CHENNAI | TUESDAY, 29 MAY 2018 TAKE TWO 3. <

BLOOMBERG

28 May

Walt Disney ’s Shanghai theme park drawsmillions and some of its films have topped boxoffice sales in China. Yet one of its most lucrativefranchises is still a flop in the world’s second-biggest cinema market.

Solo: A Star Wars Storyopened in China overthe weekend with about $10.1 million in boxoffice sales, behind two films that weren’t evenpremiering, according to Disney and Box OfficeMojo. Romantic comedy How Long Will I LoveYoutopped the chart after drawing $37 millionfor its debut weekend. The superhero hit fromDisney’s Marvel: Avengers: Infinity Warcamesecond for the May 24-27 period, weeks after its$191 million opening, data at the Box Office Mojowebsite show.

China, on track to overtake the US in movieticket sales by 2020, is an important market forHollywood films, including some franchises likeUniversal Pictures’ Fast and Furious, which hassometimes generated more revenue in thecountry than in North America. That’s onereason Disney keeps pushing the Star Warsseries in the country, where Solosecured a rare

concurrent release with North America, eventhough it lacks the familiarity won in the US bydecades of sequels and prequels since its 1977premiere.

Grace Jiang, a 30-year-old office worker inShanghai, said she took a chance on Solo basedon the franchise’s reputation, but almostdozed off halfway through the film.

“The planets and monsters feel weird,” shesaid at a theater in north Shanghai’s Yangpudistrict. “Maybe it’s cultural differences orsomething; in general it doesn’t suit my taste.”

Solo also opened to disappointing weekendsales in the US and Canada, a rare slip for amovie studio that has dominated the boxoffice for almost three years with serial-typeadventures.

T E NARASIMHAN

Chennai, 28 May

Of the two defence corridors announced inthe Budget in 2018 to promote local man-ufacturing, one is shaping up faster thanthe other.

Tamil Nadu’s defence corridor seems to havetaken a lead over Uttar Pradesh’s when it comes tovisible action on the ground. In less than twomonths since the announcement in March, thestate has mobilised an armada of small and medi-um enterprises keen on making components forlarge equipment manufacturers.

“Given the large number of units showing inter-est, we are advising them to form consortium,pool together their capabilities and bid for proj-ects,” says M Ramesh, chairman, Confederation ofIndian Industry (Coimbatore zone). The TamilNadu chapter of the industry body is working withthe state government to promote defence pro-duction, offering to prepare a list of firms thathave the potential to work on defence projects.

In Coimbatore, as many as 200 enterprises arevying for lucrative defence contracts from largemanufacturers, and some have a few deals in thekitty already. Among the early starters are CRI

Pumps (supplies to the Indian Navy) and ShanthiGears, a part of the ~329-billion MurugappaGroup, which makes gearboxes for battle tanks.

In other southern cities — Salem, Hosur andTrichy, all part of the planned defence corridorlinking Chennai and Bengaluru—companies cur-rently engaged in making textiles, automobileparts and engineering goods are eager to diversi-fy into defence manufacturing. “We are exportingvalue-added products from vegetables and fruitsto South East Asian nations, besidespulses-based products. Such healthyfood items can be supplied to thedefence units,” says NKanagasabapathy, president, TrichyDistrict Tiny and Small Scale IndustriesAssociation.

Nearly, 2,500 micro, small andmedium enterprises (MSMEs) inTrichy, a majority serving as ancillaryunits of Bharat Heavy Electricals Ltd(Bhel), have found a place in the quad.

“Since the MSMEs have experience in manu-facturing precise products for Bhel, little moreupgrade in skills and production technology canmake industries here to excel in the defencequad,” says G A Padanjali, managing director,

High Energy Batteries, which makes batteries forthe armed forces.

A team of naval officials will be visiting Trichy inJune to assess the facilities at the TiruchirapalliEngineering and Technology Cluster and preparethe fabrication and engineering enterprises there toundertake modification and rehauling of boilersused in warships.

