The year 2008 brought in some big-ticket investment commitments to Tamil Nadu. The state government signed 21 MoUs with leading multinational companies, which would see around Rs 31,333 crore flowing into the state.
The investments were mainly in automobile, power and energy, IT/ITeS, hospitality and infrastructure sectors. Here’s a recap of the investment scene in the state in the year just gone by.
HOSPITALITY
The state got approval for 110 hotel projects, of which Chennai city alone is expected to get 4,000 rooms by 2012, according to MP Purushothaman, president, South Indian Hotels and Restaurant Association. He said that eight 5-star hotels, one 4-star hotel, three 3-star hotels were being constructed in Chennai. These hotels will add another 4,000 rooms by 2010 and the promoters include Hilton, ITC Chola, Rain Tree, Le Meridien, Deccan Park, Ginger Hotels and Marriott. The investment for 5-star hotels would be around Rs 1,10,000 to Rs 1,20,000 for a single room.
IT/ITES
Tamil Nadu is already home to Tata Consultancy Services, Infosys, Wipro, Satyam, HCL, Patni Computers, I-Flex, Polaris and Hexaware as well as a galaxy of international majors - Accenture, Verizon, Xansa, Office Tiger, Standard Chartered Bank, ABN Amro, Alcatel, and Cognizant Technology.
Over the last 18 years, foreign direct investment worth Rs 25,683 crore had found its way into the state. That apart, projects worth Rs 16,000 crore have been finalised and are awaiting official announcements.
The upcoming IT parks in special economic zones (SEZs) across seven southern districts of Tamil Nadu, promoted by Electronics Corporation of Tamil Nadu (Elcot), are likely to attract investments of over Rs 25,000 crore and would create 540,000 direct and over 1.5 million indirect jobs over the next five years.
The Tamil Nadu Industrial Development Corporation also announced an IT Investment Region in Chennai that will see an investment of Rs 25,000 crore.
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Spanning an area of 1,400 sq km or 350,000 acres, the proposed ITIR will lie between the Old Mahabalipuram Road (OMR) and the Bangalore Highway. Corporates are expected to move in with an investment of Rs 4 lakh crore into the ITIR, which would generate roughly 400,000 additional jobs.
POWER & ENERGY
Shiv Das Meena, former executive director, Tamil Nadu Electricity Board (TNEB), on December 8, announced that the board was planning to add 4,250Mw of power over the next five years in a phased manner to tackle electricity shortage in the state. The investment to add 2250 Mw of power by 2010-11 alone would be over Rs 15,000 crore.
On November 26, TNEB and BHEL signed an MoU for setting up a 1,600 Mw thermal power plant at Udangudi in Tuticorin district with an investment of Rs 8,700 crore.
On July 25, Chief Minister M Karunanidhi said two atomic power plants were being planned in the state with 4,000 Mw each at a cost of Rs 32,000 crore.
TNEB, on May 13, announced it would spend Rs 925 crore on cogeneration plants and three power generation projects of 2,200 Mw were being planned at an investment of around Rs 10,725 crore.
The state government also announced that it would set up cogeneration plants in 15 cooperative and two public sector sugar mills in the state.
The TNEB will invest nearly Rs 925 crore over the next two years in this project to create an additional capacity of 185 Mw.
MANUFACTURING
The investment was led by the automobile sector. In February 2008, the alliance of French and Japanese automakers Renault-Nissan signed an MoU with the state government to set up an assembly plant in Oragadam near Chennai, with an investment of Rs 4,500 crore to manufacture 400,000 vehicles a year.
On May 2, Chennai-based MRF Ltd inked an MoU for setting up a tyre manufacturing plant near Chennai with an investment of Rs 900 crore.
On June 8, Motorola, the world's second largest handset-maker, said it would spend $100 million in stages to set up a manufacturing facility near Chennai,
On July 7, Daimler Hero Commercial Vehicles said it would invest Rs 3,000 crore for setting up a truck manufacturing facility at the Sipcot industrial park in Oragadam, which would manufacture 70,000 commercial vehicles a year. The investment may go up to Rs 4,000 crore.
On November 10, Delphi, a leading mobile electronics, transportation components, and systems technology manufacturer, announced that it is setting up an electronics components manufacturing facility at Oragadam with an investment of Rs 250 crore.
US-based firm Signet Solar Inc on March 18 signed an MoU with the state government to set up a Rs 2,000crore manufacturing facility near Chennai.
Nokia Siemens Networks Ltd, a subsidiary of Nokia Siemens Networks BV, Netherlands, plans to set up a Rs 300crore manufacturing facility for telecommunication products near Chennai. The company will set up the project at Oragadam.
