A Study on Special Economic Zone and Infrastructure Facilites with Reference to APSEZ, Achuthapuram

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A Study on Special Economic Zone and

Infrastructure Facilities with special reference

to APSEZ, Atchutapuram, Vizag.

A minor project work submitted to in partial fulfillment of First year course of Master of Business Administration Program

By

NAME ROLL NO N.Vineeth 1225108260

Under the esteemed Guidance of

Shri K. Mansoor Ali Khan Shri C. Yathi Raju

Asst Professor DGM-APSEZ, APIIC GITAM Institute of Management (External Guide)

MBA PROGRAMME, GITAM INSTITUTE OF MANAGEMENT,

GITAM UNIVERSITY, VISAKHAPATNAM.

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DECLARATION

I VINEETH NAGUMANTRI here by declare that this project report entitled “A Study on

Special Economic Zone and Infrastructure Facilities with special reference to APSEZ,

Atchutapuram, Vizag”, submitted by me, under the guidance of MR. K. Mansoor Ali Khan

faculty of GITAM INSTITUTE OF MANAGEMENT, Visakhapatnam, is my own and has not

been submitted to any other University or Institute or published earlier.

Visakhapatnam

Date: VINEETH NAGUMANTRI




Certificate

This is to certify that this report entitled “A Study on Special Economic Zone and

Infrastructure Facilities with special reference to APSEZ, Atchutapuram, Vizag” submitted

by, Vineeth Nagumantri in partial fulfillment of the requirement for the award of the Degree of

Master of Business Administration to GITAM INSTITUTE OF MANAGEMENT,

Visakhapatnam is a bonafide work carried out by him under my guidance.

Place: Visakhapatnam K Mansoor Ali Khan

Asst Professor Date: Project Guide




Acknowledgements

“Nothing succeeds like success, they say”

We owe this once in a life time experience to many people whom we could not name here due

to space constraints. However, we would like to thank

Shri.N. Jagan Mohan Rao (SE, ISLMC DIVISION, Visakhapatnam), Shri C. Yathi Raju (DGM-APSEZ, APIIC)

for providing us such high platform to stage our dreams even during an odd time.

We convey our deepest sense of reverence to Shri C. Yathi Raju (DGM-APSEZ, APIIC) for

spending his valuable time with us despite of his busy schedule. We are indebted to him for his clinical

suggestions he made while going through this script. We also thank him for providing valuable material.

It is my greatest pleasure to thank PROF, K.SIVA RAMA KRISHNA, Dean & Principal, GITAM

INSTITUTE OF MANAGEMENT, Visakhapatnam, for giving us the opportunity to do this project work.

I would like to express my heart full thanks to Prof. M.V.Ram Prasad, MBA (HEAD OF THE

DEPARTMENT), GITAM INSTITUTE OF MANAGEMENT for permitting me to do the project.

We express our gratitude towards Shri. K Mansoor Ali Khan, Asst Professor, our internal guide,

Gitam Institute of Management, Staff & Management of our college for giving us this opportunity to

explore ourselves. We are grateful to them for their constant guidance & moral support without which

this work would not have seen the light of the day.

Vineeth. N




TABLE OF CONTENTS

CHAPTER –1: Review of Literature 8-10

Theoretical frame work

1. Main subject

` 2. Industry overview

CHAPTER –2: Methodology 11-13

Need / Significance of study

Objectives of study

Scope

Research Design

1. Data collection methods

2. Analysis Method

Limitations of study

CHAPTER –3: Organization profile 14-25

Industry profile

Organization profile

Topic profile

CHAPTER –4: Analysis of Study 26-34

CHAPTER –5: Findings, suggestions and conclusion 35-37

Findings

Suggestions

Conclusion

Bibliography 38

Annexure-Questionnaire 39-41




Executive Summary

Industrial sector occupies an important position in the Indian economy and has a pivotal role to

play in the rapid and balanced economic development.

Special Economic Zones (SEZ) in Indian Economy has very important role to provide

internationally competitive environment, to increase share in global exports, to encourage FDI

and enhance GDP and to act as laboratories for changes in our policies. The Government of India

(GOI) has formulated a policy for setting up SEZ in India. SEZs are proposed to be specially

delineated duty free enclaves for the purpose of trade operations, duty and tariffs. These zones

would be self-contained and integrated having their own infrastructure and support services.

Taking SEZ concept as advantage, Andhra Pradesh State Government has developed Andhra

Pradesh Special Economic Zone at Atchutapuram, Visakhapatnam.

There is a need to assess and evaluate, objectively and realistically, the changes in the industrial

growth, employee requirement, and infrastructure facilities so on. In this context, a survey has

been conducted on APSEZ, Atchutapuram which is located 50 km south from the

Visakhapatnam city.

Infrastructure of a company(SEZ) assessed by learning about the investment, financial aid, size

of the company, current line of activity, the technology deployed, source of raw-materials. Effect

of inadequate facilities evaluated through attrition rate and attributes like water, power,

telecommunication, medical facilities and so on. Future course of action estimated through the

diversification plans.

