Transcript PowerPoint Template - Welcome to Infrastructure Leasing
www.ilfsindia.com
C
luster
_ D
evelopment
__ I
nitiative
December 2006
Index
IL&FS-Cluster Development Initiative
The Need Vision Approach & Methodology Bouquet of Services Our Footprint The Organogram Our Team Why Us?
Index
IL&FS-Cluster Development Initiative
The Need Vision Approach & Methodology Bouquet of Services Our Footprint The Organogram Our Team Why Us?
MSMEs: Integral Part of India’s Growth Strategy
Significant contributor to Indian economy
Employs more than 28 million people and accounts for over
40% of gross industrial value addition 35% of direct exports 15% of indirect exports
“Ensuring the competitiveness of small scale sector is important as it would help in overall growth of Manufacturing Sector as also the National Economy” - NMCC
The Need
Sub-Sector Engagement Is the Key for MSMEs Development Programme
“
Certain sectors emerge in the forefront of growth and employment because of the unique opportunities they enjoy at the present time. Textiles & Garments,Leather & Leather products, Food Processing, Auto components and Drugs & Pharmaceuticals, select them selves at this point in time
”-NMCC
The Need
Textiles : Emerging Growth Story
90 80 70 60 50 40 30 20 10 0
25 13
2005 Exports Domestic
45 40
2010
Value in USD Billions
Burgeoning domestic markets and favourable international trade climate in the post quota regime offer significant opportunities for the Indian textile industry to grow rapidly
The Need
Increasing Market Share of Indian Clothing in US Market
Before Quotas
Rest of world 24% China 16% Bangaladesh 4%
India 4%
Indonesia 4% Philippines 4% Chinese Taipei 4% EU 5% Rest of America 16% Mexico 10% HK- China 9%
Post Quotas
Bangaladesh 2% Rest of world 10% Indonesia 2%
India 15%
Philippines 2% Sri Lanka 2% Thiland 3% 6% Mexico 3% Rest of America 5% China 50%
The Need
Leather & Leather Products:significant Turnaround and Growth
Value in USD Billions
8 7 6 5 4 3 2 1 0
2.39
Exports 2005
7
2010
The Need
Agro & Food Processing: ……. 300 250 200 150 100 50 0 102 62 2005 Primary Processed Food 182 93 2010 Processed Food
Value in USD billion
Emergence of organized retail chains in India and increasingly urbanizing lifestyles offer a strong opportunity for SMEs to participate in supply chain as well as food processing segments
The Need
Auto Components……..
0 1 2 3 6 4 5 1.8
Exports 2005 5 2010
Value in USD Billions The Need
Handicrafts: Growing Market for Ethnic Products
Value in USD Billions
7 6 5 4 3 2 1 0 3.8
Exports 2005 6.5
2010
The Need
Exploiting the Emerging Market Opportunities Challenges & Constraints
Global free trade regime - survival of the fittest Policy and fiscal rationalization within the country lower protection and increased competition Increasing technology benchmarks Lower turnaround time Compliances - trade and legal Lowering cost of manufacture and improving quality The Need
……..Challenges
Factors adversely affecting competitiveness of MSMEs
Limited size and scale Outdated technology Non-availability of finance Traditional marketing systems Inability to meet environmental compliances Poor infrastructure The Need
MSMEs & Clusters
Most of the MSMEs are located in 388 industrial clusters across the country
490,000 firms 75,00,000 employed Rs 157,000 crores of annual output The Need
….Some of the Prominent Clusters Cluster
Ludhiana Panipat & Karur Tirupur Surat Jalandhar Jamnagar Ludhiana Ambur, Agra,Kanpur Chennai & Gurgaon Badohi & Jaipur Alleppy Rajkot & Coimbatore Cochin & Veraval
Product
Woolen knitwear Home furnishings Cotton knitwear Synthetic textiles Sports goods Brass parts Sewing machines Leather Auto components Carpets Coir products Diesel engines Sea-food processing
Production (Rs. Crore)
5500 5000 6500 7000 400 1000 750 3500 6000 3500 600 3500 3000
% of total sectoral production
90 60 60 (80% of exports) 80 65 70 70 80 60 70 80 80 80 The Need
Cluster: Definition & Principle Definition:
Geographical concentration of units producing similar products and facing similar threats and opportunities
Principle:
Collaborating while competing
The Need
Why Cluster Based Approach?