Further, Hyundai Motor India in early 2008 said it was planning to invest $1 billion in its second plant near Chennai. Similarly, Ford India also announced a Rs 2,000-crore expansion plan for setting up a small car production facility and an engine-manufacturing unit in Chennai.
On December 17, Caterpillar India informed that it would set up its third manufacturing facility in the state for off-road vehicles with an investment of around Rs 800 crore.
SPECIAL ECONOMIC ZONES
On September 10, Bangalore-based industrial park developer Velankani Group said it would develop an SEZ for electronic hardware manufacturing and ITeS industries at Sriperumbudur, with an investment of Rs 1,300 crore.
Chennai-based Sri City Pvt Ltd is developing a multiproduct SEZ in public private partnership with an initial investment of Rs 1,000 crore. The SEZ, in the next 2-3 years, is expected to attract over Rs 17,500 crore investments.
Chennai Petroleum Corporation Ltd on September 8 said it was planning to set up a refinery-cum-petrochemical complex with an investment of around $10 billion.
The company is also planning to invest around Rs 8,000 crore as part of its expansion plan in the Manali refinery and has plans for a single buoy mooring with an investment of around Rs 800 crore.
Moser Baer signed an MoU for setting up a facility to manufacture silicon-based photovoltaic thin film modules and allied products on June 9. The proposed investment is around Rs 2,000 crore and the project will come up in Oragadam.
On June 12, Nagarjuna Fertilizers and Chemicals Limited signed an MoU with the state government for setting up a petroleum refinery plant in Cuddalore district with an investment of Rs 4,790 crore.
On February 7, MARG Ltd launch ed its mega infrastructure project – MARG Swarnabhoomi in over 1,000 acres. This city includes two notified SEZs with an investment of $400 million.
ETA Star Property Developers Ltd, a joint venture between Dubai-based Al-Ghuriair and Hong Kong-based Amana Investments, announced an integrated township project in Sriperumandur, with an investment plan of around Rs 7,500 crore.
INFRASTRUCTURE
State’s highways department along with the National Highways Authority of India (NHAI) and the Southern Railway has initiated various road, bridge and railway construction projects with an investment of over Rs 7,500 crore.
The government is also planning to develop two minor ports at Punnakkayal and Manappad in Thoothukudi district, which would attract investments of over Rs 2,000 crore.
Likewise, the Chennai Port Trust would to invest around Rs 3,500 crore in the next two to three years to upgrade existing facilities. The Tuticorin Port Trust is investing Rs 5,200 crore.
And, L&T has proposed to set up an integrated ship building at Ennore, north of Chennai, with an investment of over Rs 2,000 crore.
Money from home
On December 8, Mexican electrical transformer maker Prolec-GE International announced a Rs 86.23-cr open offer to the shareholders of Chennai-based Indo Tech Transformers for up to 20 per cent stake at Rs 406 a share.
Tractors and Farm Equipment Ltd (TAFE), part of the Chennai-based Amalgamations group, said on October 13 it plans to set up a greenfield tractor manufacturing plant in Turkey. The company did not disclose the proposed investments, but according to reports this is around Rs 100 crore.
On October 1, Ashok Leyland, the flagship of the Hinduja Group entered into a 50:50 joint venture with US-based John Deere to manufacture and market construction equipment.
In August, Aditya Birla Group’s Aditya Birla Nuvo Ltd acquired a 56 per cent stake in retail broking firm Apollo Sindhoori Capital Investments Ltd for Rs 198.8 crore. In the same month, Chennai-based Orchid Chemicals & Pharmaceuticals made an investment in US-based drug discovery and development company Diakron Pharmaceuticals.
The Fortis Healthcare group acquired a 48 per cent stake in Chennai-based Malar Hospital for around Rs 42 crore and announced Rs 25 crore investment to upgrade the hospital.
On July 23, India Cements Ltd said it plans to increase the total capacity to 14 million tonne per annum by March 2009, at an investment of Rs 2,100 crore. The company also said it would invest over Rs 160 crore to set up a 40 Mw captive thermal power generation facilities. On June 23, flat glass products maker Saint-Gobain Glass India said it would invest Rs 1,000 crore for setting up a glass complex at Bhiwadi in Rajasthan.
While on May 5, the Murugappa group said it would invest Rs 1,300 crore in capacity expansions in 2008-09. The month of April saw Chennai-based Apollo Hospital announcing it would invest about Rs 1,000 crore in the next 18 months to set up about 15 hospitals in tier II and III cities in India.
On February 19, Sterling Infotech Group flagship company Siva Ventures Ltd announced the acquisition of Norwegian Shipping firm JB Ugland Shipping AS from JB Ugland Holding AS for Rs 1,200 crore.
And on February 25, Chennai-based Cavinkare Pvt Ltd acquired Salem-based Maa Fruits for Rs 30 crore.