Karnataka to set up aerospace park with $10 bn investment, M N Vidyashankar

Bengaluru will be the India's first and biggest aerospace industry hub in next five years. Karnataka government will set up an aerospace park with an investment of $ 10 billion near the Bangalore International Airport, announced M N Vidyashankar, IAS, the Karnataka state's Principal Secretary for Industries and Commerce while inaugurating the two-day BICSI India Annual Conference in Bengaluru on August 23rd, 2012.

He said the state will announce Aerospace Policy, the first such policy from any state in India within a fortnight. "Karnataka will have the World's biggest knowledge hub in Chitraduga - 2,000 acres of land is being provided to IISc, 1,500 acres to ISRO, 2,000 acres to DRDO, and 50 acres to National Aeronautics in Chitradurga. It will also have a manufactruing zone," said M N Vidyashankar.

To leverage the technology value chain, India must focus on Intellectual Property, R&D, manufacturing and applications. He said the contribution of GDP from manufacuturing should increase to 25% from 10%. India has to create ecosystem within the country for value generation and extraction. He opined that three pillars namely technology, government and academia should collaborate and this would create huge opportunities.

Dr Alok Bharadwaj, President, MAIT said at the current rate of technology growth, India will have to be a $ 400 billion net consumer of IT hardware and technology by 2020 as compared to $ 50 billion today. This also implies that there is $ 400 billion opportunitites. The challenge is to convert this into a value chain. To leverage the technology value chain, India must focus on Intellectual Property, R&D, manufacturing and applications.

He also pointed out, the contribution of GDP from manufacuturing should increase to 25% from 10%. India has to create ecosystem within the country for value generation and extraction. He opined that three pillars namely technology, government and academia should collaborate and this would create huge opportunities.

“IEEE is weighing the next data transmission speed options of 400 Gigabit per second and Terabit per second. And most interestingly, the Terabit Ethernet technology is based on a proposal from two companies -- Google and Facebook --who think it is very necessary. However the next speed hike will make sense only if the cost per gigabit come down”, said BICSI India District Chairman Dileep Kumar in his opening remarks.

In the inaugural address, Pravin Prashant, Editor, Voice & Data magazine mentioned that IT has grown by 18%, exports have increased by 22-29% but the domestic IT industry has slipped down. He pointed out that the government should support the industry in uncertain business environment.

Mahindra unveils new Reva plant

Mahindra Reva Electric Vehicles,part of the $15.4 billion Mahindra Group,inaugurated a new manufacturing facility in Bommasandra on the outskirts of Bangalore on Wednesday.In May 2010,Mahindra had acquired a majority stake in Reva Electric Car Company,subsequent to which the company was renamed Mahindra Reva ElectricVehicles.
The new manufacturing facility has an installed capacity to produce 30,000 vehicles annually,and is expected to reach full production capacity over the next three years.The company said the facility,which is scheduled to begin production in September,will produce around 6,000 vehicles to begin with.
Till date the Reva brand has sold 4,500 cars.The new facility will see the production of Mahindra Revas new two door electric car that it had showcased in the beginning of the year at the auto expo in Delhi.The new car is yet to get a name and a price tag.The current Reva vehicles retail between Rs 4.2 lakh and Rs 5.2 lakh (on road prices Bangalore ).The combined investment into the plant and the new product range is over Rs 100crore,the company said.
This plant was conceived even before we came on board, Anand Mahindra,CMD of Mahindra Group,said.Mahindra has turned this plant into a reality,from our expertise of putting up plants in record time and making them cost-effective.This is the greenest plant in the Mahindra group, he said.The new manufacturing facility has been awarded the platinum rating from the Indian Green Building Council,becoming the first automobile manufacturing facility in India to receive this certification.
Electric vehicles like Reva are high priced because of battery and other equipments that are imported from around the world.But Mahindra said,Those costs are now being driven down.In the mean time we will focus on the cost per kilometre. The company says that its electric vehicle technology gives buyers a cost per kilometre of 50 paise to 60 paise,which is 10 times lower than conventional gasoline vehicles.
Mahindra said that the government must put in place a road map for electric vehicles and should emulate the policies seen in countries such as Norway.In the last quarter,2.6% of cars sold in Norway were electric vehicles,a sector which 18 months ago had a 0.01% share of the country's automobile market.In 1999,China had 40,000 electric two wheelers;today that number has crossed 100 million.
Mahindra said he was also keen to approach enlightened state governments that have strong leaderships,who understand the perils of urbanization and the need to cope with them quickly.We should treat them as different countries.We should approach these leaders and ask them to put in place a comprehensive policy that would ensure that a particular percentage of vehicles would use alternate fuels by a certain time.
Delhi gives a 15% subsidy for electric vehicles as well as reductions on VAT and road tax.Chhattisgarh and Gujarat have also reduced taxes on electric vehicles,while Karnataka gives a 5% reduction on VAT andhas a lower road tax.

