The Indian industry is positive about ‘shining Kerala’ and its image as an investment destination has undergone a sea change, according to a top industrialist.
“We are positive on the industry’s chemistry with the state government and we’ll work closely to attract more investments,” said G V Sanjay Reddy, chairman, Confederation of Indian Industries (CII)-southern region, who is also managing director of Mumbai international airport and Bangalore international airport.
The state received investments worth Rs 320bn since June 2011 with major share going into the energy sector (Rs 206.2bn) followed by infrastructure Rs 87.65bn and Rs 26.25bn in other sectors.
“Kerala is today one of the preferred investment destinations. Everyone loves to come here. Earlier they used to come only for leisure. This perception has changed. This is the appropriate time to cash in on it,” Reddy insisted.
“Today, the state is a major contender when investors think of making new investment decisions. Overall, the state seems to be quite stable”.
The Confederation of Indian Industry (CII), which is partnering with the Kerala government in the upcoming Emerging Kerala 2012 summit in September, has proposed setting up a Centre of Excellence on Innovation, Competitiveness and Entrepreneurship here.
It would organise 14 sectoral conferences during the ‘Global Connect Initiative’ to be held in Kochi to deliberate on various policy issues that are relevant to propel the growth of the economy nationally as well as in Kerala.
The CII would bring in captains of industry from across the globe to participate in the sectoral conferences.
Reddy said the event would help the state attract more investments in emerging sectors like aerospace, green energy, financial services, food processing, ports, logistics and ship building, information technology and biotechnology.
The CII will focus on its theme `South India 2020– Accelerate Inclusive Growth & Sustainable Development’. Some of the other initiatives in Kerala include development of the high-speed rail corridor, solid waste management for municipal corporations, entrepreneurship development, power, development of Tier II & III cities and industrial corridors.
“South India now contributes to over 22% of India’s GDP and 28% of its employment and its advantages in economic and social development indices give it the potential to sustain accelerated growth over the next decade and create global scale in select sectors,” Reddy said addressing a news conference here yesterday.
Australia has welcomed the Emerging Kerala Global Connect initiative as an opportunity to strengthen engagement with the State in a number of sectors.
According to Mr Peter Varghese, High Commissioner to India, these would include education, agriculture, energy and waste management.
A high-level diplomatic delegation led by Mr Varghese met the Chief Minister, Mr Oommen Chandy, and Ministers to discuss the possibility of new partnerships.
The Australian delegation included Consul-General for South India, Mr David Holly.
Mr Varghese said that Australia’s private sector has expertise and capabilities in the ten focus sectors identified for showcasing at Emerging Kerala 2012.
Agri-businesses and agro-based services are among the key areas identified by Australia, which wants to partner Kerala in deep-sea fishing projects.
The country offers various related services, including the training of fishermen and promotion of sustainable and environment friendly practices to boost agriculture.
Mr Varghese has promised to make private industries in his country aware of the ‘global connect’ opportunity. The Australian government will be happy to bring trade delegations and make presentations at the event, he said.
The Industries Minister, Mr P. K. Kunhalikutty, said that Australian response to the state government’s efforts has been very positive.
“Our meeting clearly showed the great synergy of ideas we have. There is so much Kerala can offer that Australia wants, and vice versa.”
Among those who attended the meeting included senior government officials, Mr Somasundaram, additional chief secretary, Industries, and Mr Alkesh Sharma, secretary (Industries-IP).
Australia has offered to collaborate in improving technical education in schools and ITIs through projects similar to those in Maharashtra and Karnataka.
The projects propose capacity building of educational institutions and improved skills training, with the goal of making the graduating students more employable.
Among the mega projects that have attracted Australia’s attention are the proposed Oceanarium and LNG terminal at Kochi.
Australia, which has set up a trade office in Kochi in 2010, has also offered its expertise in the field of food processing, medical equipment and healthcare, water management and desalination, sports management, infrastructure and renewable energy.
The assembly on Wednesday threw light on two major dream projects – the state’s own airlines and the gas pipeline project being implemented by Gas Authority of India Limited (GAIL).
While chief minister Oommen Chandy said that the first-phase of GAIL gas pipeline project would be commissioned by December, NORKA minister K.C. Joseph said the proposal for a state-owned airways would be mooted at the upcoming Emerging Kerala meet seeking prospective investors.
