Port Wings News Network:
We plan to make Sri City a smart city and will have around 500 factories when the project is complete, Mr. Ravindra Sanna Reddy, Managing Director, Sri City, has said.
In an exclusive interview to Port Wings, Mr Reddy said, “We anticipate Sri City will become that to India what Shenzhen is to China. Sri City will become a hub for everything.” He also spoke elaborately on Sri City and future plans to emerge as numero uno (the best) SEZ in the Country.
1. Tell us the saga of Sri City, from concept to commissioning?
Mr. Ravindra Sanna Reddy, MD, Sri City: After completing my MSE degree in Environmental Engineering from The Johns Hopkins University, Maryland, USA and a successful stint in Information Technology Industry, the experience had allowed me to amalgamate the knowledge gained by living and doing business abroad with my strong roots in the local communities in creating Sri City. As a son-of-the-soil, I had a vision of building a new business city and embarked on a mission of transforming a backward rural area of Andhra Pradesh into a modern industrial economy and thus launched Sri City initiative in 2006.
In the same year, in association with my friends, and Equity funds, Sri City (P) Ltd. was set up. The company invested Rs 1,000 crore to acquire land and develop the infrastructure, funded largely by equity. It has managed to attract PE investments from noted investors.
For setting up the project, we wanted a location that had easy access to rail, roads, airports and ports. After a survey we found the present location. Since I belong to this area, I was also keen to build a new modern city which would benefit people from this area. Proximity to Chennai, availability of supporting industries in Tamil Nadu and the industrial culture influenced us in building a city which is like what Hosur is to Bangalore.
The process of land acquisition was an interesting challenge and we addressed many of the issues for a consent based settlement. These initiatives are now part of the new land acquisition Act. The Ministry of Commerce also recognized these initiatives as the best in India.
Sri City engaged the most experienced master Planners to develop this site. We wanted to bring in people who had practical experience in building the Chinese SEZ’s. The formal ground breaking was done on August 8, 2008 by the then Chief Minister of Andhra Pradesh.
We faced problems during the global melt down in 2009-2010 and investments by units were slow. We continued to invest in infrastructure and when the economy improved, we were ready. We saw the slowdown as an opportunity to develop infrastructure at the lowest cost. We also delivered whatever we promised to customers and helped them start production within 8-10 months of sign up. We also saw opportunities in the Domestic Tariff Area (DTA) and developed this zone next to the SEZ.
The Domestic Tariff Zone has companies like Isuzu, Alstom and VRV etc which have been acting as sources to meet the demands in the Indian market; otherwise those products would have been imported. Eventually, this is adding a considerable amount to the foreign exchange.
Today, Sri City is a vibrant Integrated Business City offering holistic solutions for multiple investment options and lifestyle at its multi-product 'Special Economic Zone' (SEZ) with a contiguous Domestic Tariff Zone (DTZ) and a Free Trade Warehousing Zone (FTWZ).
2. How many companies (foreign and their subsidiaries) are now located inside Sri City and what is its performance?
RSR: During the past 5 years, over 100 companies from 25 countries have chosen Sri City as the home for their investment. Global companies such as ISUZU, PepsiCo, Cadbury, Colgate Palmolive, Kellogg's, Kobelco, Lavazza, to name a few, have already set up their plants. We have 42 Multi National Companies in Sri City.
In its true sense as an Integrated Business City, Sri City has a global footprint, with units in Automotive, Engineering, Logistics & Warehousing, Apparel & Fashion, Biotech/Pharma, Electronics/Hardware, Renewable Energy, Fast Moving Consumer Goods (FMCG), Food & beverages and other Eco-friendly industries. We have space for 500 companies.
As of now, these companies have proposed to bring in a total investment of over Rs.18,500 crores (approx. $ 3.08 billion) and generate employment for over 20,000 persons.
Till date, exports from Sri City are about Rs 1000 crores, and for this year alone it will exceed Rs. 500 crores. Total Imports till date are around Rs. 700 crores. The net foreign exchange earnings during the past 5 years are over Rs. 300 crores. This will show major increases as soon as large units reach full production.
3. Which are the companies that have signed MoU with Sri City in the recent past? How many are in the pipeline?
RSR: There are several companies who have signed with Sri City in the current financial year. It is a good mix of Indian and MNCs. There are almost over 500 acres in pipeline which is expected to be finalized within the next 2 quarters. The current central government and the state government have been very much encouraging and have promised to improve the industry scenario positively in the coming years. Several companies are waiting for clarity from the government regarding few of their earlier statements.
4. Union government promised to give special status to Andhra Pradesh to attract investors. What will be its effect on the business prospects of Sri City?
RSR: The industry is looking forward to get incentives from the Central government and the new electronic policy, which was announced just few days ago is very ‘industry friendly’ and offers incentives across the board, which has hinted towards a positive and progressive industrial policy. It is expected that the special economic status for Andhra Pradesh would become a reality by the next financial year. The overall mood of the industry seems very positive towards Andhra Pradesh and announcement of the expected additional incentive package by Union government would only accelerate the process. This will definitely have a positive effect on Sri City considering the established success and feel good factor of our units.
5. How is the logistic infrastructure inside the SEZ and what are the plans to improve them in future?
RSR: Sri City has a world class infrastructure with the Master Plan provided by the Jurong Consultants, a leader in this field. Several other players like Jones Lang Lasalle, Mace Studio, CSS etc were involved in framing what Sri City is now. The basic infrastructure like road access, power, water, storm water drains, sewage treatment and telecom is already available and operational. All areas of the SEZ are well connected with the main access road (NH-5). We have 60 Kms of three types of internal road with an average with of 68 meters. There are internal shuttle services which run on scheduled timings. These shuttle services connect the SEZ units with the main access road and also enable workers to reach the unit from NH5.
