Textile units shifting from Punjab to Madhya Pradesh

Cheap land availability and host of incentives are luring a number of textile units from Punjab to Madhya Pradesh.

Enquiries by FE revealed that the Rs 3,500-crore Vardhman Group, one of the largest integrated textile players in the country, has acquired 700 acres in Madhya Pradesh and plans to invest Rs 2,500 crore in that state. The Group has largest installed capacity in spinning in India.

?We have already invested Rs 1,500 crore in Madhya Pardesh to set up three yarn and fabric spinning mills. We invested in MP as the land cost is less and the industry is export-oriented. Ports are also closer so the transportation and other logistic charges are less as compared to Punjab,?said SP Oswal, chairman, Vardhman Group of Mills.

Abhishek Industries, a flagship company of the Trident Group, has also purchased about 1,000 acres in Madhya Pradesh and will invest Rs 3,000 crore for setting of yarn and fabric spinning mills.

Managing director of Trident Group, Rajinder Gupta told FE on Monday that the availability of good quality cotton, conducive weather, cheap labour, uninterrupted power and a pan India market are the major reasons behind setting up units in Madhya Pradesh.

He said that the company has already commenced commercial production in two of its yarn spinning units in the state, while two more units would come up in the next two years. The first unit at Budni in Madhya Pradesh has 50,400 spindles with the production capacity of 7,098 million tonne yarn while the second unit has 50,400 spindles.

Ludhiana-based Rs 3,000-crore Nahar Group of Companies also joined the race by acquiring 200 acres in Madhya Pradesh to set up textiles facilities. Not to left behind, SCL Group has also brought 400 acre in Madhya Pradesh as a part of its expansion plan. ?We are setting up the biggest snipping mill in the country in Madhya Pradesh and plans to invest Rs 1,900 crore, VK Goyal, executive director and chief executive officer of SCL (Saluja Group), said.

Besides cheap land, power, marketing, easy availability of cotton bales in Madhya Pradesh makes the state a better investment options, added Goyal. Enquiries by FE revealed that concession on land premium, refund of VAT and CST, exemption from entry tax, infrastructure development assistance up to Rs 1 crore, special investment subsidy for micro and small scale units and interest subsidy offered by Madhya Pradesh are other reasons for textile units of Punjab buying land and setting up units in Madhya Pradesh .

SS Channi, principal secretary Industries, Punjab admitted that that high land cost and power problem is deterrent to set-up textile units in the state.