Meanwhile, Joseph informed the house that considering the demand from NRKs, the state government would be reviving the plans for an own airline. The previous UDF government had mooted the proposal, but it did not materialise.
The state’s own airlines would help address issues like airlines charging exorbitant fares, he said in reply to a submission.
Billed as the biggest and most expensive infrastructure projects conceived by Kerala, a high speed rail corridor for India's first bullet train is one of the mega projects the state plans to implement.
On completion, it will enable one travel from Kerala's capital Thiruvananthapuram to the state's northern most point Kasaragod in 142 minutes, covering a distance of 526 km.
The project may sound unbelievable, especially in the case of Kerala lagging in industry and infrastructure development for decades.
Estimated to cost Rs 1,18,000 crore on completion, the first phase is expected to cost Rs 43,000 crore. It will also be showcased in 'Emerging Kerala Global Connect' at Kochi from September 12-14.
"If all preparatory works progress on schedule and the project starts by April 2013 as planned, the first phase is expected to be completed in five years and the second in the following two years. The whole project should be complete by 2020," said T Balakrishnan, CMD, Kerala High Speed Rail Corporation Ltd (KHSRCL).
"Work of drawing up the Detailed Project Report is now on. Alignment study/survey has started; preparatory work on land acquisition has also begun. Recruitment of key personnel has begun," Balakrishnan,a former bureaucrat, told PTI.
Nine stations are proposed initially - Thiruvananthapuram, Kollam, Kottayam, Ernakulam, Thrissur, Kozhikode, Kannur Kasaragod and in the final stretch to Mangalore in Karnataka. Three more at Chengannur, Tirur and Thalassery, would come up at a later stage.
The total corridor length (upto Mangalore) would be around 571 km and it will have two parallel tracks each in standard gauge systems, independent of existing rail network in Kerala.
The government has appointed Kerala State Industrial Development Corporation as the nodal agency for the project, which could transform lives and economy by facilitating hassle free movement between cities and towns in "God's own country."
The Delhi Metro Rail Corporation has prepared the pre-feasibility study and meeting at the PMO level has given the green signal to all departments concerned. An all-party meeting at the state-level to form a consensus has been very positive.
"We have started discussing funding options with various agencies, including Japan's JICA and ADB. It's in the early stages and nothing has been finalized yet. However, during the Emerging Kerala event, we expect a lot of international companies and financing agencies to take part.The project will be discussed with them and more options may emerge from these discussions," said the KHSRCL CMD.
The DMRC recommended model in the feasibility report is a Special Purpose Vehicle (SPV) owned by the Central and Kerala governments with Japanese participation. "But a final decision on this has not been taken yet and the government is keeping all options open, including PPP and hybrid models," he said.
On the technology, he said it was not an issue at all as that was already available worldwide.
"If we go by the DMRC recommendation, we can get it from Japan as a whole package, technology, funding, implementation everything. But it is also available elsewhere, in Europe, Korea and even in China, although the Chinese technology has not been fully tested and proven," he said.
About the Karnataka government's response to the project which extends to Mangalore, he said they had welcomed it. "Karnataka actually wants it to be extended to Udupi, thinking it will attract greater traffic from Kerala, especially as a pilgrimage centre," he added.
Videocon Industries will set up a Rs 250-crore manufacturing plant for ‘white goods' in the State.
Stating this, Mr Anirudh Dhoot, director of the company, told newspersons here that the product range includes air-conditioners, washing machines and refrigerators.
Finer details would be worked out in the next three months and a final announcement made during the ‘Emerging Kerala Global Connect' event in September.
Mr Dhoot said Videocon Industries would also invest Rs 100 crore in an IT park here, along the lines of those being promoted in West Bengal and Chhattisgarh.
The company has an entrenched presence in real estate catering to the niche area of IT infrastructure parks, he added.
The white appliances plant is expected to generate direct and indirect employment opportunities for 500 to 800 people.
Additionally, it will spawn ancillary industries that can bring in investments and generate jobs.
The land for the projects will be identified in due course. A pilot team from the company will visit various investment zones the State government has set up here.
