Industrial Development of Mangalore – Some Reflections
Dr Uday Kumar M.A.
Associate Professor and Coordinator MBA(IB)
University College Mnagalore 575 001
Mangalore, originally Mangalooru, is the fourth largest city and the chief port city of the Karnataka State.
The city is located along the Malabar Coast on the backwaters of the Netravati and Gurupur Rivers and is
the administrative headquarters of the Dakshina Kannada (South Canara) district. Mangalore is an
administrative, commercial, educational, and industrial centre for the state of Karnataka. It has a long
tradition of business and entrepreneurship and ranks second in the state after Bangalore in terms of growth
and potential for development. Mangalore is located along the western coast of India about half way
between Mumbai and Cape Comorin. The district of Mangalore spreads across an area of about 4866 sq
kms.
The district has 2 distinct geographical regions:
The Coastal Region: Mangalore Taluka with coast line of 60 km and
The Malnad Region: consisting of Belthagady , Puttur, Sullia and Bantwal Taluk
Regional Settings
The city of Mangalore is located at 12º-52’N latitude and 74º-49’E longitude within Mangalore Taluka It is
located along the Arabian Sea and is strategically placed on the coastal corridor, which connects Kerala in
South with Goa and Mumbai in north. Mangalore is about 347 km from Bangalore and 937 km from
Mumbai via National Highway. The total area of Mangalore district is 30,600 hectares. The area under the
city Municipal limits is 12,877 hectares.
Linkages & Connectivity
Mangalore is well connected through Sea Port, Rail, Road and Air. Being a coastal city, it has the
advantage of all four modes of transport as well as export routes abroad. Three National highways viz.,
NH-17 linking Panvel and Kanyakumari, NH-48 linking Mangalore and Bangalore, NH-13 linking
Mangalore and Sholapur pass through the city. A domestic Airport is located at Bajpe, which is 15 km from
city connecting it to Mumbai and Bangalore. Mangalore is also linked by rail through the Konkan and
Southern railway network to all major cities of India and is also having all weather harbors. An all weather
port is located in Mangalore is the only major port of Karnataka. The New Mangalore Port Trust (NMPT)
provides transportation of goods to and fro from Mangalore. The port at present handles cargo as well as
tankers. Mangalore also has a very good network of government and private bus service which connects it
to the interior parts of the other Talukas and Districts.
Climate
The Climate of Mangalore is characterized by high humidity and temperature. The relative humidity is
generally very high reaching saturation levels during the summer season. A high relative humidity of more
than 90% is experienced during the monsoons (June to October). Humidity is lowest during winters
(December to February). The ambient temperature varies minimum from 17ºc to a maximum of 37ºc. The
city receives heavy rainfall during monsoons. The rain fall is about 4000mm throughout the year of which
about 90% received in the monsoon period.
Topography, Soil & Vegetation
The topography of the city varies from plain to undulated terrains at various locations. An interesting
feature of the coastal strip and the middle belt is that, it is not a plane but a series of estuarine low lands
separated by numerous hill ranges projecting the Western Ghats are seen along this belt. The geology is
characterized by hard laterite in hilly tracts and sandy soil along the seashore. The coastal tract is the most
densely populated part of the district and is the most fertile belt. The middle belt again has an undulated
topography with hills and dales. The valleys are fertile and boast of evergreen forest and several gardens of
arecanut and coconut, and paddy fields, which are the main crops of the district. The soil is mostly sandy
along the coastal belt and laterite in other parts characterized by high iron and aluminum contents. The
valley & river basins to the east of the coastal region contain rich alluvial soil. However, the water retention
capacity of the soil is poor.
