Subramanyam Javvadi: 'Eight auto majors are looking at Andhra Pradesh as their base for operations.'

by Nilesh Wadhwa 17 Feb 2020


Subramanyam Javvadi, CEO of the Andhra Pradesh Economic Development Board, and Director, Industries & Commerce Department, speaks on making Andhra Pradesh an automotive and electric vehicle manufacturing hub, the ease of doing business, and the focus on making available skilled workforce to industry.

Andhra Pradesh is becoming one of the most aggressive states in terms of roping in automobile companies. Kia Motors was one of the latest entrants along with other established component suppliers also moving in. What has been your strategy and new policies that you are introducing to attract more investment to the state?
Andhra Pradesh is a very big market for automobiles. We brought in our Automobile and Auto Component Policy a few years ago. This is an all-comprehensive policy, which promotes the auto component manufacturers and OEMs who want to set up shop in the state. Kia Motors is a big investment — almost $2 billion (Rs 14,282 crore) investment with all its ancillaries. It established manufacturing operations almost within 28 months after signing of the MoU. Similarly, Isuzu, Hero Motors and Apollo Tyres are establishing manufacturing in the state. Many others have also evinced interest to set up in the current eco-system. At present, there are more than 100 component manufacturers in Andhra Pradesh, who are supplying to international majors like Ford and Lamborghini, among others.

Kia Motors, which invested $2 billion (Rs 14,282 crore)
with all its ancillaries to begin manufacturing operations in just 28 months, brought Andhra Pradesh into the automotive limelight
. Eight new auto majors have evinced interest in Andhra Pradesh. Do they include China's Changan, Chery, SAIC or Lifan?

We want the entire ecosystem to flourish further. For that, we are developing industrial clusters at Anantpur, Chittoor and Nellore districts of Rayalaseema in the south of Andhra Pradesh. These have  come up in a big way due to land availability in abundance, provision of quality and uninterrupted power and water supply. All our approvals are online, no one needs to visit our office. Some approvals take just seven days. But overall we promise a turnaround time of 21 days. Our SLA (Service Level Agreement) today is about 99.7 percent. Our business is to ensure that we make the businesses easy, not only ease of doing business but also bring down the cost of doing business and provide quality manpower and resources.

Skilling is another growth driver we are focusing on. Both in automobiles as well in other industries, we are focusing on skilling manpower in a big way under the leadership of our Chief Minister Jaganmohan Reddy.

What is the target and investment that you foresee for Andhra Pradesh in the coming years?
Close to 200,000 engineers graduate from Andhra Pradesh every years but only 55 percent get employed. The remaining 45 percent have to be upskilled or reskilled. These are the ones we are trying to target. Along with them, we are also targeting the graduates from polytechnic institutes to come to our skilling university as well as multi-skill development centres.

We are trying to link industry and academia and make a real-time analysis of what the industry actually needs. In this context, we have already mapped about 2,500 job roles for the overall industry. We are trying to identify the job roles not available in the local market and also trying to create specialisations in that way and ensure that industry will be able to tap it.

Currently the bulk of scrappage centres are in New Delhi. Is Andhra Pradesh looking to take advantage of the soon-to- be announced policy and develop vehicle scrappage centres in the state?
We are not yet privy to the policy. So, we have to see the fine print. But overall we also need to see the environmental impact and only then we will be able to comment on that. Once the government of India comes out with a proper policy, we will surely try to capitalise on it.

What is the current status of the EV policy?
The EV policy of 2018-2023 is still in vogue. We are coming up with a comprehensive Industrial development and export development policy together. That is yet to be approved. That will come in March 2020.

Is the state looking at becoming an export hub?   
We are working with export-oriented organisations so that the agri sector, the allied sectors and manufacturing sector are mutually benefitted. There is a big MSME eco-system that has developed and we are supporting through our one-time loan restructuring process. We will now like to take them to the next level of value addition through exports for MSMEs and bring in the anchor clients for these MSME units.

Have any new OEMs evinced interest to set up manufacturing operations in Andhra Pradesh?
At present, I am not at liberty to divulge details on this subject. What I can tell you is that at least 7-8 auto majors are in talks with us, including some who do not have a footprint in India. They are now looking at Andhra Pradesh.

Also read: Andhra Pradesh invites India Auto Inc to set up robust manufacturing eco-system in the state