The company is looking for a city with available port infrastructure for the white appliances plant since it intends to export 20 per cent of its production.
It is at present exporting these products from existing bases to South Africa, West Asia and Sri Lanka. Last year, export revenues amounted to Rs 500 crore.
Mr Dhoot said consultants Ernst and Young have been commissioned to prepare a detailed project report on the proposed manufacturing plant in Kerala.
The company is also a leading player in electronic goods manufacturing, and would not be averse to looking at opportunities here provided they make business sense.
According to Mr Dhoot, tourism and IT have excellent opportunities for growth in the State.
Being chairman of the Kerala Development Council of Assocham, he would want the State to look at new areas of growth as in SME clusters, medical tourism, technology parks and BPO.
Even as the Oommen Chandy government gets ready to host the high-profile Emerging Kerala 2012 Global Connect, decks have been cleared for the first Chinese investment in the state.
TPJ Group, a Kottayam-based company manufacturing rubber products, has signed Memoranda of Understanding with Jingdong Rubber Company that operates out of China's Hebei province for two joint ventures.
During their recent visit, a team of officials from Kerala assessed the technology being used by the Chinese firm and its facilities. They found that rubber waste is efficiently recycled by Jingdong. The company produces rubber sheets, mats and sports goods.
Jingdong and TPJ Group are looking to set up a white reclaim rubber production unit with an annual capacity of 1200 tonnes in Kerala. White reclaim rubber, made out of the waste material from latex factories, is a much sought after product in several countries including China.
Jingdong will invest 30 per cent towards the share capital of this joint venture (JV) and is expected to buy the bulk of the production. The surplus may be sold in India.
The second JV, in which Jingdong will invest 49 per cent of the equity, will take up the construction of indoor stadiums, synthetic tracks and courts in Kerala. The Kerala government has provided 10 acres of land in Kasaragod district for setting up the factory.
Jingdong will supply both raw material as well as machinery for the project and arrange training for the Indian staff too. The Chinese company has so far implemented over 30 such projects and was even involved in preparations for the Beijing Olympics.
Jingdong has the approval of the International Association of Athletics Federations to make sports courts, artificial turf and synthetic tracks. It has already done so in Morocco, Saudi Arabia, Malaysia and Thailand.
According to the TPJ Group, the proposed venture will help address the issue of inadequate sporting infrastructure in Kerala. "A sports-loving state, Kerala has produced a number of world class athletes. But sports development has suffered in the past few years due to lack of infrastructure and facilities for talented young sportspersons," rued Mr George Thomas, the group's managing partner.
"A specialised sports construction company based in the state would be of particular advantage since Kerala is to host the 35th National Games in 2013," he stressed.
The group has been producing stable mats, hollow mats and various kinds of tyre flaps at its three units since 1986. They export 60 per cent of their products to the Middle East, Europe and the US.
At Emerging Kerala 2012, the Kerala government will facilitate connect initiatives, including B2B and B2G meets. Kerala State Industrial Development Corporation (KSIDC) is the nodal agency for the event while the Confederation of Indian Industry (CII) and National Association of Software and Services Companies (NASSCOM) are the trade and industry partners.
The over three-crore population of the state may be small compared to those of the other Indian states and the state’s rate of industrialization negligible.
But some of the fastest growing urban centres matching global standards are in Kerala, global management consultants McKinsey has noted.
In its latest report, McKinsey identified five cities from Kerala that could become a part of the 600 booming global cities by 2025. The cities are identified on the basis of their potential economic growth or Gross Domestic Product (GDP).
Apart from Kochi, Kozhikode and Thrissur, the surprise finds are Kollam and Thalassery.
Of the 136 new cities joining the 600 Club, 100 are from China and 36 from India. Among the states, Kerala and Maharashtra contributed the maximum number to the club – five each, followed by Andhra Pradesh –three.
According to McKinsey, these 600 cities will account for nearly 65 per cent of the global GDP growth.
“With new hot spots emerging and household wealth surging in little-known urban centers, companies may have to adopt a much finer-grained approach to tap into the growth that lies ahead,” the report said.
According to former president of the CII Kerala chapter, Nawaz Meeran, Kollam and Thalassery must have found a place in the list probably due to the large number of emigrants from these places.