Offers critical mass for customization of interventions Economies of scale in operation Better access to technology, information Greater access to customers, channels Cheaper access to inputs, raw materials
“ Cluster approach should be the preferred route for improving the manufacturing competitiveness. New and innovative approaches to cluster development should be adopted”- NMCC
The Need
Some Benefits of Clustering 1 1.
2.
3.
4.
Commercial Benefits Enhanced chances of securing larger contracts Greater bargaining power with customers Greater presence in the market place Guidance from experienced larger companies with shared risks 2 1.
2.
3.
Economic Benefits Sharing & Pooling of resources Sharing Business Development & Operating Costs Access to New Technology 3 Environmental Benefits 1.
2.
3.
Aids in decongesting units from urban areas Ensures that environment al safety standards are maintained Various forms of pollution always under check 4 1.
2.
3.
Social Benefits Employment generation Compliance to trade related barriers Ensures enhanced security during the start up phase
The Need
Index
IL&FS-Cluster Development Initiative
The Need Vision Approach & Methodology Bouquet of Services Our Footprint The Organogram Our Team Why Us?
IL&FS Cluster Development Initiative Vision , Goals and Objectives
Vision
IL&FS would be the preferred service provider to MSMEs and the Government for developing clusters across the country
Approach
PPP driven & ‘Concept to Commissioning’
Development Goal
Contributing to creation of 1 million jobs by 2010
Commercial objective
Rs 1 billion annual revenues by 2010
Index
IL&FS-Cluster Development Initiative
The Need Vision Approach & Methodology Bouquet of Services Our Footprint The Organogram Our Team Why Us?
Our development approach in addressing critical gaps to enhance sustainability
Not for profit Commercial Soft Inputs Association Critical Infrastructure Marketing, Credit SPV (Company) Approach & Methodology
Cluster based PPP Model where we play a pivotal role in bringing the stakeholders together SMEs Government Banks/FIs Other Institutions
Approach & Methodology
Methodology entails handholding the stake holders from “concept to commissioning” Concept Commissioning Need Assessment Capacity Building Project Development Project Financing Project Execution
Approach & Methodology
With specific focus on Common Infrastructure in the Cluster
Cluster Common Infrastructure Physical Infrastructure Technology Infrastructure Marketing Infrastructure CETP Power Supply Water Supply CFC Design Studio Testing Centre Display centres e-commerce Exhibitions Approach & Methodology
Not forgetting the Social Capital which is a prerequisite for SME common infrastructure
Awareness creation
Sensitization
Trust
Organization
Capacity building
Competitive reliance on one another
Approach & Methodology
Why are Cluster Parks different - A comparative analogy 1 Cluster Parks
1.
2.
3.
4.
5.
Focus on the enterprises and their needs Owned and managed by user enterprises Pre-marketed Customised infrastructure Homogeneous units with strong linkages and collaborative behavior
2 Industrial Estates
1.
2.
3.
4.
5.
Focus on real estate No involvement of user enterprises Post marketed Standard infrastructure Absence of collaborative behavior Approach & Methodology
Index
IL&FS-Cluster Development Initiative
The Need Vision Approach & Methodology Bouquet of Services Our Footprint The Organogram Our Team Why Us?
Bouquet of Services CDI Infrastructure Finance Capacity Building Technology Market Access Textiles Agro CLUSTERS Pharma Leather Artisan
Bouquet of Services
Our Services are encompassing
1.
Structuring of the Special Purpose Vehicle (SPV) 2.
Proposal Preparation for funding from Central/State Govt 3.
Financial Closure through syndication of debt funding requirements 4.
Detailed Engineering/Procurement process including a) Layout, design, detailed engineering b) Preparation of cost estimates of the infrastructure facilities c) Preparation of bid documents d) Selection and appointment of contractors/consulting firms 5.
Monitoring and supervision of implementation 6.
Assistance in establishing systems and contractual structures for O&M Bouquet of Services
With Value Added propositions such as :
1.
Capacity building of the SPV/members 2.
Assistance in selection of appropriate technology/ machinery 3.
Facilitating marketing tie-ups 4.
Creating Brand concepts 5.
Facilitating compliances: a) Corporate Governance b) Legal compliance c) Social compliance d) Environmental compliance Bouquet of Services
Index
IL&FS-Cluster Development Initiative
The Need Vision Approach & Methodology Bouquet of Services Our Footprint The Organogram Our Team Why Us?
