Economy of Kollam

Kollam or Quilon is an old seaport and a city on the Laccadive Sea coast in Kerala, India, on Ashtamudi Lake.[1][2][3] Kollam was the ancient commercial capital of Kerala and the south-western coast of India. Kollam is now known as the "cashew capital of the world." City corporation of Kollam has the third largest budget in Kerala (after Trivandrum and Kochi) in terms of revenue and expenditure.[4]

Street view of Downtown Kollam, the largest commercial centre in the city of Kollam

Outline

Kollam sea port was founded by Mar Abo with sanction from Udayamarthandavarma, the Tamil king from Venad, otherwise called the Ay kingdom, in 825 AD. The trade and business culture of Quilon is as much old as Kollam Port. Kollam was the most famous port city in India. It served as the business hub of people from China, Middle East, Dutch, Portugal, Brazil, and other Eastern Mediterranean countries.[5][6] The recent discovery of treasures and remnants at the Kollam Port area is proof for all those ancient trade activities related to old Quilon city. The archaeologists believe that there is an engulfed city in the seabed of the current Kollam Port.

Local businessmen were active in the business at Kollam since the 1950s. Key players like TKM Group started their first business centre, possibly the first mall in the heart of Kollam city at Chinnakada with few shops and a couple of theaters(Grand and Prince) in 1950. Their first bakery, 'Supreme' started in 1984 at Chinnakada, now a prominent group across Kollam, Kochi, and Thiruvananthapuram.[7] Kollam is a moderately industrialized city. Some of the major employers in the public sector are Indian Rare Earths Limited (IRE), Kerala Metals and Minerals Limited, United Electrical Industries Limited(UNILEC) (popularly known as the Meter Company), Kerala Primo Pipe Factory, Parvathy Mills Limited, ALIND Kundara, and Kerala Ceramics.

Industrial Estates in Kollam City are;

Economy
Organizations/Councils based in
Kollam city
No.Council/Organization
1Cashew Export Promotion Council of India
2Kerala Minerals and Metals Limited(KMML)
3Kollam Port
4Kerala State Cashew Development Corporation Limited
5United Electrical Industries Limited

Kollam is a relatively industrialized city, and Kollam Municipal Corporation is the second-largest revenue-earning city corporation in Kerala, second to Kochi. The meeting of three National Highways and a flourishing Port has made the city a favorable location for export and import businesses. Educational institutions like the TKM College of Engineering are known as the "cradle of Kerala entrepreneurs" because they greatly encourage entrepreneurial activities. Kollam was the third city in Kerala (after Kochi and Kozhikode) to adopt shopping mall culture. Kollam district ranks first in livestock wealth in the state. Downtown Kollam is the leading CBD of Kollam city. Kollam remained as the most populated city corporation in Kerala until 2005. During that time, the population density in Kollam city was 6041 per square kilometer.[10]

Because of Kollam's importance as a trade and export hub, Export Inspection Council of India(EICI) runs a Sub office with a lab facility in the city.[11] It is one of the 7 Sub offices of EICI in South India.[12] Along with the city, Punalur town and suburbs of cities like Chavara, Kundara etc. are also industrially well developed in nature.

The cashew business
Main article: Cashew business in Kollam

Kollam is the largest processed cashew exporter in the world. In recent years there are more than 600 cashew processing units in Kollam. About 800,000 tonnes of raw cashews are brought to Kollam for processing every year.[13] 90% of India's export quality Cashew Kernels are prepared from Kollam.[14] Kollam is known as the Cashew Capital of the World.[15] CEPCI is expecting a rise in export to 275,000 tonnes by 2020.[16]

Two principal councils/agencies are working at Kollam city for the export promotion and growth of the cashew business of the city. They are the Cashew Export Promotion Council of India(CEPCI) and Kerala State Cashew Development Corporation Limited(KSCDC).

Cashew Export Promotion Council of India
Nila's cashew packets displayed in a supermarket at Paravur near Kollam. Nila Cashews is one of Kollam's cashew exporters
Main article: Cashew Export Promotion Council of India

The national government established the Cashew Export Promotion Council of India (CEPC) in 1955 with the active cooperation of the cashew industry. Its mission is to promote exports of cashew kernels and cashew shell oil from India.[17][17] The CEPC is headquartered in the Mundakkal area of Kollam[18][19] and serves as an intermediary between importers of cashew kernels and exporters who are members of the council. It is also tasked with dispute resolution when problems arise on account of matters, including quality standards and breach of contract between parties to import and export contracts. It undertakes numerous other activities, such as organising global buyer-seller meetings, organising studies on the nutritional aspects of cashew and providing support to cashew processors and exporters to improve their infrastructure.[20]