“Thalassery has some remarkable entrepreneurs who have set businesses in various parts of the globe. Kollam also has a large emigrant population,” Meeran said.
Kerala government has decided in principle to implement the seaplane project aimed at boosting tourism in the state.
The public sector Pavan Hans would be entrusted with the work to carry out technical feasibility study of the project, State Minister for Tourism A P Anil Kumar said after a meeting convened by Chief Minister Oommen Chandy to discuss it.
Five companies have approached the state government expressing interest in the project, he said adding government aims to have an open sky policy instead of having monopoly for any particular company.
A final decision would be taken on the project planned under Tourism Development programmes only after conducting environment impact and financial feasibility of the project, he said.
A total of 20 spots have been identified for the project now, he said. Government plans to showcase the project in the coming 'Emerging Kerala' meet to be held in September in Kochi.
Seaplanes are small aircraft designed to take off from land and float in the water.
In Kerala, they have their heads in the clouds and eyes on non-residents. A fifth international airport-and India's first wholly private one-is coming up in a state where no highway is more than half as wide as the National Highways Authority of India's standard minimum of 60 metres.
No other state in the country has as many international airports. Tiny Kerala, where narrow roads are the norm due to lack of land, clearly bets its future on its vast army of non-resident Keralites whose remittances account for 31% of the state's GDP.
Fittingly enough, the new airport is coming up at Aranmula in Pathanamthitta district, where a toy plane flown into a crowd could well hit a non-resident Indian.
"It's going to be the most state-of-the-art airport in the state, with two runways and a taxiway," Gigi George, managing director of the Chennaibased KGS Group, the airport's promoter company, told ET.
George said the company has got every clearance in hand and 750 acres have been acquired for the project.
The Aranmula airport will be close to multiple tourism destinations such as Kumarakom, the backwaters of Alappuzha, and the high ranges of Kumily, the Thekkady tiger reserve, and most of all, the pilgrimage centre of Sabarimala Ayyappa temple in Pathanamthitta district.
The United Nations Educational, Scientific and Cultural Organization (Unesco) was willing to work with the state government in the field of education and culture, said Shigeru Aoyagi, director and Unesco representative to Bhutan, India, Maldives and Sri Lanka.
"Ahead of the 'Emerging Kerala' meet when the state is trying to woo investors, it is very important to display the capability of the human resource here, which should include the portrayal of the rich culture of the state. Unesco is willing to work with the state in this regard," he told TOI.
Aoyagi also hailed the rich reading culture of the state, as well as the role played by the library movement in boosting this. While India's neighbouring countries are struggling to raise their literacy level, this state achieved that way back in the 90s. "Countries like Bangladesh and Pakistan have reached only the 50% mark," he said.
Aoyagi said literacy could be promoted in rural areas only by inculcating the habit of reading in people. "Kerala's achievement cannot be ignored, especially at a time when Unesco is devoting the decade (2003-13) to promote literacy," he said.
During his two-day visit to the state, Shigeru Aoyagi held discussions with chief minister Oommen Chandy, industries minister P K Kunhalikutty and education minister P K Abdu Rabb, and expressed Unesco's willingness to work in cooperation with the state.
Chief Minister Oommen Chandy and State ministers attended an Industry Interactive Session organised by ASSOCHAM (Associated Chambers of Commerce and Industry of India) in New Delhi on July 2. The session was aimed at attracting investors to the 'Emerging Kerala 2012' conclave being planned in the State in September.
The Chief Minister invited investors present at the function to the global investor event "Emerging Kerala" to be held at Kochi this September. "With 14 sectoral conferences this event would open up business opportunities in aerospace, green energy, financial services, food and agriculture, ports, logistics, ship building, IT, Biotech amid other sectors," said Mr Chandy.
Speaking at the function, the Chief Minister elaborated on the transformation planned for the State and the opportunities it held for investors. The State will focus on knowledge based agro-industrial projects to bring about the transformation, he said.
The Chief Minister said that the Kochi-Palghat-Coimbatore industrial corridor would open up huge opportunities for industrial units and business and trade. The corridor would have nine industrial zones, two agro processing zones, two tourism zones and a power hub. The corridor with an outlay of Rs23,500 crores was expected to generate seven lakh jobs.
