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Guidance Bureau Page 1
Tamil Nadu: State Economy
Tamil Nadu is located in the South lying in the peninsula between the Bay of Bengal in the East, the Indian Ocean in the South, the Western Ghats and the Arabian Sea on the West. Chennai has emerged as the hub of commercial activities due to its strategic location which has given it a competitive advantage. Its climate favours port operations all round the year which is a big plus point. It has a fantastic network of banking and financial institutions. Besides this, it also has modern telecommunication infrastructure. There three modern harbours and 16 minor ports; of these, two namely Chennai and Tuticorin Ports are currently equipped with container handling facilities.
Gross State Domestic Product: The structural composition of the state economy has remained more or less the same over the past few years. Tamil Nadu has been performing well on the economic front with its Gross State Domestic Product (GSDP) at Rs.228479 crores at current prices ($48.61 billion) in 2008-09. At constant prices (1999-2000 prices), the GSDP was Rs.203485 crores (US $ 43.3 billion). It has been growing at a compound annual growth rate (CAGR) of 9.26 per cent from 1999-00 onwards. In the last 5 years since 2004 - 05 to 2008 - 09, the state economy grew at an average annual growth rate of 8.71 per cent.
Primary Secondary Tertiary
11.53%
Net State Domestic Product at Constant (1999-2000 prices)Sectoral contribution 2008-09
25.85%
62.62%
Tamil Nadu's per capita income is one of the highest in India and from $421.2 in 2000, it has grown to $718 in 2008-09 which is quite high. The annual income of the households is also a prime determinant of the level of prosperity and if there are good number of households falling under the high income group, it means the state is economically progressing and is on its way to development.
A comparison of distribution of households by various income categories in Tamil Nadu vis-à-vis all-India shows that the share of households in higher income categories in Tamil Nadu is more or less same, especially in case of urban households. In the lowest income category of less than $1,667, only 14.3 per cent of Tamil Nadu’s urban households are present, as compared to 12.1 per cent of all India urban households.
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2297
5
2609
4
2555
8
2896
5
2832
0
3198
6
2944
5
3315
2
3065
234
417
0
5000
10000
15000
20000
25000
30000
35000IN
RU
PEES
2004-05 2005-06 2006-07(RE) 2007-08(QE) 2008-09(AE)
YEARS
PERCAPITA INCOME NSDP GSDP
As far as the rural households are concerned, around 33 percent fall into the lower income category which is still less as compared to the national figure of 46.2 per cent of all India rural households. Another aspect that indicates the economic wellness of people is the ownership of physical assets such as personal vehicle and consumer electronics. Six per cent of Tamil Nadu’s households own a four-wheeler while the all-India figure is just four per cent. Similarly 40 per cent of Tamil Nadu’s households own a two-wheeler, which is higher than the all India rate of 18 percent. Key industries of Tamil Nadu are textiles, leather tanning industries, cement, paper, power pumps, automobiles and automotive equipments, heavy commercial vehicles and safety matches.
2540
1
2347
3 6457
2
5259
8
1385
06
1274
14
0
20000
40000
60000
80000
100000
120000
140000
VA
LUE
(RS.
IN C
RO
RE
S)
Primary Secondary Tertiary
SECTORS
GROSS AND NET STATE DOMESTIC PRODUCT AT CONSTANT (1999-2000) PRICES
FOR 2008-09 ADVANCE ESTIMATES
GSDPNSDP
Primary sector: The growth of the state is driven by all the three sectors with primary sector contributing almost 11.53 percent to the total GSDP for the year ending 2008-09.
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Within the four sub-groups of primary sector, agriculture and allied activities was the largest component and registered a Compounded Annual Growth Rate (CAGR) of 7.81 per cent between 1999-00 and 2005-06.
Agricultural & Allied activities Forestry & Logging Fishing
Net State Domestic Product at Constant (1999-2000) pricesPrimary Sector 2008-09
89.08%
8.34%2.56%
Secondary sector: Tamil Nadu is one of leading industrialized states of India. Tamil Nadu proves to be a safe haven for the investors owing to ideal business climate & healthy socio-economic reforms. Among Indian states, Tamil Nadu is now ranked :
First in number of factories First in number of workers employed in factories sector Third in Gross Industrial output Third in Net value Addition Secondary sector has grown at an average Growth rate of 7.90% during the last 5 years, i.e., 2004-05 to 200809. During 2008-09, the contribution of Secondary sector in GSDP at current prices was Rs.64572 crores at current prices and Rs.52598 crores (1999-2000 prices). Within the Secondary sector, the contribution of Manufacturing was 64.5%
Mining & Quarrying Manufacturing Electricity, Gas & Water supply Construction
0.68%
Net State Domestic Product at Constant (1999-2000 prices)Secondary Sector 2008-09
1.59%
63.43%
34.30%
The
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Tertiary sector: Tertiary sector have made a significant contribution to the total GSDP. The services sector accounted for 62.62 per cent in the GSDP during 2008-09. From the period between 1990-2000 and 2005-06, fast progress was witnessed in the following sectors: hotels and restaurants, transport, storage and communication, financing and insurance and real estates and business services.
Net State Domestic Product at Constant (1999-2000 prices)Tertiary Sector 2008-09
Trade, Hotels & Restaurants Transport, Storage & CommunicationsBanking & Insurance Real Estate, Ownership of Dwelling & Business ServicesPublic Administration Other Services
14.71%18.76%
11.08%
7.07%32.19%
16.83%
Exports: Tamil Nadu is a major exporter of automobiles & components, Textiles & apparel, Leather products, Software & Support (ITES) services, Electronic Hardware, etc. During 2007-08, total exports from Tamil Nadu was Rs.100688 crores.
• Tamil Nadu accounted for 12.53% of India’s exports • High export Intensity of the manufacturing sector in Tamil Nadu: 35.12% • Tamil Nadu has large presence of export-driven industries like Textiles &
Garments, Leather Goods, Automobiles & Components, Electronic Hardware, etc., besides Software & BPO.
• Chennai – the second largest Software exporter : US $ 8200 million (07-08) • Tamil Nadu –largest exporter of Leather products • Accounts for 22% of India’s Textiles exports
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Export
Intensity of Tamil Nadu was:
The Top 10 items exported from Tamil Nadu are:
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TN TOP TEN PRODUCTS EXPORTS
0
5000
10000
15000
20000
25000
30000
2006-07 20701 19178 17515 7132 5360 3541 4594 3499 2049 532 6756
2007-08 28490 19417 16703 7905 5382 4782 4088 3766 1729 698 7728
Softw are &
Electron
Engineering
Goods
Textiles &
Readym
Ores & Mineral
s
Leather &
Leather
Agro &processed
Chemicals & Allied
Basic Chemic
als,
Marine Product
s
Gems & Jewelle
ry
Other Commo
dities
Rs. C
rores
TN EXPORTS – AGRO & PROCESSED FOODS
0
200
400
600
800
1000
1200
1400
2006-07 153 12 205 248 167 1248 353 8 12 1135
2007-08 1113 6 379 408 167 1136 467 21 9 1076
Pulses, Cereals, Seeds
Rice Basmati
Rice (Other than
Dairy, Meat,
Polutry
Floriculture
products
Sugar & Mollasse
s
Groundnut
Spirit & Beverag
es
Castor Oil
Fruits, Vegetabl
es,
Rs. C
rores
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TN EXPORTS – RMG & TEXTILES
0
1000
2000
3000
4000
5000
6000
7000
2006-07 18 36 4593 1899 117 5112 6645 68
2007-08 58 60 4413 2239 91 5656 6401 55
Cotton raw w aste incl.
