When Tamil Nadu was gearing up for industrial investments from overseas marquee brands and conglomerates in the 1990s, post-liberalization, the state’s southern districts were in the news for caste clashes.
Identifying lack of employment opportunities as the root cause for such social disturbances, successive state governments worked to push industrial investment in the south. But with limited success.
The muchhyped Nanguneri SEZ, for example, never really took off. But the tide is finally turning. Plots in Sipcot’s Gangaikondan industrial estate in Tirunelveli district are almost sold out. Sipcot is now looking to acquire more land in adjacent areas.
Signs that the state’s push to get more industrial investments in the southern region, especially in Tirunelveli and Tuticorin, is succeeding. The recently inaugurated furniture park in Tuticorin could turn out to be a major hub with both domestic and overseas players showing interest.
And Gangaikondan is set to become the hub for ‘renewable’ manufacturing, with both Tata Power and Vikram Solar planning big investments. “If Tamil Nadu is to achieve chief minister M K Stalin’s dream of becoming a $1 trillion economy by 2030, the southern districts have to play a significant role.
There are now new investments in the region due to the government’s focus on identifying the core strengths of each district,” says Michael Motha, past chairman, CII (Tuticorin). “Despite the closure of Sterlite Copper, the port at Tuticorin is a key driver for growth. Once the `7,000-crore outer harbour project is completed, the port could well welcome mother vessels instead of just the feeder vessels, which now ship 65%-70% of cargo to Colombo.
This will save huge costs and boost industries and exports. The recently inaugurated 1,500-acre furniture park is already showing the way,” says Motha. Others see this recent spurt in investments in the south as a natural progression. “For some time, the focus was on Chennai and Kancheepuram and that region attracted most of the investments.
The lopsided development resulted in Chennai bursting at its seams. Every region has its own unique advantage and strengths to offer,” says Jaisinh Vaerkar, chairman, CII Madurai Zone. Dindigul and Theni are agro-based economies and offer plenty of scope for value addition and exports, he says. Madurai is an old trading hub, besides turning into a manufacturing base for rubberbased products over the past few decades.
The city has also attracted IT hardware and software players such as Honeywell, HCL and now Zoho, besides several local IT companies. Virudhunagar has the best processing facilities for dal and cereals, besides spices. Value addition expands the potential for exports.
On its part, the state has been pushing industries to establish new units in the southern region, which offers vast extents of land at affordable prices, besides plenty of both skilled and unskilled manpower. “Vikram Solar, which initially established a small unit near Chennai, was keen on expanding operations there. We pushed it to go south and even had to offer slightly higher incentives. Now the region will become a major hub for renewable manufacturing, particularly Solar PV, with other component suppliers joining them,” says Pooja Kulkarni, MD and CEO, Guidance TN.
“Neighbouring Virudhunagar district has seen a few investments in the `400-`600 crore range in the textile sector. We are confident that it will get the mega textile park under the PM Mitra scheme. With garment units and even footwear units set to come up in the region due to availability of labour, the south is set for the long-awaited industrial investment surge,” she says.
The developments are not just limited to the large industries; even MSMEs are pitching in. “While Sidco is establishing a new industrial estate at Sakkimangalam in Madurai district, we are pushing the capital subsidy scheme for new investments in the southern region.
Of the three regional startup hubs planned for the state, two will come up in Madurai and Tirunelveli. And, new clusters are set to emerge in Virudhunagar (women garments), Madurai (toys), Tirunelveli (cookware) and Kanyakumari (wood carvings),” says TN secretary for MSMEs V Arun Roy