North Andhra set to emerge as a pharma hub

With major players evincing interest to set up units in North Andhra district, investors pin high hopes on govt. sops. There is also a talk that there will be flight of investments. SMS Pharma Group, with a turnover of Rs.500 crore, has announced plans for scaling down its operations in Telangana and expanding its business in North Andhra region.

September 23, 2014 01:16 am | Updated August 18, 2016 12:12 pm IST

Investors are looking at North Andhra for making it a pharma hub of AP post-bifurcation, taking advantage of freight, location and the promise of a slew of incentives from the government.

Even before bifurcation, the region made a mark in pharma sector with the development of the Jawaharlal Nehru Pharma City at Parawada, Hetero SEZ at Nakkapalli and opening of campuses by the Reddy Labs, Aurobindo Pharma, US giant Hospira and Japanese major Eisai. Exports from the area are now pegged at Rs.5,000 crore, which can be enhanced four-fold if a conducive climate is created, the industry feels.

Power supply

However, round-the-clock power supply to the units remains an issue. Investors are pining high hopes on the promise of Chief Minister N. Chandrababu Naidu to ensure round-the-clock power supply and the Centre’s resolve to accord special category status to AP, with special package to North Andhra. There is also a demand to set up National Institute of Pharma Education and Research to generate manpower for the industry.

“The State government is putting in efforts to make the region a major pharma hub. Because of port connectivity, highway expansion and proposed industrial corridor, North Andhra districts are bound to become ideal destinations for investors,” APIIC Chairman P. Krishnaiah says.

There is also a talk that there will be flight of investments. SMS Pharma Group, with a turnover of Rs.500 crore, has announced plans for scaling down its operations in Telangana and expanding its business in North Andhra region. Group Chairman P. Ramesh Babu said they were investing Rs.150 crore to Rs.200 crore in the first phase on their new facility at Derasam in Srikakulam district. The group has acquired land at JNPC to start another unit.

Tax regime

“Minimum alternate tax is the biggest hindrance to investors in the SEZ. We have already invested Rs.250 crore in our facility and Rs.15 crore more on R&D at JNPC. We have put on hold investment of Rs.100 crore for expanding operations because of imposition of the MAT on us,” according to Eisai Pharmatechnology & Manufacturing Pvt. Ltd. president and MD Sanjit Singh Lamba.

 

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