Kerala State Cashew Development Corporation Limited
Main article: Kerala State Cashew Development Corporation Limited

The Kerala State Cashew Development Corporation Limited(KSCDC) is a model employer in the cashew industry field. They protect the interest of workers and provide maximum employment to its workers and to give statutory benefits like minimum wages, bonuses, etc. prevailing in the cashew industry. It is headquartered in Kollam city - The Cashew Capital of the World.[21] The head office is situated at Cashew House, Mundakkal, in Kollam City, Kerala. KSCDC was incorporated in July 1969 and started Commercial activities in the year 1971 as a company wholly owned by the Government of Kerala.[22] Corporation has now more than a turn over of Rs. 250 crores.

Seafood export business

Kollam is one of the famous seafood exporting business hubs of India. So many seafood exporting companies are there in the city. Most of the companies are working in Maruthadi, Sakthikulangara, Kavanad, Neendakara, Asramam, Kilikollur, Thirumullavaram, and Uliyakovil areas of the city.[23][24] Companies like Capithans, Kings Marine Exporters, India Food Exports, Oceanic Fisheries, etc. are some of the renowned names from Kollam city in this business.[25] The dynamic development of Kollam Port will accelerate more for this business in the city. The total export contribution from Kollam city is very high compared to other Kerala cities.[26] Kochi based Marine Products Export Development Authority(MPEDA)'s one among seven sub-regional offices is situated at Chinnakada in Kollam city due to the importance of the city as a significant marine food exporting business hub.[27]

Clam fishery

Kollam's clam fishery is now world-famous. It is the only Marine Stewardship Council(MSC) certified fishery in India. The Marine Stewardship Council is an international non-profit organisation set up to help transform the seafood market into a sustainable endeavor.

Ashtamudi Lake in Kollam is the major source of the clam used in this fishery. Ashtamudi Lake is a Ramsar Wetland of international importance, is the second-largest estuarine system in Kerala. It has extensive mangrove habitats harbouring nearly 90 species of fish and 10 species of clams. Kollam's clam fishery began in 1981. It supports the livelihood of around 3,000 fisher folks involved in the collecting, cleaning, processing, and trading clams. Approximately 90 species of fish and 10 species of clams are found there.

80% of India's export quality clams come from Kollam. The growth of Ashtamudi’s commercial fishery was driven by demand from Vietnam, Thailand and Malaysia in the 1980s and 90s. By 1991, the catch peaked at 10,000 tonnes a year, but declined by 50 percent in 1993 due to overfishing. An average of 10,000 tonnes of clam fishing is taking place at Kollam in a year.[28][29]

Apart from this, the main fishing areas like Sakthikulangara, Neendakara, and Tangasseri in Kollam have emerged as the main source of Lanternfish. The fish is a rich source of Omega-3 fatty acid. About 50 to 60 tonnes of Lanternfish catching is happening at the Sakthikulangara fishing harbour every day, and are sold at Rs.16/kg. This gives more or equal to Rs.50,000 a boat on each fishing trip. This fish is being traded only from the Sakthikulangara harbour within the Kerala state.[30]

Pencil slat manufacturing

Kollam is the largest pencil slat manufacturing hub of India. There are more than 150 slat production units in Kollam, employing roughly 5,000 persons. These Kollam based units meet a good portion of the demand for pencil slat in the country. 35% of the pencil slots manufactured in the world come from Kerala.[31] Of the 170 odd pencil slot manufacturing units in Kerala, 125 are based in and around Kollam district. These units are managed to export 160 loads of slots per month to companies across the world. This, according to slot manufacturers, is enough to make 20 crore pencils a month.[32] A slot is of 185mm length, 77mm width and 5.5mm thickness. Each load being exported contains 300 bags with 900 slots bundled into each of them. On an average, each month 150 loads of pencil slat consignment go-to pencil factories based in Delhi, Chennai, Mumbai and various places in Gujarat. Over 30 countries depend on the 170-odd pencil slot manufacturing units in Kollam for making pencils under different brand names.[33] These factories are working with the support of their associations, namely The Kerala Slots Factories Association and Kerala State Small Industries Association (KSSIA). Most of the important staff office bearers of these associations are from Kollam.[34]

Kollam Port
A distant view of Kollam Port
Main article: Kollam Port

Port operations are one of the major revenue earners of Kollam. Kollam Port is one of 20 major ports in India, which is situated 4 km away from the heart of the city.[13] It is the second major port in Kerala after Cochin Port. Construction equipment, sands, cashew, industrial products for companies like Vikram Sarabhai Space Centre (VSSC), Kerala Minerals and Metals Limited (KMML) etc. are transported through Kollam Port. To modernize the state's second-largest port, The Government of Kerala is planning to build a wharf for Kollam Port with a capacity to accommodate 6 ships at a time. It is one of the two ports in Kerala with online customs clearance facility and Vessel Tracking and Monitoring System (VTMS). The port is now undergoing for second phase of development worth Rs.125 crores.[35][36][37]

