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A Study on Special Economic Zone and
Infrastructure Facilities with special reference
to APSEZ, Atchutapuram, Vizag.
A minor project work submitted to in partial fulfillment of First year course of Master of Business Administration Program
By
NAME ROLL NO N.Vineeth 1225108260
Under the esteemed Guidance of
Shri K. Mansoor Ali Khan Shri C. Yathi Raju
Asst Professor DGM-APSEZ, APIIC GITAM Institute of Management (External Guide)
MBA PROGRAMME, GITAM INSTITUTE OF MANAGEMENT,
GITAM UNIVERSITY, VISAKHAPATNAM.
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DECLARATION
I VINEETH NAGUMANTRI here by declare that this project report entitled “A Study on
Special Economic Zone and Infrastructure Facilities with special reference to APSEZ,
Atchutapuram, Vizag”, submitted by me, under the guidance of MR. K. Mansoor Ali Khan
faculty of GITAM INSTITUTE OF MANAGEMENT, Visakhapatnam, is my own and has not
been submitted to any other University or Institute or published earlier.
Visakhapatnam
Date: VINEETH NAGUMANTRI
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Certificate
This is to certify that this report entitled “A Study on Special Economic Zone and
Infrastructure Facilities with special reference to APSEZ, Atchutapuram, Vizag” submitted
by, Vineeth Nagumantri in partial fulfillment of the requirement for the award of the Degree of
Master of Business Administration to GITAM INSTITUTE OF MANAGEMENT,
Visakhapatnam is a bonafide work carried out by him under my guidance.
Place: Visakhapatnam K Mansoor Ali Khan
Asst Professor Date: Project Guide
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Acknowledgements
“Nothing succeeds like success, they say”
We owe this once in a life time experience to many people whom we could not name here due
to space constraints. However, we would like to thank
Shri.N. Jagan Mohan Rao (SE, ISLMC DIVISION, Visakhapatnam), Shri C. Yathi Raju (DGM-APSEZ, APIIC)
for providing us such high platform to stage our dreams even during an odd time.
We convey our deepest sense of reverence to Shri C. Yathi Raju (DGM-APSEZ, APIIC) for
spending his valuable time with us despite of his busy schedule. We are indebted to him for his clinical
suggestions he made while going through this script. We also thank him for providing valuable material.
It is my greatest pleasure to thank PROF, K.SIVA RAMA KRISHNA, Dean & Principal, GITAM
INSTITUTE OF MANAGEMENT, Visakhapatnam, for giving us the opportunity to do this project work.
I would like to express my heart full thanks to Prof. M.V.Ram Prasad, MBA (HEAD OF THE
DEPARTMENT), GITAM INSTITUTE OF MANAGEMENT for permitting me to do the project.
We express our gratitude towards Shri. K Mansoor Ali Khan, Asst Professor, our internal guide,
Gitam Institute of Management, Staff & Management of our college for giving us this opportunity to
explore ourselves. We are grateful to them for their constant guidance & moral support without which
this work would not have seen the light of the day.
Vineeth. N
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TABLE OF CONTENTS
CHAPTER –1: Review of Literature 8-10
Theoretical frame work
1. Main subject
` 2. Industry overview
CHAPTER –2: Methodology 11-13
Need / Significance of study
Objectives of study
Scope
Research Design
1. Data collection methods
2. Analysis Method
Limitations of study
CHAPTER –3: Organization profile 14-25
Industry profile
Organization profile
Topic profile
CHAPTER –4: Analysis of Study 26-34
CHAPTER –5: Findings, suggestions and conclusion 35-37
Findings
Suggestions
Conclusion
Bibliography 38
Annexure-Questionnaire 39-41
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Executive Summary
Industrial sector occupies an important position in the Indian economy and has a pivotal role to
play in the rapid and balanced economic development.
Special Economic Zones (SEZ) in Indian Economy has very important role to provide
internationally competitive environment, to increase share in global exports, to encourage FDI
and enhance GDP and to act as laboratories for changes in our policies. The Government of India
(GOI) has formulated a policy for setting up SEZ in India. SEZs are proposed to be specially
delineated duty free enclaves for the purpose of trade operations, duty and tariffs. These zones
would be self-contained and integrated having their own infrastructure and support services.
Taking SEZ concept as advantage, Andhra Pradesh State Government has developed Andhra
Pradesh Special Economic Zone at Atchutapuram, Visakhapatnam.
There is a need to assess and evaluate, objectively and realistically, the changes in the industrial
growth, employee requirement, and infrastructure facilities so on. In this context, a survey has
been conducted on APSEZ, Atchutapuram which is located 50 km south from the
Visakhapatnam city.
Infrastructure of a company(SEZ) assessed by learning about the investment, financial aid, size
of the company, current line of activity, the technology deployed, source of raw-materials. Effect
of inadequate facilities evaluated through attrition rate and attributes like water, power,
telecommunication, medical facilities and so on. Future course of action estimated through the
diversification plans.