Pattern of Urbanisation & Growth
The city’s growth has largely been oriented towards the north and eastern sides along the Airport and
National Highway 17 (towards Suratkal and Udupi). The sea face along the west and the administrative
state boundary of state of Kerala along the south has restricted the city’s growth in the western and
southern directions. A large number of redevelopment initiatives around Hampankatta and K.S Rao Road
are also taking place. The development pattern of the port city has been in a manner that has resulted in the
central areas in the city being congested and densely populated. The development of ensures a smooth
traffic flow in the city liberating the city roads from Heavy traffic flow and enhances development of the
city towards less developed areas, thus resulting in the expansion of the otherwise choked city. The Ring
Road shall also augment the development of residential & commercial regions catering to industrial
development in the northern region & IT development in the southern region along the alignment.
Demographic Profile
Population
The total population of the Mangalore taluka as per census 2001 is 8, 82,856. The population of city of
Mangalore as per the 2001 census is 3,99,565. The population of males and females in this is 50.23 % and
49.77 % respectively. There has been a phenomenon increase in the growth rate every decade due to the
emergence of new economic avenues and improved infrastructure in the city. There has been a steady
increase in the population residing in the urban agglomeration areas of the city. As per the 2001 census, the
population in the urban agglomeration was 5.39 lakhs which has increased to 6,03,269 as per the report
published by World Gazetter recently.
Population Growth Trends in Mangalore
Literacy
The literacy rate in Mangalore is 82% which is higher than the national average of 59.5%. Mangalore has
also emerged as an educational centre with a number of good quality education institutions offering
professional courses including engineering, medical and management studies along with Commerce,
Science, Arts and Literature studies.
Languages Spoken
The native language of Mangalore is Tulu. However, Konkani is also widely spoken in the region. The
region covering Mangalore is also locally known as ‘Tulunadu’, on account of the predominance of Tulu
language. Tulu language and its people have been closely associated with Kannada language as Tulu has
been written in Kannada script for many centuries.
From Tradition to Modernity
Dakshnia Kannada, which basically was a trading hub during the pre-modern period, got introduced to the
process of industrialization with the advent of German missionaries. Missionaries arrived here carried with
them the burden of providing alternative employment to people who got converted to the new faith. But the
entrepreneurial inhabitants of the land were quick in adapting to the new methods of production and new
ways of living. Transformation of the agrarian economy into money economy due to above said process of
modernization could easily generate surplus in the hands of the non-farming community. Surplus with the
newly emerging community thus laid foundation to the birth and growth of modern institutions like credit
and banking. Even though local ‘nada henchu’ underwent transformation to become ‘Mangalore tile’ and
modern printing press was started, there was no fundamental change in the social structure of the society. It
is apparent from the above that despite the above developments industries failed to make a head way in the
region.
During pre-independence period lack of industrialization could be attributed to lack of capital formation.
Surplus generated by the trading and merchant community was not sizable enough to promote industries.
Mobilized surplus in the form of savings was utilized for the furtherance of trade than industry as the risk
involved was less and gestation period was also short. In addition to this a large number of traders also
were rent seekers from land ownership. But the size of holdings was not sizable enough to gather volume of
rent sufficient enough to enhance industrial growth. Other implication of this tendency in the economy was
that in the rural areas, large number of farmers depended on small and medium sized land holdings that
hardly left them with any surplus after paying land rent. Even though there was poor growth of industries,
starting of transport companies, educational institutions, hotels, trading companies, hospitals, and
professions related to it have contributed enormously to the economic growth of the region and they kept in
tact the social structure in the region.
During the post-independence period emphasis that state laid on industrialization influenced the activities
in the district. Accordingly there has been growth of small and medium scale industries. The farm and
service sectors have been growing with out much head way in the industrial sector.
But after 1980’s the region has noticed a significant growth of the service sector. The region has received
the attention of the large scale or heavy industries despite resistance from the local population. Large scale
or heavy industries which have started operating in the region are capital intensive and has not been able to
generate employment as expected. There are some issues that remained a bone of contention between the
public, state and the corporate world. Scanning through economic environment of the district, it is
apparently clear that it is banking sector, education, health, small and medium scale industries and
Information technology sector that are generating both income and material benefits to the population of
the region.