waste
Manmade Staple Fibre
Cotton yarn, fab, madeups
Manmade Yarn, fab, Madeups
RMG Cotton Incl. Accessori
RMG Manmade
FibresRMG Wool
RMG of other textile
Rs. C
rores
TN EXPORTS – LEATHER GOODS
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2006-07 1888 505 464 1775 726 3
2007-08 1676 451 466 1919 869 2
Finished Leather
Leather Goods
Leather Garments
Footwear of Leather
Leather Footwear
Components
Saddlery & Harness
Rs. Crores
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TN EXPORTS – CHEMICALS & ALLIED PRODUCTS
0
200
400
600
800
1000
1200
1400
1600
2006-07 1034 64 337 422 950 1566 220
2007-08 948 65 373 385 713 1401 202
Rubber products
excl
Footwear - Rubber/ca
nvas
Paints/enamels/varnishes, etc
GLS/GLSWR/Cermes/Reftrs/C
Paper/Wood
products
Plastic & Linoleum products
Residl. Chemicals
& Allied
Rs. C
rores
Foreign Investment: In the FDI sector, the state has about 13.53 per cent share and one of Top Three states in attracting FDI. In the post-liberalisation era, the state has emerged as a front-runner in attracting a large amount of domestic and foreign investments.
Major Investors in Tamil Nadu
Information Technology
Electronic Hardware
Automotive & AutocomponentsAutomotives & Auto components
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A sizable number of multinationals like Ford Motors of USA, Hyundai of Korea, St Gobain of France and Nokia of Finland have set up their units in Tamil Nadu. Some of the major / Fortune 500 companies who have invested in Tamil Nadu are:
Name of the company Product Investment in US $ 1 Ford, USA Cars 800 million 2 Hyundai Motor, South Korea Cars 1750 million 3 Saint Gobain, France Glass 400 million 4 Renault-Nissan Cars 1000 million 5 BMW, Germany Cars 45 million 6 Daimler Commercial vehicles 700 million 7 Visteon, USA (3 projects) Auto components 200 million 8 Delphi, USA (3 projects) Auto components 100 million 9 Caterpillar, USA Earth-moving machinery 200 million 10 SAME, Italy Tractors 75 million 11 Komatsu, Japan Earth-moving machinery 60 million 12 Mahindra & Mahindra (MRV – Automobile
research) 120 million
13 Hwashin, South Korea Auto components 90 million 14 Mando, South Korera Auto components 50 million 15 Apollo Tyres Tyres 400 million 16 MRF Tyres Tyres 350 million 17 Valeo Friction materials,
France Auto components 45 million
18 Motherson Group (9 projects) Auto components 245 million
Major Investors: Electronic Hardware
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2241
13
3491
85 4108
31 5791
91
0
100000
200000
300000
400000
500000
600000
Rs. in crores
Mar 07 Mar 08Sep 07 Mar 09
Tamil Nadu: CMIE – Total Investment
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MoU; Government have signed 24 Memoranda of Understanding in addition to sanctioning structured package of assistance for 9 projects separately. The total investment in the State through these 33 projects would be Rs.41,241 crores and these projects would create employment opportunities for more than 2.15 lakhs persons. Many more projects are in pipeline. Shaping growth. Inspiring success. More than 3000 foreign JVs and 100% foreign subsidiaries including Daimler, Renault-Nissan, DELL, Motorola, Ford, Hyundai, Mitsubishi, Nokia, Saint Gobain, etc. have manufacturing base in Tamil Nadu with an Foreign Direct Investment (FDI) of over $ 10.0 billion. Tamil Nadu is increasingly becoming the choice of foreign investors their local partner who provides them with a global reach. Ranked within the top three Indian States in terms of Purchasing Power Parity (PPP), Tamil Nadu is a dream come true for all those looking for a rich cultural heritage, a highly productive work force, excellent infrastructure and cost – effective operations. And each of these facts is substantiated by an enviable track record. Findings of Oxford Analytica: Oxford Analytica is an international, independent consulting firm drawing on a network of over 1,000 senior faculty members in Oxford and other major universities around the world. Recently, it conducted a study called “India Deconstructed”. As part of this study, it compiled an index called “India State index of attractive operating environments”. An extract of this report was also published by The Hindu in its publication dated 27th May 2009. According to this, Tamil Nadu is the most attractive State for foreign firms seeking to invest in India, thanks to its better quality infrastructure and governance. This study analyzed 28 states and 2 Union Territories in India and adjudged Tamil Nadu as the best.
Infrastructure
Tamil Nadu has gone many steps ahead and for this major credit goes to its strong infrastructure. Its industrial, social as well as physical infrastructure is all fantastic and well developed. In terms of education and health care area, the state pays lot of attention. The government of Tamil Nadu has been making systematic efforts to encourage private sector participation in the infrastructural development. In a short span of time, there has been a rapid expansion of the physical infrastructure and the state has a wide network of roadways and railways and also there has been a tremendous rise in the passenger carrying capacity of the ports.
Tamil Nadu is endowed with relatively better infrastructure among Indian states. The State has developed several Industrial parks /Estates that have helped a great deal in boosting industrialisation. At present, it has 18 Industrial parks of SIPCOT, 87 Industrial estates of SIDCO and 95 Special economic Zones spread allover Tamil Nadu. Besides this, the government has also promoted other industrial parks like Rubber Park, Apparel Parks, Floriculture Park, TICEL Bio Park for Biotechnology, TIDEL IT Park, ASCENDAS International TechPark, Siruseri TI Park and Agro Export Zones amongst others.
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Social Infrastructure - Educational Infrastructure The state boasts of a good educational infrastructure. In the year 2008-09, almost 3.72 million students were enrolled at the primary school level. There is a vast network of institutions for imparting higher education, especially technical education. The state has a developed infrastructure for higher education and that is its plus point. The state has around 355 engineering colleges producing 136 000 Engineering graduates every year, 317 polytechnic, 1418 Industrial Training institutes and 1150 arts colleges. As of now, there are near about 1,506 schools that impart vocational education. Participation by the private firms in technical & vocational education is encouraged by the state. Vocational education was introduced in higher secondary schools during the 10th Five Year Plan period. The state government has set itself the objective of raising the gross enrollment ratio in higher education to 25 per cent by 2020 from the present level of 11.73 per cent. The state has successfully straddled investment in primary and higher education. Its focus on primary education has ensured that as high as 99 per cent of the state population has access to primary education.
Financial infrastructure Chennai is the financial capital of south India. The financial services sector offers tremendous opportunities. All national and international banks have offices in the state and are geared up to boost industrial investment. Tamil Nadu is in the top quartile in the country in terms of bank credit flow. Chennai serves as the hub of financial activities in South India having a strong presence of major Indian financial institutions and foreign banks. Several banks have their back offices in Chennai. Some of the well known names in the banking and financial services sector are ABN Amro, Scope International and World Bank.
Health Care Infrastructure The state is well equipped with all the health care facilities. It has 315 hospitals, 8683 health sub centres, 1417 primary health centres and 213 dispensaries. Chennai is popularly known as health care capital of India. Life expectancy at birth for male is 67 years and that for females is 69.8 years for the period between 2000-06 which is higher than the national average for men and women is 64.1 years and 65.4 years respectively. Tamil Nadu is increasingly been recognised as the medical hub in South Asia. Some of the well known hospitals in Tamil Nadu are Apollo Hospitals, MIOT Hospital, Malar Hospital, Ramachandra Medical College & Hospital, Vijaya Hospitals, the Sankara Nethralaya Eye Hospital, the Cancer Hospital, Madras Medical Foundation, Chettinad Hospitals, Christian Medical College Hospital at Vellore and the affiliated hospitals of SRM Medical College. The state government is concentrating on bringing about improvements in the general health, access to health care services and effective control and prevention of communicable diseases.
