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Last Updated: Wednesday, 24 May 2006, 00:01 GMT 01:01 UK
Indian factories prepare for growth
By Karishma Vaswani
BBC business correspondent, Chennai

Suresh Kumar starts every day with a prayer.

Hyundai factory
Chennai is turning itself into "India's Detroit"

The devout South Indian Christian feels he has much to be thankful for.

Five years ago, he was desperate to find work.

He left high school with just a trade degree, like millions of Indians in Chennai, and competed with them to find a job.

He needed the job to feed his ailing father, and his elderly mother.

But with the unemployment rate at 10%, finding work in India is tough.

"it was crucial for me to find work," he says, as he puts on his freshly laundered work uniform.

"So when Saint-Gobain Glass, a French glass maker, decided to set up in Chennai, I sent my resume to them and have been thankful to God every day since I got the job."

Productive workers

Mr Kumar works at the sprawling 177-acre expanse of the Saint-Gobain Glass factory in Chennai as a quality inspector.

Mahindra building
It is the first special economic zone run by corporate India
Arun Nanda
Executive director
Mahindra & Mahindra

Thanks to the manufacturing boom in the city, hundreds more of Chennai's young men have been hired as well, making windshields and glass mirrors for the Indian market.

Growth in the Indian economy has boosted their sales, and a pool of Indian labour has helped the firm to meet strong demand.

In fact, the company has just invested millions of dollars in the new Indian plant, its biggest investment in decades, according to the firm's boss.

"It is the talented labour pool here that we have been very impressed by," says B. Santhanam, India managing director of Saint Gobain-Glass

"In comparison to China, where we also have a plant, we find that quality of labour is on par. If you train them, and work with them, as we do here at this plant, the Indian worker is very very productive."

Educated workforce

Its not just European firms that are taking advantage of India's drive into manufacturing.

At Korean auto giant Hyundai's factory in Chennai, a brand new car rolls off the production line every 64 seconds. More than 300,000 cars are made here every year.

The Asian car giant hopes to capture a fifth of the country's growing car market this year.

Its already one of the fastest growing car firms in India.

Almost 8,000 people are employed at this factory.

Hyundai wanted to set up in Chennai, because of its growing reputation as a manufacturing hub.

"Chennai is known as the Detroit of India," chuckles H. S. Lheem, managing director of Hyundai India.

"It has a lot of advantages for a Korean firm like us.

"It has a port that we can import raw materials through, it has good infrastructure so we can get to business meetings on time and make our shipment deadlines, and it has 80,000 engineers who graduated from Chennai's technology schools every year.

"These people are very important for our business. Chennai has a well educated workforce, not just in the white collar sector, but in the blue collar sector as well."

Growth industry

India is going all out to lure foreign manufacturers to its shores.

There's an active preference for the trademark, and that is something that most Chinese brands don't have yet
Tom Doctoroff

Just a few kilometres away from Hyundai's plant is Mahindra World City's 1,400 acres special economic zone, where 30 manufacturers have set up to take advantage of tax breaks and efficient infrastructure.

Companies like Infosys, BMW and Madras Engineering are building their factories here, and because of strong demand, the owners of Mahindra World City have acquired another 2000 acres to develop.

"It is the first special economic zone run by corporate India," says Arun Nanda, executive director of Mahindra & Mahindra.

"We've entered a public-private partnership with the state government of Tamil Nadu, which is extremely proactive when it comes to business ideas., and we are offering tax breaks, internet connectivity on par with global standards, and efficient infrastructure.

"Foreign firms want to manufacture here so they can tap into the Indian market. We are making it easy for them."

When Mahindra World City is completed by 2009, it is expected to employ over 50,000 people, most of them from Chennai.

Manufacturing is proving to be the next big growth industry for India.


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