Odisha seems to have emerged as a preferred investment destination for a section of Indian companies seeking to remain cost competitive while aiming to expand their market.
Following an overhaul of the State’s industrial policy and moves by the administration to deliver on promises, a large number of companies from non-metal sectors are heading to the eastern state, the 13th largest contributor to the Indian economy. Two years ago, the State came out with a sector-specific Industrial Policy focusing on employment-intensive non-metal sectors with an aim to be among the top three investment destinations in the country.
It unveiled its Vision 2025 at the Make In India Week in Mumbai last year.
According to a recent Assocham report, Odisha has been ranked third with a more than 7% share in total live investments exceeding ₹177 lakh crore attracted by different states of India as of FY17. Maharashtra had a share of more than 11% while Gujarat had 8.5%.
Odisha had attracted more than 900 projects with live investments worth more than ₹13 lakh crore as of FY17, the report said.
“Though Odisha is ranked thirteenth in terms of its economic size and contribution to India’s economy [2.6% share], its economic growth has increased from 4.6% in FY13 to about 8% in FY17. The all-India economic growth rate was 5.5% in FY13, reaching just over 7% in FY17,” the report said.
Odisha clocked a CAGR of about 9% in the industry sector between FY12 and FY17 which was ahead of all-India’s growth rate of 6%.
Political stability under Naveen Patnaik since 2000 has helped. Top officials point to his relentless efforts in ensuring ease of doing business.
Sanjeev Chopra, the State’s Principal Secretary, Industries, said, “We are promoting Odisha in sectors such as apparel, food processing and gem & jewellery. We have seen fair success for three years in the sectors for which Odisha has not been traditionally known for.”
‘MSMEs interested’
Over the years, big names such as Tata Steel, Aditya Alumina, Vedanta, Jindal Steel & Power and Essar have invested in the state. But, this time around, companies from the non-metal sectors and MSMEs are coming in droves. Shahi Exports, India’s largest apparel exporter had started production in the state in 2016 and has already applied for capacity expansion to employ a total of 2,500 people.
Aditya Birla Fashion is setting up a garment manufacturing unit with an investment of ₹53 crore. Page Industries, which manufactures the Jockey brand of garments, has got approval for a unit with an investment of ₹135.5 crore. Texport Industries is setting up a unit with an investment of ₹75 crore.
From Mumbai, Kader Investment and Trading, the largest seafood exporter, is planning to invest ₹55 crore in a seafood processing unit at Deras. Carnival Films has got approval for an exhibition and family entertainment centre in 30 districts with an investment of ₹150 crore. Oricon Enterprises is coming up with a PET preforms manufacturing unit with an investment of ₹120 crore. A unit by Deepak Fertilizers is also in the works. The state’s 480 km-long coastline and three ports are also helping attract businesses, officials said.
‘Progressive policy’
Hindustan Coca-Cola will be expanding its plant with an investment of ₹500 crore.
“Our investment in the state has been steadily going up,” said Pradip Pandey, zonal VP, east, Hindustan Coca-Cola Beverages Pvt. Ltd. “This has became possible due to the progressive Industrial Policy resulting in ease of doing business. We will continue to invest more.”
Recently, Gitanjali Infratech, a Gitanjali Group company, received permission to set up a Gem & Jewellery Lifestyle and Luxury Goods Park with an investment of ₹636 crore on 100 acres of land near Cuttack. This is the first of its kind in the State.
Odisha is also pulling out all stops in promoting food processing. ITC and Surya Foods, the makers of Priya Gold, are setting up units. Parle and Britannia already have a presence there and are expanding. Anmol Biscuits has invested in a factory to manufacture 5,000 tonnes of biscuits a month in Bhubaneswar and is also planning a cake factory. The company has a total investment plan of more than ₹150 crore. “We are catering to even the south market from here. It is a cost-effective facility,” said a senior company official.
Seafood processing is also high on the State’s agenda. A Sea Food Park with a state-sponsored investment of ₹134 crore is coming up at Deras, near the State capital, which will be functional in early 2018. The park stands on 150 acres and seafood processed there would be primarily meant for exports.
Twenty firms have committed investments worth ₹466 crore in the park. Odisha is targeting seafood exports worth ₹20,000 crore per year in the next five years.
“It is going to be the best by any international standards. The industry department is providing the packaging facility, cold storage, refrigerated vans, waste treatment plant, administrative building and even power and water to the units,” said Mr. Chopra.
“The Sea Food Park will be a game changer in seafood processing not only in Odisha but in India,” said Sanjay Kumar Singh, CMD, Industrial Infrastructure Development Corporation, which is responsible for supplying land and infrastructure to industrial units. The park will process 90,860 MTPA of seafood and employ more than 7,200 people.
Navrangpur in southwest Odisha has traditionally seen significant production of maize. The State is now wooing cattlefeed manufacturers to set up base. Several starch units have applied for permission. The State is also setting up an Aluminium Park at Angul near the Nalco factory, a Plastic Park at Paradip near an Indian Oil refinery and a Food Processing Park at Bhadrak.
“We are moving away from metals and minerals. We are focusing on sectors which are creating jobs,” Mr. Chopra said.
‘Lower costs attractive’
Firms find the low wage rate attractive. Land acquisition costs and power tariffs are also low, and so is the cost of living, said sources. The State rates firms on their ability to create employment and provides incentives based on the rating.
Odisha has developed a single-window portal where applicants can log in and obtain necessary approvals. Their grievances will also be tracked through this portal.
IDCO is providing ready-to-use facilities for the benefit of companies.
“We help get the layout approval from the development authority as also permissions from the pollution control board. Today, investors look at a large number of factors to take an investment decision. We are making it a commercial proposition for them,” Mr. Singh said.
The state is creating a land bank of 1 lakh acres, of which 60,000 acres come from government-owned land. Odisha has unveiled GoiPLUS, a web-enabled platform which displays real-time information with regard to all the industrial land available in the state.
It has introduced a single-window portal called GO SWIFT from which industry can obtain more than 35 approvals online.
Last year, the state received investment intent worth ₹71,000 crore in the Make in India Week. Of 14 investment announcements received at the event, nine projects are under implementation, officials said.
From recent investor meets, the State has received and approved firm proposals for 75 projects worth ₹2.02 lakh crore. “This is only the beginning,” Mr. Chopra said.
