MADHYA PRADESH. April 2010

Transcription

1 MADHYA PRADESH April

2 MADHYA PRADESH April 2010 Investment climate of a state is determined by a mix of factors Skilled and cost-effective labour Labour market flexibility Labour relations Availability of raw materials and natural resources Procedures for entry and exit of firms Industrial regulation, labour regulation, other government regulations Certainty about rules and regulations Security, law and order situation Resources/Inputs Incentives to industry Tax incentives and exemptions Investment subsidies and other incentives Availability of finance at cost-effective terms Incentives for foreign direct investment (FDI) Profitability of the industry Investment climate of a state Regulatory framework Physical and social infrastructure Condition of physical infrastructure such as power, water, roads, etc. Information infrastructure such as telecom, IT, etc. Social infrastructure such as educational and medical facilities 2

3 MADHYA PRADESH April 2010 Contents Advantage Madhya Pradesh State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Doing business in Madhya Pradesh 3

4 ADVANTAGE MADHYA PRADESH Madhya Pradesh State profile (1/2) Madhya Pradesh is located in Central India. The state covers area of 308,000 sq km and has population of around 60.3 million. Until November 2000, Madhya Pradesh was the largest state in India, when the state of Chhattisgarh was carved out of it for ease of administering a large state. The state, now, has 50 districts. Its administrative capital is Bhopal and its largest city is Indore. Other key cities are Gwalior, Jabalpur and Ujjain. Madhya Pradesh has two major rivers flowing through it: the Narmada and the Tapi. Source: Maps of India 4

5 ADVANTAGE MADHYA PRADESH Madhya Pradesh State profile (2/2) There are 11 agro-climatic conditions and a variety of soils available in the state to support cultivation of a wide range of crops. Around 31 per cent of the total area of the state is forestland which is over12 per cent of the total forest area of India. The most commonly spoken language of the state is Hindi. English and Marathi are the other languages used. Source: Maps of India 5

6 ADVANTAGE MADHYA PRADESH Advantage Madhya Pradesh (1/2) Central location of the state Being centrally located, the state is accessible to key consumer markets and major cities such as Delhi (740 km*), Mumbai (780 km*), Kolkata (1,350 km*) and Chennai (1,430 km*). Because of this advantage, a large number of consumer goods companies have manufacturing bases in the state. Policy incentive The state offers wide range of fiscal and policy incentives for businesses under the Industrial Promotion Policy & Action Plan (including the provisions as amended in 2007). Additionally, the state has policies for the IT, biotechnology, tourism sectors and Special economic zones (SEZ). Agricultural and forest resources Around 31 per cent of the state is under forest cover with abundant natural resources. Favourable soil and climatic conditions have helped the state to be the largest producer of coarse cereals, oilseeds and soybean in the country; the state has attracted a large number of agro-based industries because of its agricultural products. Source: Maps of India * From Bhopal 6

7 ADVANTAGE MADHYA PRADESH Advantage Madhya Pradesh (2/2) Mineral resources Madhya Pradesh has rich mineral resources and has the largest reserves of diamond and copper in India. Besides, the state has significant reserves of coal, coal-bed methane, manganese and dolomite. Large industrial base The state is manufacturing base for a number of large- and medium-scale industries from diverse sectors such as automobile and autocomponents, cement, agro-processing, consumer goods, pharmaceuticals, etc. It also has a large pool of industrial labour. Source: Maps of India Potential for tourism Because of its forest cover, the state has immense potential for tourism, particularly, wild-life and adventure tourism, eco-tourism. It also has globally renowned locations of historical and religious significance. The state attracts large number of domestic and international tourists. 7

8 ADVANTAGE MADHYA PRADESH Madhya Pradesh in figures (1/2) Parameter Madhya Pradesh All-states Source Economy GSDP as percentage of all states GSDP CMIE, , current prices Average GSDP growth rate (%) CMIE, to Per capita GSDP (US$) CMIE, Physical infrastructure Installed power capacity (MW) 4, ,996.4 Central Electricity Authority, as of March 2009 GSM cellular subscribers (No) 19,636, ,328,179 Cellular Operators Association of India, as of November 2009 Broadband subscribers (No) 168,951* 4,981,976 As of October 2008 National highway length (km) 4,670 70,548 Ministry of Road Transport & Highways, Airports (No) Industry sources Social indicators Literacy rate (%) Census of India, 2001 Birth rate (per 1,000 live birth) Central Bureau of Health Intelligence,

9 ADVANTAGE MADHYA PRADESH Madhya Pradesh in figures (2/2) Parameter Madhya Pradesh All-states Source Ease of doing business FDI inflows (US$ billion)* Outstanding investments (US$ billion) Industrial infrastructure Department of Industrial Policy & Promotion, April 2000 to October ,709.7 CMIE, as of December 2008 PPP projects (no) SEZs (No) 1 98 *Includes Chhattisgarh PPP: public-private partnership, SEZ: special economic zone Functional as of August 2009, Parameter Policy support Sectors with specific policies Availability of labour IT, biotechnology, SEZ, tourism Madhya Pradesh Government Large base of industrial labour available. 9

10 ADVANTAGE MADHYA PRADESH Key industries with policy thrust and factor advantages Industry attractiveness matrix High IT and ITeS Tourism Pharmaceutical and Biotechnology Textile Auto and autocomponents Agro, forestbased industry Policy thrust Medium Manufacturing Minerals Consumer goods Low Medium *Factor advantage High *Factor advantages include benefits due to geographical location and availability of factors like talent pool, natural resources and capital 10

11 MADHYA PRADESH April 2010 Contents Advantage Madhya Pradesh State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Doing business in Madhya Pradesh 11

12 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Socio-economic snapshot of Madhya Pradesh Capital Parameters Madhya Pradesh Bhopal Geographical area (sq km) 308,000 Administrative districts (no) 50 Population density (persons per sq km) 196 Total population (million) 60.3 Male population (million) 31.4 Female population (million) 28.9 Decadal population growth rate (%) 24.3 Sex ratio (females per 1,000 males) 919 Literacy rate (%) 63.7 Male (%) 76.1 Female (%) 50.3 Average life expectancy (years) 57.7 Sources: website of Government of Madhya Pradesh ( CMIE, Census

13 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Madhya Pradesh s GSDP At current prices, the gross state domestic product (GSDP) of Madhya Pradesh for was US$ 35.4 billion. Between and , the average annual GSDP growth was 9.5 per cent Madhya Pradesh s GSDP (US$ billion) CAGR 9.5% The growth in GSDP is, primarily, been due to growth in mining and quarrying and the services sectors Source: CMIE 13

14 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Madhya Pradesh s NSDP The net state domestic product (NSDP) of Madhya Pradesh was about US$ 30.7 billion in The average NSDP growth rate between and , was about 8.8 per cent Madhya Pradesh s NSDP (US$ billion) CAGR 8.8% Source: CMIE 14

15 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE The tertiary sector has an increasing share in Madhya Pradesh s economy In , at US$ 16.6 billion, the tertiary sector contributed 53.5 per cent to the GSDP at current prices. It was followed by the primary sector, contributing US$ 10.9 billion (35.1 per cent), and the secondary sector s contributing US$ 3.5 billion (11.4 per cent). The tertiary sector has also been the fastest growing at 12.9 per cent from to ; followed by the primary and secondary sectors. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Percentage distribution of GSDP 50.2% 53.5% 13.4% 11.4% 36.4% 35.1% CAGR 12.9% 6.8% 7.5% Primary Sector Secondary Sector Tertiary Sector Source: CMIE 15

16 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Per capita GSDP The per capita GSDP of Madhya Pradesh increased almost 1.8 times from US$ 293 in to US$ 519 in Per capita GSDP In , the per capita GSDP grew at about 12 per cent over the previous year. Robust tertiary sector has helped Madhya Pradesh increase its average per capita GSDP by around 7.4 per cent between and (US$) Source: CMIE 16

17 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Key industries in Madhya Pradesh The natural resources including agro-based products, forest products and minerals; the state s policy incentives and its central location have attracted major investments in the agroproducts, consumer goods, drugs and pharmaceuticals, mines and minerals, manufacturing and textiles sectors. The State Government is keen to develop industrial infrastructure. The Madhya Pradesh State Industrial Development Corporation Limited (MPSIDC) and its subsidiary, Madhya Pradesh Audyogik Kendra Vikas Nigam Limited (MPAKVN) are the key nodal agencies for industrial development in the state. Key industries in Madhya Pradesh Auto and auto components Textile Cement Agro-based industries Forest-based industries Pharmaceuticals Mineral-based industries Manufacturing Tourism 17

