives from Embassy Office Parks are planning to go to Mumbai to get a walk-through of the 25-storey building, which has a built up area of approximately 4 lakh sq ft. 

ICICI Ventures and Viveck Goenka, CMD of the Indian Express Group, jointly own the four-decade-old Express Towers along with a clutch of smaller investors . The property, which has a commanding view of the Arabian Sea, has a reserve price of Rs 850 crore, said one of the sources mentioned earlier. 

Blackstone and Mantri Developers declined to comment, when contacted, while ICICI Ventures MD and CEO Vishakha Mulye couldn't be reached for a comment on the Express Towers deal. Real estate consultant Jones Lang Lasalle India , who was mandated by ICICI Ventures to seek out buyers, also declined to comment.

Sahara acquires 25-acre plot in Bangalore for Rs 149 Crore

The Sahara Group has acquired a 25-acre plot in Bangalore's information technology hub Whitefield, originally owned by the television and white goods maker BPL, for Rs 149 crore, and plans to build offices and a hotel there. 

The real estate to retail conglomerate Sahara has bought the plot of land from the Asset Reconstruction Company of India (Arcil), which had picked it up under the SARFAESI Act from a clutch of banks and financial Institutions after BPL defaulted on its debt payments a few years ago. 

Sahara confirmed the transaction. "The assets have been acquired from Arcil and will be utilised as per the main objects of the company. The payments were made as per the terms of bidding process and till date we have paid Rs 100 crore," Abhijit Sarkar, head of corporate communications for the group, said. 

Arcil did not respond to an email sent by Media. 

The land was owned by two BPL group companies, BS Appliances and BS Refrigerators. Arcil acquired this property under SARFAESI Act from various banks and financial Institutions after BPL defaulted on its debts payment. 

According to the terms of the bid, this land in Whitefield can only be used for a commercial development. Sahara is planning to build a mixed-used commercial building here which will have a hotel and an office tower, said sources, who did not want to be named. 

Sahara, however, did not specify the kind of development it is planning. 

The tender document floated by Arcil quoted a reserve price for the two land parcels owned by BS Appliances and BS Refrigerators at 39 crore and 55 crore, respectively. It mentioned that the successful bidder would have to pay dues of around 49.37 crore to the Karnataka Industrial Area Development Board to get the sale deed and also clear labour dues. 

Sahara's group companies Sahara India Real Estate Corp and Sahara Housing Investment Corp were recently under the spotlight with the market regulator Sebi charging them for illegalities in raising funds.

RMZ Ecoworld leases office space to Honeywell for Rs 58 crore annually in Bangalore

Global technology firm Honeywell Technology Solutions (HTS) is taking up a million sq ft of office space in Bangalore, making it the second-biggest office leasing deal in the country in the last two years. At 48 per sq ft, Honeywell Technology Solutions will pay an annual rental of close to Rs 58 crore for the office space in RMZ's special economic zone, RMZ Ecoworld, people familiar with the transaction said. 

A spokesperson for Honeywell confirmed the transaction but did not give any details. "As we continue to be locally invested, we were looking at efficiencies and co-location synergies to enable better optimisation and productivity opportunities," the spokesperson said in an emailed response. 

Bangalore-headquartered HTS is the captive technology and engineering facility of the $37-billion US firm Honeywell International. 

In terms of space, its deal with RMZ, which was handled by property consultant CBRE, is the second largest in the country's office space segment in the last two years after Goldman Sachs took up 1.6 million sq ft in the city a year ago. 

According to people familiar with the matter, HTS will use close to 5 lakh sq ft of the space for consolidating its existing offices in the city while the rest will be used for business expansion. 

"Our plans are in line with long-term direction and strategy and will be taken up in a phased approach," the HTS spokesperson said. 

The 50-acre RMZ Ecoworld, earlier known as Adarsh Tech Park, was picked up recently by RMZ and Baring Private Equity Partners for Rs 1,000 crore. In it, RMZ got 1.4 million sq ft of built and leased space and rights to build another 6 million sq ft of office space on the land parcel on the outer ring road in Bangalore. 