Modern Medicine
Hospitals 315
Dispensaries 213
Other Medical Institutions 29
Primary Health Centres 1417
Health Sub Centres 8683
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Indian Medicine
Hospitals 4
Dispensaries & Mobile Medical Units 54
Wings attached to Medical College Hospitals, District Head Quarters Hospitals, Taluk & Non Taluk Hospitals
325
Wings attached to Primary Health Centres 426
Homeopathy
Hospitals 1
Dispensaries & Mobile Medical Units Wings attached to Medical College Hospitals, District
5
Head Quarters Hospitals, Taluk and Non-Taluk Hospitals 39
Source: State government website
Physical Infrastructure: Railways, Roadways, Airways and Waterways
Roads Tamil Nadu has a vast network of roads linking it to all the major urban centres, agricultural markets and rural habitations. The state is also a terminus for the Golden Quadrilateral project. It has a total road length of 194,087 km, of which 61,641 km are maintained by the MoRT&H Govt of India State Highways Department.
Type of road Length KM National Highways (NH) 4873 State Highways (SH) 9384 Major District Roads 11288 Other District roads 36096 Total 61641
The density of road network in Tamil Nadu is 311 km per lakh population. Its average density of road is 1.49 km per sq km which is higher the all India average of 1.03 km per sq km.
Civil Aviation The airport at Chennai caters to the international tourists and is the third largest airport with a separate terminal to meet the domestic needs. Besides this, there is are 2 international airports at Tiruchirappalli, and Madurai and domestic airports at Coimbatore, Tuticorin and Madurai. Chennai airport is currently on expansion. It currently handles more than 450+ international direct flights every week. Seven international airlines operate 28 exclusive cargo flights per week and for the clearance of customs, EDI facility is provided. Chennai airport has an Air cargo complex with a capacity to handle about 1.10 lakh MT. Also, a second International airport is planned near Sriperumpudur.
Railways Chennai has an established Suburban Railway network and presently the state is in the process of developing a metro. Tamil Nadu has 4,180 km of rail network with a density
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of 32.2 km per 1,000 sq km. Its major rail junctions are at Chennai, Coimbatore, Madurai and Tiruchirappalli.
Ports The state has several ports out of which 3 are major and are located at Chennai, Tuticorin and Ennore. These 3 ports account for about 87 million MT of cargo (22% of India’s cargo handling capacity of major ports). The ports have all the container handling facilities and are directly linked to 48 ports in Asia and Europe. Chennai container port is considered as the most efficient port with a ship-turn-around time of less than a day. Also, a second container terminal by PSA-SICAL has been commissioned in July 2009. Besides this, there are 17 minor ports which are managed by the Tamil Nadu Maritime Board (TMB). Of this, 10 ports are captive ports. TMB has announced a Minor Port development Policy that offers the minor ports to private sector for upgradation. Once the Sethusamudram Shipping Canal Project is commissioned, it is believed that it will convert the Tuticorin port into a major transhipment hub.
Power Infrastructure Tamil Nadu has an installed generation capacity of 15100 MW (as on 30.4.2009) which is the second largest in the whole of India. The breakup of the total installation capacity of the state is as follows:
4 thermal stations generating 2970 MW 4 gas turbine stations generating 516 MW 4327 MW from wind mills 37 hydro stations generating 2187 MW 1180 MW from private sector projects 2825 MW as Tamil Nadu’s share from Central Generating Stations 305 MW as external assistance 175 MW from captive power plants 466.6 MW of installed capacity of co-generation in sugar mills 109.5 MW of 15 biomass power projects 214 MW other sources
2187
2970
516
17
2825
1180
4310.6
305214 466 109.5
Hydel Thermal Gas
Wind (TNEB) Share in Central Projects Private power projects
Wind (Private sector) External Others
Cogeneration Bio mass
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Tamil Nadu has the 4th largest wind power generation capacity in the world. Tamil Nadu Electricity Board (TNEB) is adding additional generating capacity as follows:
Capacity addition Plans:
Year Capacity (MW) Availability to TNEB (MW) 2009-10 1157 955.4 2010-11 1459 1189 2011-12 2292 1948 2012-13 847 720 2013-14 1360 1156 Total 7115 5968
Renewable Energy capacity addition:
Description 2009-10 2010-11 2011-12 2012-13 2013-14 Renewable Energy
1. Wind Power 2. Bio mass 3. Co-Gen (20&80%)
Sub Total
938 30 93 1061
1018 38 280 1336
1098 46 280 1424
1098 46 280 1424
1098 46 280 1424
Captive Power Plant 220 270 320 370 420 Total 1281 1606 1744 1794 1844
Total: 8269 MW. Adding this, the total capacity addition in the next 5 years (2009-10 to 2013-14) will be 15384 MW.
Tamil Nadu will have a comfortable power situation to ensure quality and stable power supply to industries. In case of highly power intensive mega projects, power supply is provided through dual feeders from two independent sources on payment of feeder-line cost.
Telecommunications Infrastructure Tamil Nadu has a well developed telecommunications infrastructure for offering the facilities of video conferencing and data transfer in high volumes. The state has made a remarkable progress in this segment. Chennai has a teledensity of 131% (131 connections per 100 persons as on August 2009), the highest in India. Tamil Nadu has about 43.6 million mobile subscribers, the second highest in India. The teledensity for Tamil Nadu works out to 65.56% (65.56 connections per 100 persons). As far as rural connectivity is concerned, Tamil Nadu has come a long way ahead and has 86 percent rural connectivity covering major part of villages. There are 8 operators namely stateBSNL, Aircel, Reliance, Airtel, Vodafone, Tata Teleservices, MTS and Idea Cellular provide connectivity. Seven service providers in the state make phones available on demand. Chennai has the largest bandwidth of 13,520 Gbps. VSNL has laid another submarine cable linking Chennai with Singapore with a bandwidth of 5.12 Gbps. Six agencies have already been permitted on a non-exclusive basis to create high bandwidth optic fibre cable networks
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that will cover all the districts. The state houses 12,196 post offices, out of which 8,692 post offices offer postal services and 3,504 provide telegraph services in addition to the postal services. Other important features of Tamil Nadu’s telecommunication technology:
Bharti is the Single Tel Submarine cable link between Chennai-Singapore with bandwidth of 8.4 terabits per second
A second submarine cable with 5.12 terabits per second has been commissioned by VSNL
A third submarine cable project is currently under implementation Internet Leased Line with port speeds from 64K to 155 Mbps (STM-1) TV uplinking & Videoconferencing systems Managed Data Network Service Frame Relay technology to meet mission critical
applications with disaster recovery solution Long Distance Leased Line (NLD LL) offering point-to-point service with dedicated
bandwidth Internet Protocol - Virtual Private Network Service (IPVPN) Value-added services are being provided to meet needs of software / BPO
companies
Information Technology Infrastructure As far as the IT infrastructure is concerned, it has over 1700 companies employing more than 285,000 professionals. Next to Bangalore, Chennai ranks second in terms of the software exports in India. It is one of the initial states in India to come up with their IT policy. It is one of the first states to formulate a comprehensive policy for laying high bandwidth optic fibre cables throughout the state. Software companies (including services and training) in Tamil Nadu are assured of uninterrupted power supply, andexempted from Pollution Control regulations, Factories Act and certain provisions of the Tamil Nadu Shops & Establishment Act.. Government of Tamil Nadu promoted Information Technology Park – the TIDEL Park to boost the development of the Information Technology Corridor of Chennai. STRENGTHS OF TAMIL NADU IT INDUSTRY
The largest pool of technically qualified high class IT manpower in India – Out of annual Turn-out of 136,000 Engineering Graduates from 355 Engineering colleges in Tamil Nadu, 37% are with Computer Science or IT or Electronics & Communication discipline
Enormous skilled human resource compared to developed countries leading to lower manpower cost nearly one tenth of those in developed nations, thus giving Tamil Nadu a big comparative advantage.