There was a good response for survey and given value information. The important findings from

the survey are that SEZ policy and infrastructure facilities has attracting many organizations and

entrepreneur‟s to set up a unit in this SEZ. Majority of organizations seek financial aid from

financial institutions, use raw materials and technologies of both imported and indigenous and

organization in this SEZ is 100% exported oriented and export to countries like USA, UK and

European countries. There is a chance of good human resource requirements in this SEZ. High

demand for ITI‟s, unskilled labour, then by professional graduates like Engg.‟s, MBA‟s, CA‟s.

There is good requirement for professional graduates in future. Total investment and

employment proposed in this SEZ are 27,804.58 Crores and 72949 respectively. Basic

infrastructure facilities like road, railways, ports, airports, power, and water were good. There is

a need for improvements in service sectors like telecommunications, internet, public transport,

hotels and leisure, medical facilities, and education facilities. There are good chances for

entrepreneurs to start up service units in this place and gain profits.




List of Tables

Table 1: Abstract Information about Industries investment and Employment in VIZAG District

Table 2: List of Companies – Employment Proposal, Investment Proposed, Proposed Line of

Activity

Table 3: Total no. of companies, Investment and Employee Proposed in APSEZ

List of Charts/Figures

Chart 1: Scale of Industry

Chart 2: Financial Institution Support

Chart 3: Kind of Technologies Used

Chart 4: Sources of Raw Material

Chart 5: Weight age of Human Resource Requirement according to education qualification

Date: May 2009

Chart 6: Rate of Attrition

Chart 7: Infrastructure Facilities 1

Chart 8: Infrastructure Facilities 2

Figure 9: Strategic Location of Visakhapatnam

Figure 10: Location of APSEZ




Section 1: Conceptual Framework




A Study on Special Economic Zone and

Infrastructure facilities with reference to

APSEZ, Atchutapuram, Vizag.


play in the rapid and balanced economic development.

Role of SEZ‟s in Indian Economy to provide internationally competitive environment, to

increase share in global exports, to encourage FDI and enhance GDP and to act as laboratories

for changes in our policies. The Government of India (GOI) has formulated a policy for setting

up Special Economic Zones (SEZ) in India. SEZs are proposed to be specially delineated duty

free enclaves for the purpose of trade operations, duty and tariffs. These zones would be self-

contained and integrated having their own infrastructure and support services.

Taking advantage of the SEZ policy of Government of India; the State Government has

developed APSEZ. The Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC) is

the nodal agency to develop and implement the APSEZ project on a Public- Private Partnership

mode. APIIC has undertaken a detailed background study of different site options and identified

a suitable site 50 Km south of Visakhapatnam Port for APSEZ. A total of 5449 acres of land has

been acquired for the project in Atchutapuram and Rambilli Mandals of Visakhapatnam district.

There is a need to assess and evaluate, objectively and realistically, the changes in the growth,

composition and structure of organized manufacturing sector comprising activities related to

manufacturing processes, repair services, gas and water supply and so on. In this context, a

survey has been conducted on APSEZ, Atchutapuram which is located 50 km south from the

Visakhapatnam city.









SEZ POLICY

===========

The Government of India (GOI) has formulated a policy for setting up Special Economic Zones

(SEZ) in India. SEZs are proposed to be specially delineated duty free enclaves for the purpose

of trade operations, duty and tariffs. These zones would be self-contained and integrated having

their own infrastructure and support services. Government of Andhra Pradesh (GoAP) proposed

for the establishment of a Special Economic Zone near Visakhapatnam, in an extent of 9200

Acres.

Key incentives available for private sector developers and operators of SEZ (or its components)

are as follows:

· 10-year tax holiday in a block of the first 20 years.

· Exemption from duties on all imports for project development.

· Full freedom in allocation of developed plots to units on purely commercial basis.

· Full authority to provide services such as water, electricity, security, restaurants and

recreational facilities within the zone on purely commercial basis.

· No foreign ownership restrictions in developing zone infrastructure

· Freedom to develop township in to the SEZ with residential areas, markets, play grounds,

clubs and recreation centre‟s without any restrictions on foreign ownership.

· Income tax exemption benefits to bonds and capital raised by zone infrastructure

developers.

Key incentives available under the existing policy framework for locating industries:

· Income tax holidays on business income

· Exemption from import duty, VAT and other Taxes

· 10% FDI allowed through the automatic route for all manufacturing activities.

· Procedural ease and efficiency for speedy approvals, clearances and customs procedures.

· Setting up an empowered authority for approvals, clearances, zone administration, and

maintenance and dispute resolution.

· Simplification of procedures and self-certification in the labour acts.

The Government of Andhra Pradesh has taken an in-principle decision to support the project in

an appropriate manner to make this project a meaningful investment proposition for the strategic

partner and as a part of identification of strategic partners/developers.




Section 2: The Present Study /

Methodology




NEED OF THE STUDY


play in the rapid and balanced economic development. There is a need to assess and evaluate,

objectively and realistically, the changes in the growth, composition and structure of organized

manufacturing sector comprising activities related to manufacturing processes, repair services,

gas and water supply and so on. In this context, a survey has been conducted on APSEZ,

Atchutapuram which is located 50 km south from the city.

