Metals and mining baron and Chairman of Vedanta Group, Anil Agarwal says the consulting firm, BCG is helping them evaluate competing offers from Karnataka, Maharashtra and Gujarat for setting up a semiconductor manufacturing plant, jointly with their partner, Foxconn. He adds the group received ‘multiple’ expression of interests for the controversial Sterlite plant in Tamil Nadu, which it is seeking to divest. Excerpts:


Give us a little perspective on your new economy business, especially the proposed semiconductor plant in partnership with Foxconn?

India imports about semiconductor and display glass worth $16 billion each. We are in this business; we also have been making optical fiber for the last 25 years, which is again, made of glass.

So, we have the glass technology and we also make display glass in Japan and Korea. We acquired a company three years back, which is only among the four in the world that produces display glass. We are one of them. So, they literally have monopoly and they supply to all, including India.

There is no better place than Bengaluru (to create a Silicon Valley) because it has culture and infrastructure. Other States are also very keen because this will open at least a thousand industries — small, and big.

For this, we have tied up with Foxconn and we are on the fast track. We want to do it in two years. So, we can have both the products which would reduce imports wort $30 billion. Also, it is my dream that we see a Silicon Valley in India.  Our Indian engineers and minds are there (in the US), so why can’t we do it here? We are looking at (competing offers from) Karnataka, Maharashtra, Gujarat. By the end of this month, we will be able to pin down which State we are going to. 


Especially with all that’s happening between Taiwan and China?

Why has Taiwan been so much of a focus? Taiwan does not have natural resources. (It’s because) they have semiconductors, they have display glass. America wants semiconductors, China wants semiconductors. There is a war going on for semiconductors and display glass. I don’t understand politics, but I think Taiwan will remain a democratic country. And it has beautiful, hard working and innovative people.


Are you meeting with the Karnataka CM to discuss investment projects?

Yes. He’s (Basavaraj Bommai, CM, Karnataka) very keen to meet. We had a video conference and I found out he’s an engineer andunderstands (these issues) well. It’s not that you need (just) one semiconductor manufacturer, you need at least two or three. So, if we all collaborate, one of them will definitely come to Karnataka.


What are you expecting from the government, be it State or Centre?

Semiconductor industry has always developed with the vision of the country. We are just instrumental. It is fundamental that a huge subsidy is required. Central government has already announced the PLI scheme.

Also, it is not just the PLI scheme, but capital subsidy also. Everybody knows what subsidies are required. Other countries like America has given up to 90 per cent subsidy. We are looking at about 60 per cent subsidy.


What is the scale of investment?

We are talking about a full project of about $20 billion. We should be the leader of supplying this, not only to our country but to other countries as well — because we have skilled people. We are starting with $8-10 billion and then will scale it a little bit.


In your traditional business, you have always been vocal about liberalising mining policies and allowing private companies to explore more. For instance, Karnataka is known for iron ore deposits. So are you having any conversations regarding that?

Whatever a country generates, 70 per cent goes for the input. We have to address below the ground (mining policies) as priority.

Today, we have advanced technology. We will be able to pin down where is, what we want. Some foreign NGOs like the Greenpeace or Amnesty are using judiciary, politics and media to push back India’s development agenda. They want India to just import and consume, not produce and export. They want India to be dependent.

We have the resources, we have the human capital, we have natural resources, we have technology and with this, we should be able to produce (not import).


Earlier there were some plans of separating various businesses and unlocking value. Has that been dropped?

We have all together about $30 billion revenue. We decided to create a big laddoo of $50 billion in revenue in a couple of years. And then, we we’ll evaluate (the plan). For now, nothing (on breaking up) is on the cards.


What is the status with Sterlite? Were you disappointed by the developments?

We have had to shut down our largest company in Goa (Sesa Goa) and we had similar experiences. We keep doing our work. (On Sterlite) I have trust in the judiciary. Whether we open it or somebody else does, it is a national asset. We are evaluating the multiple expressions of interest we have received. The team will take a call (on the bids). 

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