The Sriperumbudur-Oragadam belt in Tamil Nadu is set to become the final destination of consumer durables firms dislodging Maharashtra. Taking a cue from Samsung and Videocon, leading consumer durables company LG Electronics India is also looking at Tamil Nadu for acquiring 70-80 acre land to set up its third plant. LG is already operating to capacity at its two existing plants in Greater Noida and Pune and will require the land to set up its third factory within 12-18 months, company sources said.
Its rival and fellow South Korean electronics major Samsung is already sitting on an 80-acre plot in Tamil Nadu, which houses its latest manufacturing units for colour televisions, refrigerators and air-conditioners. The home-grown Videocon has also completed its new 70-acre manufacturing unit near Madurai, which is waiting to be inaugurated. Experts said Tamil Nadu would be able to attract around Rs 3,000 crore of investments from the consumer durable companies alone within next 18-24 months, almost double from last year.
?The process of scouting for land has not started internally but states such as Tamil Nadu and Maharashtra are ideally located for manufacturing of white goods,? Yasho V Verma, chief operating officer, LG India told FE. Even Venugopal N Dhoot, chairman, Videocon Industries, agrees. ?Proximity to port, excellent road-connectivity and hassle-free land allotments are among the reasons why Tamil Nadu is being preferred by the industries. In consumer durable industry, the location is extremely crucial from costs perspective,? he said. For its part, Samsung India said that for any future requirements, the land in Tamil Nadu will be able to meet its requirements.
So far, Maharashtra and Gujarat have led the way in housing the white goods manufacturers, including Videocon, which is sitting on 1,200 acre of land between the two states. LG also has a fully operational plant near Pune and holds around 104 acre collectively between Greater Noida and Pune facilities.
According to sources, some of the leading durable and FMCG brands have approached the State Industries Promotion Corporation of Tamil Nadu or Sipcot, inquiring about land. Sipcot is the nodal agency for allotment of land to industries. It has already attracted over two-dozen multinationals to Tamil Nadu including, Hyundai, Samsung, Videocon, Dell, Nokia, Renault-Nissan among others. ?With attractive terms and single-window clearance, we welcome more industries to the state,? a senior Sipcot official told FE requesting anonymity.
Commenting on the need for land, Dhoot said the consumer durable industry, which is clocking an average growth of 20-25%, will grow at an average of 30% over the next 10 years. ?To support such growths, land is an essential element,? Dhoot said.