The Type of Industry, Scope of operations in terms of volume of business, amount of capital

funds required, size of the risk, continuity of the concern, adaptability of the company,

comparative tax advantage, costs, procedures and relative freedom from government regulations

are the key factors for any organization. Keeping in view these factors Government provides a

broad infrastructural and institutional set-up for the accelerated growth s for industrial parks and

SEZ‟s.

OBJECTIVE OF THE STUDY

The objective of the study is to shed light on three issues a)Infrastructure facilities in special

economic zone b)the effects of inadequate facilities on firms operation (hence on productivity

and economic development in general) c)future course of action.






SCOPE OF THE STUDY

The Government of India (GOI) has formulated a policy for setting up Special Economic Zones

(SEZ) in India. SEZs are proposed to be specially delineated duty free enclaves for the purpose

of trade operations, duty and tariffs. These zones would be self-contained and integrated having

their own infrastructure and support services.

The survey extends to all the industries that fall under the SEZ POLICY and in Andhra Pradesh

Special Economic Zone (APSEZ), Atchutapuram, Visakhapatnam.

This study is mainly focused on financial institutions supporting these companies, FDI‟s in this

SEZ, kind of technology and raw material used by industries in this SEZ, present and future

needs of employment, the infrastructure facilities in SEZ.




RESEARCH DESIGN

Methodology

Research Design : Descriptive research i.e., description of the state of affairs as it

exists; usually includes surveys and fact – finding enquiries

Sample Size : 8 samples out of 12 industries in this SEZ. 66.67% of sampling is

done

Data collection

The sampling design employed here is non-probability sampling otherwise called as

convenience sampling. The data here is being collected for the first time, hence the primary

data. The method employed to collect primary data is questionnaire method. This method of

collecting data through questionnaires is most extensively employed in various economic and

business surveys. This method is appropriate when the universe is large and wide geographically.

It is free from the bias of the interviewer, answers are in respondents own words. Respondents

have adequate time to give well thought out answers. Respondents, who are not easily

approachable, can also be reached conveniently.

In order to test the accuracy of the questionnaire „pilot study‟ (Pilot survey) has been conducted.

The questionnaire used in the survey is structured form where the questions are both closed and

open ended.

Data tabulation

Here, simple tabulation used, i.e., result of one – way table which supply answers to questions

about one characteristics of data only. Data is tabulated in percentages and represented in form of

pie-charts and bar diagram.

Analysis method

Analysis of data, for closed ended data is tabulated in percentages and represented in form of

pie-charts and bar diagram. For some open ended data, maximum respondent‟s answers were

compared and selected answers which are same for all respondents and given as the common or

majority answers opted by them.

Tools and techniques used : Descriptive Statistics - simply describing what is or what the

data shows.

Limitation (Very Important )

• Limited to APSEZ only, and so the interpretation of the study may not be taken on the

basis for other SEZ‟s or Industrial Parks.

• There was some weak response from the part of the respondents.

• Cost effectiveness

• Time constraints as well as the unwillingness of managers to give the information.




Section 3: Organization Profile




(a) Industry Profile FACTORS INFLUENCING AN ENTREPRENEUR OR AN

ORGANIZATION TO START UP NEW PLANT OR A COMPANY IN

VISAKHAPATNAM

Location

Visakhapatnam, Visakha/Vizag or Vizagapatam/Vizag City) is a coastal, port

city, often called "The Jewel of the East Coast", situated in the Indian state of

Andhra Pradesh, located on the eastern shore of India, and nestled among the

hills of the Eastern Ghats and facing the Bay of Bengal to the east.

Visakhapatnam is the second largest city of Andhra Pradesh with an area of 550

km², it is primarily an industrial city, apart from being a tourist destination.

It is known for its unspoilt beaches, nearby scenic Araku Valley and Borra

caves, the 11th-century Simhachalam temple and ancient Buddhist sites like

Thotlakonda spread across the area.

Demographic Characteristics

• The population of the district is 38.32 lakhs as per 2001 Census and this

constituted 5.0% of the population of the State while the Geographical area

of the District is 11161 Sq. Km. which is only 4.1% of the area of the state.

Out of the total population 19.30 Lakhs are males and 19.02 lakhs are

female.

Literacy

• There are 20.02 lakhs literates forming 52.25% of the total population of the

District. Male literates constitute 30.56% while female literates forming

21.69%. The literacy rate is 60% in the district.




Economy

Educational Facilities (According to 2006 census)

There are 4218 schools, 196 junior, Degree and Professional Institutions during 2004-05.

Prestigious education universities and institution like Andhra University, Gitam University,

A.V.N. College , Andhra Medical College, Gayatri Vidya Parishad College of Engineering,

St. Aloysius Anglo Indian High School located in Vizag.

