BackJayalalithaa signs pacts worth ₹20,000 cr with 12 firms
Investments include ₹4,500 cr by Indo Rama to set up petrochemical units, Rs2,325 cr by BGR Energy-
Hitachi JV
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Chennai: Tamil Nadu chief minister J. Jayalalithaa signed accords worth ₹ 20,925 crore with 12 companies on Monday that would provide direct employment to about 36,855 people and indirectly benefit nearly 100,000 more.
The chief minister also said the state would introduce a series of new policy reforms to strengthen the manufacturing sector with ₹ 1 lakh crore worth new investments.
“Attracting investment is dependent on providing the right environment to run a business efficiently. While availability of power, water, connectivity, port are key drivers that attract investments, administrative and procedural issues also play an important role," Jayalalithaa said.
The investment pledges have come even as the state faces a severe power shortage. Electricity demand in Tamil Nadu is touching 11,500 megawatts (MW) and generation remains only at 7,500MW. This is resulting in 8-to-18 hour power cuts in some parts of the state, including Madurai, Tirupur and Coimbatore.
“These challenges have eroded our competitiveness, making many investors shy away from Tamil Nadu," Jayalalithaa said.
Companies that have invested in the state, believe the power situation is only a short term glitch.
“We plan to use a lot of solar and alternative energy, but we are confident the state will help meet our energy demands," said Anshu Budhraja, CFO, Amway India, which is investing Rs300 crore to set up its first manufacturing plant in India. Tamil Nadu is an attractive destination for this wellness company as 22% percent of its sales is from Tamil Nadu said the CFO.
For Hyundai Motor, which has invested Rs4,000 crore into building a flexible engine plant at its existing facility in Sriperambudur, the project will not require any more additional power than what is consumed, said R. Sethuraman, director- finance and corporate affairs. He added that an additional 3 lakh engine capacity was being added to the existing 6 lakh capacity. “We should begin production in the third quarter or fourth quarter of 2013."
TVS Group too has made a Rs700 crore investment to increase capacity to 2 million units per annum from 1.35 million. The investment is across 3 companies – Sundaram Clayton, TVS Motor and Sundaram Auto Components, over a period of three years.
“With this investment, we will continue to get the benefits that we already get in the state-- like 80% of the investment is given as a soft loan over a period of 12 years. This will be the real cash flow benefit to the company," explained SG Murali, CFO, TVS Motor.
Investments pledged include ₹ ,500 crore by Indo Rama Group of companies for setting up synthetic fibre and petrochemical manufacturing plants; a ₹ 2,325 crore joint venture by BGR Energy Group and Hitachi Ltd to make turbines, generators and boilers; and a ₹ 4,100 crore commitment by the US-based paint maker PPG Industries and Harsha group for setting up fibre glass and float glass units.
A 2,000-acre textile park with an investment of Rs3,100 crore will also come up in Coimbatore.
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