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Offers a wide range of services from support / data processing to sophisticated
software systems etc. Rich experience of working with large global companies and enjoy high credibility Expertise on a wide variety of platforms 28 operational IT SEZs in Tamil Nadu 234 IT Parks in pipeline in Tamil Nadu with a built-up space of 131 million sq. feet
in Tamil Nadu 1683 Software Exporting units with an export performance of Rs.36680 crores (US
$ 8120 million) employing about 285,000 Software professionals Tamil Nadu had the highest Growth rate in software exports in India : 29.04% Chennai has the largest bandwidth in India – 13.52 tbps through two submarine
OFC cables linking Chennai with the rest of the World Tamil Nadu exported 58% of its total IT exports to USA followed by UK (12%) ELCOT is currently developing IT SEZs in Tier II cities namely Coimbatore,
Madurai, Thirunelveli, Salem, Trichy and Hosur.
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New IT related Infrastructure initiatives
234 IT parks have been so far approved with a built-up space of 131 million square feet TIDCO is implementing a state-of-the-art ITES SEZ with about 4.00 million sq.ft. built up
space on 26.64 acres of land in Thiruvanmiyur village in Chennai District and, Kottivakkam Village in Kancheepuram District. The project is being implemented through a joint venture with M/s. DLF Limited. The estimated cost of the project is Rs.1500 crores. The project is expected to provide employment for about 50,000 persons.
TIDCO is implementing a state-of-the-art SEZ for IT-ITES with an Integrated International Convention Centre on 25.27 acres of land in Kanagam village and Thiruvanmiyur Village in Chennai District. The project would have minimum built up space for IT&ITES and commercial activities of about 4 million sq.ft., and an Integrated International Convention Centre to seat 1500 delegates along with 275 Serviced Apartments and Suites. The consortium led by M/s. TATA Reality & Infrastructure Limited are the joint venture partner for implementing this project. The project is estimated to cost Rs.3000 crores and provide employment to over 50,000 persons.
TIDCO is establishing a IT-ITES SEZ at Sholinganallur, Tambaram Taluk, Kancheepuram district through a joint venture with Nuziveedu Seeds Limited (NSL), Secunderabad, to build about 73 lakh sq.ft. for ITES Space, residential, retail and a 150 room hotel in an area of 66 acres of land; at an estimated cost of about Rs.1500 crores. This project will generate employment for about 25,000 persons.
Industrial infrastructure The government of Tamil Nadu established the Madras Special Economic Zone (MEPZ) way back in the year 1984 to promote Foreign Direct Investment (FDI). It is one of the seven EPZs set up by the Government of India. It is one among the Multi-product zones housing more than100 functional units. At present, 91 SEZs have been given approval by Govt of India. Of these, 49 have been notified.
The Government of Tamil Nadu has set up two apparel parks one at Tiruppur and other at Irungattukottai near Chennai. The Government has also decided to set up Hi-Tech Weaving Parks namely:
Cauvery Hi-Tech Weaving Park Kumarapalayam, Vaigai Hi-Tech Weaving Park Andipatti and Palladam Hi-Tech Weaving Park, Palladam.
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There are several factors responsible for an industry to grow in a particular region, some of which are mentioned below:
Competent Policy: The policy that a state government adopts for any given sector has a direct impact on its prospects of growth and s its attractiveness for further investment. For example, the Government of Tamil Nadu has given several concessions in the IT sector. This has prompted a number of IT majors, both domestic such as Infosys and Wipro as well as multinationals such as Cognizant, to set up software development operations in the state.
Availability of natural resources: Certain industries such as agro-based have a high dependence on availability of natural resources. The western part of the state say for example serves as the hub of agriculture as the climate over there is quite favorable for the growth of crops.
Skilled Manpower: Availability of good quality manpower is a must for all industries to flourish. High rate of literacy and well developed educational infrastructure are two reasons the state has skilled manpower in abundance. These are a few factors that have enabled the state to carve a niche for themselves in sectors such as engineering, automotive, IT and ITES.
Given its strong base of technical workforce, knowledge-intensive industries are gradually taking a lead position in the state.
Based on an assessment of the above factors, some of the industries with potential for investment and growth in the state are illustrated below:
Industry Profile of Tamil Nadu
1. Automobiles Industry in Tamil Nadu
The Indian Automotive Industry after de-licensing in July, 1991 has grown at a spectacular rate of 17% on an average for last few years. The industry has now attained a turn over of Rs. 1,65,000 crores (34 billion USD) and an investment of Rs. 50,000 crores. Over of Rs. 35,000 crores of investment is in pipeline. The industry is providing direct and indirect employment to 1.31 crore people. It is also making a contribution of 17% to the kitty of indirect taxes. The export in automotive sector has grown on an average CAGR of 30% per year for the last five years and has reached a turnover of 8 billion USD The export earnings from this sector are 3.5 billion US $ out of which the share of auto component sector 1.8 billion US$. It is estimated that the total turnover of the automotive industry in India would be of the order of US$ 75.3 billion in 2012 (a substantial increase from the size of US$ 34 billion in 2005-06). There is a potential for much higher growth in the domestic market due to the fact that the current car penetration level in India is just 7 cars per thousand. The increase in purchasing power at the top echelon of about 300 million people in the country, where the per capita income is over US $ 1000, implies that passenger car growth in the domestic market is on the verge of a major and sustained boom. It is expected that the passenger car market which was 1 million in 2003-2004 can easily cross the 3 million mark by 2015. This can lead to an increase in the size of the domestic auto-component market from the current level of US $ 9.8 billion (2005-06) to at least US $ 15 billion by 2015.
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Even with this rapid growth, the Indian Automotive Industry’s contribution in global terms is very low. This is evident from the fact that the passenger car segment has crossed the production figure of 1 million in the year 2005-06. Indias current share is about 1.6% of world production as the total number of passenger car being manufactured in the world is 60 million against the installed capacity of 90 million. Similarly, export constitutes approximately 0.3% of global trade.
Status of Automobile Industry in Tamil Nadu:
Automobile industry occupies a pride of place in the industrial map of Tamil Nadu. Traditionally, Tamil Nadu is known automobile Manufacturing. Started in 1840, Simpsons pioneered India’s automobile industry rail coaches, motor cars, diesel engines and steam passenger buses. In 1948, Ashok Leyland was started for assembly of Austin cars. The Integral Coach Factory (ICF) was established in October 1955. In 1960s, TVS Group established a number of auto components manufacturing plants. However, this momentum was lost in subsequent years.
To rejuvenate the growth momentum in automobile industry, present Government brought out a very innovative Policy “Ultra Mega Policy for Integrated Automobile Projects” that offers a very attractive package of support to automobile projects investing more than Rs.4000 crores. As a result of this Policy, since May 2006, investments attracted by Tamil Nadu is automobiles & components manufacturing is Rs.21900 crores, almost 5 times of the Investments attracted during previous 15 years (May 1991-April 2006). The total employment potential in these new projects is:1.20 lakhs (direct+Indirect).
As a result of our efforts, Chennai is now emerging as one Top 10 Global Automobile manufacturing centres. By 2010-11, Chennai will have an installed capacity to produce 12,80,000 cars and about 3,50,000 commercial vehicles each year. This translates to 3 cars output every minute and one Commercial vehicle every 75 seconds. During 2008-09, Chennai produced 5.60 lakhs passenger cars accounting for 33% of India’s production.
