While South India is home to major industries, including IT, ITES, Automobile, Textile, Food Processing, Healthcare… some of the newer sectors attracting the service industry are medical tourism, educational institutions and hospitality.
Hotels usually engaging inhouse staff for thier maintenance and support services. Lately, they have begun outsourcing people for front office management, kitchen stewarding and other activities. This trend is a resultant of the high attrition rate experienced in the service industry.
Educational institutions, especially B-schools, colleges with hostel accommodation and international schools, have been on the rise in India. Over and above, with international universities setting up base in India and the need for well-equipped and maintained buildings have created a new market.
Tourism has been a major contributor to the country’s exchequer and the growing medical facilities offered in the country has paved the way for medical tourism. Kerala in South India has been contributing mainly to this segment which is expected to provide international accommodation facilities and other amenities for patients.
IT industry
Most of the Indian IT giants have already started their operations in tier-II and III cities, including cities like Visakhapatnam, Vijayawada, Mangalore, Mysore, Kochi, Coimbatore, Madurai and Tiruchi. A total of 51 STPI centres (Software Technology Parks of India) and sub-centres are operational across the country out of which, 44 are located in tier-I and II.
“Servicing about 75 million sqft of office space, more than IT, we are focusing on ITES now,” said T Raghunandana, Managing Director, Updater Services Pvt Ltd. “ITES, though is low end, has tremendous FM potential. It engages more employees and requires bigger office space, which has to be maintained. In short, to accommodate 20,000 staff, it would need about two million sqft to this huge number of people! It is thus big business for us.”
A cost intensive business, ITES is now growing in the much affordable tier-II and III city space. “We have presence in Mysore, Trichi, Coimbatore, Vijaywada, Madurai and other places.”
Each industry has its own processes and maintenance, especially automotive and manufacturing facilities. We are looking forward to servicing the growing industries in South.
Airports
The development of international airports and the expansion of the existing ones in metros and tier-I cities, there are news airports coming up in Shimoga, Hassan, Gulbarga, Bellary, Bidar and Bijapur in Karnataka. Given
Chennai is preparing for Asia’s largest Greenfield airport. Updater Services is present at Bangalore International Airport and GMR Hyderabad International Airport. Sinar Jernih too is into airport facility management.
“There is a lot of development in airports, malls and residential segments and it could be viewed as booming in the tier-II and III cities,” said Ram Balan, Managing Director of Avon Facility Management Services Pvt Ltd, which has a strong workforce of 8000 and is also planning to expand into the automobile, manufacturing, food processing and bottling sectors.
Healthcare
ISS, Sinar Jernih, Faber Sindoori, etc., are some of the major service providers in this segment. Faber Sindoori Management Services, with a workforce of over 3500, services about 50 lakh sqft area majorly in South India. It has been providing facility services, mainly engineering and cleaning, for the last five years and grown about 65-75% in the healthcare sector. “Hospitals are yet to outsource complete maintenance but the trend is gradually changing. In government hospitals, working within limited budget is not easy, yet we have been able to deliver quality services as per the contractual requirement,” asserts MK Padmanabhan, COO, Faber Sindoori Management Services Pvt Ltd.
“We are looking at increasing the volume of business, in order to be able to bring in more automation in cleaning and deliver better and faster services.
“The South is a growing market; the end users are more cleanliness conscious and want cleaner work atmosphere.”
“There are more opportunities in Bangalore. Where we have big hospitals like Apollo and Narayanguru, there are smaller ones which are more like boutique hospitals with scope for professional cleaning,” observed Bharathi Kamath, Carewel Facilities India Pvt Ltd.
The three largest hospital chains – Manipal, Apollo and Fortis have about 33 hospitals in tier-II and III towns, such as Kangra, Raigad, Moradabad, Salem and Visakhapatnam.
With the kind of buildings coming up in Bangalore and Hyderabad – tech parks, residential blocks, gated communities – there is huge potential for maintenance services.
Apollo announced in January this year that it was going to invest `10,000 crore in building 250 Apollo Reach Hospitals smaller hospitals – other than the 51 in big cities – in tier-II towns such as Karimnagar in Andhra Pradesh.
In a major single investment spree, HealthCare Global Enterprise Limited (HCG), a Bangalore-based pan-India chain of super-specialty cancer care hospitals, is planning to expand its network to 40 centres by 2014. HCG, at present, has around 24 centres in India and one each in Uganda and Nairobi. It has plans to open four to five centres in metro cities, and around 10 in tier-II and III towns by 2014.
“Even hospitals which were going for manpower suppliers earlier are now elevating standards to meet competition and outsourcing maintenance to organised service providers,” said Vishwanath S Prabhu, Regional Head of Tenon Facility Services.