People close to the development said HTS had been in talks with RMZ and Mantri Developers for office space as it wanted to move out of its office at Kalyani Tech Park in south Bangalore in view of the upcoming metro rail work there. HTS decided to go with RMZ because it already has space in the SEZ, which was earlier run by Adarsh Developers. 

The deal is good news for the domestic commercial office business, which is showing sign of revival after remaining depressed for a year. Businesses hired more office space in the first quarter of 2013 compared with a year ago, according to CBRE. 

Data provided by two property advisors last month showed office space absorption had dropped from about 35 million sq ft in 2011 to 26 million sq ft in 2012. Leasing of office space is widely seen as an indicator of business sentiment in a country.

Alstom to strengthen Bangalore R&D centre

Alstom Transport is transforming its engineering facility in Bangalore into a global research and development centre.

The company is part of the Euro 20 billion,Parisbased Alstom,a global leader in transport infrastructure,power generation and electrical grids.

Alstom Transport develops and markets a range of systems,equipment and services for the Indian railway sector,some of which include providing signalling systems for the Delhi and Bangalore metro rail totalling 100 kilometers,building metro rail coaches for the Chennai metro,and designing Linke Holfmann Busch coaches for the Shatabdi and Rajdhani.

Alstom Transports Bangalore engineering team of 300 people is engaged in application and product engineering for the companys signalling projects in Europe and in Asia.This centre will be expanded to include a new team focused on research,engineering,and development of coaches,beginning next fiscal.

Henri Poupart-Lafarge,president,Alstom Transport,who was in Bangalore,said that the company planned to increase the headcount at its Bangalore centre to 550 by the end of fiscal 2014.

We will add another 150 engineers for the signalling part and would grow the coaches division by 100 people a year, said Lafarge.

The Bangalore centre will initially focus on developing various systems and sub systems for coaches,both for the Indian and global markets.Over the next four to five years the company expects the centre to reach a level of competence to design and develop a complete coach.

Lafarge added that the company would also increase the headcount at its manufacturing facility in Sri City in Andhra Pradesh to 200 from 120 at present.

The manufacturing unit,established with an investment of Euro 30 million,will manufacture metro rail coaches for the Chennai metro.

Over the next one-year,bids for a host of rail projects that include expansion of the Delhi and Bangalore metros,and initiation of the Ahmedabad and Cochin metros are expected.

There is huge potential in the rail transportation business in India.The country has a large number of cities growing because of urbanization,which today are not equipped with metro connectivity, said Lafarge.

Filipino cities gain in outsourcing ranking as Bangalore retains top slot

The Philippines, led by its capital Manila and followed by secondary cities such as Cebu, Mandaluyong and Taguig, has emerged as a key IT/ITeS destination, posing a challenge to India's outsourcing story.

The latest annual ranking of the top 100 global outsourcing destinations by Tholons, an advisory firm for global outsourcing and research, places Manila at No. 3, up from No. 4 in last year's survey. It has pushed Delhi down to No. 4. Cebu City too went up one rank in the top 10, pushing Dublin (Ireland) down. Indian dominance continues though, with six Indian cities in the top 10 and Bangalore still the No. 1.

The critical factors that are adding momentum to Philippines are its cultural and accent similarities with the US, cost competitiveness, and a strong positive perception of BPO careers (they are not stop-gap careers like in India). The Philippines government is also keeping its focus firm on the development of the industry through grants and infrastructure developments.

Salil Dani, practice director at outsourcing advisory and research firm Everest Group, said the Philippines is cheaper by up to 70% for US companies. "The country is the leader in voice (call centres). But its non-voice story is still untold. A lot of Indian and global BPOs in the financial, analytical, HR and people-based services are expanding in the country. The Philippines' current IT/ITeS market is $14 billion, of which IT is only $2 billion. But remember, a few years ago the total market was barely $7 billion. Look at the way it's catching up," said Dani. Ankita Vashistha, managing director, Tholons, said costs are rising in India. "Infrastructure and quality of life are also under pressure in Indian cities and these could impact growth in the future," she said.

Convergys, a US-based customer management solutions company, has 18 call centres in the Philippines. UnitedHealth, a US-based healthcare provider, has back-office operations in Taguig City. EXL is opening its third centre in Cebu City. IBM is planning to grow its BPO services in the country, focusing on higher value analytics and high-value customer support services. Wells Fargo & Co is setting up a business support centre in Taguig City to provide customer service and back office services. JP Morgan Chase has recently expanded in Manila by establishing a 1,000-employee facility.

