Growing Opportunities for Facility Services in South India

Some of the market research reports have even recorded the facility service industry in India at a whooping `58,000 crore for 2011! Going by the numbers, the fact that this industry is largely in the hands of the unorganised sector, there are only a few organised players who hold the major accounts in various industries. Nonetheless, with the focus of development is shifting from the metros & tier-I cities to tier-II & III cities and B2 towns, the market for the service industry is huge. Some of the important facility service providers who have presence in the South include Updater Services, ISS Facility Services, Dusters Total Solutions, A2Z Infraservices, All Services Global, Faber Sindoori, Avon FM, Tenon, etc.

While South India is home to major industries, including IT, ITES, Automobile, Textile, Food Processing, Healthcare… some of the newer sectors attracting the service industry are medical tourism, educational institutions and hospitality.

Hotels usually engaging inhouse staff for thier maintenance and support services. Lately, they have begun outsourcing people for front office management, kitchen stewarding and other activities. This trend is a resultant of the high attrition rate experienced in the service industry.

ITES, though is low end,  has tremendous FM potential. It engages more employees and requires bigger office space, which has to be maintained. In short, to accommodate 20,000 staff, it would need an office space of about two million sqft! It is thus big business for us.

Educational institutions, especially B-schools, colleges with hostel accommodation and international schools, have been on the rise in India. Over and above, with international universities setting up base in India and the need for well-equipped and maintained buildings have created a new market.

Tourism has been a major contributor to the country’s exchequer and the growing medical facilities offered in the country has paved the way for medical tourism. Kerala in South India has been contributing mainly to this segment which is expected to provide international accommodation facilities and other amenities for patients.

IT industry

Most of the Indian IT giants have already started their operations in tier-II and III cities, including cities like Visakhapatnam, Vijayawada, Mangalore, Mysore, Kochi, Coimbatore, Madurai and Tiruchi. A total of 51 STPI centres (Software Technology Parks of India) and sub-centres are operational across the country out of which, 44 are located in tier-I and II.

“Servicing about 75 million sqft of office space, more than IT, we are focusing on ITES now,” said T Raghunandana, Managing Director, Updater Services Pvt Ltd. “ITES, though is low end, has tremendous FM potential. It engages more employees and requires bigger office space, which has to be maintained. In short, to accommodate 20,000 staff, it would need about two million sqft to this huge number of people! It is thus big business for us.”

A cost intensive business, ITES is now growing in the much affordable tier-II and III city space. “We have presence in Mysore, Trichi, Coimbatore, Vijaywada, Madurai and other places.”

IT investment proposed near Devanahalli, Bangalore; new IT Parks at Hubli, Shimoga and Gulbarga; IT SEZ Park at Shimoga and IT Parks at Mysore, Mangalore and Belgaum are an added attraction.

Each industry has its own processes and maintenance, especially automotive and manufacturing facilities. We are looking forward to servicing the growing industries in South.

Airports

The development of international airports and the expansion of the existing ones in metros and tier-I cities, there are news airports coming up in Shimoga, Hassan, Gulbarga, Bellary, Bidar and Bijapur in Karnataka. Given the size for maintenance, most airports have engaged multiple vendors.

Chennai is preparing for Asia’s largest Greenfield airport. Updater Services is present at Bangalore International Airport and GMR Hyderabad International Airport. Sinar Jernih too is into airport facility management.

“There is a lot of development in airports, malls and residential segments and it could be viewed as booming in the tier-II and III cities,” said Ram Balan, Managing Director of Avon Facility Management Services Pvt Ltd, which has a strong workforce of 8000 and is also planning to expand into the automobile, manufacturing, food processing and bottling sectors.

Healthcare

ISS, Sinar Jernih, Faber Sindoori, etc., are some of the major service providers in this segment. Faber Sindoori Management Services, with a workforce of over 3500, services about 50 lakh sqft area majorly in South India. It has been providing facility services, mainly engineering and cleaning, for the last five years and grown about 65-75% in the healthcare sector. “Hospitals are yet to outsource complete maintenance but the trend is gradually changing. In government hospitals, working within limited budget is not easy, yet we have been able to deliver quality services as per the contractual requirement,” asserts MK Padmanabhan, COO, Faber Sindoori Management Services Pvt Ltd.



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1 Comment

  1. Jayachandran Pillai

    This article was quite informative. Thanks

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