A well-developed entrepreneurial ecosystemand the availability of a vast pool of ready-to-hire

talented graduates with technical qual-ifications are big advantages Tamil Naduenjoys over other states. The state hashundreds of engineering colleges andpolytechnics that can offer a constantsupply of skilled manpower to compa-nies looking to scale up or diversify.

The nodes of the Tamil Nadudefence corridor—Chennai, Hosur,Salem, Coimbatore and Trichy— eachbring a unique set of capabilities to the

table. Trichy, for example, is known for fabricationand machining; some SME units there specialisein laser cutting of tungsten, a metal widely usedin making ships and submarines.

Similarly, Salem has rich deposits of mineralssuch as bauxite, magnesite, granite and calcite, and

is a hub for making power grids and steel, whichform the foundation for the shipping industry.Hosur, on the other hand, is a hub for the automo-bile industry, and many global manufacturers ofcommercial and passenger vehicles have set upbase in the region. Coimbatore, besides being atextile hub, has a strong base in foundry, machiningand forging and along with Chennai, it has emergedas the centre for the auto ancillary industry.

The large scale availability of componentslocally lends a distinct cost advantage to manu-facturers. N Shekar, president of the AerospaceIndustry Development Association of TamilNadu, pegs the savings enjoyed by global manu-facturers from sourcing locally at 20-40 per cent.

“They have the capability and we have arequirement, it is a question of connecting thetwo,” says a senior defence official who does notwant to be named. He counts the state’s proxim-ity to information technology hubs in Bengaluruas another advantage.

To Tamil Nadu’s credit, all the cities picked upfor the defence corridor project have airports andare well connected via rail and road to major andminor ports. Ashish Saraf, vice-president forindustry development, strategic partnerships andoffsets, at Airbus, says Tamil Nadu is one of thestates the airline manufacturer is considering forits helicopter assembly plant.

Easy access to automotive parts and proximi-ty to ports are the pull factors for the GMR Groupas well, says BVN Rao, chairman (transportation& urban infrastructure) GMR Group, which is inthe process of setting up an aerospace and defencemanufacturing plant in Hosur.

Since the announcement in March by DefenceMinister Nirmala Sitharaman, just hours after theUnion Budget, that the country’s first defence cor-ridor will be built in Tamil Nadu, the state hascovered a lot of ground. The work for preparingproject reports has been initiated by theDepartment of Defence Production and inCoimbatore and other regions, stakeholdersincluding defence ministry officials and industryrepresentatives meet every month to thrash outthe details.

Meanwhile in Uttar Pradesh, a DefenceProduction Management Cell has been set upwith the express purpose of speeding up the cor-ridor projects by hiring experts —retired armedforces personnel—and via incentives and subsi-dies to the private sector. UP possesses skilledmetal workmanship, besides an establisheddefence manufacturing base in Kanpur span-ning six public sector units of the arms anddefence ware.

Tamil Nadu, which has set a target to attract~100 billion in aerospace and defence, however, isrelying on its entrepreneurship alone. It is yet toannounce any policies or incentives to attractinvestments in the corridor.

Disney’s Chinapuzzle unsolvedas another ‘StarWars’ film flops

A Make-in-India arms race

A still from Solo: A Star Wars Story

Companiescurrentlyengaged inmaking textilesand automobileparts are eagerto diversifyinto defencemanufacturing

Tamil Nadu is relying on its entrepreneurial ecosystem to race past Uttar Pradesh and build the country’s first defence corridor

A CASE FOR DEFENCECities to be linked bythe corridor

Tamil Nadu has set a target to attract ~100 billion in aerospace and defence

ChennaiHub for car manufacturing

Trichy2,500 fabrication andengineering units

SalemKnown for its steel plantand mineral resources

Hosur700 companies support theauto industry

India's No.1 granite company