Enterprise &Economic Update Kerala

Vol.1 Issue 5 June 2011

Reading the future RNI No. KERENG02297

Editor K J Jacob Copy Editor Anna Mathews Principal Correspondents Aby Abraham G K A P Jayadevan Senior Correspondent Kuruvilla Chacko Sub-Editor Asha Jacob Design and Layout Renu Arun Website Suhas K Ranju Thomas Sales and Marketing Jose Thomas Printed, published and owned by K J Jacob and published from Independent Media, XI/173 B, Mulakkampallil Buildings, Kunnumpuram-Civil Station Road,Thrikkakkara, Kochi,Kerala-682 021 Phone: 0484-2421916 and Printed at Sterling Print House Pvt.Ltd. Door No: 49/1849, Ponekkara-Cheranelloor Road, Aims Ponekkara P.O., Kochi - 682 041 Phone : +91 484 2802522, 2800406 *Editor: K J Jacob For subscription, Advertisement : sales@economic-update.in Tel: +91 99475 39023 We value your feedback.

Please write to us at: letters@economic-update.in Read us at www.economic-update.in Cover design : Anoop Radhakrishnan

*Editor responsible for selection of news under the PRB Act.

T

he news that the government of India is contemplating setting up a company to take up port projects all over the world underscores the changing fortunes of the sector. The proposed company, reportedly christened Indian Ports Global, will operate on the lines of Dubai Ports International and invest in overseas ports and container terminals.

It is natural that India looks at strengthening its presence in ports across the globe as its international trade is set to double from the present $600 billion by 2014. That 90 per cent of India’s foreign trade is carried by marine lines adds to the urgency of the move.

Kerala knows very well how a port can improve the economy of a people. For centuries, it has traded with the global community, exporting its precious products. It used to have functioning ports which were a dear choice for traders both from the West and the East. The Cochin port has been an integral part of the development of the State.

Several industries in the State, including oil refining, coir, cashew, handloom and wood and emerging sectors such as processed food depend on the port for their sustenance and growth. Once the Vallarpadam ICTT is fully operational, all these industries will become internationally more competitive.

It is in the context of these global and local scenarios that we must look at the several ambitious projects the Cochin Port Trust is contemplating. The cover story deals with the projects extensively. We are sure that they are not just projects that will make minor changes here and there.

They are aimed at ensuring the future of the port, by making available more facilities for the industries in Kerala to succeed. In fact, their timely completion is a must for the future growth of Kerala’s economy as well.

This issue has a report on Travancore Mats and Matting Co, one of the pioneers in the carpet industry. They are a model for an aspiring business house: bring the best raw material from wherever, make value-added products at state-of-the-art factories, and sell in the global market.

The ability to foresee the changes that would visit the industry also has helped them keep their leadership position.

We have always received very good response to stories from the agricultural farm. This issue has a very thrilling report on how farmers taking to precision farming. That they use technology to optimise inputs, minimise expenses including those on scarce manpower and make a serious effort to come out of the vicious circle they generally find themselves in, must cheer all.

Editor

Contents COVER STORY

34 Anchoring growth The Cochin Port completes 75 years as a major port. It is chalking out a number of projects which will result in the more efficient use of precious resources, attracting more investments, creating more jobs, and most important, making it future-ready

22 The carpet kings Travancore Mats and Matting Co makes products using raw materials from all over the world and sells them in the global market

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Contents 51 Bigger, better The Kochi International Marina hosted more than 100 yachts in its first year of operations. It needs to launch Phase-II of the project to attract more

26 Let there be life KSIDC’s Life Sciences Park to promote units in biotechnology, nanotechnology and life sciences 28 Get, set, go The first part of Infopark Phase II will be ready in two years, says Gigo Joseph, CEO

18 Farmers go hitech Plan well. Use technology to execute it at optimum cost. Precision farming forces Kerala farmer to think and act and become successful

32 The Kerala couture Kochi International Fashion Week announces the arrival of Kochi couture 40 The virtual watchman Digital security systems provide increased protection for domestic and industrial purposes and are easy to install, employ and maintain 44 To skip or not to skip That is what many worry about breakfast when they want to lose weight. But eating intelligently, and not skipping food, is the best option 54 Fixed

Maturity Plans An alternative to FD

Fixed Maturity Plans offered by mutual funds are a tax-efficient alternative to bank fixed deposits 5

As dredging progresses at Kochi port to enable mother ships to enter the International Container Transshipment Terminal, Vallarpadam, other vessels with containers meant for international destinations come calling.

6

7

Many people have often complained that Ayurvedic treatment is very costly, even costlier than allopathy. I request you to investigate the costing done by hospitals and resorts offering Ayurveda.

K V Raman Nampoothiry, Kottayam

No jargon I am happy that UPDATE writes stories about industry and economy in a language that common readers also understand. You do not use jargons, which is a welcome change.

Saritha Tomy, Kottayam Poster boys I have lived in Kochi for the past 15 years. I have often seen the small sign board of Synthite Industries Ltd on MG Road. To think that the same company is a world leader in spice extracts and one of the largest companies in the State speaks volumes on its focus to provide value added products to its customers rather than harp on building posh offices. The story (The Spice route) made me feel proud as a Malayalee.

Thomas Joseph, Kochi Hydel power I was part of the team employed by ANERT under the Total Energy Security Mission to discover the State’s potential in harnessing its small waterfalls. During the survey, we discovered how much we were actually losing out by not adopting these mini projects. Your article on small hydro has brought to light the ability of small hydro to help the State meet its power deficit and also to reach electricity to its remotest areas. The story of the villagers of Mankulam was inspiring indeed.

More like the Shah Rukh Khan starrer Swades, wherein villagers turn hydel engineers themselves.

Faisal K, Thrissur 8

Ayurveda Your article on Ayurveda hit the right spot. A couple of years ago, a friend of mine from Australia had trouble with his back. The discomfort never gave up and finally, he was recommended by an Indian doctor there to undergo Ayurveda treatment. He came to Kerala for the same and underwent treatment at Kotakkal Aryavaidya Sala. And he experienced immediate relief. It is time that we took the message of Ayurveda to the needy people across the world.

Anil Kumar N S, Kochi It remains a sad fact that even though we boast of major Ayurveda centres, we have not been able to tap into this segment and lead it. While we slept, Sri Lanka stole our march.

But the initiatives outlined in your story show that the Kerala government is serious about improving the fortunes of Ayurveda in the global market. This can only augur well for the State.

K N Narayanan, Thripunithura While I congratulate you for the report on the prospects of Ayurveda, I felt it should have mentioned about the costs of Ayurveda treatment.

CSR: want more It is heartening to note that Keralabased banks engage themselves in social activities that benefit the poor. It is also commendable that they help bright students pursue their academic interests. But considering the huge earnings and profits they make, the banks must make a coordinated and systematic effort to identify the deserving people and help them come to the mainstream. CSR should not be seen as ‘been there, done that’ task.

R Rajalakkshmi, Thrissur More info needed Smartphones have indeed arrived.

Today’s generation just can’t seem to get their eyes off the various apps available. But the older generation, especially the working class, are yet to wake up to its potential in advancing their businesses. Your story has provided the base, though much more awareness needs to be created over time for it to be utilised effectively.

Rajesh Ramachandran, Thiruvananthapuram Good photos I appreciate the efforts you make to include good photographs in every issue. The pictures in the ‘Big Picture’ page give us readers an idea of the big projects coming up in Kerala. The ‘Business Called Life’ column is also good in that it attempts to throw light on the life of people who are marginalized from the mainstream.

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9

I say!

There is clear evidence that the (Athirappally hydel) project will be ecologically devastating... and they (Kerala Cricket Association) were not playing cricket with a straight bat.

Union Environment and Forests Minister Jairam Ramesh.

Mr Ramesh gave green signal to seven of the nine projects for which Kerala wanted clearance.

The Minister even recommended a green bonus for sacrificing the hydel project.

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The people need to surrender land only after getting the compensation and rehabilitation package. Also they will be made the first beneficiaries of whatever project comes up there.

Oommen Chandy, Chief Minister, after handing over title deeds to evictees at Moolampilly

As I close, I thank God, this country, this world, family, relatives and friends for helping me – an average person with many below-average attributes – to add whatever little value I have to this country and to the world.

N R Narayana Murthy in his last address as chairman of Infosys Ltd

Kerala must concentrate on timely implementation and monitoring of projects.

K M Chandrasekhar, former cabinet secretary who is named as the new vice-chairman of the Kerala Planning Board

Companies that claim to have great plans for India but do not have a strategy for rural India are missing the big story.

Aditya Puri, managing director, HDFC Bank, on the next big opportunity

AT A GLANCE

US to probe oil price increase

The US Federal Trade Commission will investigate whether profiteering and anticompetitive behavior fuelled crude oil and product price increases. US Energy Information Administration statistics in early May showed a 90 per cent increase in US refiners’ margins since the beginning of the year, and refineries running at 81.7 per cent of capacity at the time, 7 per cent less than a year earlier. The investigation follows a letter to the FTC by a group of senators. “Bad actors who are artificially driving up prices ought to be brought to justice and face stiff punishment,” Senator Maria A Cantwell said.

Internet drives GDP growth A McKinsey study based on Internet-enabled consumption patterns reveals that the Internet accounted for 21 per cent of the GDP growth over the past 5 years in the developed countries. The US is the largest player in the Internet, with a 30 per cent share of global Internet revenues. The Internet contributes 15 per cent to the US GDP growth.

The Internet contributes 5 per cent of the GDP

growth in India, compared to the 3 per cent for BRIC nations as a whole.

Studies have said the total Internet traffic will reach 966 exabytes (1 exabyte is a billion gigabytes) per year by 2015, a four-fold increase from the current levels.

Hiring slows in US Hiring in the US slowed sharply, with just 54,000 non-farm payroll jobs being added in May, a third of the forecasted number.

This comes after the strong job growth in the preceding three months, when 2.2 lakh jobs were added each month. The unemployment rate has also increased from 9 per cent in April to 9.1 per cent in May. The job losses came from the government sector, reeling under budget cuts. Manufacturers also shed 5000 jobs, ending a six-month streak of job gains. Jobs were added by private companies, professional and business services and in the health care service.

Quake pushes Japanese companies abroad

Lack of opportunities in the domestic market, left paralysed by the earthquake and tsunami, is forcing Japanese companies to expand abroad. A two-decade long recession

fuelled by an ageing population, and competition from China, South Korea and other South East Asian nations had many of them already looking outside for opportunities. The disruptions in production after the quake and the missed deadlines have left customers livid and they are demanding that companies reduce their geographical risk by opening plants overseas.

This is driving up Japanrelated mergers and acquisitions, according to investment bankers.

Deals worth 15 trillion yen (USD 187 billion) are estimated in 2011, the highest since 1999.

Americans turn to small cars

The economic recession coupled with the rising fuel costs are forcing Americans to shift to fuel efficient small cars.

The share of compact and sub compact cars among the total vehicles sold in the US doubled during the decade to 25 per cent. Analysts say the shift could be permanent, with companies offering feature rich small cars.

The US car manufacturers – Ford, GM and Chrysler - are all shifting their focus to small cars.

Ford has converted a SUV plant to make hybrid and

electric versions of small cars. GM’s compact car Chevrolet Cruze is doing well in the market and it is planning to make its first sub compact car in the US. Chrysler is also coming up with a compact car.

Apple soars with iCloud

After Amazon, Google and Microsoft, it is Apple’s turn to join the cloud computing bandwagon. Apple CEO Steve Jobs unveiled the iCloud service at the Worldwide Developers Conference in San Francisco. The iCloud service will allow users to store their files – photos, music, iBooks, emails, contacts, etc - on Apple servers. The files will be synced across different Apple devices - iPad, iPhone, iPod touch or Mac - owned by the user.

Users will now see the books, music or apps that they buy on any device replicated on all the other Apple gadgets on its own.

The service will be free for Apple customers, who have to login to the device using their user id and password. iCloud will be given out free with iOS 5 and each account will be allocated 5 GB free storage space.

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AT A GLANCE

TCS, HCL among UK’s top employers Indian software giants TCS and HCL have received the Britain’s Top Employers 2011 certification. The certification is based on research carried out by the Corporate Research Foundation (CRF) and audited by Grant Thornton. CRF is an initiative of academics, business journalists, trade associations, researchers and international publishers that offers independent HR assessment. All areas of HR management of the companies such as benefits, working conditions, training and development, company culture and career development are assessed during the certification process. The other firms that have received the certification include IBM, Thomson Reuters, G4S plc and MacDonald’s.

Infosys to build campus in China

Infosys has bought land in Shanghai to build its own campus. It will be setting up the facility at a cost of $125-150 million, its largest investment outside India. The campus, spread over 15 acres in the Zizhu Science and Technology Park, will be developed over a period of 3 years.