Focus Areas and Current Mandates
Focus Areas and Current Mandates New Industrial Clusters (Induced) Existing clusters Infrastructure improvement Textiles Leather Pharma Skill Development Agro Processing Growth Poles Artisan clusters Policy Advisory Our Footprint
Commencing with formulation of the Scheme for Integrated Textile Parks (SITP)
Addresses infrastructure constraints of textile industry on cluster basis sectoral and cluster approach Targets growth potential clusters 26 parks, Rs.13,126 Cr investment, Rs.19,529 Cr Annual production, 5 Lakh employment Critical mass of entrepreneurs cluster SPV led by entrepreneurs to own, develop & manage park sustainability GoI as facilitator – 40% of project cost not exceeding Rs. 40Cr as grant/equity- improving viability and need based IL&FS as Programme Manager – for handholding support from “ concept to commissioning ”-proactive project development Our Footprint
Small footsteps has resulted in 26 Park Projects being approved so far under SITP State
Andhra Pradesh Gujarat Maharashtra Tamil Nadu Rajasthan Karnataka Uttar Pradesh West Bengal
Total No of Parks
4 6 6 5 2 1 1 1
26
Expected Techno-commercial impact due to development of Textile Parks State No of Parks
6 6 5 2 1 1 1
26 Aggregate Investment (Rs. crores)
3164 2020 1298 650 132 210 140
13,126 Employment (No of Persons)
73,500 38,100 30,500 17,000 2,000 3,500 30,000
500,400 Annual Production (Rs. crores)
5034 2550 1895 1350 350 225 300
19529 Weaving Capacity (No of shuttle less looms)
4788 4106 6516 2214 1260 704 600 -
20,188* Annual Processing Capacity (Million meters)
1347.5
1610.5
126.8
318 0.5
12.5
-
3415.8** Annual Garmenting Capacity (Million Pieces)
297.00
37.00
10.00
7.00
2.5
2.25
30.00
386.00
** Includes yarn processing, fabric processing as well as texturizing, converted into million meters ** The modern processing capacity (3416 million meter) out of this initiative will be 35% of the existing modern processing capacity (6,000 million meter)
Our Footprint
Our footprint has been covering more sectors ever since - > 40 clusters
Industrial Textiles – 26 Chemical - 3 Steel – 2 Pharma-1 Light engineering-1 Foundry- 1 Leather-2 Chemical-1 Agro Bamboo - 1 Fisheries- 1 Rubber-1 Craft Art Metal-ware -1 Stone Carving - 1 Zari -1 Bamboo-1 Our Footprint
Project Development Process - A Snapshot
Identification of cluster Interaction with industry associations and other representatives Identification of potential Entrepreneurs Identification of Land Need assessment and capacity building Establishment of SPV Procurement of Land Detailed Engineering & Procurement Award of contract Construction & Supervision Operation & Maintenance Assessment of Common infrastructure, amenities & factory buildings for the park Preliminary layout plan Preliminary Costing Vetting by SPV Preparation of DPR GoI Approval Financial closure Our Footprint
Growth Pole Projects
Integrated development of a sub-district (about 1000 sq kms) with economic potential that would become growth engine with in the region Cluster of clusters Enterprise development with PURA (infrastructure and linkages) Projects are being formulated by GoI (SSI) through National Commission for Enterprises in Unorganised Sector (NCEUS) IL&FS has been mandated to prepare the DPRs to begin with Our Footprint
The Growth Pole Concept
Eco – System For Sustainable Employment and Incomes Existing Enterprises & Clusters Promotion of Potential Clusters
Capacity Building Market Skills Business Dev Services Technology Prod. Infrastructure
Attracting New Investments
Factor Conditions Policy Initiatives
Infrastructure and Linkages (PURA) PPP Institutional Framework Our Footprint
Growth Pole: Evolution and Development
Public Existing and Potential clusters Organisations (Formed with Common Interest Groups/SHGs) STAGE I Capacity Building: Skills and Micro Finance Production Inputs: Technology and Design Market Linkages
Inst.
Advisory Group/ Project Manager
Market PPP Technology Upgradation Cluster / Sector Development Finance STAGE II Infrastructure and Linkages
SPVs
Private Social Infrastructure Demand for employees and migrants Retail Services STAGE III Housing Growth Pole
ULB Our Footprint
Skill Development – a precursor to industrial growth
“If Indian manufacturing sector has to grow at a rate of 12% per annum, it will be necessary for the education and training system to produce at least 1.5 million technically skilled people every year” - NMCC
Our Footprint
Manpower Development for Apparel Industry
Apparel – fastest growing segment in the textile value chain In need of skilled manpower at various levels Lack of trained manpower has been adversely affecting volumes, quality and productivity Demand-supply gap of 1.9 Million persons by 2010 Limitations of the present initiatives: Current training capacity (govt & private) is only 40,000 per year Quality of training does not match with the industry requirement Our Footprint
The Strategy
Demand driven and placement assured programme To train 1 million persons over a period of six years Leverage the infrastructure of existing institutions like ITIs, PSCs, ATDCs, and private/NGO vocational institutions.