An inside view of the new Reva factory in Bangalore

Pegasystems sets up unit in Bangalore

Nasdaq-listed Pegasystems has set up a 55,000 sqft facility in Bangalore that will deliver R&D,engineering services,industry solutions and customer support.The company,which specializes in business process management and customer relationship management,has so far hired 120 people for the Bangalore facility.

This is the second facility in the country.It opened a 1-lakh sqft R&D centre in Hyderabad in 2008 that currently employs 400 people.The level of engineering talent in India is hard to find in the US.We dont see a cost reduction play here,but top-tier skills to support strategic functions, said Alan Trefler,founder and CEO of Pegasystems.Both the centres put together can accommodate 1,000 people.The company currently has 25% of its global workforce in India.

Pegasystems had $416 million in revenue in 2011."We spend 18-20 % of our revenues on R&D.That is why margin pressure becomes an issue,"Trefler said.The firm has guided for $500 million in revenue in the current year.

Founded in 1983,the company has presence across North America,Europe and Asia with 26-branch offices in 17 countries.

Bangalore needs at least 1 lakh value homes

The demand for value homes in Bangalore is close to 1 lakh units,says M Murali,MD,Shriram Properties.Shriram has sold 1,288 homes priced between Rs 18 lakh and Rs 30 lakh since 2009.The developer is launching another housing project comprising 2-BHK and 3-BHK homes priced between Rs 25 lakh to Rs 40 lakh.Puravankara Projects,which entered the value segment in 2009 with a separate brand called Provident,reported that 50% of its revenues of Rs 247.37 crore in the June quarter came from Provident.The company has sold 4,500 such homes across Chennai and Bangalore,and is launching a mega project of 6,000 homes under this brand on Mysore Road in the next two months.The 2-BHK units will be priced at Rs 17 lakh and 3-BHK at Rs 25 lakh.

From the developers point of view,this segment gives them good sales and helps them monetize their land much faster, says Avinash Rao,regional director (south) of property consultancy Knight Frank India.

Sushil Mantri agrees: Since pre-sales on such projects are good,the capital required to see these projects to completion is much lower. Mantris Alpyne project in Uttarahalli,priced from Rs 27 lakh onwards,was a success.Prestige Estates Tranquility,located off Old Madras Road at Budigere,is also a big success.

Rao of Knight Frank estimates that in the last calendar year 35% to 45% of the total residential inventory consumed in the city came from units priced in the Rs 25 lakh to Rs 50 lakh bracket.

Builder brands see big biz in value housing

During 2008-09,the peak of the global recession,every major property developer spoke of building more affordable housing: smaller size units typically in far-flung areas that could be bought for Rs 25 lakh to 40 lakh.But as soon as the market perked up,the affordable talk ceased.

Three years down,while no developer is screaming from the rooftops about affordable housing,a fair number of launches are happening in this space.Sushil Mantri,CMD,Mantri Developers,says the volume segment remains constant in the good days and bad days.But a lot has changed between 2008 and now.

In 2008,Golden Gate launched its value housing concept Commune amid much fanfare.But the project,which comprised 3,000 units off the Mysore-Kanakapura road,didn't take off.