It will have a capacity to 12

seat 8000 professionals.

The company already has three centres in China in Shanghai Pudong Zhangjiang HiTech Park, Hangzhou Binjiang HiTech Park and Beijing China Overseas Plaza and employs 3300 people.

This is the first time Infosys is buying land outside India to build its campus.

Early monsoon to help growth

The arrival of the monsoon, two days earlier than expected has warmed the hearts of India’s planners. A good monsoon is expected to boost the production of agricultural products such as rice, corn, sugar, cotton and oilseeds. This will help growth and reduce food inflation that averaged 18 per cent in 2010. It is estimated that 235 million farmers depend on the rains for their livelihood, in the country, with agriculture providing 20 per cent of its GDP. Indians now live more The life expectancy of an average Indian has increased from 57 years to 65years in the last two decades. But this is still three years lesser than the global average life expectancy of 68 years. Indian women had a higher life

expectancy than men. An average Indian woman lived for 66 years, compared to the 63 years of her male counterpart.

Gurgaon, Noida outclass Bangalore A survey by ASSOCHAM indicates that Bangalore may lose its position as India’s IT capital to Gurgaon and Noida. 30 per cent of the top-ranked officials of the Bangalorebased IT companies said they would prefer to shift their businesses to Gurgaon, while 25 per cent preferred Noida, 20 per cent Chandigarh, 15 per cent Pune and 10 per cent Hyderabad.

Crumbling infrastructure, poor civic amenities, pollution, rising costs and deteriorating quality of life are cited as reasons that prevent software companies from expanding in Bangalore. Gurgaon’s strengths are its cosmopolitan culture, modern infrastructure, availability of skilled workforce, industry-friendly government policies and closeness to Delhi.

11 new spice parks this year

The Spices Board plans to start 11 new spice parks in

the country this year, with a view to make the country a major export processing hub for spices and spice based products. Two of the parks have already been commissioned, and two others – at Guntur in Andhra Pradesh and Sivaganga in Tamil Nadu – will be operational soon. The number of spice testing facilities will also be increased from the current four to eight.

India exported spices worth $1.5 billion in the last fiscal year, of which the share of value added products was 55 per cent.

The Board plans to increase India’s spice exports to $3 billion by 2017 and $10 billion by 2025.

Exports grow 57 per cent in May

India’s exports grew 56.9 per cent year-on-year in May to touch $25.9 billion, helped by increased demand from Europe.

Imports also recorded an increase, up 54.1 per cent to $40.9 billion. The trade deficit was $15 billion for the month. Engineering, gems and jewellery, petroleum and oil products, cotton yarn and made-ups, electronics and marine products contributed to the growth.

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AT A GLANCE

GTECH plan to go rural

pon Cargo Airlines and Qantas. The solution is available both in licensed and SaaS (Software as a Service) modes. Once implemented, iCargo will manage the entire freight movement for the airline.

The Group of Technology Companies (GTECH), the Thiruvananthapurambased strategic grouping of IT/ITES companies, has suggested co-opting the educated youngsters in the towns and villages of the State to the industry.

Under the ‘Kerala model’ for IT development, suggested by the group, the industry will offer on-thejob training for five years after which the apprentices will get an MCA degree. The GTECH wants the government to provide built-up areas for at least 50 IT clusters, each employing 100 to 200 people. Leading software companies such as TCS, IBS, UST Global and SunTech have offered to set up rural training centres under the scheme.

Kerala grows faster than AP, TN Kerala’s GDP recorded a growth rate of 8.1 per cent during the period 2005-10, according to a report by Confederation of Indian Industry (CII) and McKinsey & Co. Among the southern States, Karnataka grew the most at 8.5 per cent. GDP growth for Tamil Nadu and Andhra Pradesh was 7.4 per cent during the period.

Stable policy initiatives, investments in infrastructure and growth in specific industry clusters helped Kerala’s growth.

The growth rate of the southern States trailed the national average of 8.7 per cent. Gujarat led with a growth rate of 11.3 per cent followed by Haryana at 11 per cent and Bihar at 9.6 per cent.

IBS inks deal with Cargoitalia IBS Software Services, the Kerala-based software firm specialising in the logistics space, has entered a deal with Cargoitalia, an Italian airline, for implementing its cargo management solution - iCargo. iCargo is a leading cargo logistics solution for the air cargo industry, and boasts of a clientele that includes All Nippon Airways, Jet Blue, Kingfisher Airlines, Nip14

Yash Birla ups stake in Vaidyashala

The Yash Brila group has increased its stake in Birla Kerala Vaidyashala (BKV) to 99 per cent by buying 48 per cent stake from the Kurup family,

its joint venture partner.

Some of the assets of BKV in Kerala have been transferred to the partner in lieu of their 48 per cent stake. The Kurup family now holds 1 per cent stake in the company. BKV has more than 40 ayurvedic spas in the major cities in India. It specialises in therapeutic massages and treatments for lifestyle disorders and plans to launch its centres in the Gulf region and South East Asia.

Govt to set up SPV for Kochi metro The State government has decided to set up Kochi Metro Limited, a special purpose vehicle, for the implementation of the mass transit system.

The Chief Minister would be the chairman of its director board and the ministers for education, finance, public works and transport would be inducted in the board. The government has proposed taking forward the Kochi Metro on the lines of the Chennai Metro Rail, which includes equity participation from the Centre, the State and loans from financial institutions. The cost of the project is estimated to be `4,427 crore. Mr Tom Jose has been appointed as the special officer for the project.

BPCL to expand Kochi facility Bharat Petroleum Corporation plans to expand the capacity of Kochi Refinery to 300,000 bpd from

the current 190,000 bpd, by 2015. The company is also planning to set up a petrochemical complex at Kochi to make petrochemical products based on propylene. The company is also planning a fluid catalytic cracking unit to produce the propylene needed for the project.

Tyre companies eye rubber plantations

The huge increase in rubber prices have prompted tyre manufacturers to scout for rubber plantations in an effort to shore up declining margins. The prices of rubber, which accounts for 40 per cent of the production cost of tyres, are expected to remain strong in the near future, aided by increased demand for tyres and stagnating production of rubber. In the financial year 2010 – 11, natural rubber production in India grew 3.7 per cent to 861,950 tonnes while the demand was 949,205 tonnes. Global production in the year stood at 9.936 million tonnes, against the estimate of 10.025 million tonnes, due to lesser production in Indonesia and the Philippines.

For the current year, the Rubber Board estimates a production of 902,000 tonnes, and consumption at 977,000 tonnes.

KSIDC NEWS KSIDC is taking steps to promote two sectors which have a unique share in the development of Kerala: mineral sand and coconuts. The State has already made a headway in creating industrial units in these two promising sectors, but further development is hinged on the success in making value-added products from them.

The National Mineral Research Institute at Chavara, Kollam and the Coconut Industrial Park at Kuttiyadi in Kozhikode are expected to play a pivotal role in the development of the respective sectors.

Adding value

National Mineral Research Institute will focus on applied research activities

K

SIDC is facilitating the establishment of a National Mineral Research Institute at Chavara in Kollam district in coordination with companies and R&D institutions in the mineral processing sector in Kerala. The Institute will focus on applied research activities in the mineral sector of Kerala.

Kerala Metals and Minerals Limited will provide around two acres of land for the project at Chavara. The institute will work towards building effective linkages between industry, the government and research and development institutions within and outside Kerala in this strategically important sector.

As per the draft project report, prepared by M N Dastur & Co (P) Ltd, Calcutta, the institute will function in three

domain areas: investigative and basic research; bench scale experiment and pilot plant experiment.

The research findings will be utilised

by KMML and other chemical-based industries for development of new projects, technology up-gradation and enhancing operational efficiency. In the first phase of the project which entails a cost of `47 crore, the institute will focus on the mineral and ceramic sector.

The Kerala coast is known for its vast reserves of mineral sand. Several leading PSUs in Kerala including Trivandrum Titanium Products and Kerala Metals and Minerals Ltd are making value-added products out of the mineral sands. The KMML recently set up a 500 tonne titanium sponge factory at Chavara.

Breaking the shell Coconut Industrial park will promote units making value-added products

A

coconut industrial park which will encourage development of value-added products from coconuts will be set up at Kuttiyadi in Kozhikode district. KSIDC has formed a separate company, Kuttiyadi Coconut Industrial Park Ltd., for setting up the park, the first of its kind in the State.

To come up on 131 acres in Manimala estate at Velom Panchayath near Kuttiyadi, the park will promote units which use state-of-the-art technology to make

products. It will also ensure farmers a ready market for their products and help the government form long-term strategies for the development of the coconut sector.

The park will have a common facility centre, power sub-station, water supply points and other infrastructure. Besides, a production unit for value-added products based on the coconut available locally will be set up on five acres. The production pattern and specifications of each product will be decided in consultation with the Coconut Development Board (CDB).

The State government has already provided `11 crore to the project. The Coconut Development Board is expected to extend financial assistance to match the investment of the State government.

Mahindra Consulting Engineers Ltd., Chennai, is in the final stages of preparing the detailed project report for the park.

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When my information changes, I change my opinion.

What do you do, sir?

John Maynard Keynes (1883-1946) The most influential economist of the 20th century.

16

Everybody knows that technology changes business.

Today, the change flows through the net.

And the fact is, Kerala is the most networked State in India.

Of the 978 Panchayats in Kerala, 99% have broadband connectivity.

Information changes

Be updated

For subscription: +91 97444 17980 or subscription@economic-update.in ----------------------------------------------------------------------------------------------After all, our opinions ought to change!

17

Farmers go hit

Rural Economy

Plan well. Use technology to execute it at optimum cost. Preci forces Kerala farmer to think and act and become successful

18

tech

ision farming

A

Aby Abraham G K

s many as 625 cucumber plants grow in Mr Digaul Thomas’s 12.5 cents against 30 in a similar area elsewhere. They grow vertically, consume half the fertiliser and water than normal, and give almost double the yield.

Mr Thomas is no agri-scientist, nor his farm a lab. He is a precision farmer, a new tribe that has emerged on the agriculture fields of Kerala.

Precision farming is all about employing technology in agriculture. It uses scientific tools to understand the character of every plot of land and identify the suitable plant to grow on it. It recommends the right amount of inputs such as fertilisers and water, and delivers them in the right measure using sophisticated systems. It tends crops in highly opti-

survival. Steep rise in input costs, unavailability of suitable land and scarcity of water for irrigation made farming unsustainable. Farm labour was another issue: there were few farm hands, and those who stuck with the work were too costly for a farmer to afford. It became important that farmers adopt technologies that increased productivity and reduced labour cost.

“Farmers realised that conventional farming would not take them anywhere, except on to the list of loan defaulters,” said Mr K Krishnan Kutty, former Chittur MLA who pioneered the project.

“Many of them became loan defaulters and were facing eviction by banks. It was then that we heard about the success of precision farming in the neighbouring districts of Tamil Nadu.” The Perumatty Service Cooperative Bank which

Precision farming cuts down on labour and shortens crop cycles as it tends plants in a highly optimised environment. It, in fact, tries to bring the certainty of manufacturing to agriculture mised environments and hence could cut costs, make cycles shorter, harvests faster and productivity and yield higher. It uses labour, one of the major factors which will decide the fate of agriculture in the State, minimally.

In short, precision farming tries to bring in the certainty of manufacturing to agriculture.

The idea, a toast of the developed world, entered Kerala through Palakkad district from the backward Krishnagiri district of Tamil Nadu in 2008 and is earning new converts every season. Palakkad district alone has about 200 precision farmers cultivating chilli, brinjal, cucumber, plantain and tomato in about 800 acres. Among them, 18 people have taken to precision farming in all sense of the term. There are model precision farms in five other districts—Ernakulam, Idukki, Kottayam, Pathanamthitta and Kollam—according to the Vegetable and Fruit Promotion Council Keralam(VFPCK), which promotes and supports it.

Farmers took to precision farming at a time when it almost looked like the end of the road for their only means of

he heads took the lead in introducing the concept and extended financial assistance. Mr Krishnan Kutty is one of the most successful precision planters. And the bank spearheads the activity through the Perumatty precision farming cluster it formed.

F

ertigation, or supply of fertilizers through the irrigation system, is the most critical component of precision farming. The system is designed after a field survey using advanced technologies like global positioning systems and satellite maps. This helps identify the intra field variations and adjust the inputs accordingly. The farm is then fertilised using water soluble fertilisers. Advanced systems also have the capability to control the amount and type of fertilisers and water given to each plant.

