Pockets of progress

Print edition : October 08, 2010

Andhra Pradesh leads the country in number of SEZs; it has 74 of the 350-plus SEZs that have been notified all over India.

in Visakhapatnam

Andhra Pradesh leads the country in number of SEZs; it has 74 of the 350-plus SEZs that have been notified all over India.

THE proactive policies of the government of Andhra Pradesh have built up investors' confidence and helped the State emerge as one of the main hubs of special economic zones (SEZs) in the country.

The State's growth profile shows that it is attracting investments in a fast-track mode following the creation of a climate conducive to the setting up of units in a wide range of sectors. Since the enactment of the SEZ Act, 2005, private sector investment has been sought in a big way, and the public, private participation (PPP) model has become very popular. Andhra Pradesh leads the country in SEZs as it has 74 of the 350-plus SEZs notified all over India after the new law was enacted. To ensure balanced and inclusive development, SEZ clusters have been developed in Hyderabad, Visakhapatnam and Nellore.

While the export turnover of the government SEZs was Rs.902 crore in 2008-09 and Rs.918 crore in 2009-10, SEZs notified under the Act were able to register a turnover of Rs.2,119 crore in 2008-09 and Rs.4,636 crore in 2009-10. Thus, the total turnover from exports from the SEZs in the State increased from Rs.3,021 crore in 2008-09 to Rs.5,554 crore in 2009-10. We are in the forefront of the SEZ movement, with 40 functional [those that have started work] SEZs and 23 operational [those that have started exporting] private SEZs, said M.S. Rao, Development Commissioner for the Visakhapatnam SEZ (VSEZ) and for 100 per cent export-oriented units (EOUs) in Andhra Pradesh, Chhattisgarh and Yanam.

The authorities have set a target to double the turnover from exports in the current financial year. During the first quarter, government SEZs achieved an export turnover of Rs.281.73 crore and the SEZs notified under the SEZ Act Rs.1,576.5 crore. According to all indications, the second quarter performance will exceed the first quarter total turnover.

The Ministry of Commerce notifies an SEZ if the private firm is able to take possession of the stipulated area of land for the type of SEZs it plans to set up. Ten hectares of land is enough for the information technology (IT), non-conventional energy, gems and jewellery and biotechnology sectors. Sector-specific SEZs require 100 ha and multi-product SEZs 1,000 ha. As per the SEZ Rules, the developer can own the land or have a valid lease for it.

Private SEZs are on the government's priority list as it need not invest funds to create infrastructure. The Andhra Pradesh Industrial Infrastructure Corporation (APIIC) has so far developed 19 SEZs. To date, 165 new units have been approved under the SEZ Act and are at various stages of implementation.

The following is a list of operational SEZs: Wipro Ltd, DLF Commercial Ltd, Fab City SPV India Ltd, CMC Ltd, Hyderabad Gems SEZ Ltd, L&T Phoenix SEZ, APIIC SEZ, Sundew Properties SEZ Ltd, Divya Sree NSL SEZ, Navayuga Legala Estates Pvt. Ltd, Lanco Hills, Serene Properties Ltd and Vivo Biotech SEZ Ltd (all in Hyderabad and Ranga Reddy district); Divis Laboratories, Chippada, Bhimunipatnam, Visakhapatnam; Apache SEZ, Tada; Brandix India Apparel City (BIAC), Atchutapuram, Visakhapatnam; APIIC multi-product SEZ (APSEZ), Atchutapuram, Visakhapatnam; APIIC IT/ITeS SEZ, Madhurawada; Ramky Pharma City, Parawada, Visakhapatnam; Siricity SEZ Pvt. Ltd, Chittoor; APIIC multi-product SEZ, Naidupeta, Nellore; APIIC Building Product SEZ, Prakasam; and APIIC Pharmaceutical SEZ, Jedcharla, Mahabubnagar.

The recession has hit the flow of investments into some SEZs to a certain extent, but the trade and industry is by and large confident that with the economy showing signs of recovery, the situation can be set right soon.

Going by the trends, there are bright prospects for investment in the biotechnology segment, which registered a growth in exports from Rs.1,321 crore in 2008-09 to Rs.2,726 crore in 2009-10. Similarly, good prospects have been projected for the IT, pharmaceutical, textile, electronics and hardware sectors.

The Sri Lankan apparel giant Brandix Lanka has set up the BIAC on 1,000 acres, which forms part of the land acquired by the APIIC at Atchutapuram, about 50 km from Visakhapatnam. It has plans to provide employment to, women, mostly local, after training them in fashion design and tailoring. It is confident of generating up to 50,000 jobs when it becomes fully operational. The project will attract an investment of $1.2 billion, with 20 apparel production units, three fabric mills, eight accessory manufacturers, one finishing plant along with service providers, centralised logistic facilities backed by a full gamut of infrastructure.

Brandix has been given SEZ status and has three units, which have started commercial production, with an investment of Rs.530 crore. Ramky Pharma City, a sector-specific SEZ being set up at Parawada, is attracting huge investments from pharmaceutical majors. Developed by the State government and Ramky Infrastructure under the PPP mode, it expects to get a total investment of Rs.2,000 crore.

Andhra Pradesh leads the country in number of SEZs; it has 74 of the 350-plus SEZs that have been notified all over India.

Hetero Drugs is gearing up to commence its operations at an SEZ it has set up on 400 acres at Narsapuram, about 100 km from Visakhapatnam. EID Parry, which is part of the $3-billion Murugappa Group, is setting up a sugar refinery on 50 acres along with a 38 megawatt power plant at the Kakinada SEZ.

One of the major steps initiated by the government is the establishment of the Petroleum, Chemical and Petrochemicals Investment Region (PCPIR) between Visakhapatnam and Kakinada taking advantage of the area's high connectivity and the vast space available. A consultant has been appointed to prepare a road map for investment across the 140 km between the two cities. An investment of $75 billion has been envisaged for the first five years of operation of the PCPIR. An express highway with six lanes, a chain of ports, an international airport and three major petroleum refineries with a total capacity of 39 million tonnes are proposed. The PCPIR will be spread over 603.58 sq km, and the units in it are projected to generate employment for 12 lakh people over a period of five years. Besides the chemical, pharmaceutical, fertilizer sectors, investment will be sought in ancillary industries, housing and allied and external infrastructure.

Capt. Sriram Ravi Chander, zonal chairman of the Confederation of Indian Industry and the chief operating officer of Visakha Container Terminal, said that the SEZs had become growth engines and that with decentralised development and transparency in decision-making, growth was not confined to urban centres.

Balanced development has thus led to inclusive growth by providing rural employment.

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