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MAY 2017

The HMDA has projected a budget of `2,139.15

crore for the financial year 2017-18, of which, `2 crore is allocated for development of logistics park at Batasingaram, Hyderabad and `1.5 crore is allotted for development of logistics park at Mangalapally, Hyderabad. Both the projects will be implemented on PPP basis.

The Telangana Industries Minister K T Rama

Rao has assured that all necessary efforts will be made to revive the ailing industrial unit of Sirpur Paper Mills Limited, located in Kagaznagar. Some of the concessions extended to new industries will also be offered to the ailing company to ensure its revival.

HMDA 2017-18 budget allocation

Paper mills at Sirpur to be revived

Hyderabad registered 12 per cent growth in logistics market in 2016 year-on-year

and occupied 9 per cent of the total warehouse space in India. The north and south corridors of Hyderabad witnessed 7 per cent and 6 per cent growth in warehousing rentals year-on-year.

Companies such as Amazon, Flipkart, Jubilant Foods, Asian Paints, Johnson & Johnson and Procter & Gamble have significantly invested in warehousing and similar investments by major e-commerce companies is expected in this market.

Medchal is becoming a major hub of activity in the city. Typical warehouses in the city are close to 10,000 sq ft while the larger ones are in the range of 2,00,000-2,75,000 sq ft. The city is a gateway for all activity in Telangana and is dominant in the consumer / electronics space.

The Northern Corridor of Hyderabad witnessed stable demand for warehousing space driven by 3PL, telecom, FMCG and industrial players. The region contributed to about 70 per cent of leasing activity witnessed in the city during the review period. Prominent lease transactions concluded in Northern Corridor during the review period included Birla Tyre leasing 50,000 sq ft and Himalaya Herbal healthcare leasing 36,000 sq. ft. etc. Majority of these leasing transactions were concentrated

in independent warehousing developments.

The Western Corridor encompassing micro-markets of Patancheru and Pashamylaram witnessed subdued demand for warehouse space with no lease transactions being concluded due to limited availability of space in the micro-market. The Eastern Corridor comprising of micro-markets of Uppal, Nacharam, Cherlapally and Autonagar witnessed steady demand for warehouse space.

Hyderabad emerging as top consumer logistics hub

Distributed development is a must for all-round development of the state. The chamber has identified some sectors which need to be accorded high priority apart from encouraging setting up industries in backward regions. Adilabad has potential to be developed as a ‘cotton zone’ by extending special incentives to spinning mills.

- Ravindra Modi President, FTAPCCI

The State Industrial Policy has an important role to play in the Make in India initiative. The most significant outcome of this approach will be the production of high quality goods at the most competitive price, which will establish ‘Make in Telangana’ as a brand with high global recognition.

- Nrupender Rao Founder & Chairman Pennar Industries Limited

Telangana’s efforts to strengthen the manufacturing sector by encouraging cluster-led developmental model, further complemented by competitive sector policies and innovative initiatives like the TS-iPASS has led to the much needed surge in investments in the state.

- R Ravichander Group President & Head- BD, South, Yes Bank Ltd

Telangana’s game plan is to attract device makers and semiconductor companies to the state by showcasing a readily-available talent pool and a thriving entrepreneurial ecosystem, which will be a natural magnet for global electronics and semiconductor companies.

- Jayesh Ranjan, IAS Information Technology Secretary, Govt of Telangana

Other industries apart from IT should be developed in all districts. Apparel Park will come up in Sircilla, Kakatiya Mega Textile Park and Auto Parks in Ramagundam and Miryalguda, Food processing industries in Janagaon, Rangareddy and Rajanna Sircilla districts.

- KT Rama Rao, IT Minister, Telangana

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Telangana wants a dedicated cargo airport to be built in north-ern Hyderabad. The Airports Authority of India has appoint-ed a consultant to study and suggest sites that can be devel-oped or converted as dedicated cargo airport – which may also be termed as ‘merchant airport’.

The ideal site has to be a consumption cluster – where there is a huge demand for consumer-based goods and an industrial cluster – where there are many goods manufacturing units and a huge industrial base. It should also have good road and rail connectivity.

NEWSUpdates

Upcoming logistics parks

1,097 industrial units started in Telangana

Dedicated cargo airport for Telangana

Telangana to be meat hub

The road ministry has shortlisted 15 locations with the highest freight movement for the devel-opment of multimodal logistics parks worth `32,853 crore. According to estimates prepared by the transport ministry `10,665 crore will be spent for acquiring land, `10,359 crore and `11,828 crore will be spent on devel-opment of storage areas and development of allied infrastruc-ture.