“Precision farmers use only first generation hybrid seeds as only they give maximum yield,” said Mr T V Arun Kumar, district manager, VFPCK. “The subsequent generations might not have all their qualities. They may be more vulnerable to pests also.”

Planning is another key element.

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“We start with a market study to determine the crops that will fetch a good price in a particular season,” said Mr K I Ani, the agricultural officer in Perumatty, when precision farming was introduced there. “We also study the unique characteristics of the farm and the seasonal variations before deciding the target yields and the inputs required to achieve it. One can simulate the yield and profitability outcomes for various combinations of inputs before deciding on the crop for a season. If a crop cannot be made profitable, after providing for a margin of safety, the farmer should not go ahead.”

There were several factors, other than the plight of farmers that helped precision farming gain acceptance. Unlike most other States in the country, Kerala has many complex agricultural zones with large variations within.

“Providing generalised recommendations for them all will not work,” said Mr Ani. “We need a system that takes into account the subtle variations.”

M

r Thomas, 31, returned to his native Wayanad when the eco-

20

nomic slowdown impacted his job as interior design engineer in Dubai.

Hailing from a farmer’s family, he took to farming, but chose to use technology to do it better. He started off with a polyhouse on 25 cents.

The atmosphere in the polyhouse is optimised for growth. It protects the plants from excessive sunlight, rain and wind. It blocks the ultraviolet rays from the sun, but allows diffused light to enter it, ensuring that plants grow well. It also locks in carbon dioxide, which enables growth. “The rate of

growth is twice that in the open; you can literally see them shoot up,” said Mr Thomas. “The plants flower and start yielding fruits in the poly house quickly. Their shorter life allows more crop cycles per year.”

The seeds are planted in pro-trays, which make for easy transportation and transplantation. The planting bed is then readied; soil is tested and nutrients added. The soil is mixed with generous amounts of cow dung and fungicides. The mixture is then solarised by exposing it to temperatures of above 40oC for two days. The temperature is raised by shutting the ventilation in the polyhouses, which trap the heat from the sun. This kills most disease-causing germs and pests in the soil.

A drip irrigation system waters the plants while foggers maintain humidity. The temperature is controlled by raising or lowering the shutters of the ventilation. A fertigation unit mixes fertilisers with water and supplies it to the plants daily. “It is better not to mix crops, but crop rotation is a must,” Mr Thomas said. A crop is repeated only after the lifecycle of pests

M

any rice farmers in Kuttanad lost their crop to the summer rains this year. The data for the past 25 years show that there is a high probability for summer showers in the region from April 5th to May 5th followed by a dry spell till June. “So while planning the crop, farmers should choose varieties and plant in such a way that the crops mature before or after the said period. This will help them avoid the problems due to the summer rains,” says Mr Ani, who cultivated rice on 25 acres in the region using the precision farming system. His crop matured by mid-May and escaped the summer rains. The yield was also plentiful at 7-8 tonnes a hectare, compared to 4-5 tonnes given by conventional farming.

The fertigation system is the lifeline of precision farming. It is designed after a field survey using GPS and satellite maps. Precise quantities of water and water-soluble fertilizers are then supplied to each plant A polyhouse in which capsicum is planted associated with that crop is over. Since the topsoil remains dry, weed growth is minimal. Also being a closed unit, weeds and pests from outside cannot enter the polyhouse. Hence the plants do not have to compete with weeds for resources, or fear pests, thereby reducing the use of weedicides and pesticides drastically. “Great care is needed to ensure that the agents from outside do not enter the polyhouse.

Since the atmosphere inside it is optimised for growth, weeds and diseasecausing organisms can also thrive in it and spread fast,” says Mr Thomas.

“A lapse in attention of just two days caused the fungi to spread in my cucumber crop.”

Marketing is often a challenge for farmers, but Mr Thomas who sells his produce in the local market and also through supermarkets feels that finding a market will not be a problem if there is scale. “You should have enough of the produce to interest the big retailers so that they can optimise on transportation costs,” he says. “Farmers should fix the price of the produce before harvesting. Once the crop has been harvested, it has limited shelf life and the farmer loses bargaining power, and will be at the mercy of the retailer.”

The low labour requirement for managing the farm is also a big plus in precision farming. A husband-wife

team can easily manage a small farm, he said, a view endorsed by his wife, Ms Neena Digaul.

Mr Thomas spent `12.5 lakh to set up the facilities on his 25 cents.

The fact that it was a new venture also resulted in the costs shooting up. “It took me three months to set up the first facility.” He is now confident of setting up a precision farming facility in 20 days.

The good news is that the high investment is balanced out by low operating costs, and high returns. The salad cucumber Mr Thomas cultivated on 12.5 cents of land in December 2010 flowered on the 25th day and started yielding fruit by the 35th day.

Even though a fungus attack reduced the yield to 5.5 tonnes, from the 10 tonnes expected, he made a tidy profit. The total cost of production of the crop came to around `50,000 and he sold the produce at an average price of `20 a kg.

“The opportunity cost is high in precision farming. If your crop is lost, abandon it and start afresh without wasting time,” he says.

Precision farming is becoming the preferred method of farming in developed countries. In India too, States like Tamil Nadu and Gujarat have taken to it in a big way. It is time farmers in Kerala too adopted the technique.

The cost factor

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recision farming is a costly affair in the beginning, at least. It costs around `80,000 to get a hectare of farm ready with a fertigation system which has a sprinkler and a 5 HP motor. For a poly house, the costs are higher: it would cost more than `2 lakh to set up a 216 sq ft polyhouse with a hybrid nursery.

The government, however, subsidises up to 50 per cent of the capital cost.

The government promotes precision farming through several projects, said Mr Arun Kumar of VFPCK. The government reimburses up to 50 per cent of the cost incurred on setting up the machines and other facilities. It will cost up to `80,000 to get a hectare of land ready for precision farming, which includes a 5 HP motor. Setting up a poly house of 216 sq ft will cost `210,000, which includes the cost of a hybrid plant nursery. “A common nursery will be enough when done as a cluster, which helps cut the cost,” said Mr Arun Kumar.

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industry report

The carpet kings Travancore Mats and Matting Co makes products using raw materials from all over the world and sells them in the global market Aby Abraham G K

W

hen his agent for the US market flew down to Cherthala one fine morning with some quaint explanation, Mr V R Prasad, managing partner of Travancore Mats and Matting Co, did not blink. The visitor oversaw the production of a piece for which he had placed an order. The work was finished in time and loaded on the flight. Mr Prasad, whose mats adorn some of the best living rooms in the world, made a casual enquiry about the address to which it was headed for.

Camp David, pat came the reply.

For Mr Prasad, whose company has made the golden fibre and its products synonymous with Kerala in many well-known households, the address—the country retreat of the President of the United States—did not spring a huge surprise. For, his exclusive carpets welcome guests in the palaces, castles and stately homes the world over; and the hosts may be presidents, prime ministers, kings or the sheikhs of Arabia. And the group that has made it all possible is the Travancore group of companies, headquartered at Cherthala.

The Travancore group is one of the

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early organised players in the coir industry, starting its operations in 1917.

The flagship Travancore Mats and Matting Co started with making coir products for the domestic market and ventured to overseas markets in 1937.

Today, it is a 100 per cent export unit.

The group, almost a hundred years old, is nothing but old in its thinking.

It evolves constantly; the company no more limits itself to working on coir fibres. In the last decade, it has transformed itself from an ordinary coir mat manufacturer to a specialised weaver that uses raw materials from all over the world to weave the best carpets and sell it across the world.

“Coir has a limited scope. That prompted our move into other fibres,” said Mr Prasad. “The market in other natural fibres and synthetics is like an ocean.”

In the last decade, Travancore Mats and Mattings has transformed itself from an ordinary coir mat manufacturer to a specialised weaver

True to the thinking of Mr Prasad, the company can now make mats of any yarn. The group uses fibres like jute, cotton, wool and sisal and synthetic fibres to make its products. “We procure the best quality raw materials from all over the world. Jute comes from Bangladesh, while extra long sisal is imported from Tanzania. The best quality wool comes from New Zealand,” Mr Prasad said. “Quality products need raw materials of good quality.”

It gets the best machines and equipment, sources the best technology and ensures that it keeps its leadership position. And it goes the extra mile to ensure quality: many of its employees were trained in Belgium the country which makes the finest carpets in the world.

The product range also reflects

Mr V R Prasad at the company showroom at Cherthala

the evolution: From the simple mats to some of the complex ones to the unique products. The company manufactures tufted doormats in coir, coir with rubber backing, and handloom mats in coir and jute. It has two tufting heads which produce about 3200 sq m of tufted coir doormats a day.

It also has a flocking machine that embosses designs on the tufted mats converting them to works of art. The Italian cutting machine enables precise cut of the mats to various shapes.

The emphasis on quality has helped the products of the group gain acceptance in markets all over the world. “Quality, service and timely delivery have helped us establish in global markets,” Mr Prasad said.

While coir products are generally sold through retail shops, products from other fibres have contract

and commercial applications such as coverings for walls, floors and ceilings.

This has led the company on the path of diversification. It has started new enterprises to produce high value area rugs and broad loom matting.

New frontiers Wilton Weavers, the group’s first en-

Wilton Weavers is the only company in India to make Wire Wilton carpets, considered to be the most difficult to weave. It is also the only company in India that is certified to make carpets for aircraft

try into high-end carpets, produces wire wilton area rugs made of jute, wool and polyester cotton. Wilton is used to make constructions like loop, cut and loop etc in carpets. The 1 lakh sq ft factory has 8 Wire Wilton looms, each with a capacity to weave 2500 sq m of carpet per month. The plant has ISO 9000 certification from BSI. All the workers in the factory were trained in Belgium.

Wilton Weavers has many firsts to its credit. It is the only company in India to make Wire Wilton carpets, considered to be the most difficult to weave (see box). The carpets are inspected per square inch to correct defects.

It is the only company in India that is certified to make carpets for aircraft. Kingfisher Airlines is its first customer, while orders from many 23

The computerised high-end looms have the ability to pick and choose 11,000 threads of different colours

About Carpets

E

xquisite carpets, once handwoven, are made on specialised looms now. Axminister and Wilton carpets, well known for their high quality, got their names from the English towns where they were first woven.

The process of weaving an Axminister carpet, made of wool, involves interlocking the pile yarns with backing yarns.

The yarn is cut to a length which depends on the required pile height. The cut yarn is then woven simultaneously on the same loom with the backing, which is generally made of jute or synthetic fibres. Different coloured yarns are selected at each point based on the design. Since the backing is woven along with the carpet, these carpets do not delayer while in use.

The first Wilton carpet loom was patented in Wilton in the year 1741. The yarn in a Wilton carpet is a continuous strand woven through the carpet, whereas in Axminister carpets, the yarn is cut according to the pile height. They can be woven with cut pile, loop-pile, or cut and loop pile.

Tufted carpets, are not woven carpets unlike Axminister and Wilton carpets. They are produced by fixing yarn to a preexisting backing, with the help of adhesives.

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others are in the pipeline.

The company spins its wool, the only company in South India to do so.

The group launched production of top quality broadloom matting, area rugs and carpets using machines through Extraweave Pvt Ltd. Launched in 2000, Extraweave is vertically integrated, and takes up all activities of carpet making—from design, dyeing, spinning and weaving to installation. The company uses jute, sisal and wool in its products. It is the only company in the world that has been licensed to use DuPont’s new synthetic fibre – Sorona – for flat weave.

The company has 19 rapier and electronic jacquard looms, imported from Belgium, which ensure the quality of the product. The company is in the process of installing two electronic Jacquard Axminister looms. These computerised high-end looms have the ability to pick and choose 11,000 threads of different colours, as per the design specifications fed into it.

They are capable of weaving designs, without repetition, up to 50 meters in length – a concept called infinite design. Cameras fitted on the loom scan the woven carpet and stop the machine on detection of a defect. This ensures real time defect prevention.

The company has a design centre that makes the designs for products using the latest computer aided design systems. The designs are customised according to the requirements of the clients.

Extraweave markets its products all over the world, with US and Europe being the main markets. IKEA,

the biggest furniture retailer in the world, is its main customer. The company received the “Best Supplier TASA Availability Award” from IKEA in 2009. It also boasts of a client list that includes Walmart, Target, Crate & Barrel, William Sonoma, H C Taepper Denmark, Negotap France, Otto Golze & Sohne GMB, Germany, etc.

The hotel segment is a major market for carpets and area rugs. The company installs its carpets for such customers. It also distributes and installs luxury wall coverings manufactured in Belgium, making it a single stop for wall to wall furnishings.

The company set up Extraweave US, a subsidiary, to market its products effectively in the US. Extraweave US has around 1000 clients, which it plans to increase to 3000 in the near future.