The future of industrialization of the region needs to be based on the realistic estimate that a balance
between the exploitation of opportunities, ecological balance, and employment opportunities to the rural
population has to be maintained. Some of the large projects have already paved way for social and
ecological problems. Therefore, industries that invests intellectual capital available in the region, makes use
of the infrastructure facilities like ports, airport and railway should be developed for the economic
prosperity of the people of this region. People centric welfare oriented growth with the involvement of
public and private sector should be guiding light of industrial development in future.
Economic Profile
The district’s economy is dominated by Agricultural Processing and Port- Related Activities followed by
fishing activity in the coastal areas. Mangalore port handles 75% of India’s coffee exports along with a
bulk section of the cashew nuts exports from the country. In the recent years quite a few chemical,
engineering, automobiles and food processing units have also been initiated in the city. Mangalore’s
economy is mainly based on agriculture processing and port related activities. The other subsidiary
occupation includes Animal Husbandry and Food based Cottage Industries. Of late Sericulture is also
developed in certain areas. Trade and commerce in the district is fairly at the higher level. Mangalore has
also viewed as a successful Banking and Financial hub for the country. The district has large middle class
and affluent population which is
working in banking sector About five nationalized banks have their base at Mangalore namely; Corporation
Bank, Canara Bank, Karnataka Bank, Syndicate Bank and Vijaya Bank.
Software Technology Parks of India: Software Technology Parks of India (STPI) is a society set up by
the Ministry of Communication and Information Technology, Government of India in 1991, with the
objective of encouraging, promoting and boosting the Software Exports from India. STPI maintains internal
engineering resources to provide consulting, training and implementation services. Services cover Network
Design, System Integration, Installation, Operations and maintenance of application networks and facilities
in varied areas ranging from VSATs to ATM based networks.
STPI Mangalore
STPI Mangalore operates with Multiple International Optic Fibre Bandwidths and also resides International
Satellite Gateway earth station facilitating High-Speed Datacom services, thereby availing Quality Internet
services. Provides incubation services for start-up companies.
Data communication Facility at Mangalore
Internet Backbone connected to Multiple International Optic Fibre Bandwidths. Ideal for all kind of real-
time applications.
9.3 mtrs C-Band Satellite Antenna using Intelsat 62 Degrees East for Class B Earth station, for
International Private Leased circuits.
Infrastructure
The State-of-the-art STPI Mangalore has total built-up area of 12,000 Sq feet at Blueberry Hill, Derebail
located very close to the city. The infrastructure consists of Reception, NOC working area, Spacious
Conference Hall, Library, Cafetaria in the ground floor.
It has fully networked six incubators each of 220 Sq feet to facilitate SMEs.
Quality Objectives
• To strive for the upgradation of the technology to meet customer requirements in ever changing
market
• To upgrade the technology knowledge of all STPI personnel through continuous improvement
training
• To provide state-of-art data communication services as per acceptable international standards
• To provide comprehensive service including project approvals, import attestation, software export
certification etc., in a time bound manner
• Achieving customer satisfaction through the combined efforts of planning the infrastructure and
executing the projects through dedicated workforce
The prime requirement for the Software Export community for sustained operations is High Speed reliable
data-communication connectivity between their Offshore Software Development facility and their partners
abroad. For the society at large to access Internet connectivity is very essential. To meet the twin objectives
STPI initiated comprehensive data-communication services under the name of "SoftNET".
STPI is a licensed International Communications service provider and is Category A Internet Service
Provider in the country. Established in 1992 in STPI - Bangalore the Services have spread to most of the
strategic locations across the country.
Carrier relations are formed with major providers in the world including Concert, Worldcom, KDD,
Teleglobe, C&W, etc.. STPI enjoys the reputation of being one of leading data communication provider in
the country with operations spanning to more than 25 countries across the globe.
SoftNET provides total and immediate response to the customer needs using the lead communication
technologies and flexibility of service. Pioneering the services
SoftNET has demonstrated many technologies that were the first of their kind in India.