Bring in innovative multi-media based teaching methodology and market oriented curriculum Driven by SPV with industry participation Government to provide one-time capital support Our Footprint
The Approach MoRD APPTEX Manpower Development Company Limited (SPV) Assistance towards
Equipment
Content development
Teaching aids O&M expenses
Provide equipment Content development Train the trainers Certification Placement Assistance Training Partners Advisory Committee Training Centres (Polytechnics/ ITIs/PSCs/ ATDCs/NGOs/ Private Entrepreneurs
Provide Land & Building Conduct programme Placement Trainee Feedback
Our Footprint
The Process flow
Identification
of Prospective Employer
Assessment
of manpower requirement Identification of
Potential catchment area
Identification of
BPL trainees
as per GoI Norms
Screening by SPV
representative with respect to suitability for training
Selection of trainees
Sending the trainees to
nearest training centre
by SPV
Training by the SPV
through training partner
Examination & Certification by training partner
under supervision of SPV
Placement by SPV
Our Footprint
IL&FS Anchoring the Initiative
Concept developed and presented to major stakeholders SPV has been incorporated Content development is in progress Training partners have been identified Ministries of Rural Development and Textiles have agreed, in principle, to support the programme Industry has agreed to be part of SPV and the programme To be launched by Feb 2007 Our Footprint
Index
IL&FS-Cluster Development Initiative
The Need Vision Approach & Methodology Bouquet of Services Our Footprint The Organogram Our Team Why Us?
Our operating framework :
CEO SME Policy Experts Legal Experts Industry Technical Experts Marketing Experts Project Finance Experts Project Management Experts COO Infrastructure Planners Architects Engineers Environment Engineering Experts Brand Developers Cluster Capacity Building Expert Cluster Capacity Building Expert Cluster Capacity Building Expert Cluster Capacity Building Expert
Organogram
With emphasis on adding value to our clients by providing Multidisciplinary inputs Project Finance SPV Capacity Building Engineering Environment Specialists Legal Domain Expert
Organogram
Index
IL&FS-Cluster Development Initiative
The Need Vision Approach & Methodology Bouquet of Services Our Footprint The Organogram Our Team Why Us?
Skill Sets residing in-house:
Given the breadth and depth of services provided by our team across projects, an in-house cross-functional team with following skill sets has been put in place Industrial Domain Experts to assist in defining technical contours of the projects and providing SMEs access to technology and best practices Technical Experts to oversight physical project development Capacity Building Experts to develop SMEs’ capacity to move up the value chain Project Development Experts to interface with sponsors, State Governments, external technical consultants and other stakeholders on all aspects of project development Project Financing team to structure projects and raise external financing Legal, Accounting and Secretarial expertise from within IL&FS’ and outside Our Team
Our geographic presence helps us cater to the needs of our clients in the North, South, East or West
Jaipur Delhi Ahmedabad Mumbai Bangalore Hyderabad Chennai Palladam Kolkata
Our Team
Index
IL&FS-Cluster Development Initiative
The Need Vision Approach & Methodology Bouquet of Services Our Footprint The Organogram Our Team Why Us?
We believe in…
…………handholding India’s industrial growth through considerable contribution from the MSMEs, by providing them with strong infrastructure enablers through a collaborative approach, thereby ensuring trade related compliances and creating a conducive framework for MSMEs to move up the value chain efficiently and expeditiously
Thank you, and looking forward to work with you soon
www.ilfsindia.com
You could reach us at:
Sanjay Sethi IL&FS India Habitat Centre, 4 th Floor Lodhi Road, East Court, Zone VI, New Delhi - 110003 Tel: 91-11-24682060 to 63 Fax: 91-11-24682070 to 71 Email: [email protected]
Ravi Raman The IL&FS Financial Centre, 3 Bandra-Kurla Complex, Bandra (E) Mumbai - 400 051 Tel: 91-22-66947682 Fax: 91-22-66947700 Email: rd Floor [email protected]
www.ilfsindia.com