Presentation on

“Tamil Nadu – Global Manufacturing hub:

Strengths and Opportunities”

M Velmurugan IES

Executive Vice Chairman

Guidance Bureau

Industries department

Government of Tamil Nadu

by

Presentation Structure

4Tamil Nadu: Growth story

4Competitive strengths and Opportunities

4New Initiatives by Government

Tamil Nadu Growth Story

Tamil Nadu in Global economy

• Tamil Nadu’s GSDP in 2014-15: INR 9767.03 billion (US $

150.3 billion). On PPP basis, GSDP:US $ 381 billion (IMF

data)

• Second largest economy among Indian states

• On Global scale, Tamil Nadu will be ranked 46th largest

economy on PPP basis). – bigger than Romania, Ukraine,

Vietnam, Bangladesh, New Zealand, Norway, Finland,

Denmark, Sri Lanka, Bulgaria, Uzbekistan, Afghanistan,

etc. In nominal terms, TN is ranked 58th.

• One of the fastest growing State economies with an average

growth rate of 9.75% in the last 9 years

• One of Top Three FDI destinations among Indian states

• Tamil Nadu Vision 2023 target to place Tamil Nadu in the

league of Upper Middle Income countries

0

2

4

6

8

10

12

14

16

7.25 7.40

Tamil Nadu India

India and Tamil Nadu: GDP Growth

rates at constant prices

Average growth rate between

2004-05 to 2014-15

India 7.58%

Tamil Nadu 9.29%

Source: Economic Survey 2014-15

Sectoral composition of GDP (2013-14)

% share

13.95

26.12 59.93

India

Primary Secondary Tertiary

7.39

30.32

62.29

Tamil Nadu

Primary Secondary Tertiary

Per capita Income at constant prices 2013-14: Select states

7

133427

114392

112664

106831

95361 92638 84709 81397

70059 65974

51798

36250 31199

0

20000

40000

60000

80000

100000

120000

140000

160000

Among major states, Tamil Nadu is ranked Second

Rank of Tamil Nadu among Indian states Parameter Rank of Tamil

Nadu

Urbanization rate 48.5% First

Size of State Economy (GSDP) at constant

prices (2014-15) Rs. 5,15,458 crores Second

Per capita Income at constant prices

(2014-15)

Rs.112664 Second (among

major States)

Number of Factories 36,869 (2012-13) First

Invested Fixed capital in factories sector Rs.1,87,242.33 crores

(2012-13)

Third

Number of New MSMEs filed (2007-14) 437065 First

New MSMEs in 2013-14 alone 1,16,393 First (32.04%)

Number of workers employed 19,64,169 persons First

Value of Industrial output produced Rs.6,22,307.58 crores Third

Net value addition in factories sector Rs.93,947.24 crores Third

Exports (2013-14) Rs.2,15,400 crores Third

FDI attracted (April 2000 to June 2015) Rs.94,595 crores

(US $ 17.94 billion)

Third

Source: Central Statistical Organisation – CSO and Department of Industrial Policy and Promotion (DIPP)

State’s share in number of factories, higher than any

other state

State’s share in India’s industrial

workforce

2nd largest contributor to India’s GDP

Tamil Nadu – India’s economic powerhouse

Contribution to India’s industrial output

Contribution to India’s renewable energy capacity, higher than any other state

#1

India’s most urbanized state by geography and population

$€£¥

Ranks 3rd in terms of cumulative FDI inflows (USD 12.7 billion from 200o to 2014)

Number of India’s technical universities, higher than any other state

Infrastructure Profile of Tamil Nadu • Tamil Nadu – the most Urbanised state

• Power generating capacity: 22000 MW – second largest

• Communication: Largest Bandwidth and High Teledensity – highest in

India – 14.8 Tbps (3 Submarine cables: (SEA-ME-WE-4, i2i, and TIC)

• 20 Industrial Parks, 45 Notified Special Economic Zones – The largest

• High Road & Rail network:

• Port logistics: 4 modern sea ports, 23 minor ports

• Well-developed social infrastructure: Health care, education, Housing,

etc

Density per 100 km2 of land area Tamil Nadu India

Road density 177 kms 148 kms

Rail density 32 kms 19.27 kms

FDI attracted by Tamil Nadu Period Cumulative FDI

in US $ millions

Rank of Tamil Nadu

From April 2000 to April 2011 7341 Fourth

From April, 2000 to June, 2015 17,938 Third

Incremental FDI inflows during

May 2011 to June 2015

10597

(US $ 10.6 billion)

Source: Department of Industrial Policy and Promotion (DIPP), publication titled FDI Statistics

Investment (domestic) attracted by Tamil Nadu Period Rs.in crores

2011 73306

2012 21253

2013 27380

2014 14598

January to June 2015 16289

Total Rs. In crores 152826

Source: Department of Industrial Policy and Promotion (DIPP), publication titled SIA Statistics

As part of GIM-2015, Govt of Tamil Nadu attracted Rs.2.42 lakh cores

Tamil Nadu GIM - 2015 • GIM with- Pioneering initiative that is set to place Tamil Nadu in a

higher growth orbit

• GIM – a resounding success far exceeding our targets and expectations

• As against target of Rs.1.0 lakh crores investment, GIM attracted

Rs.242160 crores in 98 projects

• Employment potential in these 98 projects is: 4,70,065

• More than 50% of the investments proposed in Southern districts

• Tamil Nadu set to become add about 18000 MW of power

(solar+Thermal) making the State power-surplus.

Sector No of MoU’s Investment Employment

Manufacturing 50 1,04,286.00 1,14,455

Energy 15 1,07,136.00 15,850

MSME 16,532.67 ---

IT and ITES 17 10,950.00 2,05,500

Handlooms and Textiles 10 1,954.83 65,010

Animal Husbandry & Fisheries 4 500.00 500

Agro based 2 800.00 68,750

Total 98 2,42,160.00 4,70,065

Guidance Bureau

Product % share

of TN in

India

Automobiles

(cars only)

36%

Commercial

vehicles

35%

Auto parts 33%

Leather products 40%

Textiles 33%

Spinning capacity 47%

Powerlooms

capacity

20%

Software & ITES 11.6%

Infrastructure Profile of Tamil Nadu • Tamil Nadu – the most Urbanised state

• Power generating capacity: 22000 MW – second largest

• Communication: Largest Bandwidth and High Teledensity – highest

in India – 14.8 Tbps (3 Submarine cables: (SEA-ME-WE-4, i2i, and

TIC)

• 20 Industrial Parks, 76 Special Economic Zones – Third largest

• High Road & Rail network:

• Port logistics: 4 modern sea ports, 23 minor ports

• Well-developed social infrastructure: Health care, education,

Housing, etc

Density per 100 km2 of land area Tamil Nadu India

Road density 177 kms 148 kms

Rail density 32 kms 19.27 kms

CHENNAI

TUTICORIN

COLACHEL

ENNORE Ports of Tamil Nadu

CUDDALORE

NAGAPATTINAM

PAMBAN &

RAMESWARAM

MANAPPADU

THIRUKADAIYUR

KATTUPALLI

VALINOKKAM

Chennai the most efficient

port of India MUGAIYUR

• Tamil Nadu – pioneer in promoting Technical education in Private

sector

• Annual Turn-out: More than 1.0 million Graduates (Engineering,

Arts & Science), Diploma holders and ITI workers

• Abundant availability of skilled manpower at competitive wage

costs

• Wage cost of a skilled worker: about US$ 150 to 180 per month –

Less than one US$ per hour

501 Polytechnics Annual turn-out:

188456 technicians

1552 Industrial training Institutes & schools:

Annual turn-out: 116551 workers / operators

572 engineering colleges - Annual turn-out

262,164 Engineering graduates

Skilled manpower availability in Tamil Nadu

Fortune 500 companies in Tamil Nadu

USA Ford, DELL, Flextronics, Sanmina-SCI, Delphi, Visteon,

Caterpillar, Honeywell, Johnson & Johnson, Citigroup,

Pepsi, Dow Chemical co., Coca-Cola, Accenture, Hewlett-

Packard, Microsoft, IBM, Johnson Controls, Emerson,

Terex corporation and Motorola

Japan Nissan, Mitsubishi, Yamaha, Bridgestone, Hitachi, Komatsu,

Panasonic, Toshiba, Mitsui, Marubeni, Fujitsu, Sumitomo,

Mizuho, NEC Corporation,

Germany BMW, Daimler, Bosch, Siemens, Bayer, BASF

France Renault, Michelin, Saint Gobain, Alstom,

South Korea Hyundai, Samsung, POSCO, Lotte

Finland Nokia,

Taiwan Foxconn,

China Huawei,

Switzerland ABB

At present, 54 Fortune 500 companies have base in Tamil Nadu

Tamil Nadu competitiveness: Six Sigma Advantage

Manufacturing Total Cost

competitiveness

Excellent Port Logistics Well-developed

Infrastructure: Power, roads,

communication, etc

Fastest growing State economy

Average Growth rate: about 10%

Mature Industrial base:

Leader in automobiles & parts,

Electronic hardware,

Textiles, IT, etc

Largest producer of skilled

Manpower In India

Guidance Bureau

23 October 2014

Draft

Tamil Nadu – A Broad based Economy with presence of multiple sectors

Auto and Auto Components

Textiles Chemicals and Petrochemicals

Heavy Engineering

Electronics hardware

Pharma and Biotechnology

IT & ITeS Aerospace

Agro and Food Processing

Skill Development

Automobile Industry in

Tamil Nadu • Currently, Chennai is ranked as one of Top 10 Global auto

hubs

• Chennai is India’s largest auto hub – Currently, Chennai

has installed capacity to produce one car every 20

seconds (3 cars per minute) and one commercial vehicle

every 90 seconds

• Chennai is poised to emerge as World’s largest auto

cluster

• Chennai accounts for about 33% of India’s auto parts

production

• More than 700 Tier-I and Tier-II auto suppliers in Chennai

alone – Some of them prestigious Deming award winners

Automobile Industry in Tamil Nadu

• Chennai – the largest auto cluster in India

• Installed annual capacity of Chennai:

Cars: 14,00,000 ( 1.40 million )