Sanjay Dhawan, executive director at PricewaterhouseCoopers, said local government had created a lot of momentum. "More and more corporations are keen to expand to the country as no one wants to put all their eggs in the same (India) basket."

Pradeep Udhas, executive director at KPMG, said the Philippines had learned lessons from India in terms of best practices, talent management and handling taxation challenges. Som Mittal, president of Indian IT/ITeS industry body Nasscom, dismissed concerns that India had reasons to worry: "Our own companies are expanding to the region. Outsourcing is a global play. So it's less about competition and more about partnership."

Malaysian cities have also moved up in Tholons listing, as have Latin American cities. Montevideo, capital of Uruguay, has moved up six places to No. 37, Bogota, capital of Colombia, has moved up six places to No. 49, and Medellin, Colombia's second largest city, has moved up seven places to No. 53. This indicates a sense of urgency in Latin American countries to explore new industries like outsourcing, said the Tholons report.

FireEye to set up R&D facility in Bangalore

California-based cyber security firm FireEye plans to invest $50 million over the next 4-5 years

California-based cyber security firm FireEye plans to invest $50 million over the next 4-5 years in setting up an R&D facility at Bangalore for developing internet security products.

The India center would hire around 250 people, said Ashar Aziz, founder and CTO, FireEye.

The company also announced appointment of Sridhar Jayanthi as the Vice President (R&D) and Managing Director, India operations.

Prior to joining FireEye, Jayanthi was McAfee’s managing director and senior vice president (engineering). The FireEye platform has 1000-odd customer, spread over 40 countries, Aziz said.

Founded in 2004, key investors in FireEye include Norwest Venture Partners, Sequoia Capital, and Juniper Networks.

Buffet company, FlightSafety comes to India

FlightSafety International, one of the world’s leading aviation training companies and promoted by Warren Buffett’s Berkshire Hathaway, has established operations in India through a consultancy and licensing agreement with Bangalore-based Aviators India.

The 60-year-old New Yorkheadquartered aviation company delivers over a million hours of flight training each year to pilots, technicians, cabin attendants, and aviation professionals, and is a supplier of flight simulators, visual systems and displays to commercial, government and military organizations around the world.

FlightSafety’s India play would start in the next four months and would begin with cabin attendant training for commercial and corporate flight operators.

“Put together (both commercial and corporate operators) there would be over 10,000 flight attendants in India. And given the number of aircraft orders airlines have placed, this vertical could well see a growth of 100% over the next five to seven years,” said Captain Arun Sharma, MD, Aviators India.

Aviators India has been in the business of aircraft charter services and sales of corporate jets to Indian high net worth individuals for close to two decades.

Cessna-maker Textron plans some production in India

Textron, the maker of Bell helicopters and Cessna aircraft, said it would add 300 to 400 people to its engineering centre in Bangalore over the next one year. The centre currently has about 500 engineers.

Inderjit Sal, MD of Textron India, said the centre works on new products for almost the entire range of areas that the $11-billion Textron is in, including helicopters, aircraft, surface vessels and industrial segments. He said he could not provide details of the work for confidentiality reasons.

The US company has offset obligations in India, thanks to the $257-million order it won from the Indian Air Force in 2010 for sensor-fused weapons (computer controlled and radar equipped submunitions that hunt for tanks or armoured vehicles below and destroy them). Under offset obligations, vendors are obliged to procure materials and services from within India equivalent to 30% to 50% of the contract value. In the Textron order, the offset obligation is 30%.

The sourcing from the Bangalore centre will help towards partly meeting the offset obligation. The company is also looking to co-produce components in India. Ellen M Lord, CEO of Textron Systems, said the company had identified specific projects to undertake in India. “We are in the process of identifying partners, which we hope to complete in about a year,” she said. Textron is also bidding for the naval

utility helicopter deal of the Indian Navy.

The Navy plans to procure 56 helicopters, and Textron is offering two versions of Bell helicopters, which are being showcased at the aero show in Bangalore. Sal said private operators, the oil & gas sector, the medical sector and the paramilitary are also potential buyers of helicopters. Bell is estimated to have the highest market share in the Indian helicopter market. All of that is in the civilian sector now.

