D&B bullish on SME clusters in West Bengal

A recent study by Dun & Bradstreet (D&B) India, leading source of global business information with a database of over two million companies, on the small and medium enterprises in and around a radius of 60-80 kilometres from Kolkata, showed that the information technology, IT enabled services & business process outsourcing (IT-ITeS-BPO) segment was expecting an average annual revenue growth of 57 per cent over the next two years, which was highest among the six cities surveyed by D&B under its 'Emerging SMEs:2008' study series.

Four key areas were identified for each of the six cities selected for the survey including Mumbai, National Capital Region (NCR), Pune, Chennai and Hyderabad apart from Kolkata. For Kolkata the sectors were engineering, food processing, textiles and IT-ITeS-BPO.

Leaving out Mumbai the IT-ITeS-BPO segment was surveyed in the remaining five cities, informed Kaushal Sampat, chief operating officer, D&B India.

The publication titled 'Emerging SMEs: Kolkata 2008' had profiled a total of 342 companies, of which 52 were from IT-ITeS-BPO segment, 164 from engineering, 97 from textiles, and 29 from food processing.

"Driven by knowledge, skill, low costs, improved quality and demand, all the four sectors covered in the survey have witnessed tremendous growth over the last two years and are confident of continued robustness in their growth-path", said Sampat.

The average annual growth rate for the IT-ITeS-BPO segment stood at 41 per cent for the last two years, highest among the other sectors covered in Kolkata.

Around 50 per cent of the companies were involved in exports, and the US emerged as the most preferred destination, said the report.

In fact, 29 per cent of the companies providing software products and 39 per cent of the companies providing IT services earned more than 50 per of their revenues from the international market.

As for the other sectors, textile SMEs clocked a growth rate of 27 per cent for the last two years, engineering SMEs stood at 29 per cent and food processing was at 24 per cent for the same period.

Food processing companies in the Kolkata cluster expected an average annual revenue growth of 33 per cent, engineering companies were looking at 38 per cent, and textile units expected 35 per cent growth over the next two years.

Wage inflation rates were comparatively lower in Kolkata and the SMEs here did not complain of lack of access to funding, claimed Sampat.

Ancillarisation was going to emerge as a major growth driver for SMEs all across the country, he added.

With foreign multinational companies taking interest to do business with Indian SMEs, such a survey provided crucial information and facilitated the process, Sampat mentioned.

It had profiled over 1800 SMEs across the country for the Emerging SME 2008 series and had only selected companies with a positive networth.

Sanjay Sinha, territory manager-India East, Bangaldesh,Bhutan & Nepal, IBM India, said that with shared services & infrastructure emerging as a major instrument employed by SMEs to cut down implementation costs, IT services had increasingly become popular.

SMEs would now invest in IT tools or outsource its IT related work to smaller firms, he added. IBM was keen to invest in developing quick and low cost solutions for this segment.

Commenting on the report, Rakesh Shah, chairman, engineering exports promotion council, told Business Standard that SMEs would typically consider infrastructure as a major enabler and as the power situation in the state had been doing reasonably well, it might have accounted for the optimism refelcted in the SMEs surveyed.