Commercial Vehicles: 361,000

Motocycles 3.7 million

SUV: 1,50,000

• Chennai is one of Top 10 centres in the world for automobile

manufacturing

• Chennai has the best eco system of for automobile manufacturing

Largest auto components cluster – 35% of India’s capacity

Largest pool of skilled manpower for automobile industry

Port Logistics from 4 ports

Advanced Testing, R&D and Homologation facilities

Attractive Fiscal incentives

Cost competitiveness

Guidance Bureau

Chennai: India’s largest Automobile Cluster

Automobile & Auto Components

Name of the company Product Installed

Capacity

Land

allotted

Ford (2 plants) Cars 2,50,000 360 acres

Hyundai (2 plants) Cars 7,00,000 537 acres

Nissan Cars 2,00,000

640 acres Renault Cars 2,00,000

BMW Cars 40,000 40 acres

HM-Mitsubishi Cars 40,000 120 acres

Daimler Commercial Vehicles 71,000 389 acres

Ashok Leyland Commercial Vehicles 1,00,000 260 acres

AL-Nissan Commercial Vehicles 1,90,000 400 acres

TAFE Tractors 60,000

TVS Motor Motorcycles 1.7 million

Royal Enfield Motorcycles 200,000

Yamaha Motorcycles 1.8 million 128 acres

Mahindra and Mahindra SUVs and Cars 1,50,000 450 acres

Caterpillar, Komatsu, Doosan *** Earthmoving machinery

Automobile Industry in Chennai

23 October 2014

Opportunities in the Auto industry in Tamil Nadu

1

Passenger Vehicles, Passenger Cars, Utility

Vehicles, Multi-purpose vehicles

Two Wheelers: Mopeds, Scooters, Motorcycles

Three Wheelers: Passenger and Goods carriers

Commercial vehicles: Light, Medium and Heavy

commercial vehicles

Auto ancillaries/auto parts manufacturing

Auto parks/industrial infrastructure development

on PPP mode

23 October 2014

Draft

Tamil Nadu has over 23 Electronic Hardware Technological Parks located in major IT centric Special Economic Zones(SEZs) of Sriperumbudur, Oragadam, and Mahindra World City.

13

46%

17%

14%

12%

3%

1.76%

1.54%

0.96%

0% 10% 20% 30% 40% 50%

Tamil nadu

Karnataka

Uttar Pradesh

Maharashtra

Kerala

Delhi

Gujarat

Andhra Pradesh

Share of Top States in Electronic Hardware Exports of India

Tamil Nadu stands 1st in terms of Electronic

exports in India

Electronics Hardware - Segmental Presence of Major Industrial houses in Tamil Nadu

Electronic Hardware

Information Technology

Tamil Nadu: The Electronic manufacturing Ecosystem

Nokia has a Global support services centre operating in Chennai employing over 1800

persons as on Sep 2015 Foxconn has two facilities manufacturing LED TV and Hardware

servicing.

23 October 2014

Draft

271 approved IT parks Full fledged wide area

network and data centre 15 operational Special

Economic Zones in state

TIDEL Park, with a total area of 1.28 million sq. ft. is the largest in India

Over 1700 software units in the state

Land identified for setting up

International Institute of Information

Technology (IIIT)

0

2

4

6

8

10

12

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13(E)

IT/ITES exports – USD billion

7.1 9.3

State Government is establishing an IT Investment Region near Chennai covering an area of 1600 sq. km with a total investment of USD 1.7 billion. Land acquisition has been

initiated

IT & ITES sector in Tamil Nadu

Tamil Nadu is the second largest software exporter in the country

19

0

10000

20000

30000

40000

50000

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Tamil Nadu Software exports Rs. crores

23 October 2014

Draft

Opportunities in Electronic Hardware Sector in Tamil Nadu

14

Photovoltaic panels

Computer peripherals

Mobile handsets

Communication hardware and

networks Semiconductor

Medical electronics

23 October 2014

Draft

Share of Major Industries in terms of Total Output in Tamil Nadu (2011-12)

Top 3 State wise Industrial Output Contribution to the Textile sector in India 2011-12

2nd Largest

Contribution to the total Industrial Output of Tamil Nadu

1st In Apparel Industry and 2nd in

Textile Industry in terms of Total Industrial Output Contribution

Textile Sector in Tamil Nadu: Industrial Overview

3

19.66%

10.07%

9.68%

11.58%

7.70%

6.02%

5.59%

29.70%

Automobiles

Coke & refined PetroleumProductsBasic Metals

Textiles & Apparels

Food Products

Machinery & equipment

Fabricated MetalProductsOthers

Source: Ministry of statistics & program Implementation

17.2%

27.0%

16.8% 17.1%

13.0% 11.2%

Textiles Wearing apparels

Guja

rat

Tam

il N

ad

u

Mahara

shtr

a

Tam

il N

ad

u

Hary

ana

Karn

ata

ka

23 October 2014

Draft

0% 20% 40% 60% 80% 100%

Spindles

Rotors

Knittingmachines

Looms

Compositeweaving

Installed capacity as a % of total capacity in India (Non SSI units)

Tamil Nadu Rest of India

Textile Industry in Tamil Nadu: Facts and Figures

2

20% contribution to India’s total Export of Readymade Garments

58% of total textile Mills in India are present in Tamil Nadu (inclusive of SSI)