The company is also showcasing unmanned aircraft systems, command and control technologies, and precision smart air-delivered and ground-delivered weapons at the show. “India is ready to absorb these technologies, which is why we have such a big presence at the aero show,” Sal said.

HAL-Rolls-Royce production facility opened

The Rs 135-crore International Aerospace Manufacturing (IAMPL) production facility, a joint venture between Hindustan Aeronautics Ltd and Rolls-Royce, was inaugurated here today. 

The unit, to have an employee strength of about 100, incorporates the latest Rolls-Royce manufacturing techniques for making 130 different compressor parts. 

Incorporated in July 2010, IAMPL is a 50:50 joint venture company (JVC) of HAL and Rolls-Royce (the UK). The JVC is will have about 225 vendors initially. 

The facility, inaugurated by Managing Director, HAL (Bangalore Complex) K Naresh Babu, will include latest machine tools, computerised maintenance management systems, metal spray booths and non-destructive testing lines, it was stated. 

"The production facility incorporates the latest Rolls- Royce manufacturing techniques and will create job opportunities for highly skilled technicians and engineers in India," said Babu. 

The facility will begin manufacturing production components later this year. 

HAL Chairman R K Tyagi pointed out that HAL and Rolls- Royce have been strategic partners for long. 

"This is a step towards indigenous production activities in the crucial aero-sector. The state-of-the-art facility in Bangalore will produce components for the technologically advanced Trent family of civil aero engines, as well as for a number of marine and energy gas turbines," he said. 

HAL started producing the Orpheus engine under licence followed by maintenance of the Gnome engine and the 501 K industrial gas turbine. HAL is the production agency of Rolls-Royce's Adour 804/811 engine for the Jaguar aircraft of IAF since 1981. HAL is now manufacturing the Adour MK 871 for the new Hawk Advanced Jet Trainers

Karnataka economy hit as IT, ITES face slowdown

Economic Survey report says service sector to grow at 8.9 pc

The IT and ITES sectors, driver of the Karnataka’s economy, is in all probability slipping into another slowdown phase in the current financial year.

According to the Economic Survey report for 2012-13, yet to be released by the State government, the service sector is most likely to register a disappointing 8.9 per cent growth against 10.6 per cent last year, and it may further slowdown the State’s economic growth. 

Due to sluggishness in the IT sector, drought hit agriculture and continued stagnation in the industry, the overall economy of the State is likely to grow at 5.9 per cent against 6.4 per cent in the previous year. The State government is likely to release the report before the presentation of 2013-14 budget scheduled on February 8. The State Planning, Programme Monitoring and Statistics Department has prepared the report based on the advance estimates.

The big blow to the State economy is expected to come from the service sector, which contributors about 55 per cent to the Gross State Domestic Product (GSDP). It is for the first time since 2008-09, the worst year of global economic slowdown, the service sector (IT and ITES) is estimated to register decline in its growth. The sector had recovered in 2010-11 and 2011-12 financial years after recording the slowest growth rate of 8.2 per cent in 2009-10.

Food production 

The drought-hit agriculture sector (primary sector) is estimated to grow at just 1.8 per cent against 2.4 per cent last year. And the foodgrain production is estimated to be 125 lakh tonnes against the target of 135 lakh tonnes. The State has been experiencing severe drought for almost two years now. As many as 157 of 176 taluks have been declared as drought-affected by the government.

The primary sector had registered the highest growth of 13.3 per cent in 2010-11, with the record foodgrain production of 145 lakh tones. But the sector recorded a negative growth in 2011-12 with only 2.9 per cent. 

The industry or the secondary sector is expected to remain almost stagnant with 2.4 per cent growth. The poor performance in the sector is largely due to overall economic slowdown, official sources said.

Institute of Social and Economic Change Director Prof R S Deshpande said the drought has done major damage to the agriculture sector. There will be decline in production of oilsseeds, pulses and cash crops this year. Still there will be reasonable growth due to increase in productivity. Overall, the State finances have been well maintained, he added.

