Industrial clusters have become an important component of the industrial policies of various Indian states. The government of Andhra Pradesh has now announced the setting up of a textile and apparel cluster, with some unique facilities. In an exclusive interview with Reena Mital, Dr. N. V. R. Nathan, Consultant, Andhra Pradesh Industrial Infrastructure Corporation Ltd, (APIIC) highlights the exclusive features of the upcoming cluster, which is generating a lot of interest from investors.
Industrial clusters, parks, special economic zones are today part of almost every state government’s industrial policy. But not many have succeeded. According to you, what are the reasons for this?
During my tenure as Director, NIFT and also as Vice President, IL&FS, I have been part of establishing several apparel parks in India, Many have not succeeded due to poor planning in providing most essential basic amenities like proper EFT, and skill development centres within the park and proper dormitory facilities in the vicinity of park for workers. Since apparel sector has large migrant labour, dormitory and housing facilities are very important in such zones, to retain workers.
Tell us about the proposed textile and apparel cluster coming up in Andhra Pradesh. Will it be for the entire textile value chain?
The proposed apparel and textile clusters will be in three locations. For apparel in Ananthapur, which is in close proximity to Bengaluru; for textiles in Nagari and Puttaparti. It will cover the entire textile value chain. APIIC is keen to develop manufacturing of technical textiles, geotextiles, too. The cluster is for both the organised and the SME sector. The cluster is for both exporters and domestic brands.
Already, 40 companies have expressed interest in the clusters.
What facilities are proposed in this cluster?
The word apparel park has lost its relevance and investors prefer standalone units provided we take care of proper infrastructure development for smooth functioning of the industry.
APIIC has proposed to provide Common Facility Centre for effluent treatment, Centre of Excellence for skill development to train eight different levels of skilled workers, dormitory facility which the investors can pay and use, housing cluster for workers in middle management that can be rented out from APIIC. Facilities like government school, primary health care centre, full-fledged logistics park nearby, are some of the other highlights of this cluster.
Dormitory and housing clusters will be within a radius of 3 kms from the cluster, thus ensuring that workers are able to reach the factory and office on time. I believe this is one of the most important features of this cluster. Most of the clusters till now did not have any housing facilities. While companies in the clusters realise the importance of having good housing for workers near the workplace, they are unwilling to invest in the same. So, we are offering this facility to the industry.
APIIC has proposed to offer plug and play facilities for willing manufacturing units, plus exclusive facilities for trims and accessories manufacturers. An R&D, and incubation centre will also be part of the cluster.
Are there any financial incentives for companies wanting to operate from the cluster?
There are several investor friendly financial packages being offered to attract investors which will be the best in comparison to other state policies. These include, among others, substantial subsidies on land cost, power subsidies, a component of the wage will also be reimbursed to generate employment in the cluster. We are expecting to generate employment for 5000 workers in the first phase.
How will APIIC ensure easy availability of inputs, water, energy, labour, to the cluster?
Andhra Pradesh is a power surplus state, water is available in view of three overhead canals, and most skilled labours working in Karnataka are from Ananthapur district. We have a large database of skilled workers. We have identified 3000 skilled workers within the cluster, and more will be trained.
What are the proposed transportation and logistics facilities?
An exclusive logistics park is proposed as part of the cluster development. This again is a very unique feature of the park, something which has been overlooked in many other apparel clusters. This will make it easier for companies to book containers, and ease shipments.
What will be the focus on sustainability in terms of energy and water efficiency, waste water treatment, digitalization, etc?
APIIC believes in sustainable development and will implement the project with experts in the respective field.
What will be the capacity of the cluster?
As per the current plan, the cluster is expected to be around 400 acres including the logistics park and support service infrastructure like dormitory housing, etc. About 40 investors have shown interest in investing and will provide 5000 jobs in Phase 1.
Depending on the demand, we could embark on Phase 2, which would be around 300 acres.
When will the cluster become operational?
We are planning to start operations from July-August 2021. We have identified prefabricators, so construction of the structures should take about three months.
Anything else you would like to highlight?
Ease of doing business is not just about single window clearances, and fast clearances. It is about providing affordable infrastructure to investors so they can generate business and create employment with minimal effort.
We are optimisitic about the success of this cluster. The industry is doing well despite the pandemic. India’s apparel exports for 2020-21 are expected to reach almost the same levels as the previous year, inspite of four months of non-activity. This is very good for the industry, the entire value chain. And will certainly spur investments, given the changing global supply chain.