Replying to the queries raised, the Chief Minister dispelled the impression about labour problems in Kerala. He pointed out that not even a single industrial stoppage had occurred due to strikes in the State last year. "The labour problem is a past story" he said.
Mr Chandy assured the investors that there would not be any problem with land acquisition as the government had already set up industrial and biotech parks. The Kerala Industrial Infrastructure Development Corporation (KINFRA) already had acquired over 400 acres of land for setting up food processing units. The State is also developing a Marine Park at Beypore for the sea food industry, an oceanarium for tourists, a coconut park at Kuttiyadi, a Spices Park at Idukki, and two Mega Food Parks in Wayanad and Kinaloor.
Mr Chandy also highlighted the opportunities available in the IT sector, in the backdrop of the SmartCity coming up in Kochi. The tourism sector was another area with huge potential, especially health tourism and Ayurveda sectors.
The CM said that the State was inviting further investment in infrastructure. It already had three existing airports, and one more is planned. In addition to the ICTT at Vallarppadom, it plans to develop one more ICTT at Vizhinjam and 18 minor ports. Coastal shipping was also being developed as it was more economical and could take the traffic off the roads.
Mr Anil Agarwal the past president of ASSOCHAM who presided over the function, lauded Kerala for ranking first in human development index among all the states of the country. He hoped the State would repeat the feet in industrial and economic development too, as it is blessed with an intelligent and skilled population.
The Chief Minister released the ASSOCHAM-Frost & Sullivan report titled "Kerala: Road Map for Inclusive Growth 2012" on the occasion. Mr DS Rawat, National Secretary-General, ASSOCHAM said that the industry body has opened a window for investors to send their proposals for the Emerging Kerala event. He added that ASSOCHAM would be closely interacting with the organisers in pushing the proposals by its members.
Kerala Finance Minister KM Mani, Planning Minister KC Joseph, and top officials also attended the event.
Kerala is set to roll out the red carpet to potential investors from the Gulf in September at one of the biggest investment branding exercises the South Indian state has ever undertaken as part of a major all-round growth drive initiated by Chief Minister Oommen Chandy, a senior government official said.
The first “Emerging Kerala” investment meet, to be held from September 12 to 14, 2012, in Kochi, will provide entrepreneurs an opportunity to explore, invest and establish their business interests in a state with a pro-active administration and investment-friendly policies, said V. Somasundaram, the state’s additional chief secretary (Industries).
Speaking at an investor meeting hosted by the Indian Business & Professional Council in Dubai, Somasundaram, who was leading a delegation from Kerala to showcase the event to investors across the Gulf, said the state offers unique opportunities in tourism, medicine, healthcare, software, hardware, garments, chemicals and many other growth-oriented sectors. “With a pro-active administration and investment-friendly policies, Emerging Kerala will offer a key gateway to investors to make their mark on the industrial map of Kerala,” he said.
He said the aim of the event was to make Kerala a premier global hub of economic activity through fostering entrepreneurship and industry, which could leverage its inherent strengths.
Kerala has impressive socio-development indicators including high literacy, high life expectancy, low infant mortality, high degree of women empowerment and above all enormous human resource potential.
A series of mega infrastructure projects in the pipeline includes High Speed Rail Corridor connecting north and south Kerala, Kochi Metro Rail, Thiruvananthapuram Mono Rail and Kannur international airport, said Somasundaram.
Sanjay Verma, consul general of India in Dubai, said Kerala, along with most other states, has been playing a significant role in driving India’s exponential growth. “Things are indeed changing for the better for India. Some years ago, nobody would have hazarded even a remote guess that India would achieve such admirable growth,” he said.
Bharat Butaney, president of IBPC, said Emerging Kerala has been undertaken with a mission to transform the industrial and socio-economic scenario of the state boasting one of the highest literacy rates.
He said the main focus of the event was to showcase the myriad investment opportunities by projecting the state as an investment-friendly destination. “With the positive, ‘no red tape’ approach adopted by its dynamic Chief Minister Oommen Chandy, Kerala will indeed be an investment haven worthy of serious consideration for progressive investors,” said Butaney.