First to offer the Digital private lines through Multiple Access Radio Network - 1992
First to offer Commercial Internet Services in India - 1993
First to demonstrate Video Conferencing capabilities - 1993
SoftNET Services offering
• SoftPOINT - International Private Leased Line Offering (Point to Point Link)
SoftLINK - High Speed Internet Access for Software Exporters and ISP
Captive Networks - Facility Management + SoftPOINT and/or SoftLINK offering
Advantages:
Strong Banking & Financial Industry
Airport
Telephone Density (10 per 100)
Literacy rate and
Quality Education
Good Transportation facility
Good health Care facility
FUTURE DEVELOPMENT
Background
The city of Mangalore is undergoing a rapid economic change. It is fast emerging as an attractive real estate
destination in Karnataka. This is mainly due to the development of port and improvement in infrastructure
such as roads, development of international airport, increased trade and commerce, development of service
industries, IT-ITES clusters and Special Economic Zones. To back this development and growth, the city
has developed an equally good social infrastructure. Good quality educational, financial and health care
institutions are been established. The above developments have attributed to the increase in demand for real
estate market in Mangalore. The property prices have shown a phenomenal increase in the last few years. In
certain locations, it has almost doubled.
Development of Residential & Commercial Spaces
The immediate periphery of the city centre has predominantly residential development. The development is
fast moving towards the north and north eastern sides along the industrial growth corridors of the city.
Commercial growth is predominantly seen towards the eastern side. This can be linked to the development
of residential zone along this side. The southern part of the
city has various resort developments exploring the water front potential.
Residential Development
Residential Development
Commercial Spaces
In Mangalore, the commercial areas are mostly concentrated at the Central Business District (CBD). With
the growth of the city, an expansion of these areas is seen along the major road corridors and mainly along
the IT/ ITES development. The network of retail shops in the city is also expanding steadily, and is spread
across several locations in the form of traditional and modern retail streets, up market and suburban and
retail clusters. With the expansion of
city’s economy especially in IT and Education, requirement for new commercial
spaces with better design and infrastructure has increased.
Key factors for increase in Real Estate Prices in Mangalore
Affordability of Investors: Though Bangalore has well established real estate market, in the recent years,
due to the extremely high and unaffordable property rates, Mangalore has been a popular destination for
investment. A high literacy rate, development of the IT Industry and
employment of several locals in the middle-east are other factors that have attributed to the affordability of
Investors in Mangalore.
Improved Connectivity: Mangalore has an advantage due to the accessibility by all means of
transportation systems. It has a very good sea link and is well connected via roads, rail and air.
Development of Industries: The industrial corridor of the city expands towards the northern side. Growth
of IT Corridor and Mangalore Special Economic Zone has increased the value of residential and
commercial properties along this side.
Prominent Developments in Mangalore
Industrial Sector
Traditionally, Mangalorean firms have had a major presence in the tile, beedi, coffee and cashew nut
industry, although the tile industry has been in decline due to the predominance of concrete in the modern
construction. The Beedi rolling industry one of the major home industry of district employs over 6 lakh
people with estimated manufacture of around 27 crore of Beedi stick a day
covers around 17 % of the country’s total Production. Other industries which have set up their units include
Campco Chocolate factory, BASF, and score of tile, cashew, fish and canning Factories The city has two
major industrial areas, viz. northern areas, such as Baikampady Industrial Estate, Panambur & Kuthethoor
and eastern areas, such as Yeyyadi Industrial Estate. The northern areas have industries of crude oil
(refinery), chemicals & fertilizers, iron & steel,
shipping, seafood, granite, spice, etc. whereas the Yeyyadi Industrial Estate comprises manufacturing units
of coir products, wooden furniture, plastic articles, engineering products, etc. The map below presents the
geographic distribution of industrial activities in the Baikampady Industrial Estate. Some of the major
industries located in Mangalore are:
• Mangalore Chemicals and Fertilizers Limited
• Kudremukh Iron Ore Company Limited
• Mangalore Refinery and Petrochemicals Limited (MRPL)
• Mangalore Special Economic Zone (MSEZ)
• Jaiprakash Associates have envisaged power plant at Mangalore
Karnataka Industrial Areas Development Board (KIADB) is the Nodal Agency for industrial development
in the State including matters pertaining to land acquisition and R&R packages. The Baikampady Industrial
area spread across an area of 937 acres is one of the largest & most developed industrial parks in Dakshina
Kannada District. The following table Indicates statistics of Industrial Parks developed by KIADB.