18 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Madhya Pradesh is the among the largest producers of pulses, oilseeds and Soybean in the country Wheat, soybean, sugarcane, rice, cotton, rapeseed, mustard and arhar are the major crops of the state. In , total production of the major crops of the state was around 17.0 million tonnes. Wheat, soybean and sugarcane, together, accounted for 83 per cent of the total production of the major crops. In , Madhya Pradesh was the largest producer of pulses, oilseeds and soybean in the country. Crop Annual production* ( 000 tonnes) Wheat 5,896.0 Soybean 5,001.0 Sugarcane 3,180.0 Rice 1,409.0 Cotton Rapeseed and mustard Arhar *As of Source: CMIE 18

19 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Investments and FDI inflows According to the Reserve Bank of India, FDI inflows from April 2000 to October 2009 amounted to US$ 160 million. Break-up of investments by sector As of December 2008, of the total outstanding investments of US$ 62.5 billion. Electricity accounted for more than 50 per cent of the investments, followed by manufacturing, accounting for around 22 per cent of outstanding investments. 6% 4% 9% 22% 3% Manufacturing Mining Electricity Services Irrigation Construction 56% As of December 2008 Source: CMIE 19

20 MADHYA PRADESH April 2010 Contents Advantage Madhya Pradesh State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Doing business in Madhya Pradesh 20

21 INFRASTRUCTURE STATUS Road network Madhya Pradesh has 17 National Highways in the state, measuring 4,670 km. The total road length in the state is around 72,000 km, of which around 60,000 km are surfaced. Madhya Pradesh also has 8,728 km of State Highways. The state has 31 public-private partnership (PPP) projects in the roads sector, at various stages of development. The state is well connected to the major cities of the country, consumer markets, and ports on the West-coast such as Kandla and Jawaharlal Nehru Port Trust. Source: Maps of India 21

22 INFRASTRUCTURE STATUS Railway network Madhya Pradesh has around 5,900 km of railway lines passing through it. The railway network in Madhya Pradesh primarily falls under the West-Central Railways, which was formed in 2003 and is headquartered in Jabalpur. Chhattisgarh is the other state under the West-Central Railways. Part of the state is also covered by Central and Western Railways. Source: Maps of India 22

23 INFRASTRUCTURE STATUS Airports Madhya Pradesh has five operational airports, one each at: Bhopal, Jabalpur, Gwalior, Indore and Khajuraho. GWALIOR Indore is the busiest airport in the state. KHAJURAHO INDORE BHOPAL JABALPUR Domestic airport Source: Maps of India 23

24 INFRASTRUCTURE STATUS Telecom As of March 2009, Madhya Pradesh had 2,558 telephone exchanges and 21.1 million telephone connections (wire-line and cellular). As of November 2009, there were 19.7 million GSM-cellular subscribers in the state. As of March 2009, tele-density (telephone connections per 100 persons) in Madhya Pradesh is The total number of broadband users as of October 2008 was 168,951 (including Chhattisgarh). Major telecom companies in Madhya Pradesh Telecom infrastructure in Madhya Pradesh Bharat Sanchar Nigam Limited (BSNL) Bharti Airtel Vodafone Essar Idea Cellular Reliance Communications Tata Teleservices Parameter No of telephone exchanges 2,558 2,686 No of telephone connections (million) Sources: Cellular Operators Association of India, company websites GSM: Global System for Mobile communication No of wire line telephone (million) Tele-density (per 100 persons) Sources: Department of Telecommunication, Government of India, Cellular Operators Association of India 24

25 INFRASTRUCTURE STATUS Power As of March 2009, Madhya Pradesh had a total installed power generation capacity of 4,773.9 MW, which comprised 4,582.9 MW under state utilities and MW under the private sector. The capacity owned by state utilities comprised about 61 per cent of coal-based power plants and 37 per cent of hydro electric plants; the balance was based on renewable energy sources. 6,000 5,000 4,000 3,000 2,000 Installed state and private capacity (MW) 4, , , , , , , ,773.9 NTPC, the central-sector operator in the state, had plants of another 3,260 MW of thermal power generation in the state. An ultra-mega power plant (UMPP) is being constructed in Sasan, with an installed capacity of 3,950 MW. 1, Source: Central Electricity Authority 25

26 INFRASTRUCTURE STATUS Urban infrastructure (1/2) Under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), 21 projects (of value US$ 443 million) have been sanctioned for urban centres such as Bhopal, Indore, Jabalpur and Ujjain. Some of the key projects are in sectors such as roads and flyovers, water supply, storm-water drainage, sewerage, solid-waste management and mass rapid transport systems. Projects of value US$ 3.0 million have been completed in Bhopal and Indore. Those were related to urban renewal and roads and flyovers. The Asian Development Bank (ADB) has funded16 projects for Bhopal in the areas of water supply, sewerage and sanitation, storm-water drainage and solid-waste management. 26

27 INFRASTRUCTURE STATUS Urban infrastructure (2/2) Water supply Sewerage system Solid-waste management Others The average per capita supply of water in major cities such as Indore is around 80 litres per day. Under the JNNRUM, cities are planned to achieve per capita water supply of 135 litres per day between Six projects worth US$ 183 million have been sanctioned for water supply under the JNNURM. In cities such as Indore, around 50 per cent of the population is connected to sewage network. Under the JNNRUM, the entire population in the cities will be connected to sewage network. Three projects worth US$ 100 million have been sanctioned for sewage treatment under the JNNURM. Indore and Ujjain generate around 500 tonnes per day (tpd) and 160 tpd of solidwaste respectively. Under the JNNRUM, the entire solid-waste is expected to be collected and treated. A project worth US$ 9.4 million has been sanctioned. Two projects worth US$ 77.6 million have been sanctioned for improvement of drainage system. Six projects worth US$ 69.2 million have been sanctioned for improvement of transport system. Source: JNNRUM, Ministry of Urban Development, Government of India 27

28 INFRASTRUCTURE STATUS Key public-private partnership projects under construction Project name Sector PPP type Project cost (US$ million) Development of central business district in South TT Nagar, Bhopal Sports city, international convention centre, star hotel, shopping complex and residential complex Urban development BOT-toll Urban development BOT-toll Gwalior - Jhansi national highway road project Roads BOT-annuity Khalaghat-Maharashtra border Roads BOT-toll Indore to Khalaghat Roads BOT-toll Four-laning of Bhopal,Devas state highway Roads BOT-toll 92.8 Four-laning of Lebad Jaura state highway Roads BOT-toll km road between Jhansi - Lalitpur on NH-25 and NH-26 Roads BOT-annuity 91.5 Lakhnadon to Maharashtra border Roads BOT-annuity 88.7 Four-laning of Joura-Nnayagaon state highway Roads BOT-toll 87.8 EOI: Expression of interest, BOT: Build-operate-transfer Source: 28

29 INFRASTRUCTURE STATUS Education sector The state had a literacy rate of 63.7 per cent in 2001, compared to 44.2 per cent in In 2001, literacy rate among male was 76.1 per cent and literacy rate among female was 50.3 per cent. The state has 159 engineering colleges, 139 management institutes and five medical colleges. Educational institution Number Primary schools 94,890 Higher secondary schools 8,504 Degree colleges 303 Universities 12 Polytechnic institutes 158 Industrial training institutes 343 Engineering colleges 159 Management institutes 139 Reputed institutes of Madhya Pradesh Indian Institute of Management (IIM), Indore Indian Institute of Forest Management, Bhopal Indian Institute of Hotel Management, Bhopal Medical colleges* 5 * Recognised by Medical Council of India Sources: Madhya Pradesh at a Glance, 2008, Economic Survey , Website of Government of Madhya Pradesh ( International Institute of Professional Studies, Indore 29

30 INFRASTRUCTURE STATUS Health infrastructure The healthcare services network of Madhya Pradesh comprise 48 hospitals, 270 community health centres, 1,149 primary health centres and 8,834 sub-centres, and 58 other hospitals. It also has 34 ayurvedic, 22 Homoeopathic and two unnani hospitals. As of , the total number of in-patient beds in Madhya Pradesh s (excluding medical colleges) were 26,971. Health institution No District hospitals 48 Primary health centres 1,149 Sub-centres 8,834 Community health centres 270 Ayurvedic hospitals 34 Unani hospitals 2 Homeopathic hospitals 22 As of March 2008 Source: Ministry of Health & Family Welfare Government of India 30

