Kerala cyber park to be first in world by a cooperative society
Donning a white dhoti and a khadi shirt, 55-year-old Ramesan is the president of Uralungal Labour Contract Co-operative Society (ULCCS). The largest labour cooperative in Asia, a diversified business organisation with an annual turnover of Rs 400 crore, is set to open Kerala’s third cyber park–the first in the world by a labour cooperative–in December .india Updated: Nov 19, 2015 18:45 IST
It is 3 pm, well past lunch time. But the first question that P Ramesan asks visitors to his office is, “Have you had your lunch?”
Donning a white dhoti and a khadi shirt, 55-year-old Ramesan is the president of Uralungal Labour Contract Co-operative Society (ULCCS). The largest labour cooperative in Asia, a diversified business organisation with an annual turnover of Rs 400 crore, is set to open Kerala’s third cyber park–the first in the world by a labour cooperative–in December .
His question is not just a formality; there is a reason behind it. It is related to the origin of the Society more than 90 years ago, when a group of low caste labourers of a small village in northern Malabar, Uralungal, organised themselves with a capital of just 37 paise, as per the guidance of Vagbhadananda, a social reformer of northern Kerala, to get out of starvation, poverty and feudel oppression.
“The primary aim of the cooperative back then, and for a long time, was to get food for every member. Wage was secondary,” Ramesan says in his northern Malabar Malayalam. Filling stomachs is still a part of their legacy, as reflected in the question he had just asked.
Today, the total worth of the Society would be more than Rs 10 billion. It undertakes multi-crore projects that include highways, bridges and flyovers across the state. It has eight business subsidiaries consisting technology solutions (software), affordable housing, urban planning and sustainability, agro-farms and a craft village, among others. The turnover has been growing at 30% annually for the last three years.
The 2.7 million square feet UL Cyber Park is the first IT Special Economic Zone in the Malabar region and is expected to generate about 40,000 direct employment opportunities. The UL Technology Solution, the software arm of the Society, that started with just four people in 2012, now has more than 60 permanent and 40 temporary employees and has been growing at 50% since then, now reaching a turnover of Rs 25 crore.
“The most remarkable fact is that they are able to accumulate money, modernise and diversify, in spite of giving its members high level of wages and all the allowances and benefits,” says TM Thomas Isaac, former finance minister of Kerala.
ULCCS is centered around laboureres who manage it from top to bottom and usually start their membership as masons or breaking road metal. The average earning of workers at the Society is about 40% higher than their counterparts. Once a member, they are entitled to Provident Fund, insurance, gratuity, interest-free loans and many other benefits. They rise ranks over the years and some like Ramesan go on to lead the organisation that now employs around 3,000 workers directly and 6,000 indirectly.
TP Knhhikkannan, a noted economist in Kerala, cites ULCCS as a successful example of social entrepreneurship, where unlike capitalistic business model, wealth created is shared equally by every member. “Thus, each member, starting from an ordinary mason at the lower level to the director board, is equally responsible for its progress and success.”
In Kerala, a state often blamed for highly politicised and troubled labourers, it is a wonder that this labour cooperative hasn’t ever seen a single day of labour unrest, he adds.
“We are, of the workers, by the workers and for the workers,” says S Shaju, the secretary of ULCCS. The state government has given the Society an accredited agency status because of the timeliness and quality of work so that it can directly get work without going through a tender.
Away from the city, at a construction site, where a bridge was just completed, it was hard to distinguish VK Anandan, the vice president of ULCCS, from other labourers. Dropping out after his seventh class in school, he joined the society in 1977, with breaking road metal at a quarry as his first task. Pointing at a just finished 300 meter bridge he says, “We took just 10 months to complete this bridge, the deadline was one year. We worked 24 hours, in shifts, to finish it.”
And this is one of the secrets of their success, says Ramesan: “Our model is simple. You treat the workers well and pay them well, and they work well with commitment. And you are able to produce quality work, able to finish it much before the time and make profit out of the time and cost savings.”
He highlights the discipline and lack of political interferences as other reasons. “We may have our own political affiliations but we never allow that get into functioning of the Society. You may find fierce competition in the Society elections held every five years. But that just starts there and ends there too.”
“If someone shows indiscipline, we punish them, no matter even if he is a director,” Anandan says. A usual punishment is sending a person to a quarry, to break road metal.
The Society entered its high growth stage after the beginning of the millennium, when the number and money involved in the infrastructure projects in the State saw a high growth. “Big projects start coming up from government,” Ramesan says.
Facing labour shortage, the Society started acquiring heavy machinery to reduce its dependence on labour and began modernisation and diversification to other areas that included the ULTS and now the IT Park. “We saw that a transition is required if we are to attract the new generation to the Society.”
The United Nations has endorsed ULCCS as a unique sustainable rural development model for creating employment in multiple business areas with a social perspective.
In September 2014, the UN invited the Society to Europe, the birth place of the cooperative movement. “We were very small compared to the size of many cooperatives there, who were employing high technology, some even making robots,” says Shaju.
“But still they were impressed at our growth rate, and our diversification. And we found that we have been on the right track,” says Ramesan with a confident smile.