Metals sector to lead investments in AP

To invest Rs 14,211 crore in three years.

While paper, textiles and cement sectors are set to undergo a major capacity expansion in Andhra Pradesh, basic metals and alloys sector will lead the investments in the state with a total commitment of Rs 14,211 crore followed by Rs 7,891 crore from chemicals, including bulk drugs, and Rs 7,651 crore from mineral-based industries such as cement in three years from now.

According to the profile and time frame of investments evaluated by the state industries department, Andhra is expected to witness the highest-ever investment of Rs 17,024 crore for a single year to reach the stage of commercial production during the current financial year followed by Rs 13,158 crore in the year 2008-09 and Rs 8,733 crore in the year 2009-10, when the cumulative investments in Andhra is expected to touch the Rs 1-lakh crore mark from the present Rs 63,000 crore.

The Rs 8,200-crore Vizag Steel expansion and the Rs 3,500-crore alumina project being set up by JSW Steel in Vizianagarm are among top investment plans in basic metals category while a host of iron and steel plants of relatively smaller size are coming up in districts like Nellore, Nalgonda and Mahaboobnagar among other locations.

The department has so far received 38 mega project proposals at a total estimated investment of about Rs 69,000 crore of which the proposals with close to 60 per cent of these investments are expected to reach production stage during the next three years.

In the chemicals sector, public sector HPCL is leading the investments with Rs 8,875 crore Vizag refinery expansion while a greenfield 25 million tonne capacity refinery project by the company is under initial stages.

In the bulk drug segment, pharma companies including Dr Reddy's Laboratory, Matrix, Aurobindo, Glochem, Shantha Biotech and BE Limited have announced new investment plans worth over Rs 700 crore that would see commercial operations before the year 2010.

Under the cement sector, about 8 projects with a total investment of Rs 3,857 crore will be completed by the year 2010, which will almost double the present production capacity by adding 20.8 million tonne.

Similarly, existing as well as new players in the paper industry have drawn up plans with an estimated investment of Rs 4,131 crore with a proposed capacity addition of 5.36 lakh tonne. The state is already on top in the country with an installed capacity of 4.5 lakh tonne in this sector. ITC Bhadrachalam, Sirpur Paper Mills, AP Paper mills and White Field Paper Limited are the four players bringing in these investments.

In the textile sector, about Rs 1,400 crore investment is expected to go into commercial production stage in three years from now, which would bring in 2 million spindle capacity in addition to the present 2.2 million spindle industry in the state.

About Rs 4,440 crore foreign direct investment is expected to come into the state during the next 3-4 years through 10 projects being set up by companies including Tecumseh Products, Apache, Nano-Tech Silicon India Private Limited, Holley Meters, Schneider Electric India, Transoworld Garnet India, Camozzi Textile, Brandix Apparel, and Pilkington India Private Limited, according to a report prepared by the industries department.