Mfg likely to get boost during Reddy's 2nd term

Expectations are on the rise that the second term of chief minister YS Rajasekhara Reddy would give a boost to the manufacturing sector with the state bagging four major projects, including two manufacturing units, involving an investment of Rs 8,750 crore in the past fortnight.

“Indications are there that the next five years will witness a proliferation of manufacturing units in the state,” chairman and managing director of the AP Industrial Infrastructure Corporation (APIIC), BP Acharya, told Business Standard.

Despite the best efforts of the state government in the past 10 years, the manufacturing sector did not take off in AP. Acharya, however, said things had improved over the past one year and this was evident from the recent finalisation of the two manufacturing projects to be set up in the state.

The two projects, a Rs 6000-crore power equipment manufacturing unit by a joint venture of NTPC and BHEL and a Rs 1,000-crore helicopters production unit by Tata Advanced Systems of the Tata group, are expected to attract more manufacturers into the state.

According to Acharya, APIIC has built the necessary infrastructure in the past five years to attract the manufacturing sector. An amount of Rs 846 crore was spent on infrastructure upgradation between 2004 and 2009 as against Rs 40.4 crore in the previous five-year period.

This apart, he said, the state was offering power supply to the industry at a competitive rate of Rs 2.50 per unit , which had also been the major incentive for the manufacturers to set up their units here.

The above two factors coupled with the proactive policies of the government have paved the way for flow of investment into the state. Unlike in the past, many automobile companies are stated to be showing interest in establishing their units in the state.

On the other hand, Acharya said, the Genome Valley had become the favoured destination for the pharma and biotech companies. In the last fortnight, US-based life sciences giant, Alexandria and Switzerland-based global pharmaceutical major, Lonza, have come forward to invest Rs 1,000 crore and Rs 750-crore respectively in the valley. Besides, the Indian Immunologicals Limited is setting up a Rs 500-crore vaccine making unit at the place.

The APIIC chief is also confident that the proposed Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) in the state would take off.

The PCPIR comprises about 603 square kilometre of delineated investment region for the establishment of manufacturing facilities for domestic and export-led production in petroleum, chemicals and petrochemicals, along with the associated services and infrastructure.