While it expands its presence in the global market, like any truly focused company, it has not lost sight of the expanding home market. “Around 600 hotels of 4-star and above rating are coming up in India,” said Mr Velayudhan Santhosh, managing director, Extraweave. “We plan to explore this market.” The company has set up a team for the purpose.

Travancore Cocotuft (P) Ltd, another group company started in 2000, is a 100 per cent export oriented unit.

It specialises in making Vinyl (PVC) backed, tufted coir-matting rolls and flocked door mats. It provides a range of floor coverings, such as rubber mats, coir handloom mats and matting and jute and cotton rugs. The company has French tufting machines

Velayudhan Santhosh, managing director, Extraweave

The carpets are inspected per square inch to correct defects.

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with a combined capacity of 4800 sq m per day. It houses a computerised machine which can flock 4,500 door mats a day. It also has state-of-the-art printing units, captive looms producing high quality jute and coir rugs and manufacturing facilities for rubber mats.

The company exports its products to more than 24 countries, with the US and Europe being the major markets.

Recently, Cocotuft was in the news when four of its workers hand-wove the world’s longest doormat from coir.

The mat measured 333 ft in length and was 4 ft wide, and weighed 999 kgs.

Diversification has helped the group manufacture a wide range of products, catering to different segments of the market. Its turnover has

The making of a carpet

he process of making carpets and rugs begins with dyeing.

The raw material is fed into dye house. The Travancore group has a dye house with a computerised dosing facility for dyes and liquids that ensures accuracy of the colours selected. After dyeing, the yarn in dried in radio frequency driers which help retain the inherent texture, colour and quality. The dyed yarn are spun into bobbins in the spinning yard. The bobbins are then loaded on the loom. As per

the design fed into the computer, the looms weave the carpets. After weaving the carpets are taken to the mending station where they are checked for defects and corrections made.

The mended carpets are then backed with latex or fabric. After being cut, their edges are surged with Titan 2 Duerkoppadler stitching machines. The company has the capacity to produce 2.75 million square meters of carpets per year.

grown to `200 crore, but the passion for growing the business still remains.

“Tufting is the holy grail in this industry,” said Mr Santhosh. “We want to make tufted carpets.” Extraweave is also forming a joint venture – Metal Constructions India Pvt Ltd - with Techniquas Belgium to make pallets used for transporting parts for Volkswagen.

Travancore Matting is not just business for Mr Prasad and Mr Santhosh, his younger brother. The group with 867 permanent employees prides itself at being an equal opportunity employer. “About 30 per cent of our weavers are women. Ours is the only factory in the country where you will find women weavers,” says Mr Santhosh. “We would like to increase the percentage further, but regulations prevent us from employing women in the night shifts.”

The company has a state-of-theart effluent treatment which recycles the waste water and makes it available for reuse. Leading retailers around the world have certified the plants for social and environmental compliance. Cocotuft has received the SA 8000:2001 certification from SAI, a US-based not-for-profit organisation dedicated to implementing voluntary verifiable social accountability standards. It is also one of the promoters of the Common Facility Center for storage and treatment of hazardous waste – launched by SIDCO in the Cochin Special Economic Zone.

The company procures the best quality raw materials from all over the world. Jute comes from Bangladesh, while extra long sisal is imported from Tanzania.

The best quality wool comes from New Zealand 25

INFRASTRUCTURE

Let there be life KSIDC’s Life Sciences Park to promote units in biotechnology, nanotechnology and life sciences

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Kuruvilla Chacko

erala, which pioneered the concept of dedicated infrastructure for the rising IT industry 30 years ago with Technopark, now, wants to make the most of biotechnology, nanotechnology and life sciences, the new sunrise sectors.

Kerala State Industrial Development Corporation (KSIDC), the premier investment promotion arm of the State government, is setting up a dedicated Life Sciences Park to host companies in the three sectors.

To come up on around 250 acres in Veiloor Village near Thonnakkal in Thiruvananthapuram, the park will symbolise close interaction between industry and academia by hosting research institutions and industry incubation centres.

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To be developed as a Knowledge Centre, the park will have a centre for advanced learning and research in biotechnology, life sciences and nanotechnology; an industrial cluster with units offering products and services; and an incubation centre which will handhold new entrepreneurs making all the necessary infrastructure available.

The park will offer common facilities such as water, power and

The park will have a centre for advanced learning and research in biotechnology, life sciences and nanotechnology, an industrial cluster and an incubation centre

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he Indian biotechnology industry has been reporting a growth rate of 36.5 per cent per annum, one among the highest in the world. Although it currently commands a market share of just two per cent of global revenues, India has great potential to become a significant player in the global biotech market.

With numerous comparative advantages in terms of research and development facilities, knowledge, skills, and cost effectiveness, the biotechnology industry in India has immense potential to emerge as a key global player.

According to an industry survey by the Association of Biotech Led Enterprises (ABLE), the biotechnology industry earned revenues of $2.67 billion in 2008-09. Exports accounted for nearly 60 per cent of the total business in 2008-09 and went up by almost 25 per cent to reach $ 1.57 billion. The domestic business at $1.09 billion registered a 10 per cent growth in the same period.

The biopharma segment continued to account for the largest share (65 per cent) of the biotech industry's revenues.

India is ranked among the top 12 biotech destinations in the world and is the third biggest in the Asia-Pacific region in terms of the number of biotech companies, according to a report by the Confederation of Indian Industry (CII) and consultancy firm KPMG.

internal roads. The industrial infrastructure will include developed land, standard design factory modules offering plug-and-play facilities and wet labs including common equipment laboratory and pilot plants. Entrepreneurs and units can avail them on long term or short term leases.

The project is envisaged to be implemented in two phases. The first phase of the project will be implemented through the system of government-led development on 60 acres of land, of which 30 acres has already been taken possession of. Phase II will be developed through public-private partnership route.

The park will be connected to Thiruvananthapuram in the south and Kollam in the north through the NH47. The site is approximately 22km from the Trivandrum International airport.

The focus areas of promotion in the biotechnology sector include agribiotechnology, marine biotechnology, bioinformatics and industrial biotechnology.

Life sciences industry includes life sciences research and development, pharmaceutical and medicine manufacturing, electro mechanical apparatus manufacturing, surgical appliance and supplies manufacturing, medical and diagnostic laboratories, and blood organ banks. Biotechnology, pharma

The State, which hosts Western Ghats, one of the 25 biodiversity hotspots in the world, is considered a fertile ground for the life sciences industry to flourish and health care are the emerging and high growth opportunity segments in Life Sciences.

Nanotechnology, principally concerned with the production and application of devices at nanometre (nm) scale, is widely used in the manufacture of medicines and treatment of diseases. Nanotechnology would help doctors to remove obstructions in the circulatory systems, kill cancer cells or take over the function of sub-cellular organelles. Nano materials are suitable for implantable medical devices.

The State, which hosts Western Ghats, one of the 25 biodiversity hotspots in the world, and thousands of herbs that developed Ayurveda, a holistic healthcare system, is considered a fertile ground for the life sciences industry to flourish. The Park will assist the existing and upcoming R&D

institutions and the industry players in exploring new growth avenues. It will also be able to help them address their IT-related needs, besides attracting huge investments, both domestic and foreign, in the related areas.

The park comes amid a virtual academic environment and is in close proximity of institutions such as the Rajiv Gandhi Centre for Biotechnology, Sri Chitra Tirunal Institute for Medical Sciences and Technology, Regional Research Laboratory, Tropical Botanical Garden and Research Institute, Institute of Spice Research, ER&DC, CSIR, VSSC and the University of Kerala. The park, close to Technopark - one of the largest congregations of technology companies in India - will be capable of addressing the IT related needs of the rapidly emerging life sciences industry. It is expected that the park will attract huge investments, both domestic and foreign, in the related areas.

The State government promotes the biotechnology industry offering a lot of incentives, which include all the benefits the information technology industry receives. It seeks to create a knowledge base and human resources by establishing world-class centres of education and R&D in biotechnology by upgrading existing institutions and organising new entities in the public and private sectors.

The park comes amid a virtual academic environment and is in close proximity of institutions such as the Rajiv Gandhi Centre for Biotechnology

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INTERVIEW/ Mr GIGO JOSEPH We have no more land available for development in the first phase of Infopark.

Get, set, go The first part of Infopark Phase II will be ready in two years

M

r Gigo Joseph, the new chief executive officer of Infopark Kochi, comes with 16 years experience in the IT industry. He has worked with the global giants in the industry such as IBM, UTStarcom and 3Com in the US. Prior to joining Infopark, Mr Joseph was working as a Group Manager in Infosys at Thiruvananthapuram. His experience in diverse fields such as consulting, business strategic planning, prospecting, sales, product management, corporate turnarounds, corporate reorganisations, global IT management and offshore development management is expected to help establish Infopark as the place of choice for global IT firms. Mr Joseph has assumed office at a time when Infopark is poised for a major expansion. In a candid talk with Aby Abraham G K, Mr Joseph outlines his plans for Infopark.

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What is the current status of Infopark?

The first phase of Infopark has a built up space of 31 lakh sq ft. Infopark currently has 75 companies operating out of it, employing around 16,000 people. Cognizant and Ernst & Young are the recent additions to the campus. The companies in the park achieved a total export of `900 crore this year, a 40 per cent year on year growth. The campus of TCS and the buildings developed by L&T, Leela and Brigade are under construction.

We are setting up a marketing council with representation from IT companies across the globe to promote Kerala as an IT destination

What is the status of the second phase of Infopark, which was launched recently?

The second phase of Infopark is coming up on 160 acres. We have prepared the master plan and the work will start as soon as the rains subside. The second phase will have 80 lakh sq ft of built up space when complete, and will employ up to 80,000 persons. The first building will have 3.5 lakh sq ft space and will be ready for occupation by March, 2013.

We are planning to develop the place along with our co-developers. Space will also be provided for companies who wish to build the campus on their own. We are on the look out for an anchor IT company for the phase. We have also received approvals for an SEZ in 30 acres.

Kerala is following the hub and spoke model for developing IT infrastructure. What is the response of companies to the spokes developed by Infopark?

Currently two of our spokes, at Koratty and Cherthala are operational. Start ups and companies who want to lower their operational costs find them very attractive. We are also seeing interest from rural BPOs. Infopark Koratty, situated near the national highway, in a serene environment, has 40,000 sq ft space.

We already have many companies operating out of the park employing around 300 people. The second phase of the park is being planned, along with an SEZ. We have readied a 1.5 lakh sq ft facility at Infopark Cherthala. Talks are progressing with a few companies for leasing out space there.

How do you plan to market Infopark?

After the recession, the IT/ITES sector is booming again. NASSCOM expects the sector to clock growth rates of 15-18 per cent this year. To take advantage of this boom, we are setting up a marketing council with

It is said that IT companies should have an attrition rate of 10 per cent for the IT ecosystem to remain competitive. A rate below 10 per cent means that employees have lesser opportunities representation from across the globe to promote Kerala as an IT destination. We are tying up with major outsourcing associations such as the German Outsourcing Association to help us increase the awareness about the State’s advantages. Infopark is also engaging property consultants to market the facilities to prospective clients. Targeted marketing of the park with a select group of companies is also being planned.

When can we expect a big MNC in Infopark?

Big MNCs are laggards while opting for space in newer IT parks. Most of the MNCs operate out of Tier I cities only. But the discussions we held with them recently were very positive.

They are looking at Tier II cities for local talent.A few of them have shown interest in coming down and seeing the place. We have big Indian names such as TCS, Wipro and CTS in Infopark, Kochi. So the MNC biggies should also follow soon.

The SmartCity project at Kochi will become a reality soon. How do you view the entry of such competitors in the IT infrastructure space?

We are very positive on the entry of SmartCity. It will help promote the Kerala brand worldwide, and help attract more companies to the State.

This would make it easier for all the IT parks in the region to attract companies.

As more companies come into the State the IT ecosystem will improve.

It is said that IT companies should have an attrition rate of 10 per cent for the IT ecosystem to remain competitive. A rate below 10 per cent means that employees have lesser opportunities and new companies would find it difficult to find good talent to grow. A higher rate would affect the operations of the companies negatively. So it is a win-win situation for all - the employees, companies and the IT parks in the region.

Will Kochi be able to attract senior people from outside? Do we have the social infrastructure needed to attract such people?

Why not? The quality of life offered by the State is the best in the country.

We do have quality schools, hospitals and recreation facilities. Many malls are also coming up in the city. It may not be as prevalent as it is in big metros, but it is there. The view that Kochi lags in these facilities is only a perception problem. The flow of people will be slow in the beginning.

But it will gain momentum soon. I feel that we have reached the tipping point.