From bicycles to battle tanks “B to B”, everything that moves is manufactured at Chennai. More than 350 auto components suppliers are located in Tamil Nadu accounting for above 35% of India’s production capacity
Chennai has emerged as India’s largest automobile and auto components exporter in India. Hyundai has made Chennai the manufacturing and export hub for its small cars. The ‘i10 and i20’ are being manufactured only in Chennai and exported to the world. Chennai is Hyundai’s largest base outside Korea.
Caterpillar USA, Komatsu Japan and Doosan South Korea chose Chennai to establish large earth moving equipment manufacturing plants.
2. Auto components in Tamil Nadu
Indian auto component industry is quite comprehensive with around 500 firms in the organized sector producing practically all parts and more than 10,000 firms in small
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unorganized sector, in tierized format . The auto component sector has been one of the fastest growing segments of auto industry. The Industry also sustained a high growth rate and could achieve growth of 24% in 2003, 16% in 2004-05, 15% in 2005-06 and 20% in 2007-08. In 2007-08, India’s auto components production was estimated to be US$ 18000 million. Tamil Nadu accounts for 35% of India’s auto components production (US$ 6.2 billion). The industry, over the years, developed the capability of manufacturing all components required to manufacture vehicles, which is evident from the high levels of indigenization achieved in the vehicle industry as well as the components developed for the completely Indian made vehicles. In an economic downturn, auto component sales to the after market shares an inverse relationship to sales in the OEM segment. This holds good in case of commercial vehicles where truck operators defer fleet expansion and increase the frequency of trips resulting in higher incidence of wear and tear and thereby replacement. In 2008 – 09, auto component production growth at 4.8% bettered a 3.2% rise in automobile output. Demand from the replacement and export markets account for around 60% of the supply for a number of auto components. Tamil Nadu accounts for about 35% of India’s auto components products. Some of the big names are: Visteon, Delphi, Robert Bosch, Lear, Hwashin, Motherson, Unipress, Valeo, Mando, etc., have large manufacturing facilities in Tamil Nadu. Three Chennai based industrial groups namely TVS, Rane and Amalgamations Groups constitue more than 25% of India’s components production. Some of them have won prestegeous Deming awards, GM Supplier of the Year, etc. Along with the establishment of mother plants by Nissan, Daimler, Renault, etc., the Government has promoted Vendors’ Parks that attract large number of ancillary projects notwithstanding the recession. Recent initiatives of the Government: The most critical intervention of the Government thus far in the automotive sector has come in the form of an ambitious project on setting up world-class automotive testing and R&D infrastructure in the country to deepen manufacturing, encourage localized R&D, boost exports, converge India’s unparalleled strengths in IT and electronics with automotive engineering sectors to firmly place India in USD 6 trillion global automotive business. Govt of India is currently implementing a project “National Automotive Testing R&D Infrastructure Project” (NATRIP) in Oragdam near Chennai at a project cost of about Rs.450 crores. This project aims at facilitating introduction of world-class automotive safety, emission and performance standards in India as also ensure seamless integration of our automotive industry with the global industry. The project will deepen manufacturing, enhance employment, encourage localized R&D, boost exports, converge India’s unparalleled strengths in IT and electronics with automotive engineering sectors to firmly place India on the global automotive map.
3. Electronic hardware Industry in Tamil Nadu
Current Status: Today, Chennai has emerged as the largest Electronic Hardware manufacturing and exporting hub in India. Some of the Fortune 500 companies which have set up manufacturing facilities in Chennai neighbourhood include: Nokia, Motorola, DELL Computers, Samsung, Foxconn, Sanmina-SCI, Flextronics, and Nokia-Siemens besides more than 30 components suppliers. The total Investment in
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Electronics hardware industry in Tamil Nadu is estimated to be about Rs.11500 to 12000 crores employing about 40000 workers. Nokia signed a MoU in April 2005 for establishing one plant for manufacture mobile hand-sets with an investment of Rs.675 crores. Encouraged by the support of the present Government, the company went ahead to establish two more plants in 2007-09. The total investment made by Nokia is about Rs.1350 crores. Today, Nokia plant in Chennai has become World’s largest mobile hand-sets manufacturing facility. Chennai is also emerging as a centre for manufacture of Photo-voltaic (PV) cells with an investment of about Rs.4000 crores. Moser Baer is currently establishing a PV cells plant at Oragdam Electronic Hardware SEZ with an investment of Rs.2000 crores while Signet Solar, USA has proposed to establish a similar plant with an investment of Rs.2000 crores in Sriperumpudur Electronic Hardware SEZ. Tamil Nadu has at present 8 Notified Electronic Hardware SEZs with a total area of about 1200 acres. Following are some of the major Electronic hardware manufacturers in Tamil Nadu:
Major Electronic Hardware Industrial Projects in Tamil Nadu
S.No Name of the company
Location Product Investment Rs. in crores
Employment – direct+Indirect
1 Nokia India Pvt Ltd
Sriperumpudur Nokia Telecom SEZ (210 acres)
Mobile handsets
900 crores in 3 plants
19500
2 Foxconn India Pvt Ltd
Sriperumpudur Hi Tech SEZ – 2 plants Nokia SEZ – 1 plant
Electronic hardware & mobile phone components
850 crores in 3 plants
5000
3 Flextronics Sriperumpudur Hi Tech SEZ
Electronic hardware & mobile phone components
450 1000
4 Samsung Sriperumpudur Hi Tech SEZ
Electronic Consumer Durables
450 2500
5 Motorola Sriperumpudur Hi Tech SEZ
Mobile handsets
135 3500
6 DELL Computers
Sriperumpudur Hi Tech SEZ
Computers & peripherals
280 1100
7 Sanmina Oragadam Hi Tech SEZ
Electronic Hardware
225 4000
8 Moser Baer Oragadam Hi Tech SEZ
Photo Voltaic (PV) panels
2000 2000
9 Signet Solar Photo Voltaic (PV) panels
2000 1000
10 TAPP Semi Conductor
Sriperumpudur Hi Tech SEZ
Semi Conductor
1000 1000
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Testing & Packaging
11 Nokia Siemens Networks
Oragadam Hi Tech SEZ near Chennai
Mobile handsets & communication networks
300 400
12 BYD, China Oragadam Hi Tech SEZ & Irungattukottai (2 plants)
Components of mobile handsets
350 4000
13 Salcomp, Finland
Nokia Telecom SEZ
Mobile handsets components
120
Included in the employment
figures of Nokia
14 Perlos, Finland Nokia Telecom SEZ
Mobile handsets components
124
15 Wintek, Taiwan
Nokia Telecom SEZ
Mobile handsets components
161
16 Jabil, USA Nokia Telecom SEZ
Mobile handsets components
310
17 Laird Technologies, USA
Nokia Telecom SEZ
Mobile handsets components
101
18 Polymatech Electronics, Japan
Oragadam Hi Tech SEZ near Chennai
Key pads for Mobile handsets
82
19 Shinetsu, Japan
Oragadam Hi Tech SEZ near Chennai
Key pads for Mobile handsets
47
20 TVS Electronics
Oragadam Hi Tech SEz
Computer peripherals
100
21 Dixon Technologies
Oragadam near Chennai
Colour TV 37 100
22 Natronics Semiconductor
Sriperumpudur Hi-Tech SEZ
Semiconductor Packaging
65 100
Total 10087 45200 Including other direct and indirect vendors supplying components, the Total Investment in Electronics hardware industry in Tamil Nadu is estimated to be about Rs.11500 to 12000 crores.
