Cochin Special Economic Zone is a spectacle that has grown on us as a microcosm of the manufacturing and processing worlds, squeezed into 105 acres, straddling industrial Kerala like a colossus.
Products from the Zone range from optical fibre couplers and splitters to rubber gloves. In between the two ends of the spectrum are violin bows, linen, ceramics, gems and jewellery, frozen foods, computer hardware and tissue-cultured exotic plants, which find their way to most parts of the world.
Wide variety of products
The wide variety of products and processes represent an equally wide range of experience entrepreneurs have had in their rendezvous with export processing zones, a concept that evolved out of China and finding ready acceptance in the late 1980s in India.
In its 25th year, the former Cochin Export Processing Zone has a long, winding story to tell. And, it is a story of blood and sweat, of tears and hard grind and of spectacular successes and dramatic failures.
From a broader perspective, it was also in the Zone that Kerala for the first time witnessed free-floating capital coming to terms with uncompromising trade unionism. What triumphed over what is a story in cold numbers. The Zone directly employs over 14,000 people, more than half of them women, in a hundred units and logged a turnover of approximately $6 billion (Rs. 30,000 crore) last financial year.
The figures were not so striking when it all began. The export processing zone logged a turnover of Rs. 94 lakh in its first year of operation. “Every penny counted those days,” said president of CSEZ Industries Association K. K. Pillai. The Zone began operations with five units and less than 300 workers.
However, these striking figures may not be seen in isolation. C. K. Pareed, president of CEPZ Workers’ Association (CITU) said only 4,000 workers in the Zone were permanent employees. More than half the employees are women and are recruited by contractors, who take a cut from their salaries. Employees in the contract category are not unionised and have no bargaining power. Even permanent employees were scared to join unions, he said.
N. Ramakrishnan, the first development commissioner of the Zone, recalled how the entire project was steeped in trouble from the beginning. He told The Hindu over telephone from Chennai that Kochi was chosen, along with Falta, Chennai and Noida in 1984, for development of an export processing zone.
There were only two such zones — Kandla and Santa Cruz — in India those days and Mr. Ramakrishnan said the cost of developing Kochi infrastructure shot up because of the undulating land.
Then there were the trade unions, he said, constantly raising demands, sometimes unreasonable ones. Mr. Pareed said there were lots of disputes over the building of the Zone, starting with its compound wall.
Such issues slowed down the project but the governments headed by the late K. Karunakaran and E. K. Nayanar were supportive and often police protection was offered, said Mr. Ramakrishnan.
Getting telephone and electricity connections were really hard tasks those days, said Mr. Pillai.
The conditions were so bad that the then industries minister K. R. Gouri on one occasion issued a whip to the handful of entrepreneurs in the Zone not to raise any complaints at a meeting with investors who were on the lookout for opportunities in Kochi.
C.Y.A. Rahim of Asma Rubber Products, one of the first ventures in the Zone, has come through uncertain times because the first two years of operations did not see a single pair of gloves being exported because of a steep fall in prices. Several rubber-based units were licensed in 1989, a time when the AIDS scare triggered a boom in global demand for gloves, the price of which soared to $110 per 1,000 pieces. But by the time units like Asma began production, prices plunged to $15 because of a glut in the market caused by huge capacities in countries like Malaysia and Indonesia. The market has stabilised since 1991.
Blazing a trail
Entrepreneurs like Mr. Rahim came through hard times. But there were others, who turned out to be buggy whip-makers as the world economic scene changed rapidly. There were others, who, driven to penury, faced humiliation.
But it was the unfolding of events at the Zone that became the inspiration and model for ventures such as InfoPark and Technopark that has changed the State’s industrial skyline.