The locations shortlisted are – Delhi NCR (Delhi, Gurgaon, Ghaziabad, Faridabad, Noida); Mumbai (Mumbai, Mumbai suburbs, JNPT, Mumbai ports, Raigad district); north Gujarat (Ahmedabad and Vadodara); south Gujarat (Surat and Bha-ruch) and Hyderabad.

The Telangana State Govern-ment has so far given approvals to 3,451 companies with an investment of `58,341 crore and employment potential of 2.20 lakh. Out of these companies, 1097 units have already com-menced production providing employment to 43,075 persons. Notable among these compa-nies are M/s Boeing, ITC, Tata Sikorsky, HSIL, Toshiba and Micromax, informed Finance Minister, Etela Rajender.

The Telangana government and Tirth Agro Technology Pvt Ltd (Shaktiman) have inked an MoU for setting up a centre of excel-lence and manufacturing facility for farm machinery. This will be the company’s second manu-facturing facility in the country for farm equipment after Rajkot in Gujarat. The company expects the Telangana manufacturing hub will serve as a gateway to South India.

The centre of excellence and the manufacturing facility would come up on a 200 acre site. The machinery will include rotary tillers, power harrows, mechanical seed drills, compost

ZF Friedrichshafen AG, the global major in driveline and chassis technology as well as active and passive safety technology inaugurated its first technology centre in India in Hyderabad. The ZF ITC strengthens ZF’s presence in the country with anticipated

Global logistics provider Agility has opened the first temperature-controlled life sciences storage and han-dling facility in the Hyder-abad Airport Zone.

This 6,000-sq ft Life Scienc-es Excellence Centre at Ra-jiv Gandhi International Air-port is strategically placed to serve pharma manufac-turers in Hyderabad, Goa, Pune, Visakhapatnam and Bengaluru.

It will provide conditioning, preparation and storage of pharmaceutical goods and operate as a control tower for Agility life sciences customers in India.

The Telangana government is moving towards making the state a hub for meat exports. Chief Minister K Chandrasekhar Rao, while reiterating the need to strengthen the rural economy, made it clear that District Collec-tors should ensure that Telan-gana becomes a great meat exporting state. The state stands in sixth place in meat exports in the country. The total exports in 2015-16 was about `101 crore and 75 per cent of it was to Vietnam followed by Thailand, UAE, Kuwait.

Shaktiman to set up farm equipment unit in Telangana

Agility opens facility

ZF Friedrichshafen’s technology centre in Hyderabad

shredders, flail mowers etc. The hands-on training in modern agri implements aims to transform the farmer to an entrepreneur by increasing the crop yields with low operating costs.

investment plans of €15 million over the next five years. The ITC will foster high-end innovations which will focus on bringing advanced technology to India as well as localising more strategic business activities including research, design and development for global market initiatives.

Global Demand Rising

Life sciences is one of the cornerstones of the Indian economy with exports expected to grow an astonishing 60 per cent in 2017. This new centre will help fast-growing Indian life sciences companies meet the rising global demand for their products.

- Detlev Janik CEO, Agility, South Asia

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Focus

From 13th position in 2015-16, Telangana has moved up to notch the number

one position in ease of doing business in 2016-17, thanks to the TS-iPASS scheme. Following the scheme launch investments have started pouring into the state but industrial development is not balanced across the districts.

Ranga Reddy and Medak Dis-tricts have continued to attract more number of Industries and more investment compared to other districts. The districts of Warangal, Karimnagar and Mahbubnagar are on the growth path in terms of number of industries and investment. Wa-rangal is emerging as the next best destination for investments. A comparative analysis of the periods 2010-12 and 2015-17 shows that Nizamabad, Kham-

Granite industry in Karimnagar district is losing its sheen follow-ing the steep decline in exports to China, which is the main con-sumer. Following the restrictions imposed by China, the granite exports have plummeted from more than one lakh cubic meters of granite per month earlier to around 10,000 cubic meters per month.

Against a total of 160 quarries, hardly 60 of them are excavating granite now. The industry, which used to provide employment to over 1.5 lakh skilled and unskilled migrant labourers from

Industrial growth needs to be balanced

Granite industry losing its sheen

mam and Nalgonda have wit-nessed a reduction in the share of investment in comparison to other districts.

Manufacturing sector dominates

Manufacturing sector contrib-utes about 55.0 per cent in total industrial sector Gross Value Added (GVA) in the state. Indus-trial sector contributes around 24 per cent to the state GDP and primarily includes Nano-technol-ogy, bio-technology and elec-tronic hardware manufacturing.