The estimated current turnover of Electronic Hardware industry is about Rs. 27000 crores. However, this is not reflected in the Index of Industrial production as the weights for the industries were based on 1999-2000 (Base Year). The current series of IIP does not have any weightage or representation in the computation of index of Industrial production.
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4. Textiles Industry in Tamil Nadu The Indian textile industry is in a stronger position now than it was in the last six decades. The industry which was growing at 3 – 4 percent during the last six decades has now accelerated to an annual growth rate of 9 – 10 percent. There is a sense of optimism in the industry and textiles sector has now become a ‘sunrise’ sector. Considering the domestic availability of cloth, the per capita availability of cloth is projected at 62.23 sq. mtrs. by the end of the Eleventh Plan period, as against 39.17 sq. mtrs. in 2006-07, registering an annual rate of growth of 9.70 percent per annum. The per capita availability is estimated based on the projected population and expected export trend. Strengths: Strong and diverse raw material base Third largest producer of cotton in the world Fifth largest producer of man-made fibre and yarn in the world
Vertical and horizontal integrated textile value chain Strong presence in entire textile value chain from raw material to finished goods Globally competitive spinning industry Average cotton yarn spinning cost at US$ 2.5 per kg. Which is lower than all the
countries including China Low wages: rate at 0.75 US$ per operator hour as compared to US$ 1 of China and
US$ 3 of Turkey Unique strength in traditional handlooms and handicrafts Flexible production system Diverse design base Weakness: Structural weaknesses in weaving and processing 2 percent of shuttleless looms as percentage of total looms as against world
average of 16 percent and China, Pakistan and Indonesia 15 percent, 9 percent and 10 percent respectively.
Highly fragmented and technology backward textile processing sector Highly fragmented garment industry Except spinning, all other segments are predominantly in decentralized sector. The rigid labour laws: proving a bottleneck particularly to the garment sector. Large
seasonal orders cannot be taken because the labour strength cannot be reduced during the slack season.
Inadequate capacity of the domestic textile machinery manufacturing sector. Big demand and supply gap in the training facilities in textile sector. The Textile Industry of Tamil Nadu has its significant presence in the National and State economy. It is the forerunner in Industrial development. Handloom, Powerloom, Spinning, Processing, Garment and Hosiery are the various sectors of the Textile Industry in Tamil Nadu and known for the largest economic activity next only to Agriculture in providing direct and indirect employment.
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Handlooms: Tamil Nadu occupies a pride place in handloom sector with maximum number of handlooms in the Country. Handloom weaving is one of the largest economic activities in Tamil Nadu. There are 4.13 lakh handlooms located in the State in which 2.32 lakh handlooms are functioning with 1130 Handloom Weavers Co-operative Societies and the remaining 1.81 lakh looms are outside the Co-operative fold, thus providing employment to 6.08 lakh weavers. Powerlooms: The Powerloom Sector in Tamil Nadu provides employment to around 9.14 lakh workers. As against 19.03 lakh registered powerlooms in India, 3.66 lakh are located in Tamilnadu and of that 42,566 are covered under 164 Powerloom Weavers Co-operative Societies. During the year 2008–09, these Societies have produced 1487.50 lakh metres of cloth worth around Rs. 246.09 crore and the turnover was around Rs.253.50 crore. Textile and Spinning Mills: The Textile Mills are the backbone of Tamil Nadu’s industrial development and are providing massive employment in the State predominantly spinning-oriented. The State textile industry has a significant presence in the national economy also. There are 3069 large, medium and small spinning mills in India, of which, 1889 are located in Tamilnadu. The spinning mills in the State comprise 18 Cooperative Spinning Mills (5 functioning), 17 National Textile Corporation Mills (7 functioning) and 1854 Private Mills (including 23 Composite Mills). Those spinning mills provide employment for around 2.40 lakh persons. The capacity of the spinning mills in the State is around 18.92 million spindles. The State produces about 1612 million kg. of spun yarn per year and this is about 40% of the spun yarn produced per year in the entire nation. Garment and Hosiery The Garment Sector in Tamil Nadu is one of the fast growing sectors in the textile industry. It is located substantially around Chennai City, with specialization in cotton fibre garments. The Hosiery Units in Tamil Nadu are located at Tiruppur and are manufacturing Knitwear Garments to the tune of Rs.11000 crore per annum. There are around 4000 knitwear and woven garment production units in the State provide employment to around 5 lakh persons.
Tirupur Textile Cluster Tirupur is an important trade centre of the country, which is famous for its knitted garment wears. It is situated near Coimbatore, which is known as 'the Manchester of south India'.Tirupur textiles cluster has units in spinning, knitting, wet processing, printing, garment manufacturing and export. In addition, there are ancillary units supplying buttons, laces, embroidery, cones and yarn processing.
Tirupur has a significant presence at the lower end of the international hosiery and knitwear market. Most entrepreneurs cater to the lower end of the hosiery market on a contract-manufacturing basis. The cluster accounts for 90 per cent of the country's cotton knitwear exports.
Processing The processing sector determines the core product value, product quality and has tremendous scope for innovations and control over the final output. Processing is an important value added segment in the Textile Industry. There are about 10397 Hand
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Processing Units and 2510 Power Processing Units in India, out of which 2614 Hand Processing Units and 985 Power Processing Units are located in Tamil Nadu.
PROFILE OF TEXTILE INDUSTRY IN TAMIL ANDU
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5. Leather Industry in Tamil Nadu - Current Status:
The leather Industry in Tamil Nadu occupies a place of prominence in the State economy in view of its substantial export earnings and employment generation for women and down-trodden sections of the society. The composition of export of leather and leather products from Tamil Nadu has undergone a structural change during the last three decades, from merely an exporter of raw material in the sixties to that of value added products in the nineties. The value added finished products presently constitute around 80% of the total export from the Industry, which was mere 7% in 1956-57. The major Leather clusters in Tamil Nadu are: Ambur, Vaniyambadi, Ranipet, Peranampet, Chennai, Trichy, Erode and Dindugul.
Tamil Nadu accounts for:
• 70% of Tanning capacity of India and 6% of Global leather requirement • Annual production:Rs.15000 crores – 60% of India’s production • Export:Rs.5386 crores – 36% of India’s exports (2007-08) • Employs about 5 lakhs (about 60% are women)
Total Annual Turnover over - Rs. 10,000 Crores Annual Export Turnover - Rs. 4,800 Crores Operational Tanneries - About 750 Leather Products units - 497 units in Uppers/Full shoes
698 Leather Garment & Goods Units Leather Footwear - 59 Million/Pairs Full Shoes /
27 Million/Pairs Shoe Uppers Leather Garments - 7.1 Million Pieces Leather Goods - 29.5 Million Pieces
There are 14 Common Effluent Treatment Plants (CETPs) and 150 Individual Effluent Treatment Plants (IETPs) functioning in treatment of effluent discharge from tanneries.
• UNIDO Report 2009: The United Nations Industrial Development Organisation (UNIDO) has identified the leather cluster in Chennai, Tamil Nadu among the Top ten most dynamic industrial locations globally. In its Industrial Report 2009, UNIDO said that the Chennai Leather cluster has been positioned on the basis of its export growth exceeding the national growth rates. The other determining factors included its competitiveness in international markets, the extent to which it provided better economic and social benefits in terms of employment, skills, wages, and better environmental practices for those residing in the cluster. The UNIDO report found that Chennai Leather cluster has the highest Employment elasticity. For every 1 per cent increase in exports, employment went up by 1.3 per cent. According to this report, “'Although leather goods manufacturing is pollution-intensive, the erection of treatment plants through the efforts of relevant institutions and the State government of Tamil Nadu has helped lower pollution levels”.