Ample Technical Manpower available with

Engineering Colleges - 10 (Graduate Level)

Poly-technique - 5 (Diploma Level)

I T I's - 30 (Certificate)

(Electrical / Fitter / Plumber / Turner / Machinist / Civil / Mechanical, Draftsman etc)

Managerial / Professional Man Power:

MBAs / MCAs / Foreign Trade - 15

Medical Colleges - 2

Agriculture

Agriculture is the main stray of nearly 70% of the households. Some important food crops of

the district are Rice, Paddy, Raggi, Bajra and Jowar and Cash Crops such as Sugarcane.

Groundnut, Sesamum Niger and Chillies are important.

Minerals

The district has mineral deposits of Bauxite Apatite (Rock Phosphate) Calcite, Crystalline

Limestone confined to tribal tracts at Aruku and Ananthagiri mandals.

Tourist attractions: Beaches, Hillocks, Resorts

Buddhist important places like Thottlakonda, Bavikonda, Bojjannakonda

Hill Station 100 Km Away - ARUKU

Amusement Park

Naturally formed Deep Caves (BORRA CAVES)




VISAKHAPATNAM – THE INDUSTRIAL HUB

Visakhapatnam also known as Vizag has emerged into an industrial hub and has

seen tremendous growth. The city‟s growth has mostly been due to its heavy

industries (both state owned and private such as:

HPCL Oil refinery

Visakhapatnam Steel Plant – Rashtriya Ispat Nigam Ltd (RINL)

Hindustan Shipyard Ltd,

BHPV, HSL, NTPC, Cormandal Fertilizer

Rain Calcining Limited, Essar Pelletization Plant

Its traditional importance in ship building if conferred by the fact that India‟s

first ship, the “Jala Usha” was launched in Vizag

Vizag is also one of Industrial India‟s main fishing ports, has a dedicated harbor

for the fishing industry and handles a large percentage of India‟s Seafood

exports.

This availability of a highly educated workforce allowed the entry of many

B.P.O. companies such as HSBC, thus providing the roots for the beginning

IT/ITES industry in the city. The city has around 50 small and medium software

and call centre units, of which about 10 units started their operations during the

year 2005-07

The Vizag Special Economic Zone, Duvvada plays a vital role in the industrial

Growth of the city.

Infrastructure facilities Connectivity through AIR, Road, Rail, & Port

Air

Domestic Airport at Vizag is upgraded to International Airport. Daily flights to

Hyderabad, Chennai, and Mumbai. In Jan 2010, International Flights to Singapore

going to be started. Operators such as Indian Airlines, Sahara, Kingfisher & Air

Deccan offer excellent connectivity. Existing Hyderabad International Airport

(Flying time 45min from Vizag)

Roads Network

Located on National Highway 5: Part of the 4-line Golden Quadrilateral Highway.




Rail Connectivity

Key rail link between Southern and Eastern India

Berth connectivity to Gangavaram and Visakhapatnam Port

Port

Visakhapatnam Port

Largest cargo handling port in India (56 million tones in 2005-06) with a draft of

15km.

Only port in India accredited with international systems of ISO 9001, ISO 14001,

OSHAS 18001

Modern deep draft container terminal at Port – Managed by Dubai Ports World.

Dredging depth – The deepest in the country. Capable of accommodating main

line container vessels up to 14.9 mtrs draft.

Excellent road and rail connectivity and independent road connectivity to NH-5

Development of express highway as joint venture with National Highway

Authority (December 2005)

Traffic handled in 2007-08: 64.60 MMT*

Gangavaram Port

All-weather Greenfield Deepwater Port

To be India‟s deepest port

Dry bulk & container - 21 m draft

Liquid handling facilities within harbor - 24 m draft

Single Point Mooring - 35 m draft to handle ULCC*

Phase I commissioned in July 2009 for 20 MMTPA* with 5 Berths.

Jetties to handle different tanker sizes

Tank farm area for storing Crude / POL / chemicals

Rail / Road / Pipeline connectivity to SEZ / PCPIR via dedicated Special

Logistics Corridor and / or Coastal Corridor

MMT - Million Metric Tons

MMTPA - Million Metric Tonne per Annum

ULCC - Ultra Large Crude Carrier




Power

Power consumption by industries is 408.88KWH while it is 357.44 for agriculture purposes.

Global leading player to manage the power infrastructure. Advantageous mix of thermal , hydro

and gas power. Most Competitive Industrial Power Tariff in the Country (Present tariff below

Rs. 2.75(estimated) per unit). NTPC Power Plant at Visakhapatnam (1000MW); expansion of

additional 1000MW is under construction. Dedicated substations at every Industrial Parks and

SEZ‟s

Water Supply (I think not applicable to all industries)

365 days assured industrial water supply through Visakhapatnam Industrial Water

Supply Company Limited (VIWSCO). India‟s first dedicated industrial water

supply project.

