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Next port of call

Source : BUSINESS_STANDARD
Last Updated: Fri, Mar 29, 2013 20:30 hrs

Tuticorin would surprise you. It is supposed to be a port city on growth hormones, but when you step off the train at the rather uninspiring railway station, there's nothing in sight that says you have stepped into an era of upward mobility. The station itself is small, there are no stalls around, not even for the ubiquitous bottled water, and you could find yourself discomfited by the lack of a toilet. Outside, the confusion of autorickshaws and lack of a dominating skyline would have you believe that you have somehow missed getting down at the right destination.



It's only when you leave the old town behind that you start seeing some signs of Tuticorin's new identity as a boom town. The six-lane roads are flanked by numerous construction sites and the roads themselves have bright signages pointing the way to the VOC Port, several industrial establishments and to the big urban centres of Chennai and Bangalore.

As 55-year-old T Johnson would tell you, Tuticorin was once one of the driest districts in the country, its only saving grace being a tiny port that offered some business to its people. Johnson moved to the town in the early 1970s in search of a better future. Supported by his father, who ran a small business, Johnson finished his college and joined a customs house agent as a temporary clerk for a salary of Rs 300 a month. Twelve years later, in 1989, he started his own logistics company, which now brings in a revenue of around Rs 650 crore and operates in 18 countries.

Johnson's target is to reach Rs 5,000 crore by 2020. It may seem like a tall order, but for those with business instincts in the town's population of 400,000, it isn't being over optimistic at all. P S Kathiresan, 43, left a career in sales 15 years ago. With two Ambassador cars and the help of his siblings, he started a travel company. The Vedanta group's new copper plant had just opened and Kathiresan prudently hired out his cars to the company. Today Kathiresan's travel company is the largest in Tuticorin with over 90 vehicles in the garage.

Industralisation in Tuticorin over the past decade and a half has changed a lot of lives. Known mostly for pearl fishing, the history of which can be traced back to the 6th century, the seaside town today is home to industries in sectors as varied as petrochemicals, home appliances, edible oils and flowers that offer its people new employment options and bigger bank balances.

Per capita income of the district, which languished at Rs 22,781 in 2001-02, according to the Directorate of Economic and Statistics, is set to climb upwards of Rs 100,000 over the next decade, according to experts. After companies like Sterlite and SPIC came to Tuticorin, the face of the town has begun changing. New shops have opened up, there there still are no glitzy malls or fast food outlets that mark the brash boom towns elsewhere in the country.

As K B Nagendra Murthy, MD and CEO of Tuticorin-based Tamilnad Mercantile Bank, points out, his bank has seen a 40 per cent increase in the number of new bank accounts in the past three years. Of the total Rs 36,000 crore business of the bank, Tuticorin alone accounts for Rs 7,000 crore. "We are expecting 25 per cent growth in business in Tuticorin compared with the bank's overall 16 per cent growth," says Murthy.

With bigger incomes, the traditionally conservative people of the town are giving into the lure of brands. While the people tend not to indulge in food or entertainment, they love ostentatious weddings and the lustre of jewellery. So a number of brands like Tanishq, GRT and Shah Jahan have opened shop and are drawing customers.

Tuticorin has a lot going for it. And the people's lives will change further. For, it is a town that is tempting for investors. The rate of investment, mainly due to low real-estate prices, isn't as high as in other industrial hubs. Compared to around Rs 1 crore per acre in Chennai, land prices in Tuticorin fall in the Rs 25-30 lakh per acre range. District Collector Ashish Kumar, who aims to put Tuticorin in the top 20 investment friendly destinations in India, notes that with Chennai, currently the biggest industrial hub in Tamil Nadu, getting saturated, Chief Minister J Jayalalithaa has announced that the government will promote its southern districts for industralisation, among which is Tuticorin.

With a slew of infrastructure projects, including a new port, the small town seems set for a destiny that may finally divest it of its popular acceptance as the "Pearl City".

Why Tuticorin interests industry

POWER
The most important factor for a place that aspires to attract industries is power. In Tuticorin, Neyveli Lignite Corporation is building a power plant just outside the town. A kilometre away, another project by SPIC Electric Power Corporation is in the works. In addition, power projects worth Rs 86,000 crore planned in the district will generate 17,274 MW in the coming years.

COST OF INVESTMENT
The attraction of Tuticorin to investors would be in its low costs of real estate and services. A new container terminal with a capacity for four lakh TEU a year is being constructed at a cost of Rs 312 crore at VOC Port. As experts point out, a container terminal of comparable size would cost double in places like Chennai or Kochi and up to Rs 1,000 crore in Mumbai. Land rates in Tuticorin are in the range of Rs 25-30 lakh an acre compared with up to Rs 1 crore in Chennai.

ROADS
Tuticorin is well connected to places like Chennai and Bangalore with a network of new highways. Most industries are located on a six-lane highway. The state government is upgrading a 100-km road connecting Tirunelveli with Tuticorin and widening the existing roads - NH 45B, NH 7A and East Coast Road - into six-laners.

AIRPORT
The small airport at Tuticorin is set to be upgraded. The process to acquire 2,000 acres of land to expand the airport has begun. The revamp of the airport, which currently only has facilities for ATR aircraft, will enable it to handle the bigger Airbus and Boeing aircraft.

WATER
Water is an area of concern in Tuticorin, but with big companies coming to town, water desalination plants are being constructed to provide water both for industrial use as well as for domestic use by the local population. A 10- million-litres-a-day Sterlite Industries desalination plant is in the works, from which a million litres will be piped for public usage by 2015.

PORT
The V O Chidambaram (VOC) Port has served Tuticorin since the early 1900s when shipping services were launched between the town and Sri Lanka. It is an all-weather port, close to international shipping routes, and offers cheap logistics, high turnaround time and faster deliveries. In the Union Budget this year, the Centre announced a Rs 7,500 crore project to enhance the port's capacity from 33.3 million tonne a year to 85 million tone in two years' time. Part of the financing will come from the Japan International Cooperation Agency.

INDUSTRIES
Pearl culture, ship-building and manufacture of salt have been the traditional businesses of Tuticorin. District Collector Ashish Kumar says the government wants to attract investment in automobile and ancillary production, information technology and food processing. Sterlite Industries is doubling the capacity of its copper manufacturing facility here to 800,000 tonne a year. Other important segments present in Tuticorin are petrochemicals, edible oils and home appliances.

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