31 INFRASTRUCTURE STATUS Cultural infrastructure Madhya Pradesh s history dates back to the pre-historic age. The United Nations Educational, Scientific and Cultural Organistion (UNESCO) has declared three locations in the state as heritage sites: Devi Jagadambika temples at Khajuraho, Buddhist monuments at Sanchi and rock shelters of Bhimbetka. The Directorate of Archaeology, Archives and Museums, is responsible for the upkeep of 339 monuments and 22 museums across the state. The State Government has established sports-academies to promote sports such as hockey, shooting, equestrian, water sports and martial arts. Eminent sports personalities are awarded with the Vikram awards, the Ekalavya awards and the Vishwamitra (lifetime achievement) award. Among the cultural festivals of Madhya Pradesh, the Khajuraho festival of dance and the Tansen music festival in Gwalior celebrate classical Indian dance and music. These festivals are well attended by both, domestic and international tourists. 31

32 INFRASTRUCTURE STATUS Industrial infrastructure (1/3) Madhya Pradesh State Industrial Development Corporation Limited (MPSIDC) is the nodal agency for industrial growth in the state. For balanced and sustainable growth of industry across the state, MPSIDC has set up Madhya Pradesh Audyogik Kendra Vikas Nigam Limited (MPAKVN) at Bhopal, Gwalior, Jabalpur, Indore, Rewa and Ujjain. Infrastructure Bhopal AKVN Gwalior AKVN Jabalpur AKVN Area developed (hectare) 1, , ,250 Growth centres Mandideep, Pillukhedi Malanpur, Ghirongi, Banmore, Chainpura, Siddhgawan, Pratappura Borgaon, Maneri Units established Large and medium industries (LMI): 39 small scale industries (SSI): 294 LMI: 44 SSI: 223 LMI: 10 SSI: 44 Major companies HEG, Crompton Greaves, Procter & Gamble, Godrej, Lupin. Surya Roshini, Godrej, Grasim, Cadbury, Crompton Greaves Raymond, Hindustan Petroleum,, Ayur Special infrastructure Inland Container Depot (ICD), food park ICD, food park, stone park stone park, food park Proposed project Engineering cluster, logistic-hub, food park Habitat centre, SEZ SEZ (agro-based) SEZ: special economic zone Source: MPSIDC 32

33 INFRASTRUCTURE STATUS Industrial infrastructure (2/3) Infrastructure Indore AKVN Rewa AKVN Ujjain AKVN Area developed (hectare) 3, Growth centres Pithampur, Kheda, Megh Nagar Rewa, Waidhan, Purena, Maiher Dewas, Maxi Units established LMI:153, SSI: 832 LMI: 7, SSI: 71 LMI: 52, SSI: 23 Major companies Eicher, Bridgestone, Hindustan Motors, Force, Mahindra Birla, Jaypee Ranbaxy, S.Kumars, Gajra, Kirloskar Special infrastructure SEZ, food park, apparel park, ICD - Food park, ICD Proposed project Auto testing track, food park. Industrial area Knowledge city, new industrial area under the Delhi Mumbai Industrial Corridor project SEZ: special economic zone, ICD: Inland Container Depot Source: MPSIDC 33

34 INFRASTRUCTURE STATUS Industrial infrastructure (3/3) Industrial clusters in Madhya Pradesh Gwalior Bhopal Rewa Ujjain Jabalpur Indore Source: Maps of India 34

35 INFRASTRUCTURE STATUS SEZs and industrial clusters (1/2) There is one operational multi-product SEZ in Indore. As of June 2009, 14 SEZs had received formal approvals. Bhopal, Indore, Gwalior and Jabalpur are the major locations where SEZs have been approved. Bhopal IT/ITeS (1) Bhopal IT/ITeS (1) SEZs in Madhya Pradesh Gwalior IT/ITeS (1) Multi-services (1) Gwalior Multi-product (1) Sehore Multi-product (1) Indore IT/ITeS (7) Indore Multi-product (1) Agro-products (1) Number of SEZ in parenthesis Source: Maps of India Operational SEZ Formally approved SEZ In-principle approved SEZ 35 Jabalpur IT/ITeS (1) Mineral-based (1) Agro-based (1) Chhindwara IT/ITeS (1) Chindwara Multi-product (1) Agro-products (1)

36 INFRASTRUCTURE STATUS SEZs and industrial clusters (2/2) Industry Location No of SEZs Formally approved SEZ IT/ITeS Indore, Gwalior, Chindwara, Jabalpur, Bhopal. 11 Multi-services Gwalior 1 Mineral-based Jabalpur 1 Agro-based Jabalpur 1 In-principle approved SEZ Multi-product Gwalior, Indore, Chindwara, Sehore 4 IT/ITeS Bhopal 1 Agri-products Indore 1 SEZ: special economic zone 36

37 INFRASTRUCTURE STATUS Infrastructure investments As of December 2008, infrastructure investments of over US$ 10 billion had been made in Madhya Pradesh. Around 88 per cent of investments in infrastructure were in the area of power generation and distribution. Other major investments were in the road transport and the coal sectors. Infrastructure type Investments (US$ million) Power* 8,432.1 Roads Coal 665 Oil & Gas 6.1 Railway 61.1 Airport 4.3 Total 10,069.9 *Generation and distribution Source: CMIE 37

38 MADHYA PRADESH April 2010 Contents Advantage Madhya Pradesh State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Doing business in Madhya Pradesh 38

39 STATE POLICIES AND INCENTIVES Sector specific policies (1/8) Industrial Promotion Policy & Action Plan (including provisions as amended in 2007) Aims: The policy envisages creating an industry-friendly administration, quality infrastructure, maximizing employment opportunities, tackling industrial sickness, rationalising rates of commercial taxes and bolstering private sector participation. Incentives provided to industrial units commencing operation on or after April 1, 2004 are as follows: For companies with investment between US$ million and US$ 2.17 million, 50 per cent of the commercial tax and central sales tax (excluding commercial tax on purchase of raw material) will be reimbursed for three years (for those located in economically advanced districts) and five years in the backward districts. For companies with investment above US$ 2.17 million, 75 per cent reimbursement on taxes will be available for a period of three to 10 years depending on investment amount and location of unit. Projects with investments above US$ 5.43 million will be considered as mega projects and five to 20 acres of land at concessional rate of 25 per cent of stipulated premium rate would be provided, subject to availability of land. Mega projects, which involve modern technology and management will be provided with further benefits on case-to-case basis. Industrial units in food and agro-processing, milk products, herbal and forest-based products will be considered as mega-projects for investment of US$ 2.17 million and above. Partial or full exemption from stamp duty and registration charges will be provided on loan related mortgage agreements based on location of units. 39

40 STATE POLICIES AND INCENTIVES Sector specific policies (2/8) Incentives: Industrial Promotion Policy & Action Plan, (continued) Exemption from electricity duty on captive power generation will be provided for five years. Interest subsidy, at the rate of three to five per cent will be provided for five to seven years for a total amount of US$ 20,000 to US$ 40,000, depending on location of units. Industries such as textiles, IT, bio-technology, automobiles, pharmaceuticals and herbal, food processing, agriculture and urban waste processing with fixed capital of US$ 0.11 million have been categorised as thrust sectors. A special subsidy at the rate of 25 per cent of fixed investment, up to US$ 22,000 to US$ 54,000, to be provided based on the location of the unit. Food processing industry will be exempted from mandi-fee levied on the agricultural produce brought as raw material from outside the state. 40

41 STATE POLICIES AND INCENTIVES Sector specific policies (3/8) IT Policy, 2006 Objectives: The objective of the policy is to improve the life of common man by leveraging the strength of e-governance and attract investment in the sector by providing conducive environment and highly skilled manpower to transform the state from a resource-based economy to a knowledge-based economy. Key initiatives: Software, business process outsourcing (BPO), ITeS and computer hardware will be considered as IT industry. The state intends to promote IT industry in four cities, viz., Indore, Gwalior, Bhopal and Jabalpur. Select 500 government schools will be provided modern computing hardware, software and Internet connectivity. Centres of excellence will be established in all government engineering colleges and select other government colleges. Large and reputed companies will be invited to teach technology and provide their certification in these centres. English language teaching will be promoted in school-education to equip students with language skills required in the IT industry. 41

