In a bid to woo small and medium Japanese enterprises, special economic zone Sri City is now offering ready-built factory space to help reduce clearance delays and start-up costs.
“It will basically be a kind of plug-and-play model for manufacturing. We will offer ready-built factories ranging from 5,000 square feet to 20,000 square feet. This lowers investment and risk for the companies involved,” said Ravindra Sannareddy, Managing Director, Sri City.
Pointing out that that there were over 70,000 Japanese companies in China compared to 800 in India, he said: “We believe there is huge potential left here.
In fact, due to the demand expressed by Japanese companies, the initial 300 acres that were allotted exclusively for them is now being expanded to 500 acres.” The multi-product business city had earmarked 300 acres for the Japanese enclave in 2010, which presently has 14 customers.
In the first phase, two ready-built factories have come up, with 20 more on the way over the next two years.
“In terms of cutting costs, I’d say it is very similar to how somebody would rent a house over buying one. Companies can lease space for Rs. 12-15 (per sq ft) a month for a 5-year period. If they are in for the short-term, just to test the waters, it makes perfect sense to do this,” Mr. Sannareddy said.
Shinya Fujii, Director-General of Japan External Trade Organisation, Chennai, said that the ready built factories would solve many of the problems faced by Japanese SMEs, including adequate power, delay in clearances and insufficient information from local authorities.
Mr. Sannareddy also confirmed that the first coach for the Chennai Metro Rail project, manufactured by Alstom Transport in Sri City, would be delivered by April next year.
“The first coach is going to be made and delivered by April 2013,” he said.