Sops attract Tamil Nadu textile firms to Andhra

Southern India Mills Association to set up Rs 1,500cr textile park in Nellore

After the semiconductor industry, it is now the textile industry from Tamil Nadu that are turning to Andhra Pradesh to take advantage of the incentives offered by the Andhra government.

Wooed by this, the Southern India Mills Association (SIMA) is planning to set up a textile park which would focus on spinning sector, in Nellore district, Andhra Pradesh.

Sources in SIMA said at least 15 of its members, which are now operating either from Tamil Nadu or Andhra Pradesh, would be the prospective investors in the initiative. The park is being planned on a 400-acre site at Naidupet, at a probable investment of about Rs 1,500 crore.

The move comes as a response to the Andhra Pradesh government's textile policy for 2005-10, which offers a slew of incentives, including concessional power tariff, to new textile investors.

As per the policy, the state government will also extend a training grant of Rs 5,000 to each worker, who is trained and employed by the new textile units in garmenting, processing and weaving. For spinning, the grant will be Rs 1,000 per worker.

"The policy says that the state will give power at a concession of Re 1 a unit for garmenting units. Non-garmenting textile enterprises will get a concession of 75 paise per unit. The cost of power in Tamil Nadu is the highest among all the southern states and works out to Rs 4.38 a unit," the source added.

Another factor that is attracting the textile mills to Andhra Pradesh is the availability of skilled but cheaper labour compared with Tamil Nadu. Sources say that the labour in Andhra is around 30 per cent cheaper.

Confirming the recent developments, SIMA chairman S V Arumugam, said the entrepreneurs here were keen on obtaining a long-term concessional power tariff pact with the AP government before venturing into the new project.

"We are asking for a staple power tariff for a ten-year period at a frozen rate from the date of commencement of commercial operation," he added.

Taking a clue from the success of Andhra Pradesh in attracting investments, SIMA is also planning to submit a plea to the Tamil Nadu government urging it to take necessary remedial measures to avoid an investment outflow.