D-Link’s vision, Goa’s gain

Infrastructure is by no means the only factor that determines the success of a company. Nonetheless it is one of most crucial factors on the back of the management’s mind—be it access to highly skilled people or advanced telecommunications capacity or something as banal as power availability. We take a look at D-Link India’s experience in establishing its manufacturing plant in Goa

When D-Link Taiwan was considering taking up a stake in Smart Link India and setting up D-Link’s Indian subsidiary, the company assured Smart Link’s promoter K R Naik that a joint venture would take place only after satisfactory commissioning of the project as per its stringent standards.

The company’s first facility in Goa, to manufacture networking products, was set up at the Verna Electronic City promoted by the Goa Industrial Development Corporation (GIDC). When D-Link Corporation delegates visited India to close the deal two years later, they were impressed with the facility.

Let’s take a look at the infrastructure requirements at D-Link’s facility in Goa and see how the state fares on this front.

Land

For D-Link’s manufacturing facility, land at the Verna Electronic City was made available by the GIDC as part of its agenda to promote the industrialisation of Goa. Plant 1 was built over a 20,000 sq. ft. area. Plant 2 was subsequently built over 30,000 sq. ft. area, while Plant 3 was commissioned on an adjoining plot measuring 70,000 sq. ft. Thus land was never a restriction for growth. Also, the land rates offered were reasonable and not as expensive as in some other state IDCs.

Taxation

D-Link India was offered a 5-year Income Tax exemption (for manufactured items) apart from a 10-year Sales Tax exemption offered by the government of Goa. Similar exemptions were offered on the set-up of the second and third manufacturing plants in 1999 and 2001.

Telecom

As yet, Goa’s telecom infrastructure is nothing to write home about. Data leased lines are available through Goa Telecom and D-Link has availed of this facility to connect the Goa plant to its Mumbai headquarters and Bangalore set-up. Though the available leased line is sufficient for a manufacturing facility, it would be insufficient for a service facility where the amount of data and voice
communication is huge. International private lease circuits presently do not land at Goa and IPLC gateway is not available.

Transport

The IT industry is greatly concentrated in the West and the South of India and Goa being centrally located with respect to these regions and being one of India’s favourite tourist destinations, transportation is the least of the worries.

Goa is well connected to other parts of the country through road and air routes and even rail (thanks to Konkan Railway). There are plans to start super fast train services to Mumbai. However, local transport facilities, which are quite expensive, leave a lot to be desired.

The presence of a port in Goa helps in the import and export of material. Custom clearance at the Goa port has been found to be much faster than clearance at the Mumbai port—due to lesser traffic and more efficient officials. It has been noticed that the arrival time of cargo at the port and the arrival time at the factory is less than 24 hours.

Power

Like most Indian states, power infrastructure in Goa is not up to the mark; the state relies entirely on tapping power from the national grid. The government of Goa has taken steps to improve power generation by inviting private parties. D-Link has not been adversely affected by Goa’s uncertain power situation due to the presence of Reliance Salgaocar Power Company (RSPCL), from which it draws its power requirements. Power tariffs hence have been higher than that present in other states.

Human resources

Goa has a vast resource of English-speaking people, which reduces communication hurdles. It has been observed that the work culture is very good. Goans have been found to be committed, well behaved and hard working, helpful and well spirited. The manpower available is suitable for the following jobs: technicians, service and support engineers, maintenance personnel, who are required for day-to-day functioning of the plant.

Though personnel required to design application software are easily available, the same cannot be said about hi-tech manpower required for core software programming. Moreover, IT professionals generated by the university and recognised colleges every year migrate to greener pastures in search of opportunities. This is a key weakness as manpower is the key USP in the IT business.

Bureaucracy

The biggest advantage that Goa offers is the lack of bureaucratic hurdles. Red tapism, which is rampant in other states, can actually kill a project in its infancy itself. The degrees of bureaucracy encountered in metros like Delhi is absolutely absent in Goa.

The other factors that D-Link has come across by being in Goa are:

• Goa being a very popular tourist destination there is no dearth of hotels and other entertainment avenues. This forms a very important criterion when you have plenty of foreign visitors. Also, Goa offers immense opportunities to hold seminars, conventions and other annual meets.
• The government has shown active interest in promoting the IT industry. Unlike other governments, the Goa government has been sensitive to the demands of the IT industry and has been very cooperative in taking necessary steps to boost the IT industry.