42 STATE POLICIES AND INCENTIVES Sector specific policies (4/8) Key incentives: IT Policy, 2006 (continued) All incentives provided under the industrial policy will be applicable to the IT Industries. Single window clearance will be provided for setting up IT units. Reimbursement of 30 per cent of the cost (with a ceiling of US$ 8,700) on acquiring capability maturity model (CMM) and peoples capability maturity model (PCMM) level-three certification will be provided. Exemption up to twice the existing floor area ratio (FAR) will be provided for IT investment area. Rate of property tax in the IT investment area will be at par with that of residential premises. IT Industry will be provided power through a dedicated feeder. No prior permission will be required for installing captive power plant for IT industry. Rebate on the cost of land, linked to employment generation capacity of the investment will be provided. Exemption from electricity duty, entry tax and work-contract tax will be provided. IT units in IT investment area will be exempted from payment of octroi, entry tax and local bodies tax for all capital goods and raw material purchased by them. All incentives will be for five years from the date the IT unit becomes operational. Companies establishing IT industries in the state will be entitled to special economic zone (SEZ) status under the Central Government provisions. 42

43 STATE POLICIES AND INCENTIVES Sector specific policies (5/8) Key objectives: Biotechnology Policy, 2003 Conservation of the state's biodiversity and the sustainable use of its biotic resources. Production of high-yielding, draught and pest resistant seeds for agriculture and horticulture crops suited to different agroclimatic zones. Improvement of quality of livestock and poultry, especially the breeds indigenous to the state. Enhancement productive potential of the aquatic eco-system. Promotion and cultivation of medicinal and aromatic plants. Production of cost effective drugs that help counter diseases common in the tropical and sub-tropical regions of the country. Promotion of environmentally safe technologies to reduce pollution, and treatment of urban waste and industrial effluents. Efforts to increase the number of those species whose numbers are declining. Key initiatives: Agriculture, animal husbandry, fisheries, forest, medicinal and aromatic plants, health, environment protection, education, training, research and development have been identified as the key areas for development. Eco-friendly agriculture involving practices based on locally available biodegradable waste, bio-fertilizers and bio-pesticides will be steadily expanded to cover the entire state. Research programme and application of biotechnology for improvement of quality of livestock and fish stock will be emphasised. 43

44 STATE POLICIES AND INCENTIVES Sector specific policies (6/8) Key initiatives: Biotechnology Policy, 2003 (continued) Endeavour will be made to identify traits in the commercially important species available in the vast forest land in the state and comprehensive hybridisation programme will be taken up. Modern techniques of biotechnology will be encouraged for cultivation of medicinal and aromatic plants. The State Government will participate in the development of strategies for prevention and cure of diseases induced by malnutrition, faulty diet and lifestyles through application of medical biotechnology. Bio-remediation will be encouraged as an alternative to chemical treatment of industrial effluents and urban waste. Partnerships between rural and tribal communities and research institutions will be established to improve and expand the applications environment for traditional knowledge and practices. The existing educational facilities will be expanded by encouraging universities and colleges to set up facilities for under-graduate and post-graduate level programs in biotechnology. An appropriate policy framework for biotechnology industry will be created, which will have incentives and concessions for large, medium and small scale industries. Integrated biotechnology parks will be set up in the state. To implement the salient features of the policy, world class institutes of life sciences and technology, biotechnology parks, biocentres will be set up at selected farms of the state agriculture department, medicinal and aromatic plant information exchange. Expansion of bio-village programme will be taken up. 44

45 STATE POLICIES AND INCENTIVES Sector specific policies (7/8) Aim: To promote development of SEZ in the state. Objectives: Special Economic Zone Policy All SEZ developers and units will receive exemption from payment of commercial tax, turnover tax, value added tax, octroi, mandi tax, purchase tax, electricity cess, stamp duty or any other kind of cess or levy of the State Government for any transaction between them, within the zone as well as on sales made to domestic tariff area. SEZ units will receive all required clearances under the single window system. The State Government will provide adequate water supply for drinking, industrial and other use. Processes for obtaining consents and clearances pertaining to pollution control will be simplified. The SEZ will be exempted from electricity duty, cess and any other tax or levy on sale of electricity for self generated and purchased power. 45

46 STATE POLICIES AND INCENTIVES Sector specific policies (8/8) Tourism Policy, 1995 Aims: The tourism policy envisage creation of conducive environment to attract increased private investment in the tourism sector and more meaningful role of the Government. Incentives and initiatives: Projects with at least ten rooms for accommodation and investment of US$ 110,000 will be considered for incentive package. Incentives will be provided to hotels, motels, recreation centres, ropeways, museums, amusement parks, craft villages, convention centres, air-conditioned buses for transportation of tourists and other tourism related activities such as adventure tourism, gliding, parasailing, river rafting, boating, trekking, rock climbing, etc. Government land will be provided as equity contribution to the project. Exemption under the Urban Land Ceiling Act will be provided on a case-to-case basis. New projects will be exempted of luxury tax, entertainment tax and sales tax for ten years since commencement of operations. 46

47 MADHYA PRADESH April 2010 Contents Advantage Madhya Pradesh State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Doing business in Madhya Pradesh Logos used in this section are registered trade marks of the respective companies 47

48 BUSINESS OPPORTUNITIES Auto and auto components Madhya Pradesh has an automotive cluster located at Pithampur, which is an industrial growth centre near Indore. The basic industrial infrastructure available in the automotive cluster include power, water supply, telecommunication services, road and a dry port. The Pithampur automotive cluster is among the industrial clusters in India that have been identified by the Central Government for implementation of the Industrial Infrastructure Up-gradation Scheme (IIUS). The scheme aims at improving the competitiveness of functional clusters across the country. Key players Bridgestone Eicher Motors Limited Force Motors Limited Hindustan Motors Limited Jaya Hind Industries Limited Mahindra Two Wheelers Limited Caparo India MAN FORCE TRUCKS Private Limited Gajra Group J K Tyre The Pithampur automotive cluster has automotive original equipment manufacturers (OEMs) such as Force Motors, Eicher Motors, Hindustan Motors and Mahindra Two wheelers, major tyre producing unit of Bridgestone and about 30 auto-component and ancillary units. 48

49 BUSINESS OPPORTUNITIES Auto and auto components company profiles (1/3) Bridgestone India Private Limited Eicher Motors Limited Force Motors Limited Hindustan Motors Limited Bridgestone India Private Limited is a part of Bridgestone Corporation, Japan, and is one of the leading manufacturers of tyres in India. The company started commercial production of tyres in 1998 in its plant at Kheda in Madhya Pradesh. The company produces around 2.7 million tyres, annually, including passenger steel belted radial tyres and tubes, and light commercial vehicle steel belted radial tyres and tubes. It is major supplier to car manufacturers and has over 1,000 dealers across India. It employs around 900 people. Eicher began its business operations in 1959 with the rolling out of the first tractor in India. The Eicher Group has diversified business interests such as design and development, manufacturing and local/ international marketing of trucks and buses, motorcycles, automotive gears and components. The Pithampur plant of Eicher has a state-of-the-art manufacturing facilities with capacity of producing 30,000 vehicles annually. It has auto component manufacturing facilities at Pithampur (an SEZ covering 38,000 sq metre) and Dewas (plant area of 18,000 sq metre). Force Motors is a vertically integrated automobile company which designs, manufactures and markets its range of vehicles tractors, three wheelers, light commercial vehicle, multi-utility vehicle and heavy commercial vehicle. The manufacturing plant at Pithampur was set up in 1987 under license from Daimler-Benz to manufacture utility vehicles. The plant was further expanded in Subsequently, it also obtained ISO 9001: 2000 certification. Hindustan Motors Limited (HML), pioneer in automobile manufacturing in India, is the flagship company of the C. K. Birla group. The company manufacturers passenger cars, multi-utility vehicles and road-trusted vehicles (RTV). In technical collaboration with Australian OKA Motor Company, HML manufactures RTV in its plant in Pithampura. 49

