State of the Economy 2018

Sitting tight

While powder coaters and plastic makers in Peenya await favourable policy changes, CNC manufacturers are riding a steady growth wave

Photographs by RA Chandroo

India’s Silicon Valley or Electronic City — at least one of these titles is often used to describe Bengaluru. However, what several people aren’t familiar with is the city’s proximity to one of Asia’s largest industrial clusters in terms of area — Peenya — a manufacturing hub that houses 8,500 units. Spread across 40 sq km, industries here clock an annual turnover of Rs.20,000 crore. With engineering being one of the biggest sectors in this cluster, you are bound to come across computer numerical control (CNC) manufacturers and ancillary units such as surface coating companies and power tool makers at every turn you take here. 

Touted to be the largest cluster in Peenya (estimated turnover: Rs.1,200 crore), with 3,000 units employing 24,000 people, CNC manufacturers seem to have witnessed a fairly stable fiscal. These are units where computer-controlled machines are used to produce components for a diverse set of industries including healthcare, automobiles, aerospace and locomotive.

One such company is Unnathi CNC Technologies, set up by Sandeep Parvatikar with three friends in 2007. What started out as an auto component manufacturer with one CNC machine, today boasts of 25 CNC machines that bring in around Rs.12 crore annually from clients such as HAL, Merck Life Science, Otto Bilz India and Flowserve. “After burning our fingers during the 2008 recession where we catered only to the auto industry, we changed our policy. Today, we only produce small batch quantities and don’t allocate more than 30% of resources to a single client,” Parvatikar says. 

While the current fiscal has been a stable one, there were a few hiccups due to GST. “Our working capital is getting blocked. Also, there is still confusion on the prevailing rates. One customer says 18% and another says 28%, I’ve ended up supplying the same product at different rates to different customers,” says, P Sudarshana, of Mighty Machines that clocks an annual turnover of Rs.10 crore by catering to the likes o

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