According to estimates, over Rs 50,000 crore investments are planned in various sectors in Dakshina
Kannada and Udupi districts on private entrepreneurship model in the near future.
Special Economic Zones
Mangalore Special Economic Zone (MSEZ)
The MSEZ is located 22 km away from the city, towards the north near the NH17. It is designed as a multi
product SEZ catering to petrochemical, manufacturing, service, trading and warehousing industry. To cater
to the housing needs of the workers/employees a non Processing area of 303.25 acres is planned around it.
The MSEZ has triggered a demand for real estate
in the vicinity. The real estate price along the corridor has increased Also a number of other SEZ
developments are coming along its side. This has increased the demand for housing. New townships and
group housing type of residential colonies are planned by private developers to cater the housing
requirements of migrant population who are expected to work in these industries.
(ii) Petroleum Chemicals & Petro-Chemicals Investment Region (PCPIR) Mangalore is one among the
few PCPIRs (proposed) (petroleum, chemicals and petrochemicals investment regions) in the county, and
Oil and Natural Gas Corporation (ONGC) - Mangalore Refinery and Petrochemicals Limited (MRPL) is
planning mega investments in the region. It includes Rs 8,000 crore for refinery expansion and Investment
of Rs 5,000 crore for petrochemical complex by ONGC Mangalore Petrochemical Limited (OMPL)
IT-ITES Sector
In IT/ITES activities too, Mangalore is fast catching up with other major cities. IT major Infosys has
established a large presence here. With the increasing real estate costs in Bangalore, Mangalore has
emerged as a prominent destination for development of IT industry. Keeping this in view, the Government
of Karnataka (GoK) is facilitating development of IT Corridor and a Software Park in Mangalore. Most of
the upcoming developments in SEZ’s is related to ITITES.
Infosys is setting up its IT SEZ near Konaje heralding the entry of other IT firms like Lasersoft Infosystems
Ltd., Invengor Technologies, and Mphasis BPO. Amongst the other companies Nitesh Estates and BA
group are developing IT SEZ at Ganjimutt and Thumbay respectively. There are presently three dedicated
IT Parks under construction, which indicates the demand from IT companies which intends to expand their
work force in the city. The details of the same are in
New Mangalore Port Trust
The New Mangalore Port (NMPT) is the only major port in Karnataka. It was established in 1980s and
handles 26.67 million tones of cargo. The port has marked Mangalore as a destination for trading and
economic development of the region. Since its inception, the port has successfully increased the exports
and imports from the region. Over the years the Port has grown from the level of handling less than a lakh
tonnes of traffic to 26.67 million tonnes handled during 2003-04. The major commodities exported through
the Port are Iron Ore Concentrates & Pellets, Iron Ore Fines, POL Products, granite stones, containerized
cargo, etc. The major imports of the Port are Crude and POL products, LPG, wood pulp, timber logs,
finished fertilizers, liquid ammonia,
phosphoric acid, other liquid chemicals, containerized cargo, etc. NMPT has provision of residential
accommodation within the premises of the port. The township covers an area of approximately 130 Acres.
NMPT has also proposed major development activities for the port in the near future. The figure no 9
depicts the facilities and developments envisaged by NMPT.
Mangalore Airport
The Mangalore Airport is located at Bajpe, about 22 km from Mangalore City. In the past, the airport used
to handle only domestic flights. Recently, the airport has commenced few international flights to the Gulf.