Table 1: Abstract Information about Industries investment and Employment in VIZAG District

ABSTRACT Sl No Catogery No Investment

in Rs. Crores

Employment

in No

1 Public Sector

Under takings 8 13918.23 26286

2 Cooperative Sector 4 32.1 2335

3 Private SEZ 1 150.00 2500

4 Private Sector 52 7559.24 14067

Total 65 21659.57 45188

Source for Table 1: District Industries Center, Industrial Estate, Marripalem, Visakhapatnam

Date for Table 1: 26-11-2008 (Old data)




Fig. 1& 2: Location of Visakhapatnam




(b) Organization Profile

Andhra Pradesh Industrial Infrastructure Corporation Ltd

Andhra Pradesh Industrial Infrastructure Corporation Ltd is the premier organization in the state

of Andhra Pradesh, vested with the objective of providing industrial infrastructure through the

development of industrial areas. The corporation has so far developed over 270 industrial parks

spreading over an extent of about 32,932 acres. Besides, the Corporation is also developing

sector focused parks like Apparel Park, food processing parks, leather parks in the state.

With the advent of economic liberalization the Corporation has reoriented itself to the changing

needs of economy and assumed the role of facilitator. The corporation is the principle facilitator

in Mega Projects like Special Economic Zone, Visakha Industrial Water Supply, Gangavaram

Port, Convention Centre, Pharma City & Mega Industrial Parks at Parawada, Pashamylaram

Financial District Hardware Park at Hyderabad etc.

Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC) was incorporated on 26th

September, 1973 with Authorized Capital of Rs.20.00 crores and paid up capital of Rs.16.33

crores. APIIC is a wholly owned Undertaking of Government of Andhra Pradesh. It has so far

acquired 32,932 acres of land spread over 270 Industrial Parks, Autonagars, Commercial

Complexes, and Housing Complexes etc. The Corporation has also constructed 3500 industrial

sheds, 4800 dormitory units, 466 commercial shopping complexes.

The Industrial Areas ranges from 15 acres to 2500 acres. The Industrial Areas are equipped with

approved layouts, internal roads, water supply and power supply.




(c) Topic Profile in the organization

ANDHRA PRADESH SPECIAL ECONOMIC ZONE

(APSEZ)




Introduction:

The main strength of our state AP lies in its diversified industrial base. The state has taken

advantage of the SEZ policy of Government of India; the State has taken concrete steps to

develop its Special Economic Zone concept into a pragmatic business plan.

These steps taken gave birth to APSEZ, an SEZ which is looked at as a private sector initiative

supported by the policy framework & structure of the state. The state interventions such as State

SEZ policy, initiation on land acquisition and external linkage infrastructure development form a

comprehensive framework for ensuring the success of the SEZ

The Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC) is the nodal agency to

develop and implement the APSEZ project on a Public- Private Partnership mode.

APIIC has undertaken a detailed background study of different site options and identified a

suitable site 50 Km south of Visakhapatnam Port for APSEZ. A total of 5449 acres of land has

been acquired for the project in Atchutapuram and Rambilli Mandals of Visakhapatnam district.

Some of the important site characteristics that make the selected site suitable for setting up the

SEZ include

The site topography and soil conditions

No major displacements and an area that is not environmentally sensitive

A natural contour that slopes towards the sea reducing the cost of developing utilities

The Key considerations which lead to the selection of the location is its proximity to the Port

City of Visakhapatnam with a well developed industrial & infrastructure base including its

airport.

Ministry of Commerce, Government of India has issued gazette notification conferring SEZ

status.

Industrial Location:

Location: APSEZ is located 50km south of the Visakhapatnam port.

Area: APSEZ occupies 5449 acres of land which was obtained from the Atchutapuram and

Rambilli Mandals of Visakhapatnam district.

Major Road: Major road is NH5 which is 18Km

Airport: 40km from APSEZ

Railways: 18Km from Yellamanchilli and Anakapalle Railway Station

Power: 220/132/33 KVA with 100 MW substation is dedicated to APSEZ to provide

uninterrupted power supply to the units inside the Zone.

Water: 60 MLD (Millions Litres per Day) is supplied to APSEZ.




Table 2: List of Companies – Employment Proposal,

Investment Proposed, Proposed Line of Activity

Name of the

Organization

Plot

No/

Area

Proposed Line

of Activity Stage of work

Investment

proposed(crores)

Employment

Proposed

Uniparts India

Ltd

47/

30.01

Acres

Tractor &

heavy

equipment parts

Working. Factory

structures in brisk

progress. The unit

started commercial

production partly

and released one

consignment on 24 -

10 - 2008

100 Crores 150

Pokarna Ltd

45 /

39.53

Acres

Pre-Engineered

Granite Slabs

Working. Factory

structures in brisk

progress. The unit

started commercial

production in

12/2008

160 Crores 200

Pilkington

Automative Pvt

Ltd

1 /

25.26

Acres

Automobile

Glass

Manufacturing

Unit

Working. 685 Crores 500

W.S. Industries

(India) Ltd

31 /

47.77

Acres

High Pressure

Porcelain

Insulators Working. 200 Crores 300

Brandix Apparel

City India Ltd

1000

Acres

Garments

Manufacturing

One unit is

Working. Factory

buildings under

progress and one

unit construction

completed and

started

500 Crores 60000

Southern Online

Biotechnologies

Ltd

45A /

10

Acres

Bio Diesel

Site Clearance

completed.

