Pune, Maharashtra’s second largest city after Mumbai, has been a hub for the engineering industry for over five decades. But it is in the last two odd decades that it has seen a virtual metamorphosis, evolving from a quiet peaceful town that offered harried Mumbaikars a pleasant weekend getaway to a mini metro bustling with industrial activity.
With global recession now having faded to being nothing more than a bitter memory, the one city that has bounced back with a firmer resolve than ever for brisk growth is Pune. Today, Pune wears many caps — leading IT destination, logistics hub and a renowned centre for the auto, design and white goods industries, amongst others. The arrival of the automobile and information technology giants in Pune has given the city a ‘hub’ branding that will drive its growth at a faster rate.
Mritunjay Singh, President, Hinjewadi Industries Association, says, “Post recession, many global players are setting up base in India and Pune is a natural choice. Pune being an open city that welcomes emigrants and it being an educational hub and a good talent pool gives the city an edge over the others.”
On the industrial front, the progress first began with the setting up of Kirloskar Oil Engines, Tata Motors and Bajaj Auto in the 1950s and 1960s. The Swedish Group Sandvik Asia, Atlas Copco, Alfa Laval, SKF Bearings followed suit and were amongst the earliest settlers on the erstwhile two-lane Bombay-Poona Road. Industrial activity grew gradually as more units were established, including Finolex Cables, Forbes Marshall, the now defunct Garware Nylons and Bajaj Tempo (now Force Motors), amongst others on the same stretch. The road itself is now a wide four-lane boulevard with a series of underpasses and fly-over bridges to ensure a smooth, unhindered drive from the city centre to its industrial outskirts. According to Dr Abhay Firodia, President, Mahratta Chamber of Commerce Industries and Agriculture (MCCIA) and Chairman, Force Motors Ltd, “The period between 2006 and 2008 was the best of its kind for Pune when around Rs 12,000 crore was spent on projects in the region. And now we may see an inflow of around Rs 40,000 crore for the period between 2008 and 2013.”
Pune is the toast of the season as it is being hailed as the fastest growing industrial hub with both manufacturing and IT sector fuelling its popularity as a preferred industrial destination. Entrepreneurial history, location, education levels, work culture and climate are some of the elements that have ensured that Pune has and will continue to be the premium choice as a business destination. In the past year, several global automobile companies have announced new projects in India. Many of these are being located near Pune, a clear indication of the city’s emergence as a global automotive manufacturing hub. Global companies such as General Motors, Daimler AG, Volkswagen AG, Tata-Fiat, International Truck and Engine Corporation (ITEC), Piaggio Vehicles, Hyundai Heavy Industries have recently set up manufacturing operations in the Pune region. The presence of a strong local component manufacturing industry has obviously been a crucial factor in determining their choice of location. Equally important is the availability of high-quality, skilled knowledge resources that is attracting these global companies.
Elaborating on General Motors’ choice of Pune as the location of its second plant in India, Saurabh Vats, Vice-President, Marketing Manager, says, “Pune has a large supplier base. When we start exporting, the Nhava Sheva port is just two hours’ drive away. Also, the western region is our second-largest market after the north, and logistically, this plant can cater to both southern and northern markets.” General Motors, which already has a plant at Halol, has an investment outlay of Rs 1,400 crore at Talegaon, and will look at global sourcing from India.
What has also helped is the presence of the Automotive Research Association of India (ARAI) in Pune which is India’s premier automotive R&D, testing, and certification organisation. It has now tied up with TUV Rheinland, a 130-year-old German multinational and one of the world’s largest testing, inspection, and certification agencies, to offer testing and homologation solutions to the Indian and international automotive industry.
With this association, the Indian manufacturers will have an edge in exports of vehicles and vehicle parts as all the aspects of testing and certification as per international standards like EEC/ECE will be handled locally by qualified experts. And even as the MNCs are zeroing in on Pune, there are local companies, which are now actively entering into collaborations to give the city a true global positioning. For instance, Pune-based Electro-Mech, industrial crane manufacturer and customised material handling solutions provider, has entered into an agreement with the US-based manufacturer Shuttlelift to extend its offerings to the construction and material handling industry.
Providing a reason for why Pune has emerged as the ‘chosen one’, Mukesh Malhotra, former president of the MCCIA, says that it can also be attributed to the presence of other companies such as Bharat Forge, which is among the top forging companies in the world and Sandvik’s large cutting tools facility, not to forget other big industrial establishments such as Thermax, Kirloskar Oil Engines, Mather & Platt, Praj Industries, Sulzer India, and so on. The easy availability of skilled manpower is another factor. “There must be more than a lakh engineers working in and around Pune in clusters developed by the Maharashtra Industrial Development Corporation (MIDC) at Pimpri-Chinchwad, Chakan, Ranjangaon, and Talegaon.
That Pune is gaining strength from the arrival of MNCs is also evident from associated developments. Consider, for example, the fact that Tata Motors and the Government of Maharashtra have signed a Memorandum of Understanding (MoU) to facilitate the proposed expansion of manufacturing plants and setting up of vehicle testing facilities here. Fresh investments seem to pour in regularly. Among the most recent such announcements is that of food processing and packaging company Tetra Pak that has decided to establish a new processing and packaging plant at Chakan in Pune with a total investment of Rs 600 crore to meet the continuously increasing market demands in India and abroad.
What has added a boost to the city’s growth factor is the buoyancy of the special economic zones (SEZs). Pune will have SEZ-notified zones in Manjiri, Phase III Hinjewadi, Kharadi and Magarpatta and will be home to the first Biotech Park by the Poonawalla Group.
But this is not to say that there are no road bumps ahead. The infrastructure in Pune has definitely not been able to keep pace with its industrial growth so that local transportation, the lack of an international airport, power shortages, increasing congestion, and alarming levels of pollution are some of the issues that need to be addressed urgently.
“The civic governance of Pune needs to be improved immediately or else the pace of growth might suddenly be axed if the city cannot take the pressure any more. And yes, an international airport is certainly needed but with the government unable to decide about the location, the probability of it happening soon is now becoming remote” says Pulok Gupta, Managing Director, Liebherr India.