The location was wrong as it neither had social infrastructure nor good public transport connectivity, says Sanjay Raj,CEO,Golden Gate.Commune has been hived off into a subsidiary company,Commune India,which will relaunch value homes in the price range of Rs 22 lakh to Rs 35 lakh this month.

Location is key and were launching projects situated close to business clusters,schools,hospitals,shopping areas,and places with good connectivity, says Raj.He adds Commune India would only have 2-BHK and 3-BHK units as thats the aspirational quotient among consumers.One-BHK units at Rs 17 lakh are not aspirational enough for a first-time buyer, says Raj.
Viswa Prathap Desu,VP (sales and marketing),Brigade Group,shares a similar view.He has done away with 1-BHK units at Brigade Orchards after receiving feedback from the earlier value housing project Brigade Meadows.

Desu says,Initially,at Meadows,we hadn't made provisions for balconies for 2-BHK units as the additional space would automatically increase the ticket size per unit by Rs 1.5 lakh. Customer feedback was clear: Were ready to pay more provided we get everything an apartment has. Brigade put in place the balconies and has sold over a 1,000 of these homes.

POCKET- FRIENDLY

VALUE HOMES IN CITY
Price range: Rs 17 lakh to Rs 40 lakh
Unit size: 900 sqft to 1,200 sqft

HOW ARE THEY AFFORDABLE

Reduced area: Traditionally an average 2-BHK unit in Bangalore is 1,200 sqft to 1,300 sqft.In value projects,a 2-BHK is between 900 sqft and 1,000 sqft

Low construction cost: Typically building structure is low-rise with G+4,maximum of G+6,floors

Shorter period of construction: Low-rise structure and adoption of construction technologies such as aluminium formwork and building information modelling enables developers to complete project within 1824 months,thus decreasing collection time and improving returns

Farther from city centre,where land costs are lower

'Government committed to ITIR project’

The state government is committed to implement the Information Technology Investment Region (ITIR) project. It is envisaged to establish an integrated IT city in and around Bangalore International Airport (BIA) near Devanahalli, Chief Minister Jagadish Shettar told the Legislative Council on Thursday.

Replying to a question raised by Congress member R V Venkatesh, during Question Hour, he denied the charges that the government was not keen on the project, which requires acquisition of over 10,000 acres of land. Shettar said the land would be acquired in a phased manner. “The I phase covering 2,072 acres of land will be implemented in five years and in the II phase, the remaining land will be acquired in 15-20 years. The project is proposed to be implemented on PPP basis,” he stated. Earlier, Venkatesh was apprehensive over losing the project following the delay in acquisition of land.

Hardware tech park to open by Sept-end

The hardware technology park planned by the State government near the Bangalore International Airport in Devanahalli is expected to start operations between September 24 and September 30 this year.

According to Industry & Commerce Principal Secretary M N Vidyashankar, the park is expected to host around 300 Taiwanese companies coming to Bangalore to set up shop as well as explore joint ventures with their counterparts in Karnataka.

The hardware technology park, styled Taiwan Hardware Technology Park, will come on a 300-acre plot and boast of an integrated township, industrial units and residential space among other amenities.

Investments to the tune of Rs 600-750 crore are envisaged for the project, which will be devoted exclusively to setting up manufacturing units for semiconductor chips, light emitting diodes (LED), computer hardware and telecommunication equipment, Vidyashankar said.

The state government will sign an agreement with Taitronic (Taiwan Electronics Manufacturers Association) and TCA (Taipei Computer Associates), who will lead a 75-member team to inspect the proposed site for the park, Vidyashankar said.

The proposed tech park is the outcome of several visits by Taiwanese delegations who were keen to get a number of small and medium Taiwanese enterprises to operate out of Karnataka, Vidyashankar said.

The State Electronics Hardware Policy, which seeks to facilitate, promote and develop the electronics hardware manufacturing sector, hopes to make Karnataka the world’s preferred destination for investments in high value-added electronics manufacturing.

Towards this end, the policy offers a slew of incentives for investors, along with a Electronics Innovation Fund set up at an initial corpus of Rs 25 crore. The Innovation Fund will provide funding to entrepreneurs to develop new products to be manufactured in the State.