6. What are special features of country-specific enclaves that are being created at Sri City?
RSR: Sri City has a Japanese enclave with over 15 companies signed and almost equal numbers in the pipeline. Apart from this, Sri City has plans for other countries-specific enclaves like Korean, Taiwan, etc. These special enclaves are in line with our motto to provide a “work-live-learn-play” kind of atmosphere to the employees and we hope they will make our clients feel at home far from home. Sri City also has an electronic cluster and an auto components cluster that offer the companies special incentives under State and Central schemes.
7. Sri City lacks a railway siding. Whether you would try for linking Sri City and nearest railway station 'Tada' with a dedicated line?
RSR: Yes, currently we are not encouraging this idea of bulk cargo movements through a dedicated railway line reaching the units, as we are committed to our Green-City policy. Some of the green initiatives undertaken by Sri City are -planted over one million trees with an objective of 10 million, use of solar street lightings, traffic control system, solar powered vehicles and 8 MW of solar power plant, etc. But, we may have to think about this proposal depending on the demand in the future. Sri City is 800 meters from Tada station, which is well-connected through a broad-gauge railway line to different metro cites in India. Sri City lies in between the Tada station on the North and Arambakkam station on the South, and hence the suburban train services are very useful for quick transportation.
8. Recently Sri City had organized a trade meet with Chennai Port. Any plans to go to different parts of the country with road shows for attracting more companies and investments?
RSR: Sri City participates in various trade shows, seminars, exhibitions and other industry development activities, organized by different trade associations in India and abroad. Next week, I will be joining the Government Delegation to Japan led by the Honorable Chief Minister Mr. Nara Chandra Babu Naidu to promote the Foreign Industrial Activity in Andhra Pradesh.
9. As a leading SEZ in the region, what is your unique selling proposition (USP) to attract more companies into Sri City?
• Strategic Location on the border of Andhra Pradesh and Tamil Nadu
• Excellent Multi-Modal Connectivity
• World Class Expertise in Design, Function and Maintenance of Infrastructure
• All Approvals in Place
• Integrated Business City (SEZ+FTWZ+DTZ)
• Plug n Play Offices
• Abundant Talent Pool
10. What is the social impact of Sri City on the neighboring region?
RSR: Sri City has a socio-economic impact in the neighboring region. When we started, there were hardly any industries in this area. There was no degree college and the area was a notified backward area. Today over 15000 jobs have been provided to locals and there is virtually no unemployment. Even before land acquisition, Sri City started a training centre to retrain locals and give them employment. More than 5000 people have been trained. Prior to the SEZ being set up the people were finding it difficult to make ends meet because the area has only single crop low grade land with very little irrigation facilities.
Socio economic surveys conducted by Sri Venkateswara University every 6 months from the time of acquisition have clearly shown that economic standards have increased by over 200 % after Sri City came in to existence. Villagers have paid off all their loans and have been able to get their daughters married and also send all children to school. Their children will be able to get employment easily when they finish school.
Sri City also started a model welding and other skills training centre at Kalikiri in Chittoor District where class 10 passed students were given free training with board and lodging for 3 months. After training they all got jobs in Multi-National companies and are doing well. The Companies have told us that these students are better than the 2 year ITI pass students. This is because they are allowed unlimited practical training and we got the best trainer and a dedicated team to monitor this programme. The target was 100 % placement and has been achieved in all courses.
Sri City has provided the requisite residential spaces, healthcare facilities, schools, amenities and transport at low costs. These initiatives are already yielding widespread tangible benefits to the people in those villages. They are more mobile and are able to connect easily to the outside world. The exodus to cities has also reduced.
Sri City, in coordination with hospitals set up by Sankara Nethralaya and Dr Cherian’s Frontier Lifeline serves the Health and Medical needs of the employees and people in the surrounding villages. We are also planning to build a Multi-Specialty Hospital to improve our services in order to cater to needs of the growing population.
Sri City also supports 1200 children in all the Govt. Schools in the area. The results are 100 % pass in class 10 exams and the average pass percentage is also increasing each year.
11. How would you envisage life at Sri City after 20 years?
RSR: Sri City will be home to over half a million people when completed. The inclusive growth aspect of Sri City makes it a very special integrated business city. Separate zones have been earmarked for SEZ, DTA and social infrastructure in balance. Sri City’s goal is to provide facilities for ‘work – live- learn and play’. The company aims to go beyond leasing land to provide everything that a business needs. We anticipate Sri City will become that to India what Shenzhen is to China. Sri City will become a hub for everything.
12. What are the future plans lined up by Sri City management to emerge as numero uno (the best) SEZ in the Country?
RSR: We have been regarded as the best destination for business by various Foreign Ambassadors, Indian ministers and government officials. Moreover, we are awarded as the “Best SEZ” by various trade associations. For future, we plan to make Sri City a smart city and will have around 500 factories when the project is complete and most people will live there, thus saving cost on commuting & time.
India is ranked low when it comes to attracting investment but for Sri City with help of IALA & Single window approval processes, Sri City has simplified the procedure and hence Sri City has become the preferred business destination. Sri City will be one of the leaders in providing employment opportunities and bringing investment into India.