50 BUSINESS OPPORTUNITIES Auto and auto components company profiles (2/3) Jaya Hind Industries Limited Jaya Hind Industries was established in 1947 with business interest in auto and auto-component manufacturing. The company has its manufacturing plants in Urse and Akrudi in Maharashtra and the fabrication division in Pithampura in Madhya Pradesh. Mahindra Two Wheelers Limited Caparo India Mahindra Two Wheelers Limited was founded in 2008 when Mahindra & Mahindra Limited (M&M), India's leading automotive companies took over Pune-based Kinetic Motor Company Limited (KMCL). The company has a state-of-the-art, ISO certified,manufacturing facility at Pithampur in Madhya Pradesh with capacity to assemble about 450,000 units per annum. The Caparo Group is a UK-based US$ 1.3 billion company with business interest in steel, automotive and general engineering goods. Caparo India, the Indian business arm of the group, provides complete solutions in designing, developing and manufacturing of automotive systems, assemblies and components to original equipment manufacturers and engineering industries. The company has two plants at Pithampur for manufacturing of stamping and serves Eicher Motors and Force Motors. The plants, together, have a capacity of 15.4 million strokes per year. It also has a steel tube manufacturing plant at Dewas with capacity of 48,600 tonnes per year. 50

51 BUSINESS OPPORTUNITIES Auto and auto components company profiles (3/3) MAN FORCE TRUCKS Private Limited Gajra Group MAN FORCE TRUCKS Private Limited is a joint venture between MAN Nutzfahrzeuge AG of Germany and FORCE Motors Limited of India. The company manufacturers commercial vehicles in its plant at Pithampur in Madhya Pradesh. The plant has installed capacity of 24,000 vehicles per annum and almost 50 per cent of the production is earmarked for exports. The Gajra Group has business interest in manufacturing of transmission and differential gear, cutting tools and tooling (jigs and fixtures). The company earns around 50 per cent of its revenue from exporting these products. It has a manufacturing plant at Dewas in Madhya Pradesh, which has 130,000 sq ft of machine shop and 29,000 sq ft of heat treatment facilities. J K Tyre J K Tyre is one of the leading tyre manufacturers in India. The company was pioneer in introducing radial tyres in India. It has a manufacturing plant in Banmore in Madhya Pradesh. Radial tyres for passenger cars are manufactured in the plant, which has been awarded the Golden Peacock Environment Management Award for excellence in environment protection. 51

52 BUSINESS OPPORTUNITIES Textiles Madhya Pradesh is one of the major cotton producing states of India. In , cotton was grown on 650,000 hectares in the state with a total production of 1.8 million bales. A large number of cotton textile mills are clustered around Indore, Dewas, Ujjain and Malanpur. The Indore SEZ has been identified by Central Government for setting up an apparel park under the Apparel Park for Exports Scheme (APES). Further, Indore has been identified for infrastructure development under the Textiles Centre Infrastructure Development Scheme (TCIDS). Key players Century Textiles and Industries Limited Grasim Industries Limited Maral Overseas Limited (Bhilwara) S. Kumars Nationwide Limited S R F Limited Vardhman Textiles Limited Raymond Limited Dhar Textiles Abhishek Industries 52

53 BUSINESS OPPORTUNITIES Textiles company profiles (1/2) Century Textiles and Industries Limited Grasim Industries Limited Maral Overseas Limited (Bhilwara) S Kumars Nationwide Limited Century Textiles and Industries Ltd was incorporated way back in The company has interest in textile, rayon, cement and paper. Yarn and denim production unit of the textile business are located in Satrati in Madhya Pradesh. The plant is equipped with 24,960 spindles for manufacture of yarn and produced about 4,992 tonnes of yarn during The denim division has production capacity of 21 million meters of denim fabrics per annum. Grasim Industries Limited, a flagship company of the Aditya Birla Group, is one of the largest companies in India with diverse interest in cement, chemicals and textiles. Its textile plants are located at Bhiwani, Haryana and Malanpur, Madhya Pradesh. The Malanpur unit of the company manufactures worsted dyed yarn spun from pure merino wool along with polyester and other blends. The company has a wide retail network and also serves international apparel manufacturers. Maral Overseas Limited, one of India s largest vertically integrated textile companies is a part of LNJ Bhilwara group. The company has manufacturing capability of producing 1,500 tonnes of grey yarn, 125 tonnes of dyed yarn, 400 tonnes of knitted fabric and 500,000 pieces of garments every month. One of the two units of the company are located at Khargone in Madhya Pradesh which produces yarn and fabrics. The unit also has a 10 MW captive power plant. S Kumars Nationwide Limited is one of India s leading textile and apparel company with expertise in multi-fibre manufacturing. The company has four state of art manufacturing units with collective capacity of 200,000 metre of fabric per day. Its Chamunda standard mills and Amana manufacturing unit in the outskirts of Dewas, Madhya Pradesh manufacture a fine variety of fabric Damask. Product of the plant cater to domestic market as well as exported to Europe. 53

54 BUSINESS OPPORTUNITIES Textiles company profiles (2/2) S R F Limited SRF Limited is a manufacturer of chemical based industrial intermediates with presence in UAE, Thailand and South Africa apart from India. The company is a global leader in technical textile business and is a domestic leader in refrigerants, engineering plastics and industrial yarns as well. SRF manufactures tyre cord fabrics in its Malanpur plant in Madhya Pradesh. The company has an ultra-modern packaging plant in the Indore SEZ with an annual capacity of 21,000 tonnes. Vardhman Textiles Limited The Vardhman Group is a leading textile conglomerate in India having a turnover of US$ 700 million. The company has manufacturing plants in Mandideep, Satlapur and Bhudhni in Madhya Pradesh. The yarn manufacturing units are located in Mandideep (74,496 spindles) and Satlapur (170,528 spindles) and Bhudhni (60,000 spindles). Further, the Bhudhni plant has fabric weaving unit (400 looms) and a fabric processing unit with capacity of 40 million metre per annum. Raymond Limited Dhar Textiles Abhishek Industries Raymond is a major fabric manufacturer in India. The company has also business interests in engineering and aviation. The company is one of the largest integrated manufacturer of worsted fabric in the world and commands around 60 per cent market share in India. The total production capacity of the company is around 38 million metres of wool and wool blended products. One of the four plants of the company is located at Chhindwara in Madhya Pradesh. Dhar Textile is a manufacturer and exporter of yarns, fabrics and garments. It has a spinning unit in Pithampur, Madhya Pradesh with 1,296 rotors and 3,840 spindles and installed capacity of 3,600 tonnes per annum. The weaving division of the company is equipped with 30 airjet looms and eight rotary printing and curing range with loop steamer. The garment manufacturing plant of the company has capacity of 50,000 units per month. Abhishek Industries is the flagship company of US$ 543 million Trident Group, which has business interest in textiles, paper, yarn, chemicals and energy. The company has five yarn - manufacturing units in India, of which one is located at Budhni In Madhya Pradesh. The combined capacity of all these plant is 176,352 spindles and 1,920 rotors. 54

55 BUSINESS OPPORTUNITIES Cement Jawad and Neemuch of Madhya Pradesh belong to one of the seven major lime stone clusters in India and hence provide easy access to critical raw material resource for the cement industry. The state has total limestone reserves of 3,625.9 million tonnes, spread across more than15 districts. In 2009, total installed capacity in the state was around 20 million tonnes of cement per annum one of the highest among Indian states. The cement plants in the state operate at a high efficiency level with total production being close to capacity. Key players ACC Limited Birla Corporation Limited Everest Industries Limited Heidelberg Cement India Limited Jaypee Group Prism Cement Limited 55

56 BUSINESS OPPORTUNITIES Cement company profiles A CC Limited Birla Corporation Limited Everest Industries Limited Heidelberg Cement India Limited Jaypee Group ACC Limited (ACC) is one of the largest cement manufacturers in India with 16 cement plants, more than 40 ready-mix concrete plants, 20 sales offices and over 9,000 dealers. In Madhya Pradesh, it has plants in Kymore with a capacity of 2.2 million tonnes per annum. Birla Corporation Limited is the flagship company of the M P Birla group with business interests in cement, jute, Polyvinyl Chloride, floor covering and auto trims. The cement plant of the company is located in Satna, Madhya Pradesh. The plant with 5.8 million tonnes per annum capacity, produced 5.3 million tonnes of cement in Eversest Industries Limited manufacturers a range of building solutions which includes ceilings, walls, flooring, cladding, doors, roofing and pre-engineered steel buildings. One of the five manufacturing facilities of the company is located at Kymore in Madhya Pradesh. It is among the first manufacturers of fibre-cement roofing sheets and accessories in India. The plant has been awarded by State Government for excellence in the fields of safety, health and environment. Heidelberg Cement India Limited is a subsidiary of the Heidelberg Cement Group, which is one of the largest cement manufacturers in the world. The company has cement plants at Damoh and Jhansi in Madhya Pradesh. Its cement is sold under brand name Mycem. The Jaypee group has eight cement plants in North India, with total installed capacity of about 10 million tonnes. In , the company produced around 8 million tonnes of cement. The company has two plants in Madhya Pradesh one at Rewa (with an installed capacity of 3 million tonnes) and another at Bela (2.4 million tonnes). Prism Cement Limited Prism cement has a cement plant at Satna in Madhya Pradesh with installed capacity of 2.5 million tonnes. In , the plant operated at around 100 per cent efficiency and used the entire installed capacity. 56