In late 2006, it was handling only eight international movements a week. The number of international
aircraft movements (arrival and departure) during this period
went up from 720 to 2,200. Considering increased number of passenger traffic the Airport Authority is
planning a new Terminal Building. Most passengers are from Dakshina Kannada and Udupi districts of
Karnataka and from northern Kerala. The passenger movement at the airport stood at 2.84 lakh people in
2005-06 against 2.68 lakh in 2004-05, registering a growth of 6 per
cent. The Airports Authority of India (AAI) expects to handle 3.55 lakh passengers by 2009-10 and 4.31
lakh passengers by 2013-14. According to AAI, the number of aircraft movements was likely to be
increased to 5,154 during 2009-10 and 6,265 in 2013-14, from 3,650 in 2005-06.
New Developments envisaged:
To meet the emerging demands of both domestic and international traffic, the AAI has initiated various
measures, including the construction of a second runway. This runway, which can handle bigger aircraft, is
2,450 meters long & 45 meters wide, and lies southeast to the existing runway. Adjacent to the new runway
an integrated passenger terminal is proposed, which will handle both
domestic and international traffic. A new approach road ahs also been constructed to the new terminal
which will be closer to Mangalore City by 4 km compared to the existing terminal.
AAI has earmarked 20.85 acres for commercial development along the approach road to the new terminal.
Around six acres would be available for the development of a business park, which would target Global
logistics companies, trade & industry groups and pharmaceutical companies. AAI has also earmarked 7.38
acres for the development of a hotel and a convention centre. Export of perishables such as jasmine and
vegetables to West Asia is likely to get a boost once international flights start to operate from the
Mangalore airport. Floriculture is growing in Dakshina Kannada and Udupi districts, and many small
farmers have taken up cultivation of jasmine. Apart from places like Mumbai, jasmine is in good demand in
West Asia. To provide an
opportunity for the exporters of perishable goods, the AAI has earmarked one acre for the development of
cold storages.
Tourism Sector
“Dakshina Kannada” district has rich heritage and culture in form of temples, churches and mosques. It has
some of the most beautiful beaches and ghats along the western part of the country. Inspite of this, the
tourism potential of the district remains largely unutilized. Currently the tourism activities are mostly
related to heritage tourism activities. Some of the popular heritage destinations are Mangaladevi Temple,
Kadri Manjunath Temple, St. Aloysius College Chapel, Jain temple at Moodabidire, Sultan Battery,
Pilgrim centre and Beach Resort at Ullal and Karala Temples. The inflow of tourist through out the year to
these destinations has been increasing steadily. Every year there are number of visitors to Mangalore. The
major tourist circuits include Mangalore and Udupi.
The two towns attract a number of tourists but mostly domestic tourists. More than 95% of the total tourist
inflows are composed of domestic tourist while the remaining foreign. The inflow of tourists is almost
stable throughout the year but there is an increase noted in the numbers during the months of December to
March which is the peak season. 2006 49,942 - 2007 57,559 15.25
2008 62,276 8.20
With beautiful water front and scenic coastline, Mangalore has a huge potential for developing into a
holiday destination for domestic and international tourist. Various recreational activities related to water
sports, beach resorts and amusement parks can be planned along the water front for attracting international
tourists.
Hospitality Sector
Mangalore also has a potential to emerge as one of the largest domestic hospitality markets in South India,
driven by the growth of the tourism sector and its strategic location as gateway to tourism in northern
Karnataka. The hospitality sector in the city mainly caters to the tourists (domestic & international) and
business travelers. As per the recent estimate, approximately 60 percent of the travelers to the city come
here on business trips whereas the remaining for leisure trips. Majority of premium hotel supply is
concentrated mainly in the KS Rao Road as the area is better accessible to the public transport system and
city railway station. Within the city, the corporate traveler segment is estimated to account for a majority of
demand for hotel accommodation, with domestic international tourists represent marginal share. Mangalore
has few
luxury hotels and the occupancy rates are very high during the peak season.