Foundations is

under progress

100 Crores 150

Confidence

Petroleum(I) Ltd

49 / 10

acres

Gas Cylinders

and CNG

Cylinders

Civil works is under

Progress 46 Crores 400

HPCL 1500

acres

Ethylene HPCL

Naptha / Gas

Crackers

The possession of

land was not

delivered to the

party

23000 Crores 5000

Source: APIIC, Industrial Estate, Marripalem, Visakhapatnam

Date: 09-05-09




Name of the

Organization

Plot No/

Area

Proposed Line

of Activity Stage of work

Investment

proposed(crores)

Employment

Proposed

Rain Calciner

Ltd

45D /

43.36

Acres

Calcined

Petroleum Coke

with generation

of Electric

power

The possession of

land was not

delivered to the

party

280 Crores 600

Baba Atomic

Research

Centre(BARC)

Land

2131.43

Acres

Research and

Development

Layout plan

completed. Geo

Technical

Investigations

Completed.

2500 Crores 5000

Anjaney Alloys

Ltd

42,43,44/

60 Acres

Ferro Alloys

Project

Possession

handover the

party on 04-10-

2008. The party

yet to start the

civil works

203.98 Crores 573

Vizag Marine

Anchor Chain

(P) Ltd

53A/5

Acres

Anchor Chains,

Naval Chains

and Marine

Chains etc.

Possession is not

given 29.60 Crores 76

Nagarjuna

Agrichem Ltd

(NACL)

80 Acres Agricultural

Fertilizers

Possession is not

given 150 Crores 150


Date: 09-05-09

NACL added recently in July 2009. Source: APIIC. This company is not included in our survey.

Table 3: Total no. of companies, Investment and Employee Proposed in APSEZ

Total Investment Proposed

(Specify Units) 27,804.58 Crores

Total Employees

Present

Future 72949

Total no.of companies exist at present 13

Total no.of companies Working 5

Total no.of companies Under construction 2

Total no.of companies Yet to start construction 6

No. of samples Taken 6





Date: 09-05-09

Section 4: ANALYSIS




ANALYSIS

Scale or Category of Organizations in this SEZ (Not sure)

a) Micro; b)Small ; c) Medium ; d) Large;

33%

67%

Micro Small Medium Large

Majority of the companies in this SEZ are large scale units (8) and then followed by medium

scale (4) industries.

Investment 20 Crores – 100 Crores – Medium Scale Industry

Investment above 100 Crores – Large Scale Industry




Are you supported by Financial Institutions?

A. Yes B. Self Support

83%

17%

Financial Institution Support

A B

We found that 83% of organizations has supported by Financial Institutions and 17% of

organizations are self supported. Majority of organizations are supported by financial institutions

in this SEZ.

Financial institutes which supported the organization in this SEZ SBI, Union Bank of India, HDFC, ING VYSYA, CITY BANK, ABN AMRO, KOTAK

MAHINDRA, BNP PARIBAS

Majority of the organizations are supported by private sector banks followed by public

sector banks in this SEZ.




Foreign Direct Investment (FDI) Percentage or Amount and sources of FDI’s

in this SEZ

There are 3 companies at present have FDI‟s. Uniparts India Ltd, Pilkington Automotives

Pvt Ltd, Brandix Apparel City India Ltd. [Brandix is having FDI‟s. This information is

not given by Brandix. We know the info informally. They have not given the

questionnaire till date. It can be deleted if necessary]

Uniparts India Ltd has Rs. 75 crores from AIG

Pilkington Automotives Pvt Ltd has 100% FDI from Pilkington Group

Organization in this SEZ is 100% exported oriented. Organizations in this

SEZ export their goods to countries like:

USA, UK, Europe, JAPAN, North America and Gulf Countries

Majority of companies export their goods to USA, UK, European countries.

The socially related activities’ (Corporate Social Responsibilities) which are

taken up by organizations in this SEZ

Uniparts India Ltd Donation to Local Villages developments.

Donation to Voluntary Social welfare association namely Akshay Pathra

Other activities Generating of Employment

Employment to locals

Safety of the People – Safety training




Kind of technologies employed by organization in this SEZ A. Indigenous B. Imported C. Both

33%

17%

50%

A B C

Majority of the organizations in this SEZ use imported and indigenous technologies i.e., 50%

followed by indigenous technology i.e., 33% and only imported technology of 17%.

Source raw materials for the organization in this SEZ

A. Indigenous B. Imported C. Both

100%

A B C

Majority of the organizations in this SEZ use imported and indigenous technologies i.e., 100%.




Human Resource Requirement in this SEZ TOTAL REQUIREMENT: 72949

Weight age of Human Resource according to degree on date: May 2009

5.87%

1.30%

0.44%

0.65%

5.00%0.87%

1.00%

14.13%

55.04%

3.70%

12.00%

Engg

MBA

MCA

CA

Graduate (Technical)

Graduate (Commerce)

Graduate (Other - Arts)

Diploma In Engg.