Textile Industry in Tamil Nadu accounts for ~17% of Total Invested Capital in all the industries

Constitutes 28% of total employment in India’s textile and Apparel sector

Textile and apparel sector together provide employment to 35% of population in the State

• Tamil Nadu houses more than 40% of total installed capacity of Spinning industry in India • Tiruppur(Coimbatore District) the biggest Knitting Cluster (90% exports of Knitwear from

India ) in the Country is located in Tamil Nadu • 35-40% contribution to total Yarn Production in India in last 5 years • There are 2614 Hand Processing Units (25% of total units in India) and 985 Power Processing

units (40% of total units in India) in Tamil Nadu

Advantage

Tamil Nadu

Textile Sector

Renewable Energy - Indian Scenario Renewable energy sources currently contribute 30% of the installed capacity

and is expected to increase to 34% by 2017

176.1

4.8

40.8

21.1

3.8

4.0

0.1 2.6

72.5

Installed Capacity Mix in India (GW), 2014

Thermal Nuclear Hydro Wind Power

Small Hydro Power Biomass Power Waste to Power Solar Power (SPV)

• For the period 2012-17, the target capacity addition for power sector is 118

GW out of which the target addition for renewable energy is 30,000 MW. This

implies that 25% of the planned capacity addition is in the renewable

segment

Thermal. 68%

Hydro. 18%

Nuclear. 2% Renewable

. 12%

Fuel wise generation mix, 2013

Thermal. 63%

Hydro. 21%

Nuclear. 3%

Renewable. 13%

Fuel wise generation mix by 2017 – projection

Renewable Energy - Tamil Nadu

Tamil Nadu is a pioneer in harnessing its renewable energy potential in India

as compared to its peers.

9084, 44%

562, 3% 516, 2%

2284, 11%

7253, 35%

659, 3%

211, 1% 112, 1%

10519, 51%

TN Power Capacity (MW) - 2014

Thermal Nuclear Gas based Hydro

Wind Power Cogen Biomass Power Small Hydro Power

Source: CAE, Tamil Nadu - Energy Policy Note 2014-15, * includes hydropower

#1 state in renewable energy capacity

among all the Indian states #5 global installed capacity of wind power generation units and also #1 in India. 40%* of the total power capacity from renewable energy sources #2 installed capacity of cogeneration power plants in the country

Renewable Energy Sector

S.

No.

Areas Annual

Average

Wind Speeds

1 Palghat Pass,

Coimbatore, Erode 18-22

2 Shencottah Pass,

Tirunelveli, Tuticorin 18-22

3 Aralvoimozhi Pass,

Kanyakumari 19-25

4 Kambam Pass ,

Dindigul district 19-25

Palghat Pass,

Coimbatore, Erode 18-22

The sale of wind power is through a fixed tariff regime where the regulatory commission fixes tariffs through cost plus framework

Wheeling charges for transmission of power using the network is at 5% of the energy wheeled

There is no limitation on the nature of the entity that invests in wind power segment. Any company/corporate body/association of individuals can invest in a wind power generation unit.

Ramanathapuram

Theni

Tirunelveli

Kanyakumari

Thoothukudi

Dindigul

Coimbatore

Wind Power in Tamil Nadu Wind power Passes in Tamil Nadu

The regulations allow for sale to third parties through open access.

Tamil Nadu installed capacity:7252.61 MW

• The state has an outlay of USD 9170 million for solar energy sector alone.

Investment Outlay

• Mandatory 6% solar power consumption for all high Tension customers including SEZs, Industries which have committed access to 24x7 power, IT Parks, telecom Towers, Colleges and schools, buildings with a built up area of 20,000 MW or more

Solar Purchase Obligation

• As per the state industrial policy which includes • Investments made in power plants to be included for the purpose of structures packages • Electricity tax exemption for sale to utility & captive sales for 5 years

Tax Concessions

• A total capacity of 1500MW to promote development of solar capacity (of varied capacities ranging from 1MW to over 10MW). Parks with capacity of 50MW will be setup in 24 districts out of the 32 districts of the state.

