Big boys stay away from Aurangabad

SMEs in the area are stagnating as no new opportunities are coming their way.

Big ticket investment, especially investment by an auto giant, is what the doctor has ordered for the small and medium industries growth in Aurangabad and Marathwada region, say industrialists from the region. The region has been reeling from an investment drought for over a decade now.

Former president of the Chamber of Marathwada Industry and Agriculture (CMIA), Sandeep Machar said, "In the '80s and '90s, big industries like Bajaj, Wockhardt, and Fosters came to this region which impelled the small and medium industries here. Auto ancillary, chemical and packaging units came up because of Bajaj, Wockhardt and Fosters."

The sector grew so fast that some of the Bajaj vendors in Aurangabad expanded capacities to supply to other automobile giants. However, over the last few years the industry seems to come to hit a stagnant patch. The main reason for this is that no other big investment came to this region after Bajaj Auto.

"Even Skoda here is assembling parts imported from Sweden; they have not outsourced any component manufacturing to the local units," said another past president of CMIA, Gautam Nandavat.

Though Mahindra & Mahindra and Volkswagen visited Aurangabad and made detailed surveys and M&M even bought land, nothing happened. Pharmaceutical industry is also moving out of the area due to tax sops being offered by Uttaranchal and Himachal Pradesh.

However, there is some light at the end of the tunnel as the state government has announced two SEZs in the area. One will be developed by Bajaj and the second one by Wockhardt.

There are around 402 SME units in Aurangabad with an estimated investment of around Rs 3613 crore and providing employment opportunities to 60,000 persons. Out of these, around 50 per cent are in auto ancillary and engineering, 20 per cent in pharma and the rest in other sectors.

With auto sector booming, auto ancillaries are seeing growth in turnover by around 50 per cent, engineering industry around 25 per cent and other sectors around 25 per cent.