TN govt earmarks $607 mn over next two years for heavy engineering sector

The sector has been growing at a CAGR of 8% and reached a value of $2.49 bn in 2017-18, giving Tamil Nadu the second spot in the country

The Tamil Nadu Government has earmarked $607 million over the next two years for the development of heavy engineering industries in the State. Tamil Nadu is the second largest exporter of heavy machinery, after Maharashtra. The value of its overseas shipments rose sharply to $2.49 billion in 2017-18, from $1.97 billion the previous year after stagnating for a few years, according to the State government.

The government hopes heavy machinery manufacturers will explore setting up units for manufacturing equipment for auto and auto components, textiles, food processing, heavy electricals and printing. It is planning to invest into heavy engineering industrial parks with common facilities, such as wastewater treatment plants, plug and play facilities, R&D centres and testing facilities. Dedicated MSME Parks with a focus on heavy engineering are also being discussed, it said.

Tamil Nadu already has existing infrastructure in Chennai, Cuddulore, Coimbatore, Krishnagiri and Madurai as clusters for general purpose machinery, boilers and turbines, generators, transformers and switchgears, tractors and mining and construction equipment. An upcoming industrial park in Ponneri, Tiruvallur district, spread across 700 acres with focus sectors on ship-building and auto and electrical components is expected to attract investments of Rs 6,500 crore in 10 years and generate employment for 42,000 people. 

Other industrial areas that offer opportunities for the industry in the State include the Coimbatore-Salem and Madurai-Thoothukudi industrial corridors.

State government data shows that heavy engineering exports from Tamil Nadu grew at a CAGR of eight per cent between 2013-14 and 2017-18, from $1.83 billion to $2.49 billion. Maharashtra as usual topped the charts in 2017-18 with an export value of $3.97 billion. Haryana stood third with $2.1 billion that year.

Industrial Machinery (36 per cent of overall heavy engineering exports), electric machinery and equipment (32 per cent) and ATM, injecting moulding, machinery etc (22 per cent) were the top three export sub-categories from Tamil Nadu in 2017-18.

While Chennai is one of the leading centres for auto, auto components and allied industries, Coimbatore isn't far behind. The region churned out $307.69 million worth of domestic pumps in 2017-18. The motor and pump industry in this district suppies over 40 per cent of India's requirement. Coimbatore supplies 21 per cent of castings in the country and has over 700 wet grinder manufacturers who deliver 75 per cent of the all wet grinders made in India.

The district churns out 150,000 employable graduates every year, which ensures skilled manpower for the sector. The government claims that it has the highest number of technical universities in the country, with around 400,000 engineers and graduates coming out every year from over 1,900 colleges. Tamil Nadu has a total of 88 government and 484 private ITIs and industrial training is imparted in 39 engineering trades and 17 non-engineering trades. Around 385 self financing industrial schools to fulfill local demand of industries for skilled labour.

Some of the major players in the sector include Caterpillar, Ashok Leland, Mitsubishi Heavy Industries Ltd, Doosan, BHEL, Koatsu, Alstom, Bonfiglioli, Cethar Ltd, John Deere, Toshiba, Timken, JSW, Kobelco, Gamesa and RRB. The government is offering various incentives to attract industries to the sector, as part of its upcoming Global Investors Meet 2019, to be held on January 23 and 24.