The Hindu : Advantages ample here, marketing makes the difference

Online edition of India's National Newspaper
Friday, Jan 10, 2003

Southern States

Southern States - Tamil Nadu

Advantages ample here, marketing makes the difference

By V. Jayanth

CHENNAI Jan. 9. The decision by the Confederation of Indian Industry to host its next annual partnership summit also in Hyderabad and the move by the Sanmar group here to set up its Rs. 500-crore PVC plant in Andhra Pradesh — instead of at Cuddalore — have sent out clear signals of which way the wind is blowing. The CII could not say `no' to the request by the Chief Minister, N. Chandrababu Naidu, that its next summit be held in Hyderabad. But the Sanmar group very much wanted to locate its plant in Tamil Nadu, where it has been well-entrenched for years.

According to industry sources, the key attraction or advantage in Andhra Pradesh has been its Chief Minister and the easy access to him. "The financial crisis in that State may be worse than Tamil Nadu. In a couple of years, when repayment of World Bank loans begin, the dimensions of the problem will become clear. Even the law and order situation may not be all that conducive, given the extent of naxalite menace. If, in spite of these handicaps, industry is still opting for Andhra Pradesh, it is because of the Chief Minister", according to a top CII member.

In the case of the Sanmar project, it is stated that despite several sittings and assurances, the promoters could not convince the Pollution Control Board. Some of the guarantees sought were outside the `technology and production parameters' with which the company was concerned.

The sources said it need not put a damper on investments in the State, but leading groups like Sanmar were never keen on setting up shop outside Tamil Nadu. The State has been the company's base and all its expansion has taken place here. "That is what makes it unfortunate, for a known and premier group to be forced to shift to Andhra Pradesh".

Industry organisations urged the State Government to come out with its industrial policy without further delay. "If the Government does not want chemical or polluting industries, it must say so. Or it must specify an area in which they would be encouraged. Similarly, if Tamil Nadu wants only the manufacturing and services sector to flourish, the policy must provide a direction", said a chamber spokesman.

"Investment conditions" in Tamil Nadu were "far more attractive" than in many other States — in terms of infrastructure, availability of trained manpower, the industrial relations environment and the overall law and order situation. But the problems appeared to be "in access to the decision-makers and the absence of a regular consultative forum, where we could voice our grievances", he said.

Market studies have shown that even in terms of `rating', only the Tamil Nadu and Karnataka "Government paper" had any value in the region.

Andhra Pradesh had borrowed extensively and Kerala was still in "dire straits".

With all these inherent advantages, it was finally "aggressive marketing" which made the difference, the sources explained.

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