Information technology

IT development is a major revenue earner of Kollam. A large technology park, Kollam Technopark, is functioning in the suburb of the city, which is the only technological park in India that will be accessible by road, rail, water, and air transportation facilities after the inauguration of Seaplane service was scheduled to start in December 2014. The Government of Kerala has started some small Information Technology parks named Techno-lodges in the neighbourhoods of Kollam city, but they later ceased operation.

Kollam Technopark

The Kollam Technopark is part of Technopark, Trivandrum built on the hub and spoke model for the development of the Information Technology industry in Kerala.[38] As the second phase of development of the IT industry in Kerala, the Kollam Technopark comes up in one of the earliest industrial towns of Kerala, Kundara Located on the banks of the Kanjiracode Lake, a tributary of the Ashtamudi in Kollam this technopark is to offer the support of uniform talent distribution, Infrastructure and supporting IT platforms, e.g. telecom, datacom and digital exchanges, excellent infrastructure availability and back-up support available in Kollam.[39][40][41]

Industries

Kollam has an array of manufacturing and other industrial corporations. Mineral sand mining and related material production plants, electrical equipment production, titanium sponge production, etc. are there in the city.

United Electrical Industries Limited (UNILEC), Pallimukku
Main article: United Electrical Industries Limited

United Electrical Industries Limited, an ISO 9001:2000 accredited State Level Public Enterprise, has been successfully operating in the electrical engineering sector since 1950.[42] This company is one of the pioneers in energy meter manufacturing and Switchgear items. The company is situated at Pallimukku in Kollam city. UEI Ltd. has supplied over 40 lakhs Electromechanical Meters and 50 lakhs of Electronic Meters for domestic and industrial purposes. The company received several awards for the achievements for their efforts in energy conservation.[43]

Indian Rare Earths Limited (IREL)

Indian Rare Earths Limited (IREL) is a government-owned ISO 9002 Certified corporation in India. One of the four production plants of IREL is situated near Chavara, in the suburbs of Kollam city. The plant operates on a mining area containing as high as 40% heavy minerals and extending over a length of 23 km in the Chavara belt. The present annual production capacity of Chavara unit engaged in dry and wet (dredging/ up-gradation) mining and mineral separation stand at 1,54,000t of ilmenite, 9,500t of rutile, 14,000t of zircon and 7,000t of sillimanite. Also, the plant has facilities for the annual production of ground zircon called zirflor (-45 micron) and microzir (1-3 micron) of the order of 6,000t and 500t respectively.[44] The other plants of IREL are Manavalakurichi, OSCOM, and Rare Earths Division at Aluva.

The Kollam coast in Kerala is a blessed coastal belt with the country's best mineral sand deposit.[45] This belt commonly known as the Chavara deposit. After the main locality, covers a total length of 22 km and a width of about 8 km in the northern side and 6 km in the southern side. The Chavara barrier beach portion contains a concentration of heavy minerals above 60%. The Chavara deposit is estimated to contain 127 million tonnes of heavy minerals with ilmenite content of 80 million tonnes from the total reserve of raw sand of the order of 1400 million tonnes. The deposit is quite rich concerning ilmenite, rutile, and zircon and the mineral-ilmenite happens to be of weathered variety, analyzing 60% TiO2.[45]

Kerala Minerals and Metals Ltd. (KMML)
Main article: Kerala Minerals and Metals

Kerala Minerals and Metals Ltd. (KMML) is an integrated titanium dioxide manufacturing public sector undertaking in Kollam, Kerala, India. Its operations comprise mining, mineral separation, synthetic rutile, and pigment-production plants. Apart from producing rutile-grade titanium dioxide pigment for various types of industries, it also produces other products like Ilmenite, Rutile, Zircon, Sillimanite, Synthetic rutile etc.[46] It is one of the best performing Public Sector Units in India.[47]

Parvathy Mills
Main article: Parvathy Mills Limited

Parvathy Mills is a Public Sector Undertaking (PSU) under National Textile Development Corporation in Kollam. It is situated very close to the heart of the city. It was one of the glorious spinning units in India. The mill is under the consideration of National Textile Development Corporation for renovation.[48][49] The mill is also placed in the Master Plan of the Greater Kollam City Project. The Government is planning to build a large scale garment manufacturing unit by utilizing the available infrastructural facilities.[50]

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