57 BUSINESS OPPORTUNITIES Pharmaceutical and biotechnology industry Madhya Pradesh has rich bio-diversity; about 31 per cent of the state is under forest cover; 11 of the 25 agro-climatic zones are present in the state and a large variety of rare and valuable medicinal and herbal plants are available. The state has formulated a bio-technology policy, which is expected to create a conducive environment for bio-pharmaceutical industry in the state. Key players Lupin Limited Ipca Laboratories Limited Piramal Healthcare Limited Ranbaxy Laboratories Limited Alpa Laboratories Biotechnology and pharmaceuticals have been recognised as thrust sectors and incentives are provided for setting up industries in these sectors. 57

58 BUSINESS OPPORTUNITIES Pharmaceutical company profiles Lupin Limited Ipca Laboratories Limited Piramal Healthcare Limited Ranbaxy Laboratories Limited Alpa Laboratories Lupin Limited is an innovation-led pharmaceutical company producing wide range of generic and branded formulations and Active Pharmaceutical Ingredients (API). The company has two plants in Madhya Pradesh one at Indore for formulations and another at Madideep for API. The plant at Mandideep is approved by global authorities in pharmaceutical products such as WHO, USFDA and UKMHRA. Ipca is a fully integrated Indian pharmaceutical company with a strong thrust on exports. The company has operations in over 100 countries and exports account for over 50 per cent of the income. The company has eight manufacturing plants in India. In Madhya Pradesh, it has plants at Indore (plant area of 6,503 square metre), Pithampur (200,000 sq m) and Ratlam (272,900 square metre). The plants manufacture drug intermediaries, tablets liquids, injectibles, etc., and are certified by apex global agencies. Piramal Healthcare Limited (PHL) is a globally integrated healthcare company with revenue of around US$ 656 million in The company caters to a large range of therapeutic products under a number of divisions such as acute care, biotech, cardiac, diabetes, general medicine, ortho, pain management,etc. The company has six manufacturing facilities in India, one of which is located at Pithampur in Madhya Pradesh. Ranbaxy Laboratories Limited (Ranbaxy), India's largest pharmaceutical company, is an integrated, research-based pharmaceutical company with global presence. In 2008, the total revenue of the company was US$ 1,682 million. The company manufacturers a wide range of generic medicines in its manufacturing facilities located in seven countries. It has a manufacturing facility at Dewas, Madhya Pradesh, where it has three independent units engaged in the production of cephalopsorins, semi - synthetic penicillin and non-beta-lactum products. Alpa Laboratories manufacturers and markets pharmaceutical products for human and veterinary use. It has manufacturing facility spread across 110,000 sq ft built-up area at Indore. The range of products manufactured includes injectibles, tablets, capsules, creams, gels and ointments. The company is certified by World Health Organisation. 58

59 BUSINESS OPPORTUNITIES Manufacturing Madhya Pradesh State Industrial Development Corporation and its subsidiaries have successfully developed several growth centres across the state. The industrial policy of the state provides incentives for setting up manufacturing units. Industrial infrastructure, policy incentives, labour resources and central location of the state are some of the growth drivers for manufacturing industry in the state. Key players Bharat Heavy Electricals Limited Birla Ericsson Optical Limited Kirloskar Brothers Limited Kores (India) Limited Crompton Greaves HEG Limited Avtec Limited L&T-Case Equipment Private Limited 59

60 BUSINESS OPPORTUNITIES Manufacturing company profiles (1/2) Bharat Heavy Electricals Limited Birla Ericsson Optical Limited Kirloskar Brothers Limited Kores (India) Limited Bharat Heavy Electricals Limited (BHEL) is a large engineering and manufacturing enterprise in India in the energy-related and infrastructure sector. The Bhopal unit of BHEL was set up in 1956 with technical assistance from Associated Electricals (India) Limited, a UK-based company. The unit has capability to manufacture hydro-, steam-, marine- and nuclear-turbines, heat exchangers, hydro and turbo generators, transformers, switchgears, control gears, transportation equipment, capacitors, bushings, electrical motors, rectifiers, oil drilling rig equipment and diesel generating sets. The unit also has a material testing and instrument calibration laboratory and a township spread across 20 sq km for its employees. Birla Ericsson Optical Limited (BEOL), an M.P. Birla Group company, was established with technical and financial collaboration with Ericsson Network Technologies AB of Sweden. The company has a plant in Rewa, near Bhopal with an installed capacity of more than 53,000 cable km per annum of optical-fibre and 4.3 million conductor km of jelly-filled copper telephone cables. Kirloskar Brothers Limited (KBL) is the flagship company of the US$1.2 billion Kirloskar group. KBL has business interest in large infrastructure projects such as water supply, power generation and irrigation, manufacturing of pumps for domestic, agricultural and industrial use. The total sales of KBL in was over US$ 500 million. The company has four manufacturing plants, one of which at Dewas in Madhya Pradesh was established in The plant manufacturers pumps for domestic and agricultural use. Kores (India) Limited was incorporated in 1936 and has business interest in diverse fields such as office products, foundry, textiles, pharmaceuticals, engineering, etc. The engineering division of the company has plant at Pithampur in Madhya Pradesh. The plant is set up on an area over 70,000 sq m and has facilities such as machine shop, fabrication shop and assembly shop. The company produces hydraulic tank, pump and drills in the plant at Pithampur. 60

61 BUSINESS OPPORTUNITIES Manufacturing company profiles (2/2) Crompton Greaves HEG Limited Avtec Limited L&T-Case Equipment Private Limited Crompton Greaves is a part of US$ 3 billion Avantha Group. The company is engaged in designing, manufacturing and marketing of technologically advanced electrical products and services. The company manufactures transformers and DC machines at its plant in Mandideep, Madhya Pradesh. The company has another plant in Malanpur where it manufacturers transformers. HEG limited is a part of Bhilwara group and is a manufacturer of graphite electrodes and carbon specialities. The company manufacturers graphite electrode at its plant in Mandideep. The plant spread across 170 acre has capacity to produce 52,000 tonnes of ultra high performance grade electrodes. It also has a 40 mega watt captive power plant. Around 80 per cent of production of the plant is exported. The plant is one of the largest in Southeast Asia and Middle-East in its category. AVTEC is one of the largest independent manufacturers of engines and transmissions (power trains) in India and supplies critical auto-components to reputed Indian and global original equipment manufacturers. The company has four manufacturing plants across the country. The power unit is located at Pithampur where engines and transmissions component for automobiles are manufactured. The plant is located on a 60 acre area with 36 acre of developed land. L&T-Case Equipment Private Limited was formed in November 1998,and is a 50:50 joint venture between Larsen & Toubro Limited and CNH Global N.V. The company designs, manufactures and supplies construction and road building equipment such as loader backhoes and vibratory compactors. The manufacturing facility of the company is located at Pithampur in Madhya Pradesh. It is spread over 40 acres with over 12,000 sq m of built-up space, equipped with state of the art facilities. 61

62 BUSINESS OPPORTUNITIES Fast moving consumer goods A number of factors such as industrial infrastructure in growth centres, labour pool and central location of the state are the drivers for setting up consumer goods manufacturing facilities in Madhya Pradesh. A number of multinational companies such as Cadbury, Procter & Gamble, Hindustan Unilever Limited, Coca Cola and Cargill have their manufacturing plants in the state. Majority of the manufacturing plants are located in industrial areas of the state such as Malanpur, Mandideep, Pithampur and Chhindwara. Key players Cadbury India Limited Procter & Gamble Dabur India Limited Hindustan Uniliver Limited Jyothy Laboratories Limited Godrej Consumer Products Limited Coca Cola India Cargill India Private Limited 62