Wipro unveils aerospace actuator plant in Bangalore

Wipro Infrastructure Engineering, the global hydraulics business of Wipro Ltd, on Tuesday unveiled an aerospace actuator manufacturing facility at the Devanahalli Special Economic Zone near Bangalore International Airport.

In the first phase, the plant, set up in a 7.2 acre campus with an initial investment of Rs 650 million, will have an initial capacity to produce 2,000 actuators a year, the company said.

The existing infrastructure allows for expansion of the capacity up to 8,000 actuators per annum.

Aerospace actuators have various applications in an aircraft, including landing gear, flight control systems, engines and utilities.

The facility was inaugurated earlier today by Wipro Chairman Azim Premji in the presence of Klaus Richter (Executive Vice President - Procurement Head EADS/Airbus), M N Vidyashankar (Principal Secretary - Commerce & Industry, Government of Karnataka), among others.

“Our vision is to build a significant presence in the aerospace and defence market, leveraging on our experience and competence in precision engineering and machining space. Going forward, we see significant opportunities from this business,” said Pratik Kumar, President, Wipro Infrastructure Engineering.

In May 2011, Wipro Infrastructure Engineering signed an agreement with Spanish company CESA (Compania Espanola de Sistemas Aeronauticos S.A.), a subsidiary of the global Aerospace and Defence Corporation, EADS, for the manufacture of precision engineering components.

The pact involves transfer of technology as well as manufacturing aerospace actuators and related precision engineering components by Wipro for CESA.

Wipro Infrastructure Engineering plans to double the initial investment over the next six years to expand capacity and add new product lines in precision manufactured components, the company said.

The unit will commence serial production in April.

EADS : Unit Cassidian Unveils First India-Made Defense Products

European Aeronautic Defence & Space Co.'s (EAD.FR) Cassidian unit Monday unveiled the first two defense products designed and developed by its research and development center at India's technology hub of Bangalore, two years after the facility was established.

The center, which has 60 Indian engineers, was set up as part of plans to make it a single source supplier of certain technologies for marketing by Cassidian worldwide, the company said.

The high accuracy air pressure measurement system is an on-board sensor that provides pilots with altitude readings, while the structurally integrated antenna is integrated into military aircraft to reduce drag and improve stealth, it said.

Cassidian's growing activity in India follow the company's November announcement that it wants to further strengthen its market presence in the Middle East, India,Brazil and the U.S., in addition to its traditional European sales markets in Germany, France, Spain and the U.K.

Cassidian India chief executive Peter Gutsmiedl said the Bangalore center, while increasing the company's industrial presence in India, allows the company to "customize global products to local requirements, especially in areas such as unmanned aerial vehicles, radar solutions and security systems."

Swiss group Starrag sets up plant in Bangalore

Starrag Group, headquartered in Switzerland, has set up a machining plant in Bangalore through its subsidiary Starrag India.

The new plant, located at KIADB Aerospace Park in Devanahalli in the city, was inaugurated by its Chairman, Walter Fust and is expected to focus on building WMW machining centres in India.

The company also launched a new range of high performance WMW IWK Horizontal Machining Centers (HMC) at the ongoing international machine tool show Imtex 2013 in Bangalore.

According to A. N. Chandramouli, Managing Director, Starrag India, “The greenfield facility has been built with an investment of 12 million swiss francs or Rs 60 crore.”

It was approved by Karnataka Udyog Mitra during the Global Investor Meet.

The factory is expected to rollout four popular models of WMW Horizontal Machining Centres from July this year to to December 2014. A cost reduction programme through a local supply chain is in an advanced stage of implementation and there will be a national road show of the localised product by July, said Chandramouli.

The two phased manufacturing programme (60-120 units a year) will mainly be absorbed by the Indian market which is now on its economic revival after a slowdown last year.

About 300 highly skilled technicians will be employed over time here. In the new factory, an apprentice training centre has been commissioned using Swiss Vocational Education and Training (VET) programmes already tailored in collaboration with SWISS-MEM.

Maini Aero eyes $100 m biz

The opportunities provided by “offset” in the defence space in India, estimated at about $10 billion in 2013 by Deloitee’s “Aerospace & Defence Outlook” has enthused Bangalore-based Maini Global Aerospace to look at increasing its turnover from the present $60 million to about $100 million by fiscal 2015.