ITI

Skilled Labour

Unskilled Labour

Majority of human resource potential is there for unskilled labour, followed by ITI

- 55.04%, Diploma in Engg. – 14.13%, unskilled labour - 12%, Engineers - 5.87%,

Graduates – Technical – 5%, Skilled labour – 3.70%, MBA‟s – 1.30%, Graduates

– Others (Arts) – 1%, Graduates – commerce - 0.87%, CA - 0.65% as on May

2009.




[Analysis given on the basis of employee data of one or two companies. This is the

projected data. This approximate ratio will be there in coming year. There are good

opportunities for ITI‟s, Engineers, MBA‟s in coming future.]

Rate of attrition for the organization in this SEZ

A. 0-10% B. 11-20% C. 21-30%

100%

A B C

All organizations in this SEZ has rate of attrition in the range of 0-10%. This SEZ has started

recently. Very less percentage of changing jobs from one company to other




Infrastructure Facilities

0%

20%

40%

60%

80%

100%

120%

50

%

16

.67

%

33

.33

%

50

%

83

.33

%

66

.67

%

83

.33

% 50

%

66

.67

%

16

.67

%

16

.67

%

16

.67

%

16

.67

%

16

.67

%1

6.6

7%

Excellent Good Average Below Average Poor

Majority of the companies in APSEZ are satisfied with major infrastructure facilities

like Roads in this SEZ are good.

Good accessibility of railways, port, airport accessibility from this SEZ.

Majority of the organization in this SEZ satisfied with Power, water facilities are

good.




Infrastructure Facilities

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

33

.33

% 50

%

50

%

50

%

66

.67

% 50

%

16

.67

%

16

.67

%

33

.33

%

33

.33

%

33

.33

%

33

.33

%

33

.33

%

33

.33

%

83

.33

%

33

.33

%

90

%

16

.67

%

66

.67

%

66

.67

%

50

%

10

%

16

.67

%

66

.67

%

50

%

16

.67

%

Excellent Good Average Below Average Poor

Most of the organizations in this SEZ say that Telecommunication, Bandwidth, law

and order (Security) is Average and feels that there should be improvement need in

this area.

Companies feel that transport, Crèche, hotels and leisure , education and schools, and

health care / medical facilities are poor, employee residential quarter are below

average.

Cost of residential space is expensive for that area. As this is in outskirts of the city,

they feel that cost of residential space should be low.




Section 5: Findings, Suggestions and

Conclusions

a) Findings

Attractive SEZ Policy Scheme with fiscal incentives like

100% Income – Tax exemptions for a block of 5 years, 50% tax exemption for 2

years and up to 50% of the profits ploughed back for next 3 years under the Income

Tax Act.

Exemption from duties on all imports for project development.

Exemption from excise/VAT on domestic sourcing of capital goods for project

development.

Allow entrepreneurs and organization to start up an unit who motive is 100% export

oriented business.

Full authority to provide services such as water, electricity, security, restaurants and

recreational facilities within the zone on purely commercial basis.

Majority of the organizations has supported by financial institutes like SBI, Union Bank

of India, HDFC, ING VYSYA, CITY BANK, ABN AMRO, KOTAK MAHINDRA,

BNP PARIBAS.

Majority of the organizations are supported by private sector banks followed by public

sector banks in this SEZ

Organization in this SEZ is 100% exported oriented. Organizations in this SEZ export

their goods to countries like:

USA, UK, Europe, JAPAN, North America and Gulf Countries

Majority of companies export their goods to USA, UK, European countries.

Majority of the organizations use raw materials and technologies of both imported and

indigenous.

Organizations in this SEZ show interest in social activities like donations to village

developments, welfare associations, generating employment, giving employment to local

people and land losers, giving safety training to locals and employees.

There is a chance of good human resource requirements in this SEZ. There is high

requirement for ITI‟s, unskilled labour in this SEZ. There is good chance of increasing

employment for professional course like Engg, MBA, MCA, CA. The total human

resource requirement in this area is 72949 in coming years.

All organizations in this SEZ has rate of attrition in the range of 0-10%.

Majority of the companies in APSEZ feel that major infrastructure facilities like Roads in

this SEZ is good, Railways, Port, Airport accessibility is good from this SEZ.

Majority of the organization in this SEZ feel that Power, water facilities are good.




Most of the organizations in this SEZ say that Telecommunication, Bandwidth, law and

order (Security) is Average and feels that there should be improvement need in this area.

Companies feel that transport, Crèche, hotels and leisure , education and schools, and

health care / medical facilities are poor, employee residential quarter are below average.

Cost of residential space is expensive for that area. As this is in outskirts of the city, they

feel that cost of residential space should be low.

As service oriented businesses in this area like telecommunications, internet facilities,

transport, hotels and leisure, education and schools, health care / Medical facilities are

poor, one set up a service units in of the above areas, can generate employment and also

get good profits.

