With a significant rise in the demand for third party logistics providers, TVS with its knowledge of the nuts and bolts of automobiles has positioned itself well to service this demand.
The Rs 3800 crore TVS Logistics has operations in UK, Spain, Thailand, USA, Germany and China. “When we started, 100 per cent of our operations were within India. But today India accounts for less than 45 per cent of our business,” said R Dinesh, Managing Director.
Taking bold to acquire companies overseas, TVS Logistics has endeavoured to bring best in-class practices to India. “When we were gearing up for expansion, we had a choice of being the leader in India or having a global presence. We chose the latter, as our clients in Tamil Nadu were global players who were majorly into exports. Today only 35 per cent of our operations involve automobiles and the global experience has helped us diversify into new verticals,” said Dinesh.
Focus on southern TN
The TVS group started at Madurai over a century ago. The group changed the landscape of southern Tamil Nadu. Dinesh suggests southern Tamil Nadu should receive focus as an investment destination.
“Southern Tamil Nadu has several advantages in terms of educated manpower, skills, land and quality infrastructure. These need to be leveraged. The Madurai-Tuticorin corridor, promoted as a special area to attract investments, should receive focus,” he pointed out.
“It is no use trying to attract big ticket investments of Rs 1000 crore and more for this area. A series of small investments will help create an environment that will eventually attract the big tickets,” says Dinesh.
“We must encourage those who have already invested in our state to invest more by giving them value added benefits which a new investor gets. They may already have invested Rs 1000 crore; you cannot expect them to invest a lot more. You must look at it as an incremental investment and extend support by directing it to other areas of Tamil Nadu. People prefer moving out of the state when land is not available near Chennai. We can retain them by giving a preferential treatment for investing in new locations: the incentives given for a Rs 100 crore investment in Chennai, can be offered to a Rs 50 crore investment in south Tamil Nadu,” added Dinesh.
Create special zones for services...
Apart from manufacturing, Dinesh’s strategy is to focus on services. “We need to focus and create value on the secondary services sector. For this we can create special zones and extend funding support,” he said.
Everyone thinks manufacturing means manufacturing a product. But almost ten times the number of jobs are created in support activities. In this Tamil Nadu has a unique advantage. Many entrepreneurs who start small businesses don’t know how to scale up. If we give them opportunity to work with a mid-size or a large company and give them freedom, they will be able to innovate and expand,” said Dinesh.
Tamil Nadu is a leader not only in the manufacture of automobiles, but also in its knowledge and understanding of it. “If you go to Namakkal, Madurai or Tiruchengode, you find people who have pan-India knowledge and presence, despite the fact that they do not have formal education. We need to encourage them to corporatise become larger and more profitable,” said Dinesh.
And he closed saying, “with GIM, the Government has already struck the right chord with its focus on MSME development. We need to think big. It is not about the size, but about number of projects and number of people getting employed.”