The company is looking at showcasing its capabilities at the forthcoming “Aero India 2013” event in Bangalore next month to potential customers for firming up joint ventures to tap the burgeoning aerospace and defence (A&D) market in India, given the group derives about 20 per cent of its revenues from India business currently. It’s a business that requires perseverance, according to the company. 

The term “offset” in the context of defence supplies, refers to a mechanism where a (foreign) supplier of defence equipment places work for an agreed value with business enterprises of the buying country to offset the buyer’s outlay. India announced its “Defence Offset Guidelines” that came into force from August 1, 2012. One of the objectives of the guidelines is “encourage the development of synergetic sectors such as aerospace and internal security”. 

The Executive Director of Maini Group, Gautam Maini, told Deccan Herald: “It is a business with a long gestation period where customer approvals can take about 18-24 months. We have been in business for about four years now and are poised to ride the exponential growth in the aerospace business between 2016 and 2020.” 

The company is currently a supplier to many firms in the A&D space including public sector Hindustan Aeronautics Ltd and global firms like Snecma, Eaton, Magellan, Marshall, Avio, MTU and GE. It supplies mechanical components and sub-assemblies, said Maini. 

On the pace of offset programmes in India, the company’s CEO, Naresh Palta, said that offsets have lagged behind. “The build up is not at the rate at which it should have been.” 

A 2012 survey by advisory firm KPMG titled “Aerospace & Defense 2012 – Industry Outlook” said that 49 per cent of the respondents comprising industry executives saw Asia (excluding China) as a top market. 

Maini Group outlines expansion plans at Aero India 2013

• Becomes a direct sub-tier partner with two global aerospace prime contractors
•  Enters its fourth decade of successful industrial build up

Bangalore, January 09, 2013: The Maini Group today announced that it would be sharing details regarding its expansion plans at The Aero India 2013. The group has acquired industrial land in preparation for its expansion of plant facilities and is concentrating on long term aerospace and defense strategic plans spanning the next two decades. For this purpose, it is currently in talks with global and domestic aerospace leaders in order to explore the right opportunities. The Maini Group is all set to court growth in the Indian aerospace industry, which is growing at an exponential rate.

The Maini Group is participating and exhibiting its products at Aero India 2013 in Bangalore on 6th to 10th February 2013. They will be present at Hall B, Stall B1.5.

The group also announced that Maini Precision Products Pvt. Ltd. (MPP), has achieved a unique distinction in India in the year 2012 by becoming a direct sub-tier partner with two global aerospace prime contractors, supplementing its already impressive list of customers who are the global who-is-who of aerospace domain. MPP has been steering its aerospace aspirations through a dedicated team of domain skilled people, which has been christened as Maini Global Aerospace (MGA).

“MGA is proud to be associated with global majors as direct suppliers and also to a host of global aerospace leaders like Snecma, Eaton, Magellan, Marshall, Parker, Avio, GE, MTU, HAL, SnecmaHAL and Hamilton Sundstrand. The MGA strategy is to grow up the value chain in the domains of aerospace parts manufacture such as aero structures, precision and aero-engine parts and aircraft systems.” said Mr. Naresh Palta, CEO, Maini Global Aerospace Pvt. Ltd.

MGA is also one of the few selected Indian Offset Partners (IOP) with global aerospace majors. Having already commenced supplies against offset programs, the MGA team has recently begun the manufacture of mechanical parts for space applications.

The Maini Group also enters its fourth decade of successful industrial build up in 2013. From its modest beginning of manufacture of precision components and assemblies for the automotive, hydraulic, material handling and engineering industry by its flagship company Maini Precision Products Pvt. Ltd. (MPP), the group has grown to become a six company entity today. Widely known for its innovative and revolutionary electric car ‘REVA’ and eco- friendly material handling solutions, the group diversified into aerospace activities in 2005 by manufacture of precision machined parts for the Snecma’s widely used CFM 56 engines.

With a high focus on leveraging its diverse strength in design, manufacture, innovation, integration, international joint ventures, strategic alliances, and technology absorption, The Maini Group aims to propel itself as a strong aerospace and defense entity in the country.

