Chairman of the Federal Bank, C Balagopal | Photo: Mathrubhumi/Santhosh KK
Kochi: In a recent interview, renowned entrepreneur and former IAS officer, C Balagopal, highlighted the favourable ecosystem for small and medium industries supported by advanced technology in Kerala. With a career spanning over four decades, Balagopal shared insights into his entrepreneurial journey and shed light on Kerala's industrial potential in his interview with Mathrubhumi daily correspondent.
Reflecting on his decision to leave the civil service and pursue entrepreneurship, Balagopal explained that his visit to the Sri Chitra Tirunal Institute of Medical Sciences and Technology (SCTIMST) played a significant role. Inspired by the interactions he had during the visit, particularly with Prof. AV Ramani, the head of the biomedical research centre of SCTIMST, made the decision to venture into business, he said.
Balagopal faced financial challenges when starting his blood bag manufacturing company, 'Penpol,' in 1984-85, as there was no angel investment or startup funding available at the time. He approached the Kerala State Industrial Development Corporation (KSIDC) for financial support, but they required a project guarantee from the SCTIMST. With the involvement of the National Research Development Corporation (NRDC), which agreed to a 25 per cent stake, KSIDC joined as partners, and Balagopal raised additional funds through crowdfunding to establish the factory and machinery.
During his time working at Supplyco, Balagopal gained valuable experience in planning innovative projects and understanding finance, which later proved to be instrumental in the establishment of Penpol.
When asked about the entry of Terumo Corporation, a Japanese company, as a partner, Balagopal explained that it was a strategic decision taken during the liberalisation period of the 1990s. Terumo was identified as the most suitable partner, and negotiations led to the acquisition of all shares by Terumo, resulting in the company being renamed Terumo Penpol.
Balagopal eventually sold his remaining shares in the company and retired at the age of 60 in 2012. Despite the absence of globally or nationally dominant companies in Kerala, Balagopal emphasised that the state has created a favourable habitat for small and medium enterprises. He highlighted the strength of Kerala's startup ecosystem, which has been recognized by NITI Aayog and Startup India.
“There is no need for concern over Kerala's ability to establish global or national giants. With its hi-tech infrastructure and conducive environment, Kerala is currently witnessing the emergence of a thriving cluster of small and medium enterprises (SMEs). While multinational giants achieve their growth through acquisitions, acting as aggregators, the absence of such an aggregator in Kerala should not be seen as a problem. Consequently, there is no issue with Kerala companies being acquired, as it does not result in the loss of factories or jobs within the region. In industries like medical devices, the production process operates like a chain, with SMEs playing a crucial role. With a turnover ranging from Rs 250 cr to Rs 500 cr, SMEs can achieve dominance in specific sectors. Notable examples include Terumo Penpol and Synthite Industries, operating in the spices sector. Moreover, Kerala has the potential to make significant progress in knowledge-based enterprises. According to NITI Aayog and Startup India, Kerala boasts the best startup ecosystem in the country,” he said.
Balagopal is presently the chairman of Kerala-based Federal Bank.