In an exclusive interview with SME Times, Rama N S, CEO, Electronic City Industries Association (ELCIA) said the organisation helps Indian micro, small and medium enterprises to design and develop innovative products and to increase business by augmenting manufacture at relatively small costs.

Excerpts of the interview...

ELCIA cluster was formed to set up the common facility center (CFC) for MSMEs under CDP scheme of GoI to help MSMEs to design and develop innovative products and to increase business by augmenting manufacture. CFC center is now operational and is being used by MSME companies. Small companies can use the facility for R&D and small volume manufacture without much investments. This can encourage startups to build innovative products. All the equipment is in place and members have started using them. We believe the facilities will be used by many more to bring out newer products and components

What is your view on the Indian ESDM sector right now? How about R&D and product design scenario in India?
Rama N S: Design has always been the strength of engineers in India. Chip manufacturers world over are using services of our design houses and R&D. However, manufacturing has still not taken off to the extent that is required to meet the demand and contain imports of electronics which is expected to exceed oil imports. We understand projects are under construction and they will take some time. Considering low/no component base in India, design and development of niche products are key value adds as of now. There is an urgent need for investments in ESDM sector for large scale manufacture and support from Government to get the industry on track. Niche products with great technical features need better appearance and appeal .

What will be the motive of the ELCIA cluster and how does it aim to fulfill it?
Rama N S: Electronics City Association was formed in 1992 as the members wanted to come together to get some basic infrastructure like streetlight, roads, water & security that were lacking. The idea was to seek the government attention to improve the condition of the Hosur Road and other infrastructure essential for business and people. ELCIA has earlier addressed the infrastructure requirements of its members. Now that ELCITA (Electronics city Industrial Township Authority) is responsible for Township management, ELCIA focuses on interaction with government, business related support to members and skill development.

ELCIA cluster was formed to set up the common facility center (CFC) for MSMEs under CDP scheme of GoI to help MSMEs to design and develop innovative products and to increase business by augmenting manufacture. CFC center is now operational and is being used by MSME companies. Small companies can use the facility for R&D and small volume manufacture without much investments. This can encourage startups to build innovative products. All the equipment is in place and members have started using them. We believe the facilities will be used by many more to bring out newer products and components

What roles are the ELCIA members playing in this major initiative?
Rama N S: ELCIA is acting as the bridge between the governments and the companies as it is not possible for individual companies to go to the government and resolve issues or get subsidies or implement policies. So we collectively are representing all our members of ELCIA and working on policies and interacting with the government. Creating awareness among members regarding Govt policies and supporting in implementation is being done by ELCIA.

Is this aimed only towards ESDM companies?
Rama N S: Not necessarily. Though this has the capability of design and manufacture of electronics products, it can be used for mechanical parts, environmental testing, packaging…. Just as an example, water maters, sheet metal items, aerospace parts, poles for street lights can be manufactured in this facility. Today most of the products require electronics and communication components and ELCIA cluster common facility center can cater for such requirements. We believe this will inspire entrepreneurs to come up with innovative IoT products that use multiple engineering disciplines. This facility can be used by any one who wants to build a new product or augment their production facility

Process for applying for this facility? What cost/expense do they have to bear?
Rama N S: We encourage and welcome everyone to use this facility. Details of the facility is available on Cluster website. As of for now, majority of the users know about the cluster as they are based inside the Electronics City. Such companies approach cluster with request for quotation for using the facility after which they place the order. Companies can bring their design, raw materials and take end products. Cost is computed based on machine / equipment usage and manpower requirement.

Will you help MSMEs get proper certifications for their products?
Rama N S: Certifying products is planned and it requires the facility to stabilize and acquire both experience and additional equipment. We have environmental testing facility which helps in a testing of the products.

Will you have any handholding to help the companies manufacture the product or do they get access to the machineries for a certain period of time?
Rama N S: We do have our own operators at the CFC but many a times, companies bring their experts to get the job done. This cluster facility helps members to network and share best practices and learn some secret sauces from each other. Cluster members have the capability to handhold new companies/startups. When a company has developed a product, we believe that they know the process much better.

Any plans to provide training for the MSMEs?
Rama N S: Skilled manpower is critical to success of MSMEs. While big companies have training departments, MSMEs require fewer people to be trained resulting higher overhead costs. Though Govt has announced good policies for skill development, implementation is still a challenge. We believe training and skilling is required at all levels. ELCIA has already started providing training for MSME companies and aspires to be a professional training provider. It has a collaborative approach and is partnering with GIZ, Bosch who have some of the best training implementation experience. Partnering with CII and other associations will enable us to network with companies in other spaces. ELCIA will use cluster for imparting generic hands on training to apprentices. Vision is to provide training to all employees right from entry to senior management both in content and soft skills with emphasis on industry requirement and on the job training

How do you foresee this initiative shaping the future of the Indian electronics industry?
Rama N S: Indeed it's a great initiative by the Govt of India and Govt of Karnataka and we feel that such facility needs to come up in many more places across the country. The requirement of electronics is huge in the country and the demand is continuously increasing. While such common facility centers can pave way for niche/innovative products, bigger and faster investments are required to reduce the import bill.

MSMEs have a great role to play in designing and manufacturing the niche electronics products. Having such shared facility will help them manufacture the products at reasonable cost as in general the cost of investment in the Indian manufacturing market is very high. This high cost can dissuade many to shelve their ideas or get into financial troubles. In view of this we believe this is a stepping stone for the ESDM manufacturing in the country.

What is your funding model? Who are the member organizations in the ELCIA cluster now?
Rama N S: The investment for the machineries is close of 14.5 crores. GoI and GoK have contributed a grant of 70% and 15% respectively. ELCIA and ELCIA cluster members have contributed the balance 15% while building is being provided by ELCIA.

ELCIA cluster has around 34 MSME member companies. Few among them are – Radel, Synthesis, Bhavani Industries, Syscon Calibration, TESCOM, VXL, HICAL, Customised technologies, Konar… and many more.

Tell us about the government's (central & state) contribution to push this initiative forward further?
Rama N S: The government is indeed doing a great job to promote such initiative and for the next 5 years cluster operations will be monitored. Gaining confidence from the first few clusters as pilot, many more clusters are likely to be approved. Government of Karnataka has also come up with policy for MSME cluster funding with 80% participation. We are sure they will refine the policies further and expedite implementation of such facilities across India to cater to manufacture of all types of products and services.