Prestige set for sturdy expansion in 2013

Prestige Group, the Bangalore-based publicly-held realtor, has charted out a sturdy expansion plan during calendar 2013. The company is planning to launch 20 million square feet of residential projects through the year compared to the 15 million square feet to development across assets during 2012.

Irfan Razack, CMD, Prestige Group, said that he believes that many existing areas in Bangalore are fast approaching saturation, driven by existing challenges including infrastructural constraints. “With the hope that the situation would improve one can expect increased development in select areas in Bangalore including townships in Sarjapur, Kanakpura and North Bangalore from Prestige,” Razack added. On the retail sentiment, Razack felt that with the new policies supported by the government, the sector will fare well and see renewed growth and energy.

During 2013, Prestige will be opening of several of its retail projects, starting with the Forum Vijaya Mall in Chennai, followed by the opening of Forum Sujana in Hyderabad and Forum Mangalore thus marking its retail expansion across South India. “On the hospitality front, we will also soon begin operating Oakwood Service Residences in Whitefield and the Aloft Hotel in the ORR, Bangalore,” Razack noted.

In addition to residential and retail space, Prestige Group has been making significant expansion in the coming up with sizeable offerings in the commercial leasing market. Driven primarily by the IT/ITeS Industry, the office market has witnessed a steady growth rate.

“We have leased out retail/office spaces of approx 2.5 million sq ft in CY12 and target to lease out approximately 3 million sq ft of retail/commercial space in CY2013. Several of our retail and commercial projects are presently under development and we are on track to achieving rental revenues of Rs 500-550 crore by the year 2015, which should further strengthen and increase our stabilized and sustainable cash flows,” Razack highlighted.

Govt report recommends ways to revitalize Bangalore's IT

Karnataka Information Communication Technology Group, a special body set up by the state government, presented its report to the government on Tuesday. 

The report proposes efforts towards improving education, talent development, entrepreneurship development, infrastructure development, strengthening Karnataka's relationship with other countries, development of the ESDM (electronics systems design and manufacturing) sector, readying tier II and tier III cities for business expansion and living, and refurbishing brand Karnataka and Bangalore. 

The report is the outcome of several rounds of interactions and brainstorming sessions between industry leaders, government officials, technologists, educationalists and domain experts. 

Speaking on the occasion, chief minister Jagadish Shettar said, "Our government is keen to follow this business road map. The recommendations will be implemented in phases to bring in holistic growth to the state." 

The report titled 'Karnataka's Roadmap to Undisputed Global Leadership in ICT by 2020' was prepared by a team headed by TV Mohandas Pai, former board member of Infosys. 

The report suggested that the government should clear all pending IT projects in the next 90 days. It said that Bangalore could be positioned as a MICE (meetings, incentives, conventions and events) destination. 

The Karnataka government has asked marketing specialist and consultant Harish Bijoor to prepare a report on Brand Bangalore. Bijoor said that Bangalore would outpace Delhi and Mumbai, and record the highest per capita income by 2030. "Bangalore is a microcosm of modern India. If you look at the demographics, 63% of the city's population is below the age of 25 years compared to the national statistic of 54%," he said. 

The report makes recommendations that seek to address the city's pain points and outline the need for a strong imagery to stay relevant in 2020. "The focus is on creating an inclusive city," Bijoor said. The report will be submitted to the state government in the next three months.

Karnataka to help ICT industry create 2 mn jobs

The Karnataka government would partner with the burgeoning Information & Communication Technology (ICT) sector to generate two million jobs in the state by 2020, Chief Minister Jagadish Shettar said Tuesday.

"The state government will implement the ICT group's recommendations by making budgetary provisions over the next four-five years to enable the ICT industry generate two million jobs by 2020 from 0.8 million (eight lakh) presently," Shettar told reporters here.

With a view to maintaining the state's leadership position in the knowledge sector, the state government had set up the 'Karnataka ICT group' in June 2012 under the chairmanship of T.V. Mohandas Pai, chairman of Manipal Global Education Services Ltd and former director of Indian IT bellwether Infosys Ltd.

"As the premier IT state, our objective is to triple ICT exports to Rs.4 trillion (Rs.4 lakh crore/$74 billion) from Rs.1.35 trillion (Rs.135,000 crore/$25 billion) over the next eight years and help incubate 1,000 start-ups and entrepreneur-driven firms by 2020," Shettar asserted.