The 10 case studies featured in th is UNIDO Report 2009 are from the following countries – Argentina (Buenos Aires – Automotives); Brazil (South-eastern Brazil – Pulp
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and paper); Cambodia (Pnom Penh – garments); Chile (Los Lagos – Salmon); China (Qiaotou – Buttons); India (Chennai – leather); Indonesia (Jakarta – Automotives); Lao PDR ( Vientiane / Champasack – Agro and Wood); Malaysia (Penang – Electric-Electronics); and Nigeria (Otigba – computer components). Tamil Nadu has a dominant presence in the leather and leather based industries. The tanning industry in India has a total installed capacity of 225 million pieces of hide and skins of which Tamil Nadu alone contributes to an inspiring 70%. Leather industry occupies a pride of place in the industrial map of Tamil Nadu. Tamil Nadu enjoys a leading position with 40% share in India’s export. It currently employs about 2.5 million persons. Council for Leather Exports (CLE) and Central Leather Research Institute (CLRI) are taking steps to improve the status of the leather industry in India including Tamil Nadu. These institutions are improving the technology being used in the industry and undertaking skill up-gradation among the workers. CLRI is expecting government to release more aid packages for the leather industry in Tamil Nadu. In all, 542 tanneries are targeted for implementing Rs.640 million modernisation programme; during the Eleventh Plan that continues up to March 2012.
6. Sugar Industry in Tamil Nadu
Sugar Industry is the second largest Agro based industry which has successfully contributed to the rural economy. India is the second largest sugar producer in the world. Tamil Nadu is one of the major sugar producing States in the country and it contributes 9% to 10% of the total production of sugar. Our State stands first in the sugarcane productivity at the rate of 110 MTs per hectare. Sugarcane is an important crop for the State and is cultivated in an area between 2.75 and 3.00 lakh hectares in our State. Tamil Nadu is a sugar surplus State producing about 10% of the total sugar produced in the country.
As per the recent estimates, the total sugar production in the country has fallen
from 263.28 lakh MTs to 142 lakh MTs during 2008-09 crushing season and the overall shortfall is to the tune of 46%. However, in the State of Tamil Nadu, the fall has not been so steep and the sugar production has gone down from 21.41 lakh MTs to 16.16 lakh MTs.
There are 41 sugar mills in Tamil Nadu comprising of 16 sugar mills in
cooperative sector, 3 sugar mills in public sector and 22 sugar mills in private sector. Presently, 38 sugar mills are functioning while 3 mills, viz., Madurantakam Cooperative sugar mills, Madura sugars and Arunachalam sugar mills are not operational.
During the 2006-07 crushing season, all the 37 operating mills in the state
have crushed 274.49 L.M.T. sugarcane as against 231.46 LMT of cane in 2005-06 season. The sugar production during 2006-07 season was 25.39 LMT against the previous season's 21.38 LMT. The capacity utilization of all the sugar mills during 2006-07 season was 144% as against 125% of the previous season.
The Co-operative and Public Sector Sugar Mills have crushed 87.88 LMT of
cane in 2006-07 season and produced 8.09 LMT of sugar with an average sugar recovery of 9.20%. These 17 working mills as on 31.03.2008, have crushed 41.77 LMT of cane and produced 4.05 LMT of sugar with an average sugar recovery of 9.70%.
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During 2008-09 crushing season, all the sugar mills in Tamil Nadu are expected to crush 166.41 LMT of sugarcane and produce 16.16 LMT of sugar with an average recovery of 9.71%. During 2008-09 crushing season as on 31.05.2009, the Co-operative, Public and Private sector sugar mills in Tamil Nadu have crushed 135.24 LMT of cane and have produced 13.32 LMT of white sugar with an average recovery of 9.85%. Production and sale of By-products Molasses
During the year 2007-08, a quantity of 3.87 lakh MTs of Molasses have been sold with an average realisation of Rs.703/- per MT. For the current financial year 2008-09 (upto March) 2.58 lakh MTs of Molasses have been sold with an average realisation of Rs.2510.26 per MT. Export of Sugar
The Central Government have announced a subsidy of Rs.1350/- per MT for export of sugar during the 2007-08 season to liquidate sugar stocks. By utilizing the export subsidy announced by the Central Government, 2.97 LMT of sugar has been exported. Setting up of new Integrated Sugar Complexes in Tamil Nadu
Recognising the potential of sugar industry in the State, permission was granted for establishment of 9 new integrated sugar complexes and so far 3 projects have been completed and commissioned.
The Government have taken policy decision that new sugar mills will have an integrated sugar complex comprising of Co-generation plant, Distilleries, Ethanol Plant and Bio-composting facilities. It is obligatory for the new sugar mills to pay Statutory Minimum Price (SMP) and State Advised Price (SAP) to the cane growers along with cost of cane transportation.
Cement With 12 well established plants, the state is counted among one of the leading cement manufacturers in the country. During 2005-06, cement production added up to 14.3 million tonnes per annum (mtpa). Its domestic consumption is almost 11.1 mtpa and its exports are around 0.3 mtpa. Key players in the cement industry having their base in Tamil Nadu are ACC, India Cements, Madras Cements, Chettinad Cements and Tamil Nadu Cements Corporation.
Chemicals and Petrochemicals Tamil Nadu has 3 major Chemical clusters namely Manali in Chennai, Cuddalore and
Tuticorin. Tamil Nadu has manufacturing facilities for Fertilisers, Paints, Carbon Black, Pesticides, Pharmaceuticals, Organic and Inorganic chemicals, Polymers, Caustic soda, Soda ash, etc. Saint Gobain, France has established 2 Float Glass plants in Sriperumpudur with an installed capacity of 4.0 lakh MT per annum, the largest facility in India. Besides, Asahi Glass, Japan has established a facility for making automotive glass. Harsha, UAE is currently in the process of establishing a Float Glass project with an investment of rs.1500 crores in Chennai Neighbourhood. Chennai is set to emerge as the largest Glass Hub in India.
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Tamil Nadu has emerged as major exporter of Basic chemicals and other chemical products. This indicates the competitiveness of Chemical industry in Tamil Nadu.
Product category Exports from Tamil Nadu in 2006-07
Exports from Tamil Nadu in 2007-08
Basic Chemicals 3499 3766 Other Chemicals and allied products
4594 4088
Total Rs. crores 8093 7854
Strengths of Tamil Nadu:
o A diversified manufacturing base having a capacity to produce quality chemicals.
o Vibrant downstream industries in different segments. o Competitive core industries, essential for the development of chemical
industries. o Capability to produce world-class end products. o Strong presence in the export market in sub-segments such as Dyes, Pharma
and Agrochemicals. o Large domestic market. o Major raw material component sources within the country. o Abundant availability of Quality human resources.
TN EXPORTS – CHEMICALS & ALLIED PRODUCTS
0
200
400
600
800
1000
1200
1400
1600
2006-07 1034 64 337 422 950 1566 220
2007-08 948 65 373 385 713 1401 202
Rubber products
excl
Footwear - Rubber/ca
nvas
Paints/enamels/varnishes, etc
GLS/GLSWR/Cermes/Reftrs/C
Paper/Wood
products
Plastic & Linoleum products
Residl. Chemicals
& Allied
Rs. Crores
Petroleum Chemicals and Petrochemicals Investment Region: Government of India announced a policy for promotion of Petroleum Chemicals and Petrochemicals Investment Regions (PCPIR) in May, 2007, with the objective of accelerating promotion of investment in the chemical / petrochemical sectors so as to make India a hub for both domestic and international markets taking advantage of global shift in demand and production for petrochemicals. The petroleum refinery project under implementation by Nagarjuna Oil Corporation, a joint venture of TIDCO, will be one of the anchor units in
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the proposed PCPIR. NOCL’s refinery project will go on stream in 2011. A detailed proposal has been prepared by TIDCO for establishing the PCPIR along the coastal stretches in Cuddalore and Nagapattinam districts. Oil and Gas:
Tamil Nadu has at present 28 oil and Gas fields in Cauvery basin producing crude oil and natural gas. During 2007-08, Crude oil production in Cauvery basin was 353,000 MT and natural Gas: 1169 Million Cubic Metres. Further exploration is underway.