Siddharth Balachandran, managing director Bumga Group of Companies, and Lalu Samuel, Chairman of Kingston Holdings, both with good investment track records in the state, outlined their perspectives on the opportunities and challenges Kerala has on offer to investors. Alkesh Kumar Sharma, managing director of Kerala state Industrial Development Corporation, outlined the key features of Emerging Kerala and the proactive infrastructure initiatives being undertaken by the government to turn ‘God’s Own Country’ into ‘Investor’s Own Destination.
Sharma said the branding exercise was aimed at stimulating growth through enabling policies and to facilitate an environment for investment.
Easing regulatory procedures for investors will be top on the priority list for the government, he said. The state’s Single Window Clearance system for speeding up approval of industrial projects is going online and growth-inhibiting legislations getting amended.
The government has constituted a state-level committee to look into each new project and approve special facilitation, incentives and concessions. For large and medium scale projects, the State Board is expected to issue clearance within 45 days, speeding up the process considerably, he explained.
The Union Cabinet today approved the proposal to provide a special incentive package to promote large-scale manufacturing in the Electronic System Design and Manufacturing (ESDM) sector. The scheme is called the Modified Special Incentive Package Scheme (M-SIPS). The main features of M-SIPS are as follows:
i) The scheme provides subsidy for investments in capital expenditure - 20% for investments in SEZs and 25% in non-SEZs. It also provides for reimbursement of CVD / excise for capital equipment for the non-SEZ units. For high technology and high capital investment units like fabs, reimbursement of central taxes and duties is also provided.
ii) The incentives are available for investments made in a project within a period of 10 years from the date of approval.
iii) The incentives are available for 29 category of ESDM products including telecom, IT hardware, consumer electronics, medical electronics, automotive electronics, solar photovoltaic, LEDs, LCDs, strategic electronics, avionics, industrial electronics, nano-electronics, semiconductor chips and chip components, other electronic components and EMS. Units across the value chain starting from raw materials including assembly, testing, packaging and accessories of these categories of products are included. The scheme also provides incentives for relocation of units from abroad.
iv) The scheme is open for three years from notification.
Approvals for incentives not exceeding Rs. 10,000 crores will be granted during the XII Plan period. The projects with incentives of Rs 10,000 crores have potential to create employment for nearly 0.5 million persons.
The policy is expected to create an indigenous manufacturing eco-system for electronics in the country. It will foster the manufacturing of indigenously designed and manufactured chips creating a more cyber secure ecosystem in the country. It will enable India to tap on the great economic potential that this knowledge sector offers. The increased development and manufacturing in the sector will lead to greater economic growth through more manufacturing and consequently greater employment in the sector.
As far as Kerala is concerned, M-SIPS will give the much desired boost to the Electronics Park being planned by the Kerala State Industrial Development Corporation (KSIDC) near Kochi. Electronics is also one of the key sectors being showcased for investments in the forthcoming Emerging Kerala 2012 event.
The US Consulate in Chennai would open American Business Corners in Kochi and Thiruvananthapuram to provide further impetus to the US-Kerala bilateral business relations, said Jennifer A McIntyre, US consul general in Chennai, on Tuesday.
Speaking at the interaction meeting organized by the Indo- American Chamber of Commerce (IACC) and the Malabar Chamber of Commerce here, she said the American Business Corners- or ABCs- will be opened in the two cities in September to coincide with the Emerging Kerala Summit. She also announced that the US consulate will participate in the summit and would host a country session on investing in the US. McIntyre said the business centres will act as a resource library to provide basic information on how to invest in the US and would facilitate business linkages between Indian and US firms.
"The centres are collocated with trade groups and businesses in tier II cities outside Chennai. They will also give local businesses contact information to reach our expert commercial services staff," she said.
The first two of these centres were opened by the Foreign Commercial Service under the consulate in Madurai and Coimbatore earlier this year.
Speaking at the function, vice consul Alexis Haftwani said students from India, numbering 1,03,000, made up the second highest international student group in the US after China.
She added that the consulate had processed 2.16 lakh non-immigrant visa applications to the US in the fiscal year 2011.
Malabar Chamber of Commerce president G Anoop Narayanan presided over the function. President of IACC, G C Gopala Pillai, P V Gangadharan and MCC Secretary MPM Mubashir spoke at the function.