Till Tata Motors went with its Nano plant to Gujarat in 2008, the only OEM that had a base there was General Motors India. The company set up a facility at Halol because its joint venture partner, Hindustan Motors, had a plant there.
That was in the days before Gujarat was under the leadership of its current chief minister, NarendraModi, became a byword for good governance and efficiency. That has seen some of the big names set up their tents in the state including Ford Motor Company, PSA Peugeot (though this is now delayed), Maruti Suzuki India and Hero MotoCorp.
Along with the OEMs, came their component suppliers who pitched their tents in the vendor parks. Tata Motors brought with it Rane (Madras) and a host of others including Subros, Sona Koyo, Mayur Industries and TI Cycles to mention but a few. Now, as Ford Motor’s plans for an integrated manufacturing plant continue apace, several vendors are also looking at the state.
One of Ford’s key suppliers, Comstar India is heading to Gujarat. It has been allotted 2.5 acres at the Ford vendor plant in Sanand from where it plans to support Ford, Tata Motors and other OEMs.
Another new player entering Gujarat is Swiss company Oerlikon Drive Systems whose head honcho HeribertoDiarte told Autocar Professional that construction at its Sanand facility will kick off by end-2013 and early 2014. When production begins, it will be for both the domestic and export markets.
Among key players already in Gujarat is Lanxess India whose Jhagadia plant rolls out a slew of polymers for use in the tyre and parts making sectors. Other players looking at Gujarat’s potential include the UNO-Minda Group.
Ceat’sHalol facility in which the company invested an estimated Rs 650 crore is its only radials manufacturing plant. In an exclusive interview to Autocar Professional, AnantGoenka, managing director, said doing business in Gujarat is hassle-free.
Maruti Suzuki’s plans are underway for its Gujarat unit which will include units at Hansalpur and Vithalapur, both locations within 50km of Sanand. The company is slated to roll out the Swift hatchback as well as a new light commercial vehicle (LCV) from its Sanand plant.
All this augurs well for Gujarat which plans to be a new and vibrant hub in the western part of the country where Maharashtra has held sway as result of its venerable heavyweights that include Tata Motors and Bajaj Auto, a good labour force and its proximity to the country’s financial capital, Mumbai.
Where Gujarat already has the edge is its industry-friendly infrastructure and policies. While it is only natural that vendors to the OEMs investing in Gujarat also establish base, what is perhaps the state’s greatest strength its infrastructure. On a recent visit to the state’s capital, this correspondent was impressed with the road network as well as the Bus Rapid Transit system (BRTS) which has come in for praise from the common man. The state’s capital also has a network of CNG stations and is considered one of the leading CNG markets after New Delhi and Mumbai.
Gujarat will also benefit from the Delhi-Mumbai industrial corridor that is to be funded by JETCO (India-UK Joint Economic & Trade Committee) and a clutch of other companies. About 40 percent of the corridor passes through the state. Already neighbouring Rajasthan has a large and vibrant Honda facility as the RIICO goes out to woo industry in the state which means that Gujarat can benefit from the spillover effect.
Recently, Osamu Suzuki, chairman of Suzuki Motor Company visited Gujarat to take a look at Maruti's site for a new plant.
At present, it is believed that some vendors aren’t happy with the fact that their earlier expectations from the Nano plant have not been quite met. But once the projects from the other players who have committed investments to Gujarat get underway, this could all change.
The state has a network of educational institutions that can support growth and its peaceful industrial labour has been seen as a major asset. Availability of power and water have also worked in its favour.
The challenge, therefore, for Gujarat is to ensure that this continues well beyond the current political dispensation. All too often, developments such as these are dependent on personalities that are larger than life. A political consensus, therefore, can ensure that the state’s auto sector, now in its early phase, gets stronger and more sustainable
INTERVIEW K T VYAS, ASSISTANT GENERAL MANAGER, INDEXTB
KT Vyas, assistant general manager, iNDEXTb (Industrial Extension Bureau), Gujarat government, on what the state’s pro-business outlook is and how it is gaining prominence among automobile and auto ancillary companies.
What is your role in enabling automotive companies to invest in Gujarat?
My role is to assist investors keen on making investments in Gujarat. The Industrial Extension Bureau was set up in 1978. The Bureau, which is the single point of contact for investors, was set up to promote investments in industrial and infrastructure projects. Managed with absolute professionalism, the Bureau serves investors from conceptualisation to project commissioning stage.
We helped Tata Motors by reducing the gestation period for their Nano project (as against time taken by regular bureaucratic processes) and the land for the plant was allotted in 2008. This ensured that the factory was ready for commercial production in 2010.
We reach out to prospective entrepreneurs residing in or outside Gujarat as well as those from abroad. The Board organises campaigns to motivate them to set up industrial units or participate in any industry in Gujarat. Conventions such as the PravasiBhartiya Divas and Vibrant Gujarat Summits also help.
Also, we assess the progress in industries with reference to number of units, jobs created, investments made and value of production.
Tell us about Gujarat's recent achievements?
Ford India and Maruti Suzuki are the best examples. While Ford India has committed to invest Rs 4,000 crore in Gujarat, Maruti has committed a similar amount. So the Sanand-Becharaji belt is seeing key developments while a dedicated Japanese industrial zone and townships commissioned by JETRO (Japan External Trade Organisation) is also coming up. It may well attract 200 to 300 Japanese companies.
What kind of benefits does a company get from the state government to set up a plant?
We provide fiscal benefits, for example, for a longer period as compared to other states. We do not charge octroi, ensure 24x7 power and water supply, provide dedicated investment zones, SEZs and corridors and promote projects in public-private partnerships (PPPs).
Our industrial policy aims at synergising opportunities around the Delhi-Mumbai industrial corridor. We also ensure that the OEMs get land for their vendors. Ford and Maruti had requested us to reserve land for their vendors and we have done that.
Are you scouting for new companies to set up their plants in Gujarat?
To get companies to make investments at this time is very difficult. The willingness of the company to invest is more important than any government official chasing them to do so.
We are constantly looking out for companies with a progressive outlook to set up their base in the state. We have also received inquiries from automotive companies based in other states. We hope that in the future when they wish to expand, they will choose Gujarat.
AMIT PANDAY