Tamil Nadu has 2 refineries belonging to CPCL, each one at Chennai (9.5 million MT) and Panagudi (Narimanam) at Nagapttinam (1.0 Million MT)
Nagarjuna Oil Corporation is currently setting up an oil refinery at Cuddalore with a capacity of 6.0 Million MT at an investment of Rs.4790 crores which is expected to commence commercial production in 2011. This will augment the total refining capacity of Tamil Nadu to 16.50 Million MT.
Tourism There is lot of potential in the state's tourism sector and there is great scope for creating more jobs. Health tourism has opened up new avenues as the state has ample high-end medical care facilities. Tamil Nadu is being increasingly promoted as a fascinating destination for holidaying in South India. Marketing campaigns are launched and lot of publicity is been done and even the infrastructural facilities are improved like anything. Participation by the private firms is welcomed by the state in the development of tourism sector.
Mineral-based The state has a good reserve of mineral resources. In the fiscal year 2006, the state witnessed phenomenal growth in the mineral products and its net sales grew by 28 per cent. It is the chief producer of lignite, limestone, magnesite, mica, quartz, salt, felspar, iron ore, bauxite and gypsum. The existence of lignite in the Neyveli area led to the establishment of Neyveli Lignite Corporation, which plays an important role in the power sector.
Engineering Tamil Nadu has a strong engineering base the products that are manufactured range from automobiles, bicycles, castings and forgings, to textile machinery, electrical and non-electrical machinery, pumps and transportation equipment. The units are concentrated in Chennai, Coimbatore and Salem. Tamil Nadu, which exports $320 million worth of engineering products, has nearly 3,000 units, employing a skilled workforce of more than 250,000. Prominent players in the engineering sector are Amalgamations Group, BHEL, Caterpillar, CPCL, LMW, Murugappa Group, Saint Gobain, Sanmar and the TVS group.
Coimbatore Pumps and Motors Manufacturing Cluster There has been a sharp rise in the standard of living of people falling in the middle class group which has paved way for the speedy growth in the number of pumps in the state. Coimbatore Pumps and Motors manufacturing cluster with over 1,000 units are meeting almost 40 per cent of the country's requirements of pump sets. The industry has demonstrated tremendous flexibility by incorporating design changes to suit the site conditions. It has maintained quality, reliability and performance.
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Agro-based Industries Tamil Nadu is among the three top producers of a variety of fruits and vegetables all across the country. Its climate is very favourable for the cultivation of crops and this has strengthened the agro processing sector in the state. Tamil Nadu is also a leader in agricultural production with a high yield per hectare of sugarcane, rice and groundnut. Its long coastline has opened the gateway for marine products based industry to flourish. Its exports of the marine products has added up to about $50 million. The area around Coimbatore , Dharmapuri and the Nilgiris have been recognised as ideal locations for the cultivation of flowers such as rose and chrysanthemum, the floriculture industry is likely to get a boost. Tamil Nadu with Seven agro-climatic conditions and varied soil types is better placed for production of fruits, vegetables, spices, plantation crops, flowers, medicinal and aromatic plants. Tamil Nadu is one of the largest producers of agro and horticulture products in India.
S.No Crops Production in Lakh MT
2008-09 2009-10 Forecast 1 Fruits 73.88 80.53 2 Vegetables 83.32 90.82 3 Spices 8.05 8.77 4 Plantation crops 8.07 9.48 5 Flowers 2.28 2.49 6 Medicinal plants 0.17 0.18
Total 175.77 192.28
Tamil Nadu – Area and production - Fruits
0
20
40
60
80
100
2008-09 2009-10
Area Production
Area in Lakh HectaresProduction in Lakh MT
Tamil Nadu – Area and production of Vegetables
0
20
40
60
80
100
2008-09 2009-10
Area Production
Area in Lakh HectaresProduction in Lakh MT
Guidance Bureau Page 33
Tamil Nadu – Area and production - Spices
0
2
4
6
8
10
2008-09 2009-10
Area Production
Area in Lakh HectaresProduction in Lakh MT
With rich agro resource endowments, Tamil Nadu offers excellent potential for
Food processing industries. Tamil Nadu is a major exporter of agro and Processed Food products. During 2007-08, Tamil Nadu exported :
Product Tamil Nadu Exports during 2007-08 Rs. In crores
Agro and processed Food 4782 Marine Products 1729 Total 6511
TN EXPORTS – AGRO & PROCESSED FOODS
0
200
400
600
800
1000
1200
1400
2006-07 153 12 205 248 167 1248 353 8 12 1135
2007-08 1113 6 379 408 167 1136 467 21 9 1076
Pulses, Cereals, Seeds
Rice Basmati
Rice (Other
than
Dairy, Meat,
Polutry
Floriculture
products
Sugar & Mollasse
s
Groundnut
Spirit & Beverag
es
Castor Oil
Fruits, Vegetabl
es,
Rs. C
rores
Government support: • Land – in different Industrial parks and SEZs • Structured Incentives package for projects depending on investment size
• Quality Power and Water supply • Single Window Facilitation & In-principle composite approval on a fast-track mode
within 30 days. • Dedicated Project Facilitation Committee will be formed by Government that will
escort project.
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Single window Facilitation:
An indicative list of approvals with timeframe for setting up business in Tamil Nadu
List of approvals and clearances required
Departments to be consulted
Estimated time Taken (days)
Incorporation of the company
Registrar of companies Single Window Clerance GUIDANCE (state's single window clearance facility) clears investment proposals in 30 days on an average. The single window obtains all approvals necessary for the investment proposal within the aforementioned time*.
Registration, IEM, Industrial licences
District Industry Centre
Allotment of land State Department of Industries / State Industrial Development Corporation / Infrastructure Corporation
Permission for land use
State DI, Department of Town and Country Planning
Site environmental approval
State pollution control board and Ministry of environment and forests
No Objection Certificate and consent underwater and pollution control Acts
State pollution control board
Approval of construction activity and building plan
Town and country planning authority
Sanction of power State electricity board
Registration under states sales tax act and central and state excise act
Sales tax department, Central and state excise departments
*Source: Guidance Export and Promotion Bureau
Cost of setting up business
An indicative table on cost of setting up business in Tamil Nadu
For Manufacturing
Land (US$ / hectare) in SIPCOT Industrial Ranges from USD 2083 to 1,66,666 per
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parks acre depending on the location.
Labour Cost (US$ / man year) Skilled worker/Operator Technicians / Engineers
1,362 3000
Office Space / IT Park space
Built-up area Costs in cities (Chennai/Coimbatore/Madurai) (US$ / sq ft / year)
12.00
Employee Cost (US$ / man year)*
Software Developers 6,383
Team Leads 14,893
Architects 21,276
Project Managers 32,209
Interest rate
Cost of capital (Prime lending rate, per cent)
10.6
Electricity (US cents/ kWh)
Basic Tariff per KWH Fixed Demand charges per KVA per month
7.29 cents US $ 6.25
For additional information/clarification: The Executive Vice Chairman Guidance Bureau Industries department Government of Tamil Nadu Or The Director Guidance Bureau Industries department Government of Tamil Nadu