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Naidu’s building a new Andhra Pradesh

PARAN BALAKRISHNAN | Updated on March 08, 2018

Grand dreams: Naidu focuses on infrastructure and technology

A range of foreign investors are flocking to the State, thanks to the Chief Minister’s initiative

Andhra Pradesh Chief Minister N Chandrababu Naidu’s a man in a tearing hurry. He’s determined to turn his truncated Andhra Pradesh into an industrial powerhouse and he’s pulling out all the stops to make it happen in double-quick time. This month the State got a new air cargo terminal at Visakhapatnam, which Naidu aims to transform into a buzzing hi-tech city. That came just a few days after Naidu had played host to Microsoft founder Bill Gates at the AP AgTech Summit, which focused on using drones and other cutting-edge technology to increase agricultural productivity. And in October Naidu kicked off the Vizag Blockchain Conference 2017 to show off its hi-tech credentials.

Cut to Penukonda in Anantapur district, southern Andhra Pradesh, where Korea’s Kia Motors is about to construct a brand new $2-billion plant. Andhra beat off stiff competition to win the project that’s scheduled to start production in 2019. The State already has an Isuzu plant at Sri City, the industrial township that spreads out across Chitoor and Nellore districts, and a Hero Motocorp plant, which is scheduled to start production next year. Getting Hero to its site near Sri City was one of Naidu’s early coups. Apollo Tyres is also setting up a plant in Chitoor and Bharat Forge is setting up two plants in the State.

Three years ago, Naidu took over a State that had been separated from Hyderabad, the undivided Andhra Pradesh’s capital and nerve-centre. His reduced State had rich agricultural land but was low on the industrial development scale, with manufacturing contributing only about 10 per cent of the State’s GDP. Naidu’s vision — which he outlined in his Vision 2029 document — is a State with double-digit growth where the people dependent on agriculture fall from 55 per cent of the workforce to 40 per cent in the next 12 years.

That’s a stiff target, but Naidu’s launching his development offensive on multiple fronts and it’s getting results. The State says 187 large and mega industries have gone into production, investing ₹35,256 crore and creating employment for 87,000 in the last three years.



Thriving development



What’s more, the State’s building muscle in a string of industries such as the explosive-growth mobile phones. In June, Celkon opened its one million-phones-a-month plant at Tirupati’s Sri Venkateswara Mobile & Electronics Hub. Karbonn Mobiles has also started construction at the hub and Lava Mobiles is scheduled to start soon. Foxconn, the Taiwanese giant, opened its second plant at Sri City to manufacture phones for Xiaomi. The State government says that over 2 million phones a year are already made in Andhra Pradesh. Foxconn alone employs 15,000 women at its plants.

Sri City is one thriving development that predates Naidu. It’s strategically located about 75km from Chennai and already has 150 companies from 27 countries, including giant corporations such as Pepsi, Isuzu, Cadbury’s and Colgate. Thirteen more companies signed MoUs at the CII Partnership Summit earlier this year to set shop in Sri City and all have now started construction. Many more MoUs have been signed in recent months. “Growth has been exponential in 2017. We have a lot of companies in the pipeline,” says a Sri City representative.

A key part of the Naidu vision is turning Andhra into a buzzing hi-tech hub and it’s focusing on the newly emerging sectors like artificial intelligence, cyber-security, IOT and fintech to get out in front. October’s Blockchain Conference was the second part of its bid to boost its fintech credentials. Earlier in the year it held the Fintech Valley Spring Conference and in September organised an Innovation Fair.

The State has also set up innovation centres in Vizag and Tirupati to encourage start-ups. To train youngsters for hi-tech jobs the government has got organisations like Thomson Reuters to team up with local universities.



Tech for all



The Government aims to hasten Vizag’s evolution as a hi-tech city by also bringing technology into all walks of life. It’s tying up Visa for cashless payments in the transport network and tourist sites and also for municipal and LPG payments. At the State level it’s working with KPMG to introduce blockchain in the land registry and road transport departments.

Naidu’s also been globe-trotting and in October went to the UK, US and the UAE selling his vision for the future. In the UAE he had several meetings organised by M A Yusuffali, chairman, Lulu Group which is scheduled to start construction on a convention centre in Vizag in January.

The undivided Andhra Pradesh was a key centre for pharmaceuticals and Naidu’s team is determined to ensure that this key sector keeps growing. Besides that it has added a new innovation in the form of the one-year-old Andhra Pradesh MedTech Zone in Visakhapatnam which focuses on medical devices and which has already attracted 40 companies.

What’s attracting large corporations to Andhra Pradesh? The State offers a 21-day single desk portal and is the national leader in Ease of Doing Business. One company which attests to this is Walmart which has made the State a priority market. Walmart’s building three stores in the State and has signed MOUs for 15 totally. Putting up a store requires about 40-50 clearances. Says one executive: “Very little follow-ups are needed and senior officers are extremely supportive.”

The State’s also looking at putting together the infrastructure to support hyper-charged industrial development. Andhra says it’s the only south Indian state offering industry high-quality 24x7 power (it’s also looking at expanding renewable power and is a hub for solar panel manufacture).

At a different level, it has nine major and minor ports and it’s looking to expand its airport network. The State’s also looking at building the Visakhapatnam-Chennai Industrial Corridor and the Chennai-Bengaluru Industrial Corridor which will have major infrastructure projects along their routes and also link ports and airports with manufacturing clusters. There are also plans for a Coastal Employment Zone in Nellore district.



Where’s the money?



Can the State raise the funds for all this infrastructure building? The Central government has refused Special Category status but the ADB has chipped in with funds for the industrial corridor.

On a different note, some districts of Andhra are fertile agricultural land and the State might face difficulty making space for industry. However, the State government says land is available at affordable rates and it aims to create a bank.

Cash is also needed to build the new capital Amravati, which the government says has already attracted many new industries including HCL and Ashok Leyland. A Mega Food Park is also in the works for the city.

Of course, the State will face huge competition as it goes into overdrive to industrialise. Right next door Telangana’s also going working hard at attracting industry. But the greatest drawback’s that the State doesn’t have a city to match Hyderabad. Vizag’s only just emerging as a key centre and smaller cities such as Guntur, Vijayawada and Tirupati have a long way to go. But Chandrababu Naidu isn’t likely to let that stand in the way of his grand dreams.

Published on November 28, 2017

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