Infopark is also increasing the common facilities available for the employees. A day care centre is being planned in the park. The second phase of the park will have a cricket stadium, hotel complexes, convention centres and other amenities.

Some time back a NASSCOM study said that 75 per cent of students coming out from our colleges are unemployable. How do you

view the quality of students in the engineering colleges here?

I don’t think our students are inferior to those from other States in any way. Else how is that they are able to thrive in the industry in other States.

But communication and soft skills need improvement. Our education system discourages people from engaging in constructive discussions in the classrooms. But in the industry we need people to speak out.

The main issue that companies face today is one of scale. When you are recruiting in hundreds it is easy to get good people. But now big companies require thousands of people a year.

This puts a strain on the selection process itself. So we will have to train them to suit the requirements.

Does the Infopark have any plans to start an incubation centre?

Yes, we are planning to set up an incubation centre. Kerala has 5 out of the 38 technology incubation centres in India at present. The proposal is to start an incubation centre under one of these centres.

We have a Smart Business Centre at present that helps start ups set up their office quickly. The centre offers furnished office space with plug and play facilities and common meeting/ interview rooms. Most of the companies in the Infopark are SMEs. Our rates are among the cheapest in the country and we offer all the facilities for them to start their operations quickly.

We have big Indian names such as TCS, Wipro and CTS in Infopark, Kochi. So the MNC biggies should follow soon

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BUSINESS CALLED LIFE

Rain, Rain Come Again This umbrella vendor at Broadway makes hay while the sun dims, literally.

The monsoon brings forth brisk business in the sale of umbrellas, with him selling up to 150 pieces on a rainy day. This year, the varieties on sale include those made

by Kudambasree women self-help units, which cost a little less than `100; and the famous ones with long handles (which Malayalis nostalgically call ‘kalan kuda’) sold for `200. Not to forget the local favourite till last year, the Chinese umbrellas, which come priced between `100 and `200, depending on size, shape and colour. Then there are tiny ones meant for decorative purposes which cost less than `50.

The cheap Chinese umbrellas were sold like hot cakes till last year against home grown Kerala brands, some more than 100 years old. But this year presents a totally different picture. The light weight, low-cost Kudambasree umbrellas have successfully overtaken the Chinese ones.

As the Monsoon intensifies, the sales peak, giving Kerala’s local industries a message: it is not impossible to beat the Chinese at their own game.

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Kuruvilla Chacko

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Fashion

The Kerala couture Kochi International Fashion Week announces the arrival of Kochi couture

K

Kuruvilla Chacko

ochi has arrived. The ‘Queen of the Arabian Sea’ has finally got its share in the world of high fashion with Kerala’s commercial capital scheduled to host the first International Fashion Week from August 4 to 7 at Casino Hotel.

Crafted as the first step towards an organised fashion culture in the State, Kochi International Fashion Week (KIFW) aims to exploit the adaptability of Keralites to evolving global trends. Mumbai-based Storm Fashion Company, which had earlier successfully conducted the fashion week in Chennai, is organising the event as part of its broader strategy to bring Kochi under the gambit of Tier II cities like Jaipur and Chandigarh which are open to an evolving fashion culture. Mr Gaurav Sharma, CEO, says, “With a rising disposable income and the love to adapt with the moving times, there is definitely a potential in Kochi which we expect will surface with the fashion week.”

Popular cine actor Mamta Mohandas has been roped in as the official ambassador for the event which will also feature over 50 models, 20 fashion designers and 16 cultural shows. Hoping to give a fillip to the modeling industry here, the fashion week has put in place a structure encouraging home-bred models alongside reputed ones. An audition was conducted in May to select ten local models while a previous national audition had selected the remaining models for the same.

Talking about the quality of talent available, Mr Sharma says, “The models here, with their limited exposure

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to the global fashion industry, have done well to get selected.” In tandem with the global appeal, the presence of international models such as Miss India Earth, Miss Sri Lanka and Miss Mauritius are also expected.

Facilities are also being arranged to encourage a healthy atmosphere for business and leisure. There will be a 600 seater show area featuring a 30m long catwalk, a buyer’s lounge showcasing the designer’s collection post-show, a sponsor zone, a VIP hospitality lounge providing a conducive business environment for designers and VIP guests in addition to a fully fledged media centre.

The inaugural show will see designer Ms Sanjana Jon showcasing her wares while Kerala-based designer Mr Hari Anand will be the host designer, unveiling a unique range of outfits, the theme for which hasn’t been revealed yet. He along with actor Siddique and Bengaluru-based choreographer Rahul Dev Shetty will comprise the advisory panel for the same.

Priya Kataria Puri, a Bahrainbased designer, will draw the curtains on the event with a show celebrating the spirit of Kerala.

The models in Kochi, with their limited exposure to the global fashion industry, have done well to get selected, said Mr Gaurav Sharma of Storm Fashion Company

RampAge Kochi might be gearing up for a season of ramp walk but the question remains whether a conservative society like Kerala can actually help translate KIFW into a business front.

Mr Sharma of Storm Fashion is banking on Kochi to replicate the model that they have so successfully presented in Chennai for the past two years. He feels that KIFW should be seen as a precursor to increased awareness on evolving fashion trends.

“KIFW will not exactly translate into revenues immediately,” he said. “But there will be a greater level of awareness among designers on the prospects of Kochi as a buyer’s paradise.”

He feels that the city has the potential to add to global fashion in a big way; a reason why his company zeroed in on the city.

Storm Fashion has in place plans to treat KIFW as a B2C event, targeting the customer directly, mainly the globe-trotting upper middle class Keralite. The love for ‘brands’ among the uber cool youth of the city and the increasing purchasing power of a majority of Kochiites, make Kochi a major retail hub of the south. Mr Sharma also feels that the nearby

Popular actor Mamta Mohandas is the brand ambassador of the show

town of Thrissur provides a potential market for designers.

Agrees Mr Sunil OG, president of the Fashion Federation Kerala: “The event will change the dynamics of fashion in the State. The Lakme Fashion Week in Mumbai, the Wills Fashion Week in New Delhi and the recently organised fashion weeks in Chennai have all been well received, even though they haven’t done major business. Today, the cultures of these cities have been seamlessly woven into the global fashion scene. Same will happen after the KIFW.” The major fashion weeks in India are more of glamour and culture than business, and Kochi will be no different. But according to him, the KIFW will encourage more such shows, focusing on the State’s local handlooms as a viable fashion material in the future. “With increased awareness, people here will soon be seen buying the showcased stuff, which will translate into revenues and help local industries that dabble in local clothing material generate business.”

The boutiques sprouting in the city’s upcoming residential areas could be one direct beneficiary of the event.

The fashion week will be a perfect platform for them to upgrade their collections as well as inculcate an in-

What you wearing today? The KIFW is expected to bring in the much needed style check and a new level of fashion consciousness among the city’s residents. (In pic: Actor Mamta Mohandas, brand ambassador of the event)

The inaugural show will see designer Ms Sanjana Jon showcasing her wares while Kerala-based designer Mr Hari Anand will be the host designer, unveiling a unique range of outfits

terest among buyers about designer brands. New boutiques could sprout up raising the competition in designer clothing to a new level.

Ms Shima Peter of Threads Clasiks, a boutique in Kochi, feels fashion in Kochi is still in its nascent stage and it will take time to translate fashion shows into business opportunities. She has no plans to make any real purchase but is excited about upgrading her personal wardrobe and getting to see newer designs right here instead of making her usual travels to Mumbai and Bangalore for the same. “Hopefully I will see variety stuff, which could be used to upgrade my store.”

The week long fashion show will also help improve the thought process and work culture of budding designers in the various fashion designing colleges in and around the city. Says Mr Sharma, “By taking part in the fashion week as backstage helpers, they could get to taste the professionalism associated with such events.”

Adds Mr Sunil, “KIFW gives them a chance to get a ringside view of national designers and styles, thereby helping them to raise their standards.”

KIFW, with all its hype, stands to make a serious impact on Kochi’s fashionistas, and add another feather in the cap of the city slowly emerging as a serious destination for art, culture and fashion in the south.

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cover

34

g n i r o h c n A wth o r g T he Cochin port has always been the anchoring point of Kerala’s growth. Ever since it came into being in the fifteenth century, to its transformation as an all-weather port and its naming as a major port in 1936, the port has been Kerala’s gateway to the world. Today, it is making the economic activity going by hosting the Vallarpadam ICTT, the LNG terminal and two port-based special economic zones. In the pipeline are a slew of projects that will add significantly to the industrial growth of the State as well as ensure a bright future for the port. It is planning to overhaul the entire operations to gain a refurbished look and to add to Kerala’s emergence as an investment destination.

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“

Aby Abraham G K

I live on a large island made from the bottom of the sea. It is called Willingdon Island, after the present Viceroy of India. From the upper floor of my house, I look down the finest harbour in the East.”

That was a proud Sir Robert Bristow, the architect of Cochin Port, delivering an address on the BBC in 1935. He was invited to talk on the unique engineering feat he and his team achieved in what was the jewel in the crown of the then British empire.

The Cochin Port has in the past 75 years anchored most of the important development projects of Kerala. Though not comparable with industrialised States, Kerala continues to be in the leadership position in international trade in several sectors including spices, coir, cashew, handloom and processed food. In the last decade, the port hosted several huge projects which, in the future, will de-

termine the economic growth of the State. They include the Vallarpadam International Container Transshipment Terminal, the LNG terminal and the single point mooring facility of Kochi Refineries.

With the port sector the world over promising to show tremendous growth, the Cochin Port Trust also has drawn up an ambitious growth path. They include several projects including an outer harbor at Puthuvypeen, rationalisation of the island land by creating a business district, a multi-model logistic hub, a free trading warehousing zone, a mini ship

The Port is contemplating redesigning the island by reserving the entire waterfront area on the north for port-related activities

Queen Mary, one of the largest cruise ships, comes calling at the Cochin Port.

The port hosted 42 cruise vessels, the largest number for a port in India, last year

36

yard and a multi-user fuel terminal.

Logistics hub “We would follow the model other successful ports such as Singapore have adopted,” said Mr Paul Antony, chairman, Cochin Port Trust. “They have very effectively used every square inch of land and created infrastructure to improve business.”

The Willingdon Island, on which the port stands, at present hosts several business establishments in a rather haphazard, sub-optimal manner. “We would like to have a more scientific use of the precious land,” said Mr Antony.

The Port is contemplating redesigning the island by reserving the entire waterfront area on the north for port-related activities, which includes creating more storage facilities. A multi-model logistic hub is top on his agenda. “We need to assess the future requirements of the Port and get ready for that. Logistics is one of the important factors

“We would follow the model other successful ports such as Singapore have adopted,” said Mr Paul Antony, chairman, Cochin Port Trust. “They have very effectively used every square inch of land and created infrastructure to improve business.”

that will decide the success of a port.”

He said a multi-modal hub will be the most efficient model, as is the case in most of the busy ports across the globe. With Vallarpadam ICTT picking up steam, the project is expected to have a captive demand.

A free trading warehousing zone, which would attract a lot of investment in view of the fact that it is situated close to the Vallarpadam ICTT, is also in the pipeline. Spread over about 100 acres, the project with the status of a special economic zone, will be able to house facilities from where major companies can run their distribution network for the entire south India. The facility will benefit all the players—the Port and the ICTT will get higher revenue from the increased traffic while companies will be able to find it the most costeffective destination.

Multi- User Liquid Terminal The project envisages development of a multi-user liquid terminal to handle bunker fuel and other POL cargo excluding crude oil and LPG,

with a capacity of 4.10 million metric tonnes per annum. The project consists of a main berth, barge loading berth, loading and unloading arms/hoses at both the berths, storage tanks, exchange pits and cross country pipelines for bunker fuel and other POL cargo.

The project, which will come up on a public-private partnership route, is proposed to come up at Puthuvyepeen. The Indian Ports Association has already completed a feasibility

The completion of the Seaport-Airport road would add to Kochi’s attraction because tourists who get down at Cochin Port can catch their flight to other Indian destinations without going through the city traffic

study on the project.

International Cruise Terminal-cum-public plaza The Cochin Port handles the largest number of cruise liners in India; last year, 43 ships came calling at the port. However, the port at present does not have a dedicated cruise terminal. At present, vessels are berthed at existing cargo berths according to availability. It has been recognised that the nature of the port infrastructure plays a significant role in the selection and determination of a cruise destination, as does the prominence of the destination itself. Provision of adequate service facilities and tourist attractions in the vicinity of the proposed terminal would further help in value addition.

“We have already set up some basic facilities for the visitors, but would want to do more,” said Mr Antony. “Even though it does not bring in lot of money to us, it would be a big boost to the State’s tourism sector.” The completion of the Seaport-Airport road would add to Ko37

The recently launched Ro-Ro service offers a cost-effective and environment-friendly alternative for container movement

chi’s attraction because tourists who get down at Cochin port can catch their flight to other Indian destination without going through the city traffic.