The South is a growing market; the end users are more cleanliness conscious and want cleaner work atmosphere. We want to bring in more automation in cleaning so that the services are delivered much better and faster.
Automobile/Foundry
Karnataka is the fourth largest automobile producing state of India and has created major hubs in cities like Bangalore Rural, Ramanagara, Kolar, Shimoga, Dharwad and Belgaum.
Tamil Nadu has planned for a major development with industrial corridors coming up in cities, including Ranipet, Hosur, Trichy, Coimbatore, Madurai, Salem and Thoothukudi.
Other industries like food processing, food parks, cement and steel are coming up in smaller cities of Karnataka and Tamil Nadu.
Retail industry
Retail space is growing at a much faster pace with the mall culture seeping even in smaller towns. Max Hypermarkets will be starting six to seven stores – most of these will be in Mangalore, Mysore, Vishakhapatnam, Vijayawada, and Coimbatore. The company will be investing in large stores in Mumbai, Pune, Chennai and New Delhi.
“In fact, smaller B2 towns like Hubli, Mysore, Hassan, are coming up with malls,” said Bharathi. Tandem Allied Services has recently ventured into retail is planning to adding more.
The Aditya Birla Group runs its retail business under the brand-name ‘more’. Hypermarkets will be operational from 2013 in the metros like Delhi, Bangalore, Hyderabad and Mumbai, while the supermarkets will be coming up in tier-II cities.
The Future group currently owns 152 Big Bazaar stores in the country and plans to have at least 30 more outlets by mid-year. Reliance Trends plans to increase its number of stores to 150 from the present 35 early this year. It has a major presence in Chennai and Tirupur.
Railways
“There is a big change in the Railway sector and today the platforms in stations are much better maintained. We would like to enter this sector,” said Christie Cherian, Managing Director, Red Sky Property Services, who is managing the India operations. All Services Global and BVG are two big players in the railways.
In the present scenario, security services are also fast catching up as the salaries have gone up three times by 37% last year. It has moved away from the FM preview and we are sub-contracting security for our facilities.
Residential segment
“The residential segment, which is more than 100 million sqft in South India alone, is big business. Anything above 200 apartment blocks fall in this category,” said Raghunandana. “This is one of the fast growing sectors for facility services in South India.”
As Bharathi puts it, the “homecare” segment has a huge potential. “In fact, with people not having much time to maintain homes, the service industry has stepped in. This segment also acts as a great support to the burgeoning overhead costs incurred by the service providers.”
Tandem Allied Services based out of Bangalore and in operation for about 13 years, has 1000 workers and is servicing about 4.5 million sqft.
“We would like to sustain in the growing residential, commercial and techparks segments,” said Arunkumar, Managing Director, Tandem Allied Services.
Tenon, the Rs2189.40 million company, is planning to expand into residential property management, manufacturing facilities, business parks, hospitals, hotels, malls / multiplexes, educational institutions and Retail outlets apart from the regular BFSI & IT/ITES sectors where they have a strong presence.
Hospitality
“Hospitality is a huge market. A lot of hotels have outsourced facility management services like security, kitchen stewarding and cleaning,” asserts Dhruv Sawhney, Proprietor of Bangalore-based Wall2Wall Property Services. “Industries form another huge segment and we are doing a few of them.” In operation for the last two years, Wall2Wall has some of the prestigious accounts like Fortis Bangalore, Lemontree, software companies and a mall in Whitefield.
We are doing Fortis hospital, Lemontree, software companies and a few reputed malls. We also provide pantry services besides facility management.
“Previously we were donig common area cleaning but now there is a major shift. Hotels are looking at outsourcing even for room servicing,” added Prabhu.
Manufacturing segment
Over the last two decades, Chennai and Bangalore have been growing rapidly in manufacturing. In the last four years, manufacturing growth, especially automobile, has surpassed the IT sector in South India.
Educational institutions
Sinar Jernih has mainly been into the hospitality sector. However, it is now planning to grow in the healthcare and airports as well. “We have found a new niche market segment that we wish to pursue that is education institutions. Universities, schools, hostels are also part of the fast growing market for facilities services,” said JS Shekar, Executive Director, Sinar Jernih India Pvt Ltd. “In fact, it is said that today schools and colleges are not selling seats based on their syllabus but on their hostel cafeteria quality. Educational cleaning is different from other cleaning services. There is a need for processes when it comes to cleaning a play school,” explained Shekar.
“The number of International schools, colleges and institutes coming up has huge potential for the service market and we are planning to enter this segment,” added Bharathi.