Other features

Opportunities in Tamil Nadu for Renewable Energy

Solar Power in Tamil Nadu

Development of wind-solar hybrid

installations and biomass projects

Development of solar PV manufacturing

capabilities

Offshore wind projects development

Development of large scale solar and wind

parks

Tidal and geothermal projects first at pilot

scale, and then at commercial scale

Opportunities in Tamil Nadu for Renewable Energy

23 October 2014

Draft

Tamil Nadu: an emerging chemical growth centre

• A diversified manufacturing base with about 2,500 chemical and petrochemicals factories, providing employment to over 120,000 people

• A USD 15 billion industry as in 2012-13, accounting for 7% of the total national output

• Strong presence in the export market in sub-segments such as Dyes, petrochemicals and Agrochemicals

6

2006-07 2007-08 2011-12

Basic chemicals 583 628 1315

Other chemicals andallied products

766 681 853

0

200

400

600

800

1000

1200

1400

State emerging as a major exporter of basic chemicals – (USD million)

CAGR - 18%

Chemical clusters Upcoming PCPIR

Refineries Ports with POL facilities

Key consuming industries – automobile, textiles, electronics, etc.

Chemicals and Petrochemical Sector

23 October 2014

Draft

Some of India’s leading chemical and petrochemical manufacturers have a base in Tamil Nadu

Refineries

(17.5 MMTPA)

CPCL Manali

NOCL Cuddalore

CPCL Narimanam

Glass manufacturing

(1 MMTPA)

Saint Gobain

Asahi

Harsha Group

Petrochemical complexes (1 MMTPA)

CPCL Manali

CPCL Narimanam

Chlor Alkali plants

(1MMTPA)

SPIC

DCM Shriram

Chemplast Sanmar

DCW

Soda Ash plants

(0.2 MMTPA)

Tuticorin Alkali

SIEL

Chemical Fertilizer plants

(1.94 MTPA)

MFL, Manali

SPIC, Tuticorin

TACL, Tuticorin

Container handling

(14 MMTPA)

Chennai

Tuticorin

Ennore

7

New initiatives of Government of Tamil Nadu

• Vision Tamil Nadu 2023

• Tamil Nadu Infrastructure Development act, 2012

• Tamil Nadu Infrastructure Development Board

• Tamil Nadu Infrastructure Development Fund

• Creation of Land Bank: 53000 acres

• Promotion of New industrial parks

• Skill Development initiatives

• Single window facilitation

• New Industrial Policy 2014

• Automobile and Auto parts Policy 2014

• Biotechnology Policy 2014

• Global Investors Meet 2015 on 9th and 10h September 2015

What Government of Tamil Nadu offers to Investors?

Land - in Industrial Parks

Structured Incentives package of support including fiscal

incentives for projects depending on investment size as per

Industrial Policy 2014

Quality and reliable infrastructure support including Power and

Water supply, roads, communication, waste disposal, etc

Single Window Facilitation & In-principle composite approval on

a fast-track mode within 30 days

Dedicated Project Facilitation Committee will be formed by

Government that will escort project.

4

4

4

4

4

Useful Contacts

Thiru C.V. Sankar, I.A.S.

Principal Secretary to Government,

Industries Department,

Secretariat,

Chennai - 600 009. INDIA

Tel: 91-44-25671383

Fax: 91-44-25672727

E-mail: indsec@tn.gov.in

URL: http://www.tn.gov.in

Thiru M.Velmurugan,

Executive Vice Chairman,

Tamil Nadu Industrial Guidance & Export

Promotion Bureau, (Single window office)

19-A, Rukmani Lakshmipathy Salai,

Egmore, Chennai - 600008. INDIA

Tel: 91-44-28553118

Fax: 91-44-28588364

E-mail: directorguidance@gmail.com

URL: http://www.investingintamilnadu.com

Thank You