A world class International Cruise Terminal in the northern end of the Willingdon Island. Through this, it also seeks to establish a stronger linkage between the Port and the people of Kochi.

Mini ship yard Shipping is on an upswing the world over; and so is ship-building. The order books of shipyards across the globe are overflowing, and several of them would not be able to take up fresh assignments for decades. This, along with the materialisation of the other proposed projects in Cochin port, are expected to create a huge demand for ship building and repairing. “We see a lot of opportunity for ship repairing in particular,” said Mr Antony. “Irrespective of the size of the vessel, they require annual maintenance and repair. That apart, there is a huge, and increasing demand for 38

small vessels,” he said. One of the key attractions of the project is that it will create a lot of employment, he said.

The port already has a dry dock and ship repairing yard in this area, and was planning to refurbish the same. The port has already identified land for the project, to be developed on a public-private partnership initiative. It has all the advantages needed for a shipyard which include water frontage and channel among others.

The proposed business district, spread over 56 acres of land, will have a township and commercial office space, multistoried godowns, storage facilities, warehouses, parking space, hotels and recreation facilities

“The project would be implemented only by safeguarding the interests of the employees who are already working with us,” said Mr Antony.

The Business District All these projects call for a reassessment of the present day land utilisation and an effective plan. The creation of a new Business District is the product of this thought process. The proposed business district, spread over 56 acres of land, will have a township and commercial office space, multistoried godowns, storage facilities, warehouses, parking space, hotels and recreation facilities. It will be able to host the present lease-holders who are not connected with the core business of the port, and free up land for future port-related activities.

The port has already commissioned a study for the purpose. It will cover areas such as the assessment of business potential of the Port Trust for different cargo, both currently being handled and those which may

be handled in the future, traffic forecast and planning the functional requirements of the port, apart from the proposed business district. The study will also cover different investment models and financial structuring, including viability analysis, and an implementation schedule.

Outer harbour With shipping accounting for up 90 per cent of the foreign trade, the Port envisages a big growth potential in the future. “If we are looking to the future, then we will have to create additional infrastructure,” said Mr Antony. An outer harbor, in addition to the existing facilities, is one option to ensure that it can meet future requirements.

The Cochin Port proposes to construct a deep-draft outer harbour off the Puthuvypeen coast by reclaiming approximately 1200 acres.

This will be done by constructing 5 km of breakwaters on the northern

and southern sides of the channel. It would effectively block the NorthSouth littoral drift, which will lead to continuous accretion of land in the area. Being located close to the navigation channels in the outer harbour area, the dredging expenditure for this proposed terminal will be far less than what is being incurred now.

The project could include a container transshipment terminal which would be able to handle the next generation container vessels with a capacity of 12000 TEUs and above.

The preliminary proposal is to plan

Irrespective of the size of the vessel, they require annual maintenance and repair. That apart, there is a huge, and increasing demand for small vessels

1341: Flooding of Muziris, emergence of Kochi harbour 1500: Portuguese Admiral Cabral reaches Cochin 1836: The first chart of Cochin Port drawn up 1859: Capt. Castor takes charge as first Port Officer 1870: J.H. Aspinwall moots a sheltered harbour in Cochin 1921: Robert Bristow named as port engineer 1928: S.S. Padma, the first vessel, enters the harbour.

1936: Government declares Cochin a major port 1939: Mattancherry wharf commissioned 1939: Ernakulam wharf commissioned 1974: President Tyler, first container vessel, berths in Ernakulam Wharf.

1982-83: Traffic crossed the Five Million mark.

1985-86: The idea of Vallarpadam ICTT mooted.

1986-87: Vallarpadam project approved 1994-95: Rajeev Gandhi Container Terminal commissioned.

2005: Foundation for ICTT laid.

2011: ICTT at Vallarpadam commissioned.

for a transshipment terminal with an initial capacity of 5 million TEUs (62.5 million tones) and other terminals handling bulk and liquid products to the extent of 40 million tonnes.

The project would draw on the strengths of the Vallarpadam ICTT, which is built by Dubai ports International on 30 year build-operate-transfer model. Puthuvypeen is connected by road to Vallarpadam; extending the rail connectivity to the area involves only an additional two kilometers of rails. Preliminary estimates suggest that the project would involve an investment of `2640 crore. The Port has already moved ahead with the project and called for tenders for the preparation of feasibility report for development of an outer harbour.

Bristow called Cochin ‘the finest harbor in the East’. The timely implementation of these projects will ensure that it will continue to be so.

Setting the sails…

T

he origin of the Cochin Port traces back to AD 1341 when a flood destroyed the Muziris port and threw up a port in Kochi. Trade through Cochin started to flourish when Vasco Da Gama discovered the potential of exports of spices of Kerala. With the advent of the Portuguese, the Dutch and the English, the Port of Cochin started to gain importance.

Sir Robert Bristow, the harbour engineer specially deputed to Cochin, is considered architect of the present modern Port, which was developed during 19201940. He was responsible for the daring engineering feat of cutting across the rocklike barrier of sand and silt at the mouth of the harbour to open up the present Port located on Willingdon Island, reclaimed from the backwaters with dredged soils.

By 1930-31, the Port was formally thrown open to the vessels of up to 30 ft. draft.

The government declared it a major port on August 1, 1936.

39

Digital world

The virtual watchman Digital security systems provide increased protection for domestic and industrial purposes and are easy to install, employ and maintain Kuruvilla Chacko

M

r Abraham Thomas* monitors the safety of his Kochi apartment sitting in his Dubai office. “I log onto my unique Internet Protocol address and track the happenings in my unoccupied house, thanks to real time data transmitted by the IP camera installed inside the apartment,” he says. Being wireless, the cameras were easy to install and custom built to suit his requirements, enabling him to fully control access to his house.

Call him a victim of his own sense of insecurity but he would rather have technology help him sleep peacefully, knowing well that he has a third eye fixed on his home.

Do not discount it as a case of par-

40

anoia gone too far. Consider, instead, the recent spate of security breaches in an otherwise safe State. And with nuclear families becoming the norm and neighbours maintaining minimum contact with one another, electronic security systems provide people like Mr Thomas an assurance that ‘all is well’.

E-security devices have over the past decade gained prominence in

Easy to install and maintain, IP cameras cover a wider area of view and provide real time data to owners through Internet

business establishments, industries and homes as a convenient form of 24x7 protection against theft and fire. Some, even help keep a watch on watchmen themselves!

Evolving from the basic door bell system to the simple burglar alarms, security systems have taken a quantum leap forward with the digital age.

CCTV cameras, video door phones, biometric entry systems, and fire, glass-break and intrusion alarm systems: the possibilities are many. These devices employ a range of technologies, from basic circuitry to hi-end electronics to provide superior resolution, long life and minimum maintenance.

The intrusion or burglar alarm systems, for example, can be installed at the entry or exit points of the house

41

Zicom has a 24x7 central monitoring facility which receives an alarm signal from any one of the devices when a break-in occurs. It then alerts its executives who inform the owner with minimum hassle and emit IR, UV or any other electromagnetic wave. The device sounds an alarm upon encountering any variation.

They can be set manually or automatically at a pre-set time daily and can be operated from the room of the user.

The devices store tamper-proof, digitally watermarked data, offering full protection.

And the customer has the option to choose wired or wireless systems.

“Wireless is easy to install,” says an official from Godrej & Boyce Ltd, which offers a variety of security systems. “However, it should have proper line of sight for operations to be feasible. For wired systems, one should consider the distance to be covered and the hospitability of the terrain.”

According to him, most clients nowadays prefer wired security using optical fibre cabling, since they are reliable even in varying climatic conditions.

Internet and its applications have also been incorporated in certain devices, so they have panoramic view, artificial intelligence and video stitching facilities which provide foolproof security. The advanced form of a CCTV— the IP camera — stands testimony to that. “Easy to install and maintain, these devices cover a wider area of view and provide real time data to owners through facilities like Internet, helping improve security features,” says Mr Cherian of Zicom 42

Electronic Security Systems.

Multiple cameras are connected to a single server, working very much like a computer network system, providing data over a particular web address. The video stitching facility helps to combine data from different cameras into one single rectangular screen, thereby providing a 3600 view of the desired locations.

Also, an instant SMS feature is available, wherein a message is sent either to the owner’s or to a friend’s mobile number in case of a possible breach in security. Says Mr. Cherian, “We have a 24x7 central monitoring facility which receives an alarm signal from any one of the devices when a break-in occurs. It then alerts our ex-

Digital Homes, a project of Assets Homes, has installed a foolproof digital security system.

Its video stitching facility helps to combine data from different cameras into one single rectangular screen, and helps close monitoring

yers n pla Mai mens Sie ch Bos m Zico Boyce & j re God

ecutives who inform the owner.” The owner could also inform the police, thereby providing a cushion of safety for the user.

Ms Shuba Daniel from Ernakulam is one such resident who benefits from this service. Having employed Zicom’s alarm systems at her home, she can breathe easy that she will be notified in the event of any possible intrusion. “The device gives me complete sense of peace.”

Going digital Kerala for all its claims as a relatively safe State is among those rapidly adopting e-security solutions. With homes growing vertically and manufacturing facilities growing horizontally, it is unviable to engage watchmen for all facilities. Rather, digital systems can do the job with a single person monitoring outputs from different types of security devices installed at various parts of the building.

Says Mr Cherian, “Only industries and commercial establishments were interested in the facility earlier.

But now builders and architects also show interest in installing them in homes and apartments.”

Mr Vinod Joseph from Fort Kochi has installed video door phones, motion sensors and intrusion alarms at his home here. Being a businessman always on the move, such systems guarantee a sense of security for his family while he is away. “The concept of secure surroundings is not a rela-

tively safe option to bank on today,” he said. “We need to be alert and today’s e-security devices provide just that, combining the best technologies to suit purposes both on the domestic as well as professional front.”

The systems are wireless and are connected to his room enabling him to switch it ON/OFF based on his sleep timings and preferences. “The video door phone in particular helps to keep out unwanted salesmen or strangers.”

Wanting to incorporate modern security into their projects, Kochibased Asset Homes has employed e-security systems at two apartment complexes they built in Kochi and one in Thiruvananthapuram. Keeping in mind the different timings of work for different members of the family and the safety concerns of apartment owners, these buildings are under digital scrutiny right from the entrance. “The apartments feature multi-door video phones, biometric entry systems, IP cameras, automatic gate openers, intrusion alarm systems as well as glass break alarms,” Mr Sachin Salim of the company’s marketing division, said.

The biometric entry system is prefed with the fingerprints of the mem-

The average cost for setting up a digital security system works out to anywhere between `10,000 to `30,000, depending on the model and range

bers of the household and open only when a recognisable finger presses it.

This enables them to enter the home anytime without bothering others. It also obviates carrying the keys. The systems can be placed adjacent to the doors and are connected to the locking system of the door.

“Such systems provide relief when the residents go holidaying for a few days and do not have a regular contact with their neighbours,” Mr Salim pointed out.

Cost of security Despite having such modern technology at play, these systems do not cost a bomb, according to Mr Cherian Varghese. Agrees Mr Salim: “The installation of such systems did not raise the cost of the apartments drastically.”

The average cost for setting up a digital security system works out to anywhere between `10,000 and `30,000, for a domestic household depending on the model and the range. Ms Shuba shelled out `10,000 for the alarm systems. Mr Joseph spent around `15000 to set up two sets of alarm systems at his house, while the video door phone cost him about `12,000. “A minor cost for better security,” as he says.

ons opti systems r u o Y rm ms n ala tr y syste s o i s Intru etric en eak alarm Biom glass-br ameras , Fire CTV c phones C or o do e d i V 43

Health

To skip or not to skip

That is what many worry about breakfast when they want to lose weight. But eating intelligently, and not skipping food, is the best option

W

Asha Jacob

atch your weight, you have often been warned. Terrified, you choose to bring all those dietary controls you have heard all your life. You skip your breakfast, cut down on lunch and starve yourself in the evening. On the third day, alas! you are back to the old diet. And with a vengeance. All that could remain of

your diet control days would be the decision to skip breakfast.

An unhealthy decision. Even a

Breakfast alone is expected to provide 30 to 40 per cent of a day’s calorie requirement South Indian breakfast options such as idlis and dosas are a proper package to supply the necessary nutrients to a body starved for about 10 hours.

44

dangerous one at that.

It is estimated that a healthy human being requires a minimum of 1600 calories a day which could go up to 2400 calories, depending on factors such as physical activity and age.