Pharmaceuticals constitute 29 per cent of the GVA within the manufacturing sector, followed by electrical equipment (11 per cent), other non-metallic mineral products (9 per cent) and food products (9 per cent).

In terms of investment, phar-maceuticals, other non-metallic mineral products, rubber and

Chhattisgarh, Odisha, Uttar Pradesh, Tamil Nadu and West Bengal, had dwindled to less than 60,000 and they too were employed in the granite polish units on a temporary basis.

Karimnagar District Granite Quarry Owners’ Association President, R Tirupathi Goud said, “The decline in export of granite to China has become a cause of concern for owners. More than 70 per cent granite quarries have stopped produc-tion and the machinery remains idle causing huge loss to the owners as they were unable to repay loans.”

plastic products, electrical equipment and food products account for about 54 per cent of total investment (fixed capital) in the state.

Highlighting the dominant position of Telangana in Indian pharma exports, Bulk Drugs Manufacturing Association (BDMA) President, Jayant Tagore revealed, pharma and IT alone account for 70 per cent of the state’s exports. Hyderabad has over 400 bulk drug manu-facturers. It also has 245 USFDA approved plants, the highest outside of US. The exports and domestic sales are pegged at `1 lakh crore each at the na-tional level and a third of them comes from Telangana and Andhra Pradesh together.

Projects in the pipeline

Industries Minister K T Rama

Rao announced, “We are devel-oping a Medical Devices Park in about 250 acres in phase I and in about 1,000 acres in phase II, which will be first of its kind. Along with Pharma City, spread over 15,000 acres and an existing bio-tech park Genome Valley, it creates the most ideal eco-system for any Med Devices company.”

Industrial parks like textiles park in Warangal, plastics park in Maheshwaram mandal, food park at Buggapadu, national investment and manufacturing zone (NIMZ) in Medak are all in the making. In addition, an Aero-park and furniture park are also planned. K T Rama Rao further revealed that the state is seeking partnerships with technology companies in the automotive space in making Hyderabad a mobility engineering cluster.

Big ticket investments in Pharma City

Interview

that, we have about 7 to 10 companies here that have the capability to invest. We are talking of an investment opportunity of `20,000 crore.

Q What elements do you look for in ease of doing business?

Government should develop land at a reasonable cost. The main input will be coal and power. State government should subsidise power.

Q What is the contribution of pharma sector to state economy?

The tax outgo is about `28,000 crore from pharma sector in Telangana. We are the highest VAT, income tax and service tax payers. We are key customers for logistics segment.

Jayant Tagore, President, Bulk Drugs Manufacturers Association

Q What are the opportunities with Pharma City?

Bulk drug manufacturers will be an integral part of Mucherla Pharma City. BDMA has indicated a collective requirement of 6,200 acres. Our members will invest between `15,000-20,000 crore. Big companies like Mylan, Aurobindo or Dr Reddys, spend between `200-500 crore every year to expand. Like

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Krishnapatnam Port Container Terminal (KPCT)

has set its sights on pharma cargo coming to and originating from Hyderabad as well as scrap imports, among others, to propel the next phase of growth. KPCT is one of the few ports to

have got permission from the government to handle pharma API imports (mainly from China) and finished drugs exports to US and Europe (via Jebel Ali in Dubai) and is actively wooing the sector in the Hyderabad region.

“Despite an oversupply of

container handling capacity in the country and more competition brewing down south with the Adani Group all set to throw open its container terminal at Ennore, Krishnapatnam still remains the best bet for importers and exporters from Hyderabad because of the distance advantage and the fact that the port already has freight rail connectivity to the city,” opines Vinita Venkatesh, Director, KPCT.

In line with its ambitions to emerge as a coastal cargo hub on the east coast of the country, KPCT has decided to set up a dedicated coastal cargo berth by May end to handle the growing coastal cargo traffic. The container terminal

KPCT wooing pharma traffic from Hyderabad

handled 2,55,000 teus of cargo in 2016-17 and is eyeing around 3,50,000-400,000 teus this fiscal. It is looking at around 5000 teus per month of coastal cargo exports and 2,000 teus per month of imports. The port will install a scanner by May this year to handle scrap imports, which the government has recently opened up.

Krishnapatnam is the best bet for importers and exporters from Hyderabad because of the distance advantage and the freight rail connectivity to the city.

- Vinita VenkateshDirector, KPCT

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