In order to achieve the ambitious targets, the group has recommended setting up a Rs.1,000-crore (Rs.10 billion) ICT & Innovation fund for infrastructure development and Rs.100 crore for incubating start-ups and new IT firms.

"To create the huge talent pool required for the ICT sector, the state government should provide free Wi-Fi (wireless fidelity) across Bangalore, distribute a Tablet PC with 3G connection, pre-loaded with teaching material to students in class 7 and above and connect all government and private schools and colleges with high speed bandwidth," Pai said on the occasion.

The group also recommended setting up of learning academy and talent development centers in ICT and Electronics System Design Manufacturing (ESDM) areas across the state to train thousands of youth in developing skills required by the sector.

"We have asked the state government to develop ICT centres at Belgaum, Dharwad, Gulbarga, Hubli, Mangalore, Mysore and Shimoga on the lines of hub and spoke model, with Bangalore as the tech hub," Pai pointed out.

The group also suggested expansion of the metro rail connectivity in and around Bangalore to cover 250km, development of elevated high-speed travel corridors across the city and proper solid waste management and drainage facilities by 2020.

Gurgaon, Noida set to eclipse Bangalore in IT space

North India has emerged a hot spot for IT and IT-enabled services industry with many large companies setting up their businesses here. While Shimla and Chandigarh are among the top cities with investment potential, it is the National Capital Region, including Gurgaon and Noida, that is becoming the preferred destinations for companies offering IT, ITeS, BPO, BTO and KPO services in various domains such as banking, financial services, insurance, pharma, auto, FMCG and manufacturing.

According to a study by Assocham, Bangalore may lose its crown of India’s Tech Eden to Gurgaon and Noida. The study showed that leading IT and ITeS vendors prefer to shift their focus from Bangalore to other cities — especially the satellite cities of Gurgaon and Noida — to generate more revenues.

Assocham interacted with around 800 directors, CEOs, CFOs, chairmen and managing directors of Indian and multinational companies in various verticals with a choice of five cities to relocate their businesses to garner more revenues.

Conducive environment

As many as 30 per cent of the top-ranked officials of IT companies based out of Bangalore said they prefer to shift their business to Gurgaon. Of the remaining, 25 per cent respondents said they would prefer to shift their base to Noida or Greater Noida which are rapidly developing software and BPO hubs. About 20 per cent said that they would prefer to shift their base to Chandigarh, which offers a conducive business environment.

“Gurgaon’s cosmopolitan culture, modern infrastructure, availability of skilled workforce and proximity to Delhi along with industry-friendly government policies are the factors which give it the edge,” Assocham said. Some of the top names in IT, including HCL, NIIT and Genpact, are based in NCR . “The advantages we see in this part of the country include good infrastructure with better connectivity within the area. Another major enabling factor is the relevant pool of resource/talent available due to the spread of reputed educational institutions in this area,” said the NIIT Technologies spokesperson. The company has 4,700 employees in the NCR region across three offices spread over 7.8 lakh square feet. Himachal Pradesh is portraying itself as an alternative location to the NCR. Nasscom conducted an extensive survey amongst 11 cities/ towns to find out the relative advantages/disadvantages of these cities/towns to attract IT investments.

The survey discovered that Himachal Pradesh is uniquely positioned to exploit its inherent as well as inculcated plus points for furthering IT in the State.

The major advantages include excellent power situation, salubrious climate eminently suited to IT industries, capability to increase the pool of skilled manpower, engineering colleges and other educational institutions, low cost of setting up an IT unit as well as low recurring cost (including cost of living).

Software tech park

Chandigarh and Jaipur are the other emerging cities for IT investors. The Software Technology Park in Mohali is the top exporter of software among the Tier 2 cities in North India. It is also one of the top three software exporters amongst the Tier 2 cities in India. Chandigarh got a boost for IT investments when the Government set up the Rajiv Gandhi Chandigarh Technology Park. “Chandigarh, being one of the first planned cities in India, always had an extremely good civic infrastructure and power situation. The connectivity to Delhi is excellent due to the Shatabdi trains and has, therefore, attracted many companies to consider the Tricity as an alternative location in North India,” says a PwC report