63 BUSINESS OPPORTUNITIES Fast moving consumer goods company profiles (1/2) Cadbury India Limited Procter & Gamble (P&G) Dabur India Limited Hindustan Unilever Limited (HUL) Cadbury is a leading global confectionery company with a portfolio of chocolate, gum and candy brands and operations in over 60 countries. In India, the company started its operation in 1948 and has five factories and four sales offices. The company has a factory at Malanpur industrial area in Gwalior. P&G Home Products Limited, one of India's large consumer goods companies, is a 100 per cent subsidiary of Procter & Gamble Company, USA. The company owns some of the reputed brands in fabric care, hair care and baby care segments. The company has its manufacturing plant at Mandideep in the Raisen district of Madhya Pradesh. Dabur India Limited is one of the leading consumer goods company in India with revenue of US$ 616 million ( ). The company has three major divisions: consumer care, consumer health and international business. One of its 17 manufacturing plants of the company, is located at Katni in Madhya Pradesh. Hindustan Unilever Limited (HUL) is a subsidiary of Uniliver and is India's largest consumer goods company with a portfolio of brands in 20 distinct categories. Established in1930, today, the company has 28 manufacturing plants across India and employs 15,000 persons. The company has its manufacturing plant at Chhindwara in Madhya Pradesh. 63

64 BUSINESS OPPORTUNITIES Fast moving consumer goods company profiles (2/2) Jyothy Laboratories Limited Godrej Consumer Products Limited Coca Cola India Cargill India Private Limited Established in 1983, Jyothy Laboratories is a multi-product company with six business divisions and pan-india presence. The company manufactures and markets fabric care, insecticides, utensil cleaners, fragrances and personal care products. The company has 21 manufacturing plants spread across 14 locations. One of the manufacturing plants is located at Pithampur in Madhya Pradesh. Godrej Consumer Products (GCPL) is one of the leading consumer goods companies in India with personal and home care products. The company has a pan-india presence with four branch offices and five manufacturing plants. One of the manufacturing plants are located at Malanpur, in Madhya Pradesh. Coca Cola is one of the largest beverage companies in the world. The Indian operation of the company has 50 bottling plants and a network of 21 contract packers. The company has manufacturing location at Ricchi industrial area in Jabalpur which serves a markets of Central India. Cargill in India has business interest in a wide range of products, including refined oils, grain and oilseeds, sugar, cotton and animal feed. In addition, Cargill develops flavour systems and operates a value investing business. Cargill has a soybean processing plant in Madhya Pradesh. 64

65 BUSINESS OPPORTUNITIES Agro-based industry Of the total gross area under crop cultivation in the state, 59 per cent is sown in the Kharif season while the other 41 per cent is sown in the Rabi season. About 24 per cent of the area under crop cultivation in the state can be used for cultivation throughout the year. In , Madhya Pradesh was the largest producer of soybeans with total production of around five million tonnes. Agri export zones in MP for various products/ crops The state is the largest producer of oilseeds; it produced 6.4 million tonnes in , accounting for 21.3 per cent of the national production. Wheat Pulses Seed spices - coriander and fenugreek Oranges The state leads in the production of spices and is the largest producer of garlic, accounting for 37 per cent of the total national production. Jawaharlal Nehru KrishiVishwavidyalaya is located in Jabalpur and serves as a centre for teaching and research in agriculture and allied sciences. Key players Adani Wilmar Limited Anik Industries Limited Gujarat Ambuja Exports Limited K S Oils Limited Ruchi Soya Limited Dewas Soya Limited 65

66 BUSINESS OPPORTUNITIES Agro-based industry company profiles (1/2) Adani Wilmar Limited Anik Industries Limited Gujarat Ambuja Exports Limited Adani Wilmar Limited (AWL) is a joint venture between two global corporations - Adani Group of India and Wilmar International Limited of Singapore. The company has production infrastructure across the country with a crushing capacity of over 6,000 tonnes per day) and refining capacity of over 5,000 tonnes per day. The company has a production unit in Chindwara and a packaging plant at Dewas in Madhya Pradesh. Anik Industries Limited manufacturers and markets dairy and milk derivative products, wind power, soya protein isolate and concentrate. The company has two milk processing unit in Madhya Pradesh for manufacturing of dairy products - one at Dewas (capacity of 240,000 litre of milk per day) and another at Bhopal (capacity of 100,000 litre of milk per day). These units are supported by 11 chilling centres spread across the state which collect milk from more than 5,000 villages. Gujarat Ambuja Exports Limited (GAEL) is involved in agro-processing and trading with a major focus at export. The company has three manufacturing plants, with combined capacity of 4,000 tonnes per day. One of the soya processing plants of the company is located at Pithampur, near Indore in Madhya Pradesh. Products of the company are exported to Southeast Asia, Middle East and other Asian countries. 66

67 BUSINESS OPPORTUNITIES Agro-based industry company profiles (2/2) K S Oils Limited Ruchi Soya Industries Limited Dewas Soya Limited K S Oils is a leading Indian integrated edible oil company which produces and markets mustard oil, refined oil and vanaspati. The company has its fully integrated plant at Morena in Madhya Pradesh with crushing capacity of 1,475 metric tonnes of mustard seed per day. The plant also has a in house packaging unit. Ruchis Soya Industries Limited is one of the major agro-based product manufacturers in India. Product portfolio of the company includes edible oil, soya foods, bakery fat and vanaspati. It is also the largest exporter of soya foods and lecithin from India. A factory and the head office of the company is located in Indore, Madhya Pradesh. Dewas Soya Limited, a company of Hind Group, commenced operations of its soybean extraction plant in Dewas, Madhya Pradesh in The extraction plant and the refinery of the company has capacity of 900 tonnes per day and 140 tonnes per day, respectively. It also has 150 tonnes per day plant for producing soy flour and grits. The company exports soy meal in international market. 67

68 BUSINESS OPPORTUNITIES Tourism (1/2) The State Government has identified the tourism sector as one of the key areas for growth. In 2008, domestic tourist inflow stood at over 22 million, registering average growth of 46 per cent per annum over last four years. In 2008, foreign tourist arrival was over 251,000, registering a growth of 16 per cent per annum over last four years. The State Government has shortlisted18 major centres, which attract a large number of domestic and foreign tourists for comprehensive development. Tourists (million) Domestic tourist arrivals International tourist arrivals The State Government has taken initiatives to promote eco-tourism, wild life and adventure tourism, leisure and business tourism and pilgrim tourism. Tourists ('000) Source: Tourism Statistics 2008, Ministry of Tourism 68

69 BUSINESS OPPORTUNITIES Tourism (2/2) Major places of tourist interest in Madhya Pradesh are as follows: Tourist map of Madhya Pradesh Kanha: the largest wildlife sanctuary in Asia. Khajuraho: has some of the most famous sculptures in the world. Bhimbetka: has the oldest cave-paintings in the world. Sanchi: houses the oldest Buddhist stupa in the world. In addition, the state has nine national parks and 25 game sanctuaries. Source: Maps of India 69

70 BUSINESS OPPORTUNITIES Forest-based industries Madhya Pradesh has forest area of 94,689.4 sq km, which accounts for nearly 31 per cent of the total area of the state. Forest map of Madhya Pradesh With a share of nearly 12 per cent of the total forest area of the country, Madhya Pradesh has the largest area covered by forest among all the states in India. Forest-based industries are key contributors to the economy of the state and also provide employment to a large part of the population. The average annual production of tendu leaves in the state is around 2.5 million standard bags. Madhya Pradesh accounts for nearly 25 per cent of all tendu leaves produced in India. Source: Maps of India 70

71 BUSINESS OPPORTUNITIES IT and ITeS The state has fibre optic backbone of over 24,000 km that cover its 313 developmental blocks across 45 districts. The state is home to the country s first Indian Institute of Information Technology and Management (IIITM), which is located in Gwalior. IT parks Crystal IT Park (5,50,000 sq ft) Hardware and Software Technology Park (200 acres) Software Technology Park (1,00,000 sq ft) IT Park (50 acres) Indore Bhopal Indore Gwalior Five information technology parks, located at Bhopal, Indore (2), Gwalior and Jabalpur, are at various stages of development. IT Park (90 acres) IT projects in MP Jabalpur All the IT parks in the state has been given SEZ status. IT Park, Gwalior The IT policy of the state provides incentives to the investors in the information technology sector. Hardware & Software Technology Park, Bhopal Software Technology Park, Indore Crystal IT Park, Indore Jabalpur IT Park, Jabalpur Source: Maps of India 71