Breakfast alone is expected to provide 30 to 40 per cent of this requirement; lunch, dinner, snacks and all other food one takes through the day, together, would contribute the rest.

Hence, breakfast is said to be the most important meal of the day. That you feed your body after a gap of about 10 hours also adds to the importance of breakfast.

“The blood glucose level is at its lowest in the morning compared with other times of the day,” says Ms Mumthaz K Ismail, consultant nutritionist, National Rural Health Mission, Ernakulam. “One must replenish the glucose level as it is essential for the normal body and brain functions.

A wholesome breakfast is the only way to do it.”

Breakfast needs to have a good balance of protein, fat and carbohydrate to provide the right amount of energy so that one can have an energetic start to the day’s activities.

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Food control or weight loss can be made possible by eating a proper breakfast rather than skipping it

Those who look for lighter food can go for oatmeal, porridge or steamed banana

If you are a good eater, and still want to cut down on the calories and weight, then you have intelligent options. Dieticians suggest a six-meal pattern If you skip breakfast to lose weight, then beware. It could be counter-productive. “Skipping breakfast leads to hunger attacks, resulting in overeating during lunch and dinner,” says Ms Bulbin Jose, dietician, Lakeshore Hospital, Kochi. “Energy utilisation for anyone is the maximum before lunchtime. Breakfast kickstarts a person’s body metabolism. Skipping breakfast results in low metabolic rate until lunchtime, or whenever it is that you do eat. So diet control or weight loss can be made possible by eating a proper breakfast rather than skipping it.”

Skipping the breakfast could result in having a heavy lunch and more craving for sweets, which have got a negative effect on diet control, she says.

Ms Ismail insists that a proper breakfast, not its avoidance, should be part of a good diet plan. While a regular breakfast helps in better performance on mental tasks and challenges, its absence could force one to be lethargic and low on energy levels.

If you are a good eater, and still want to cut down on the calories and 46

weight, then you have intelligent options. Dieticians suggest a six-meal pattern. “Have a light breakfast, midmorning snack, lunch, evening snack, dinner and bedtime snack,” says Ms Ismail. “Mid-morning and mid-evening snacks should be a fruit bowl or a glass of butter milk. This is found to be very effective for many people. As food is divided into different portions and taken at different times, people do not feel that they are on a diet. The light meals help reduce weight,” she says.

If weight control is your reason for skipping breakfast, you should have a proper diet plan, rather than following some arbitrary ones. Normal south Indian breakfast such as idli and dosa are eminently eligible to be part of it.

Those who look for lighter food can go for oatmeal, porridge or steamed banana. Oats is very rich in soluble fibre. Non-vegetarians can add egg to an oats breakfast. “Add a glass of milk, and you get a complete breakfast that meets all nutritional requirements, including that of calcium,” says Ms Ismail.

Corn flakes and other variations of natural cereals based on corn, wheat and oats are very healthy options. They provide a high-fibre, lowfat diet. Oats is absorbed slowly and provides a steady release of energy that lasts for several hours. Most commercial breakfast cereals contain added nutrients in the form of vitamins and minerals, especially B vitamins and iron. A good breakfast will stabilise the blood sugar, emotions and

nervous system.

Even people who know the importance of breakfast may not find enough time to cook in the morning.

Easy options like porridge and oatmeal can help cook the breakfast in a few minutes.

Unhealthy eating practices like skipping meals and irregular eating patterns can lead to gastro intestinal reflexes, ulcer and indigestion. One should consume less of fat and cholesterol. Breakfast helps lower cholesterol, which helps reduce heart diseases.

Include more of leafy vegetables along with rice or chappati for lunch.

Ensure that the quantity of rice is small, and it has fruits and vegetable salads. Fishes like tuna and salmon are rich in omega 3 fatty acids and promotes health. “Grilling, steaming and baking ensure that the food has the least possible calories,” says Ms Jose.

Consider sprouted pulses for lunch or dinner. Rich in Vitamin C, and several other nutrients, it also helps reduce calorie intake.

After all, haven’t you heard of this age-old diet plan: eat your breakfast like a king, lunch like a prince and dinner like a pauper?

Even people who know the importance of breakfast may not find enough time to cook in the morning. Easy options like porridge and oatmeal can help cook the breakfast in a few minutes

THE INSIDE VIEW

Ten years ago, if a person said he was a software engineer, the response would have been a generous mix of awe and appreciation: the brainy people who can convert anything into ones and zeros, enjoying a jet-setting lifestyle and comforts of easy money. And to add, they were on a sure shot path to an ideal partner-in-waiting.

Fast forward to the present.

It is no more considered a unique achievement. The perception has changed. The understanding of the job, however, has not got better.

It still remains a youth oriented job with odd working hours and a leisurely lifestyle.

But unknown to many, below the rush and hush of a software job, lies a whole world of creative and hard working team.

How do teams of people drawn from different regions create executable programmes that run almost every aspect of modern society? What goes into the minds of those young men and women who type away codes unendingly? What is that roller-coaster ride of coding?

A young electrical engineerturned-techie at Infopark takes us through it.

Portrait of an engineer as a techie I

had grudgingly become part of the pool of IT engineers, appearing all over the country.

It seemed to be the most sensible (and standard) route to take after a futile CAT attempt and a desire to take it up again the coming year. Joining a company and preparing concurrently for CAT, besides being the safest option, had three bonus points.

Vinita Venugopal

CAT or no cat, I always land on my feet

47

a. My work-ex column needn’t be left blank b. I will at least have the funds to sponsor the applications of my future pursuits. c. What’s the point in getting an MBA without an on-the-job involvement, anyway? Please do not think this is a story of sour grapes. After failing in CAT—I have discovered to my great satisfaction that many IIMs prefer working executives to greenhorns.

Vowing to plunge myself into CAT preparation and unquestionably bell the cat this time, I set myself a strict schedule which would be put into action after office hours. I decided that my tryst in software would last but a year.

And it would have, had I been chosen to work in a project for which the company had NOT made a wrong estimation for.

Miscalculating the complexity of a project is by no means trifling. It means less billing, a complex design and a very close deadline.

And that would equate to long (unpaid) working hours, working weekends and no compensatory offs. In a nutshell, my cat flew off to Mary’s court!

It’s all about code. Of a different kind How in the world was I expected to write Java code to implement the complete investment processing at the click of button? Those precious two months of training hardly equipped me with the skills to do the job. The training was more on the Friday dress code than the Java. The few sessions on coding consisted of writing a code to print “Hello World!” Take my word.

who blinks first

If something has to go wrong, it will.

Calculations included.

A hectic schedule also means that the associate is not well aware of the business aspect of the project. KT or knowledge transfer and induction sessions which involved enlightening us fresh-faced tenderfoots on who our clients were and various business aspects of the project were conducted simultaneously with our assigned tasks and were wrapped up in less than a week. I was given the algorithm of the code on day one of my joining the project and a deadline on day two. Was it audacity or confidence in their system that they assigned a complex algorithm to me, a clueless fresh-from-thetraining-centre beginner? Hebrew would have been easier to decipher, I thought.

48

In college I used to fiddle with resistors and diodes; C++ had been my Nemesis. I will never forget the pure joy I experienced while seeing the bright black ‘C’ shining next to my name while checking for the lab exam grades. I even celebrated it with pathiris and chilli chicken from Hotel Mandakini (a luxury in those days when along with the rupee came a sermon and a free frown).

Where there is will, there is a file to download

49

The first thing that caught my attention in my first week as a code developer was the fact that most associates used code snippets from the net and implemented it in their codes.

My respect for the software profession touched level 0, but I was convinced coding might not be as bad as I imagined it to be. Another week into the project and I realised I was mistaken.

Coding requires knowledge. But more importantly it’s about technique. Even the most technically equipped coders run a quick search in Google to find out the right format of an implementation. This improves with practice and experience. However the efficiency of an application, my dear readers, comes from, what my bright Hyderabadi colleague calls, “Lojzeek”!

this sense of responsibility came willingness to give up individual advancement for team benefit.

Jack of all trades

It worked Interestingly what my training didn’t give me in two months, my project definitely did in a few weeks: creating an enthusiasm. MY code was going to be implemented in a real time environment and MY logic was going to be used in some distant Timbuktu. When it really sunk in, that the software we developed could do wonders and take another company’s infrastructure and productivity to new levels, I realised that my job shouldn’t be about the trudge and toil involved.

It was our responsibility as software engineers to deliver a superior product for the benefit of our client. And with 50

A software job was synonymous to team work and coding certainly was not just about sitting in front of a Lenovo and typing away till your fingers became numb. It involved actual strategizing and conceptualizing of an idea rather than making automatons of all of us. It involved analysis of the design, discussions on efficiency, deliberations with the testing team, (buckling my 'cat' up in the back seat) and much more.

Pushing my initial cynicism aside, I ask myself; aren’t all the issues I mentioned faced in every profession?

Aren’t we improving our own skills as multi-taskers and managers by dealing with these hitches with a cool head?

Hasn’t my job helped me improve my technical skills faster than any book or theory class ever shall?

I am working as an engineer for Asia’s largest software exporter, a truly dignified profession. True, some 30,000 other engineers end up at the same place, but does the number degrade the value of a profession? I think not.

Maybe the path well trodden needn't be without learning. On the contrary, a software job has taught me team skills and people management like no other job can. My stint in software is undeniably going to advantage my adeptness as a Manager.

I am a lot more soft on software now…

Tourism

Bigger, better The Kochi International Marina hosted more than 100 yachts in the first year. It has to upgrade facilities to retain traveller interest

K

Kuruvilla Chacko

ochi’s tryst with the high seas continues. While the International Container Transshipment Terminal has just started hosting bigger ships, the Kochi International Marina has enjoyed a dream first year for itself with the smaller ones.

Functioning as an anchor point for yachts, the country’s only marina has established its name among sea faring adventurists in the Indian Ocean region. And in the process, it also added star value to Kerala as a hub of sea tourism.

Set up along the tranquil waters surrounding the Bolghatty Palace Hotel, the marina started functioning in April 2010 as a direct venture of the Kerala Tourism Development Corpo-

ration (KTDC). Although the plan for a marina was two-decades old, the Volvo Ocean Race 2009, which had Kochi as an anchor point, convinced every one about its potential. That there is no marina between Salalah and Male also helped the cause of the Kochi Marina.

Constructed by Sharjah-based Gulf Marinas, it has 37 floating docks built on concrete beams. Its shores provide a depth of up to 2.5 metres, enabling small and medium-sized yachts to berth here. The board walk - a wooden structure protruding into the backwaters - helps tourists see the yachts. The Marina House, located adjacent to the berthing area, has 24 deluxe rooms including four suites, a recreation centre and cafeteria.

The Kochi Marina maybe a small-

English sailor couple Mr Jamie Furlove and Ms Liz Cleere in front of the marina

er cousin of the major marinas across the world, but it is more than sufficient to meet the present demand, said Cdr Jose Verghese, vice-president of Ocean Blue, the Mumbai based company that manages and operates the marina on a three year contract with KTDC. Last year, the marina was home to around a hundred yachts and small boats, majority of them foreign-owned. The peak number was a healthy 30-35. The traffic meant that the marina recovered 20 per cent of its initial investment within a year of operations.

The marina receives its revenue mainly during the period between November and May when good weather and calmer seas attract greater yacht traffic to this region. “In the monsoon season though, yachts dock here for 6-7 months at a stretch until they can resume their voyage,” Cdr Verghese said. Thus it is able to generate income round the year from yachts on the move and those stuck due to rough seas. “Sailors who anchor here use Kochi as the base point for touring the rest of the subcontinent or come for a quick refill, in which case they tour Kerala on land, before resuming sailing,” he said.

“We may not have generated much tourism investment directly, but revenue has been flowing indirectly through the sailors who berth here,” says Cdr Verghese.

Pirates Ahead!

The traffic in the first year would have put to rest any scepticism associated with the project but instead, the ma51

rina today faces erratic bookings due to issues from an unlikely entity: sea pirates.

Says Cdr Verghese, “The traffic this year is lesser than last year’s, owing to increased pirate attacks in the Gulf of Aden.” Over the past three months alone, around 140 cases of sea piracy have been reported, with more than 90 per cent coming off the Somalian coast.

“Since most of the yachts come from Europe and the Americas, sea piracy makes it a risky affair for them to cross eastward of Africa, along the Suez Canal to the subcontinent,” he said. “This, coupled with the rough seas along the Kochi coast during the months of June-November, has forced sailors to re-think on their travel plans.”