There is a good chance of reality boom in this area. Huge opportunities for construction

oriented companies.

b) Suggestion As service oriented businesses in this area like telecommunications, internet facilities,

transport, hotels and leisure, education and schools, health care / Medical facilities are

poor in this areas, APIIC has to improve these infrastructure facilities by encouraging

one to set up a service units in of the above areas, can generate employment and also get

good profits.

APIIC has to see that these service providers/ dealer should belong local village

surrounding that APSEZ as there is a need for employment generation and very low

monthly earnings by the villagers in surrounding areas.

APIIC has to develop and keep a proposal to Government on one business policy for

these villagers who want to startup services oriented business by providing tax and VAT

exemptions even for them, help them by getting easy permissions to start their business

and providing them bank loans at lower interest rates.

APIIC has to monitor that these services are provided in effective way by regular

supervisions.

APIIC has to monitor that the maximum employment in the organizations in this SEZ are

localites.

APIIC has motivated the companies to give some funds for developing villages

surrounding this SEZ‟s, provide funds for the local people to start up service oriented

business.

APIIC and other organizations has to encourage and train to local fishermen‟s

surrounding this SEZ to start an export oriented units of Sea foods like Crab, Chilled

Fish, Dry Fish, Fishing Net and equipment.

APIIC has to develop greenery to large extent as there was very less greenery.




c) Conclusion

The Government of India (GOI) has formulated a policy for setting up SEZ in India. SEZs are

proposed to be specially delineated duty free enclaves for the purpose of trade operations,

duty and tariffs. This policy is lying a benchmark for organizations and entrepreneurs who

want to start up unit which is 100% export oriented.

Andhra Pradesh Special Economic Zone (APSEZ) location is its proximity to the Port City of

Visakhapatnam with a well developed industrial & infrastructure base including its airport,

roads, railways, power, and water.

There was good demand for raw materials and technology from both India and abroad. In

coming days, there will good improvement in trading, across the globe from this SEZ. There

were good chances for many organizations to setup their units and generate huge employment.

There is a demand for ITI‟s, unskilled labour, Engineers, MBA this SEZ.

There are good opportunities for service sector development in this area like banking,

transport, telecommunications, internet, hotels and leisure‟s, medical facilities and education

sectors as these facilities are poor in this place.

APSEZ contribute to the annual economic growth rate very significantly. It also offers wide

range of opportunities for employment and development in future.

The untapped potential at the SEZ is so vast as can be seen from my study & the neglect of

these opportunities will result in the companies losing out on the market potential which is

available to be used from here.




Bibliography or References

APSEZ Industries Record from APIIC.

AP PCPIR brochure, APIIC C.R. Kothari, Research Methodology Method and Techniques,

New Age International Publishers. www.apiicltd.com

http://en.wikipedia.org/wiki/Visakhapatnam

http://www.apiicltd.com/

http://en.wikipedia.org/wiki/Visakhapatnam




Annexure - Questionnaire Objective: We would like to interact with you through this questionnaire so as to

enlighten ourselves on the current and future status of your company.

Name of the Organization: Investment:

Name: Designation:

Contact No.: Email ID:

1) What is the scale of your company?

a) Micro; b)Small ; c) Medium ; d) Large

2) Are you supported by Financial Institutions?

a) Yes b) Self-supported.

3) If yes, please name the financial institution/s which supports your company and the

percentage/amount of total amount out of total capital?

………………………………………………………………………………

4) What is the extent of Foreign Direct Investment (FDI) in your company? Could

you also name the sources of the FDI?

……………………………………………………………………………………

5) Your current line of activity is ……………………………..; What will be your

future line of activities? Will you be going in for diversification?

6) In your total production what is the proportion which is exported and what is the

proportion which is sold within the country? (Give Percentage)

Exported: Production for domestic consumption:

7) If you export, to which countries do you export to?

…………………………………………………………………………………..




8) What kind of technologies have you employed?

a) Indigenous(Local) b) Imported c) Both

9) From where do you source your supplies like raw materials, etc?

a) Internally; b) Externally;

10) What are your present & future human resource requirements?(Ex: 200 & 200

))

Present Future

Total

Engg

MBA

MCA

CA

Graduates Technical

Commerce

Others(Arts)

Diploma In Engg.

ITI

Skilled Labor

Unskilled Labor

11) What is the rate of attrition in your company?

a) 0-10% b) 11-20% c) 21-30% d) 31-40% e) 41-50%

13) What are the socially related activities which you have undertaken? (Corporate

Social Responsibility)




INFRASTRUCTURE FACILITIES:

(Please tick either one of them)

ATTRIBUTES Excellent Good Average Below

Average

Poor

Road

Railways

Port

Airport

Power

Water

Telecommunication

Bandwidth

Canteens

Employee

Residential

Quarter

Crèche

Workers Rest

Room

Hotels and Leisure

Cost of Residential

Space

Education &

Schools

Heath Care /

Medical Facilities

Law and Order

Comments on Infrastructure Facilities (Optional):

Comments on our questionnaire and survey (Optional):

We thank you very much for sparing your valuable time for us. Have a good day

Documents

A Study on Special Economic Zone and Infrastructure Facilites with Reference to APSEZ, Achuthapuram