72 BUSINESS OPPORTUNITIES Mineral-based industry and company profiles (1/3) The state has vast mineral deposits of diamonds, slate, pyrophyllite, diaspore, coal, limes tone, copper ore and manganese among others. In , mining and quarrying contributed US$ 1.65 to the GSDP of the state. Madhya Pradesh is the sole producer of diamonds in India. Besides, the state is the largest producer of minerals such as pyrophyllite and copper. The state has over 60 per cent of the total national reserves of copper ore. The thickest coal seam (135 m) of Asia is found at the Singrauli coalfield in the Sidhi district of Madhya Pradesh. Mineral reserves as percentage of India s reserves Limestone 6.3% Coal 7.8% Coal Bed Methane 10.0% Dolomite 11.8% Manganese Ore 19.9% Rock Phosphate 36.3% Pyrophyllite 50.0% Copper Ore 61.5% Diaspore 65.4% Diamond 100.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Source: Directorate of Geology and Mining, Madhya Pradesh 72

73 BUSINESS OPPORTUNITIES Mineral-based industry and company profiles (2/3) Production of minerals and per cent of national production Name Production (tonnes) Share of MP in India (per cent) Diamond Pyrophyllite 118, Copper ore 1,202, Diaspore 8, Manganese-ore 439, Clay (others) 95, Shale 414, Coal 51,426, Limestone 19,312, Rock-phosphate 162, Production between March and December 2008 Source: Directorate of Geology and Mining, Madhya Pradesh 73

74 BUSINESS OPPORTUNITIES Mineral-based industry and company profiles (3/3) Hindustan Copper Limited Hindustan Copper Limited (HCL) is a vertically integrated copper manufacturing company. In 1982, the company established its Malanjkhand copper project, which has the single-largest copper deposit in the country. The Malanjkhand mine has a copper deposit of 221 million tonnes with 1.31 per cent copper concentration. The company possesses an open-pit mine with capacity of 2 million tonnes per annum, concentrator plant, tailing disposal system and other auxiliary facilities. The plant contributes to 90 per cent of the production of the company. N M D C Limited NMDC is a public sector unit involved in mining of wide range of minerals such as iron, copper, lime stone, dolomite, gypsum, tin, graphite, diamond among others. NMDC is the only organised producer of diamond in India and produces diamond from its Majhgawan mine at Penna in Madhya Pradesh. The production capacity at the mine is around 84,000 carat per annum. The mine employs around 240 persons. 74

75 BUSINESS OPPORTUNITIES Major industrial projects being implemented Project Sector Promoter Investment (US$ million) Location Sasan ultra mega power project Power Sasan Power Limited 4,347.8 Sasan Bina refinery Refinery Bharat Oman Refineries Limited 2,256.1 Bina Aluminium smelter (Sidhi) project Aluminium Hindalco Industries Limited 1,673.9 Orgari Vindhyachal super thermal power project - stage IV Power NTPC Limited 1,285.9 Vindhyanagar Indira Sagar (Narmada Sagar) irrigation project Irrigation Narmada Valley Development Authority (NVDA) 1,119.6 Punasa Pithead Coal Based Power (Sidhi) project Power Essar Power Limited 1,065.2 Sidhi Western Region grid strengthening scheme- II Coal-based power (Khandwa) project Power distribution Power Power Grid Corporation of India Limited Madhya Pradesh Power Generating Co Limited 1,043.5 Madhya Pradesh* Khandwa Omkareshwar irrigation project Irrigation NVDA East Nimar Bargi diversion irrigation project RBC^ Irrigation NVDA Jabalpur Maheshwar hydel power project Power Shree Maheshwar Hydel Power Corporation Limited Mandleshwar *Partially in Madhya Pradesh ^ Right Bank Canal Source: 75

76 BUSINESS OPPORTUNITIES Key industrial projects being planned Project Sector Promoter Investment (US$ million) Location Integrated steel (Parasia) project Finished steel SKS Ispat & Power Limited 1,630.5 Parasia Coal-based power (Bhokha Dongri) project Power Reliable Thermal Power Limited 1,435.8 Manpur Coal-Based Power (Singroli) project Power DB Power Limited 1,304.3 Singroli Coal-based power (Anuppur) project Power Vandana Power Ventures Limited 1,304.3 Anuppur Coal-based power (Shadol) project Power Jain Energy Limited 1,260.9 Shahdol Coal-based power (Gotegaon) project Power Today Energy (M P) Private Limited 1,174 Gotegaon Coal-based power (Sidhi) project Power Jaiprakash Power Ventures Limited 1,087.0 Nigrie Cement (Madhya Pradesh) project Cement Bhushan Steel Limited Damoh Cement (Maihar) project, Phase-I Cement Reliance Cementation Limited Satna Steel (Damoh) project Finished steel SPJ Steel & Minerals Private Limited Damoh Source: Projectstoday 76

77 MADHYA PRADESH April 2010 Contents Advantage Madhya Pradesh State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Doing business in Madhya Pradesh 77

78 DOING BUSINESS IN MADHYA PRADESH Key approvals required List of approvals and clearances required Departments to be consulted Prior to setting up the unit Registration Allotment of land/shed Permission for land use No objection certificate under Water and Air Act Approval for construction activity and building plan No objection certificate Provisional trade tax registrations District trade and industries centre District authorities Madhya Pradesh Pollution Board Development authority Fire department Central and state excise departments Before commencement of production No objection certificate under of Water and Air Act No objection certificate Permanent trade tax registration under Central Sales Tax Act 1956 Registration under Central Sales Tax Act 1956 Madhya Pradesh Pollution Board Fire department Central and state excise departments After commencement of production/activity Registration Industries department 78

79 DOING BUSINESS IN MADHYA PRADESH Cost of doing business in Madhya Pradesh Cost parameter Cost estimate Source Cost of land (per sq m) Hotel costs per room per night (four-star, five-star hotel) Residential rent (per month for1,200 sq ft apartment ) Commercial rent (per sq ft per month) Power cost (industrial, high tension) US$ 3 to US$ 11 US$ 90 to US$ 120 US$ 130 to US$ 220 US$ 0.7 to US$ 1.1 Monthly fixed charges: US$ 3.5 (11KV) to US$ 7.4 (132 KV) Energy charges: US 7.3 cents per kwh (11KV) to US 6.5 cents per kwh (132 KV) Madhya Pradesh State Industrial Development Centre Leading hotels in the state Property dealers Property dealers Madhya Pradesh State Electricity Board Labour (man year) US$ 1,075 to US$ 1160 Department of Labour, Government of Madhya Pradesh 79

80 DOING BUSINESS IN MADHYA PRADESH Key nodal agencies in Madhya Pradesh Department of Commerce, Industry and Employment District Trade and Industries Centre Madhya Pradesh State Industrial Development Corporation The department is responsible for industrialization in the state by way of development of small, medium and large scale industries and new investment. The department is also responsible for creation of basic infrastructure and development of industrial parks. The department has several support institutions such as Madhya Pradesh State Industrial Development Corporation (MPSIDC) and Audhyogik Kendra Vikas Nigam (AKVN) in five cities. District Trade and Industries Centres are district level offices of the Department of Commerce, Industry and Employment of the State Government. These centres are empowered to provide clearance for setting up industrial units. Madhya Pradesh State Industrial Development Corporation (MPSIDC) is a support institution of Department of Commerce, Industry and Employment of the State Government. The organisation had the mandate to promote the state as an industrial destination and help companies set up and expand industries in Madhya Pradesh. 80

81 DOING BUSINESS IN MADHYA PRADESH Contact list Key agency Department of Commerce, Industry & Employment District Trade and Industries Centre Madhya Pradesh State Industrial Development Corporation Contact information Vindyachal Bhawan Bhopal, Madhya Pradesh Phone: Website: District Trade and Industries Centre Bhopal, Madhya Pradesh Phone: AVN Towers 192 Zone -1, M.P. Nagar Bhopal , Madhya Pradesh Phone: Fax: sidc@sancharnet.in, mpsidc@sancharnet.in Website: 81

82 DOING BUSINESS IN MADHYA PRADESH Annexure Exchange rates Year INR equivalent of one US$ Average for the year 82

83 MADHYA PRADESH April 2010 DISCLAIMER India Brand Equity Foundation ( IBEF ) engaged ICRA Management Consulting Services Limited (IMaCS) to prepare this presentation and the same has been prepared by IMaCS in consultation with IBEF. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of IMaCS s and IBEF s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. IMaCS and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. Neither IMaCS nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation. 83