Mr Scott Ryder, an American sailor, is one such reluctant traveller. He set sail in 2002 after resigning from his job as a fireman to circumvent the globe. He has crossed half the globe at his own sweet pace. But now, he fears crossing westward of India and believes his dream will remain unfulfilled. He has been touring the country since the start of the monsoons and he doesn’t have a plan to tackle the pirates, once he sets sail again next January. “My hopes of circumventing the globe have for the time being been put on hold,” said Mr Ryder. “I will be leaving in all probability back through Thailand and China Sea to the US.” Cdr Verghese admitted that fear of pirates is a definite turn off for sailors,

52

“Sailors who anchor at the Kochi marina use it as the base point for touring the rest of the subcontinent or come for a quick refill, in which case they tour Kerala on land, before resuming sailing,” Cdr Jose Verghese said who enjoy a sense of adventure. The only alternative is to sail around the Southern African tip, which is a very cumbersome affair. Cdr Verghese said his company would explore newer markets as an alternative to increase traffic to Kochi.

That the marina is not equipped with all world class facilities is another deterrent. Mr Jamie Furlove, an English sailor, says a Wi-Fi connection and a proper repair yard would make it a truly international marina.

Many marinas offer better facilities at lower berthing costs, he said, adding, “I do hope that Kochi will also offer them soon.”

Currently, the depth at the shore of the Marina does not permit bigger yachts of 70-80 ft length to berth here. They prefer Male or Colombo, instead. “There were more than 14 yachts when we berthed here last

year,” said Ms Liz Cleere, wife of Mr Furlove. “All others have now left for better marinas in the Philippines and Thailand.” She, however, insists that Kochi has the potential to be a world class marina.

KTDC officials said plans are afoot to set everything right. Mr Bilal Muhammad, assistant manager at the KTDC-run Bolghatty Palace Resort, said the Marina was conceived to be implemented in two phases. “At present, we have completed the first phase,” he said. “The second phase will not just add new berths but also have modern technology in place. A fully fledged repair yard and a dry mooring facility which will enable boats to be parked on land, are also being planned. This will not just give more docking space, but also encourage bigger yachts to come in.”

The bigger, the better.

53

Personal Finance

Fixed Maturity Plans

An alternative to FD Fixed Maturity Plans offered by mutual funds are a tax-efficient alternative to bank fixed deposits

E

very crisis has people longing for security. The chaos that accompanies it puts a premium on certainty. The global financial crisis has been no exception. Equity markets the world over have remained volatile and the returns from them have not been impressive in the near term. At the same time, the rising interest rates are offering a safe option with decent returns in the form of debt investment to investors. Not surprisingly investors are turning to them in large numbers.

Bank fixed deposits (FD) are the preferred debt investment for people wanting to ensure the safety of their capital. Fixed Maturity Plans (FMP) are a tax- efficient alternative to FDs that could help you increase your post-tax return substantially.

What are FMPs? FMPs are closed-ended mutual funds which invest in fixed-income securities such as certificate of deposits,

The returns from FMPs will be similar to that of FDs of a similar term, but they score over fixed deposits in their tax treatment 54

The charges associated with FMPs are low compared to that of other mutual funds. This is because FMPs follow a passive management style, holding securities till maturity commercial papers, government securities and corporate bonds. They have fixed maturities usually ranging from 15 days to 5 years. FMPs take in funds only at the time of the initial offer and invests them in securities that mature just before or on the scheme’s maturity date. It redeems the securities as the maturity date approaches and pays back the money to the investors.

FMPs are less riskier than equity mutual funds as they do not invest in equities, the class of assets that have substantial price volatility. They also mitigate another risk faced by bonds: the interest rate risk. The price of a bond changes inversely with the interest rate. When interest rates increase, the prices of bonds decreases as investors would prefer securities with higher yield than the existing ones which have low yield. The opposite happens when the rates decrease. By holding securities till the maturity date, FMPs avoid the risks associated with a changing interest rate. But they also lose the opportunity to profit from interest rate variations.

FMPs face two types of risks though – credit risk and liquidity risk.

As other debt instruments, it faces the risk from default in interest payment or redemption by the borrowers, known as credit risk. In general, the higher the interest rate, higher will be the risk of default by the borrower.

FMPs try to reduce the credit risk by investing in instruments that have a good credit rating.

Another risk that FMPs face is the liquidity risk. The secondary market for bonds is not well developed in India. So FMPs which invest in them will face difficulties when they try to sell the securities in unavoidable cir-

cumstances. But since they hold on to their investments till maturity, this is not much of an issue.

Keeping these risks in mind, FMPs are not permitted to guarantee or even indicate the returns they would offer as is done by fixed deposits. The returns from FMPs will be similar to that of FDs of a similar term, but they score over fixed deposits in their tax treatment. The interest income from FDs are added to the taxable income and taxed at the applicable slab, 30.9 per cent in the highest tax band. But the dividend declared by

Fact File Minimum Investment : `5000/Term: 15 days to 5 years Charges: Exit load: 1-2 per cent (if exit option is available) Entry load: nil Management fees:0.25 to 1 per cent

an FMP is not taxable at the hands of the investor, even though a 14.03 per cent dividend distribution tax has to be paid by the fund house for retail investors opting for the dividend option. The gains on selling FMPs come under capital gains tax. If the FMP is sold before one year of purchase, short term capital gains at a rate of 30 per cent will have to be paid. If the sale is after one year of purchase, long term capital gains tax will be applicable.

The LTCG is 10 per cent without indexation and 20 per cent with indexation. FMPs also allow the investor to claim double indexation – by buying units just before the end of the current financial year and selling them immediately after the end of the next financial year.

The charges associated with FMPs are low compared to that of other mutual funds. This is because FMPs follow a passive management style, holding securities till maturity. The fund managers do not have to review the performance of the securities and make buy/sell decisions on a regular basis. Hence transaction costs and management fees are lesser for such funds. In general they charge anywhere between 0.25 to 1 per cent per annum as charges.

Investors can usually redeem the fund units only at the end of the tenure. Some funds provide investors with an exit option, but deduct an exit load between 1 per cent and 2 per cent from the proceeds. To provide liquidity to the investors in FMPs, SEBI has made it mandatory that every FMP should be listed on the stock exchanges. This provides an exit option for investors. But the frequency of trades is very low and hence selling through stock exchanges is not easy.

The price of an FMP depends on the interest yielded by the securities held by it. It also depends on the movement of the interest rates. When the interest rates increase the price of debt funds tend to decrease as people will prefer investing in newer instruments that carry a higher interest rate.

Conversely when the interest rates decrease, their price increases.

The minimum investment in an FMP is `5000/-.Fund houses provide both dividend and growth option for FMPs. There are about 650 FMPs in India at present. Many mutual fund houses such as HDFC Mutual Fund, Prudential ICICI Mutual Fund, Kotak Mahindra Mutual Fund, Birla Mutual Fund, Reliance Mutual Fund, etc offer FMPs.

FMPs are mandatorily listed on the stock exchanges, providing an exit option for investors. But the frequency of trades is very low

55

Personal Finance

The VIP way Value averaging investment plans may provide higher returns, but their complex nature could trouble lay investors

S

ystematic Investment Plans (SIP) have been in the news for some time now. But value averaging investment plans (VIP) that give higher returns and certainty to your financial goals have not yet received the attention they deserve.

A VIP plan is a disciplined way of investing in securities such as stocks, mutual funds or even gold. It uses an averaging technique developed by former Harvard University professor Michael E Edleson. The value in a VIP portfolio increases in a defined manner every month irrespective of the movement of the market, to achieve a target amount after a period of time. The amount invested changes each month, based on the performance of the portfolio.

Setting the target Setting the target is the first and most important step in a VIP. The investor can either set a fixed amount as the target or set a target based on the required rate of return. The longterm return provided by equities – 15 per cent – would be a good target rate of return to aim for. The amount you have to invest every month and the performance of the plan will depend a lot on the target set. Suppose a person wants to have `6 lakhs in 56

his portfolio five years from now. The portfolio balance should increase by `10,000 (`6 lakhs divided by the number of months), also called the nominal investment amount, every month to reach the targeted amount.

The instalment amount for each month will be the difference between the target value for the month and the actual balance in the portfolio. So in the first month the person invests `10,000 and buys securities to build his portfolio. In the next month, the target amount in the portfolio will be `10000 X 2 = `20000. In the interim period, the portfolio value would have changed due to the fluctuations in the price of the securities in the portfolio. The investor has to decide on the amount to be invested in the month based on the value of the

Setting the target is the first and most important step in a VIP. The investor can either set a fixed amount as the target or set a target based on the required rate of return

portfolio.

Suppose the market drops during the month and the value of the portfolio erodes during the month from `10000 to `8000. So the investor will have to make up for this loss in the portfolio value by investing an extra amount equal to the loss in value.

The instalment for the second month will be `20,000 - `8000 = `12,000.

This will bring up the portfolio to the target value of `20,000 for the second month. In the third month, let us assume that the market shoots up and correspondingly the portfolio value increases to `25000. The target value for the third month is `10,000 X 3= `30,000. The portfolio already has `25000 in it. So the amount to be invested in the month will be just `5000 (`30000 - `25000). Continuing in this manner the investor can achieve his target of `6lakh by the end of 5 years.

Advantages of VIP A VIP in similar to a SIP in that both the schemes promote the habit of regular investment. But unlike an SIP where the instalments are constant, a VIP invests more money when the markets drop and less when they are on an upswing.

Hence the effect of rupee cost av-

ket downturns when your portfolio value drops and the gap between the targeted value and the actual value keeps on increasing every month. Investing bigger amounts month after month at a time when your investment gives you negative returns is troubling and could force many, especially people with fixed incomes, to abandon the plan. A low target will cause the portfolio value to exceed the targeted value quite often.

When this happens the securities in the portfolio are sold to bring down the portfolio value. Such selling

increase in the investment in the coming month. For example, suppose that your portfolio value has increased to the targeted value of `5 lakhs after 50 months. In the 51st month the market tanks and your portfolio value erodes by 10 per cent to `4.5 lakhs. The target value for the month will be `5.1 lakhs and you will have to invest `60,000/- during the month to maintain your target.

To overcome these challenges, eraging (investing the same amount funds allow investors to customise regularly to buy more units when the the plan to suit their needs. The noprice is lesser and less units when it sell option is an example. The option is higher, thereby reducing the when selected prevents the sale average cost) is magnified and of units, when the portfolio valthe acquisition cost of the units Comparison between ue exceeds the targeted amount. in a VIP tend to be lower than The instalment amount will reVIP and SIP that of the units in a SIP. Thus main zero, in this case. Another VIP SIP a VIP allows an investor to buy option is to set the maximum low and sell high without trying amount that can be debited each Targets Yes No to time the market. month. This ensures that your fiInstalment Varies with Constant Consequently the returns nances will not be strained when amount each period provided by a VIP is also more the market falls leaving a big gap than that provided by a SIP between your portfolio value and Acquisition Lower Higher than under most scenarios. Back the targeted value.

Cost VIP testing studies done by BenchPerformance Higher than Higher than mark Mutual Fund have shown Methods of investing SIP in most VIPs when compounded annual growth The only mutual fund in India scenarios the market rates for VIPs to be 3.5 per cent that currently offers VIPs is the follows a higher than that of SIPs during Benchmark Mutual Fund. It definite the period 1999-2011. permits VIPs in two of its fund trend Another advantage of a VIP schemes – namely Benchmark Technique Value Rupee cost is that it is ideal for financial Index fund and Benchmark averaging averaging planning as it lets you compare S&P CNX 500 Fund. However, your investment performance FundsIndia.com, an online muPortfolio Lower Higher with your goals regularly and tual funds seller, allows investors Volatility adjust the money invested acto opt for the VIP facility for all Involvement Higher Lower cordingly. Hence the probthe equity growth schemes in its of investor ability of achieving the targeted stable. Investors can also implecorpus is much higher. ment the technique on their own if they are willing to put in the Challenges could be premature when the market effort for the same.

The advantages of a VIP are compel- is in a long term uptrend and could ling, but there are some disadvantag- cap your gains. es too. The product is not as simple Selling units could also expose Back testing studies done as it seems to be at the first glance. you to capital gains taxes. Thus tarby Benchmark Mutual Finding the target value each month gets affect the returns from the VIP can itself be a cumbersome process which may underperform during Fund have shown when the target is based on the rate periods in which the market follows compounded annual of return. The variable nature of the a steady trend – upwards or downgrowth rates for VIPs to be investment amounts could pose a lot wards. of problems, especially for people Another problem could arise in 3.5 per cent higher than with fixed incomes. the long term when your portfolio that of SIPs during the Setting the target is also a tricky has gained a respectable size. Then period 1999-2011 affair. Too high a target could strain even a small percentage drop in the your finances, especially during mar- portfolio value could mean a big

A VIP is ideal for financial planning as it lets you compare your investment performance with your goals regularly and adjust the money invested accordingly

57

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