Global majors flocking with investment plans of over Rs 2,000 cr

Amit Mitra Hyderabad | Updated on November 09, 2011


From teddy bears and herbal tea to massive equipment for steel industry, cryogenic tanks and railway coaches, the sprawling Sri City special economic zone in Andhra Pradesh is developing as a multi-product zone.

With a land bank of about 6,000 acres in Chittoor district, the zone has been developed over 1,400 acres in the first phase, with 60 companies, including 22 multi-national corporations, having signed up with the zone for setting up manufacturing facilities. “So far, 20 companies are operational, with another 14 under various stages of construction. We expect at least seven of these to be operational within a year,” according to Ms Raghini Peter, Senior Vice-President of Sri City (P) Ltd.

The 20 units that are operational have together put in Rs 800 crore, while the promoters expect the 60 companies that have so far come on board to invest over Rs 2,000 crore in phases.

French major Alstom which is setting up a $300-million railway coach manufacturing unit and Danielli of Italy, which is putting up a facility to manufacture equipment for steel plants, including blast furnaces and coke ovens, will be the biggest units in the zone. “We will be setting up the facility in three phases, with the first phase involving an investment of $50 million. We intend to become a one-stop shop for the steel industry,” Mr Chris Williamson, Plant Director of Danieli India, told Business Line.

Italy-based CRV Group has set up a facility to manufacture sophisticated pressure vessels and cryogenic tanks, while Kobelco of Japan is the first automotive manufacturing-related company in the State. Other units that have become operations include Rockworth Systems of Thailand, which produces office furniture, and US-based Amphenol, manufacturer of interconnect products.

What attracted these units to the SEZ? “We have a facility to produce soft toys in China. But the high wage bills and labour shortage prompted us to look at India. After studying different locations, we zeroed in on Sri City because of land availability,” says Mr Ajay Sinha, Managing Director of Pals Plush.

The company, which makes soft toys for Disney and Tesco, among others, is setting up a facility to produce between 5,000 and 10,000 toys a day. “Today, labour wages in India for making soft toys are one third that of their counterparts in China,” according to Ms Seema Nehra, director of the company.

Similar sentiment was echoed by Ms Barbara Navarro, representing Spanish company Eura, which manufactures abrasives to polish granite and marble. “We looked at different locations across Asia, before deciding on India and Sri City zone. We are setting up a facility to manufacture 30,000 pieces a day,” she pointed out.

Published on November 09, 2011

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