There was a good response for survey and given value information. The important findings from
the survey are that SEZ policy and infrastructure facilities has attracting many organizations and
entrepreneur‟s to set up a unit in this SEZ. Majority of organizations seek financial aid from
financial institutions, use raw materials and technologies of both imported and indigenous and
organization in this SEZ is 100% exported oriented and export to countries like USA, UK and
European countries. There is a chance of good human resource requirements in this SEZ. High
demand for ITI‟s, unskilled labour, then by professional graduates like Engg.‟s, MBA‟s, CA‟s.
There is good requirement for professional graduates in future. Total investment and
employment proposed in this SEZ are 27,804.58 Crores and 72949 respectively. Basic
infrastructure facilities like road, railways, ports, airports, power, and water were good. There is
a need for improvements in service sectors like telecommunications, internet, public transport,
hotels and leisure, medical facilities, and education facilities. There are good chances for
entrepreneurs to start up service units in this place and gain profits.
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List of Tables
Table 1: Abstract Information about Industries investment and Employment in VIZAG District
Table 2: List of Companies – Employment Proposal, Investment Proposed, Proposed Line of
Activity
Table 3: Total no. of companies, Investment and Employee Proposed in APSEZ
List of Charts/Figures
Chart 1: Scale of Industry
Chart 2: Financial Institution Support
Chart 3: Kind of Technologies Used
Chart 4: Sources of Raw Material
Chart 5: Weight age of Human Resource Requirement according to education qualification
Date: May 2009
Chart 6: Rate of Attrition
Chart 7: Infrastructure Facilities 1
Chart 8: Infrastructure Facilities 2
Figure 9: Strategic Location of Visakhapatnam
Figure 10: Location of APSEZ
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Section 1: Conceptual Framework
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A Study on Special Economic Zone and
Infrastructure facilities with reference to
APSEZ, Atchutapuram, Vizag.
Industrial sector occupies an important position in the Indian economy and has a pivotal role to
play in the rapid and balanced economic development.
Role of SEZ‟s in Indian Economy to provide internationally competitive environment, to
increase share in global exports, to encourage FDI and enhance GDP and to act as laboratories
for changes in our policies. The Government of India (GOI) has formulated a policy for setting
up Special Economic Zones (SEZ) in India. SEZs are proposed to be specially delineated duty
free enclaves for the purpose of trade operations, duty and tariffs. These zones would be self-
contained and integrated having their own infrastructure and support services.
Taking advantage of the SEZ policy of Government of India; the State Government has
developed APSEZ. The Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC) is
the nodal agency to develop and implement the APSEZ project on a Public- Private Partnership
mode. APIIC has undertaken a detailed background study of different site options and identified
a suitable site 50 Km south of Visakhapatnam Port for APSEZ. A total of 5449 acres of land has
been acquired for the project in Atchutapuram and Rambilli Mandals of Visakhapatnam district.
There is a need to assess and evaluate, objectively and realistically, the changes in the growth,
composition and structure of organized manufacturing sector comprising activities related to
manufacturing processes, repair services, gas and water supply and so on. In this context, a
survey has been conducted on APSEZ, Atchutapuram which is located 50 km south from the
Visakhapatnam city.
Infrastructure of a company(SEZ) assessed by learning about the investment, financial aid, size
of the company, current line of activity, the technology deployed, source of raw-materials. Effect
of inadequate facilities evaluated through attrition rate and attributes like water, power,
telecommunication, medical facilities and so on. Future course of action estimated through the
diversification plans.
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SEZ POLICY
===========
The Government of India (GOI) has formulated a policy for setting up Special Economic Zones
(SEZ) in India. SEZs are proposed to be specially delineated duty free enclaves for the purpose
of trade operations, duty and tariffs. These zones would be self-contained and integrated having
their own infrastructure and support services. Government of Andhra Pradesh (GoAP) proposed
for the establishment of a Special Economic Zone near Visakhapatnam, in an extent of 9200
Acres.
Key incentives available for private sector developers and operators of SEZ (or its components)
are as follows:
· 10-year tax holiday in a block of the first 20 years.
· Exemption from duties on all imports for project development.
· Full freedom in allocation of developed plots to units on purely commercial basis.
· Full authority to provide services such as water, electricity, security, restaurants and
recreational facilities within the zone on purely commercial basis.
· No foreign ownership restrictions in developing zone infrastructure
· Freedom to develop township in to the SEZ with residential areas, markets, play grounds,
clubs and recreation centre‟s without any restrictions on foreign ownership.
· Income tax exemption benefits to bonds and capital raised by zone infrastructure
developers.
Key incentives available under the existing policy framework for locating industries:
· Income tax holidays on business income
· Exemption from import duty, VAT and other Taxes
· 10% FDI allowed through the automatic route for all manufacturing activities.
· Procedural ease and efficiency for speedy approvals, clearances and customs procedures.
· Setting up an empowered authority for approvals, clearances, zone administration, and
maintenance and dispute resolution.
· Simplification of procedures and self-certification in the labour acts.
The Government of Andhra Pradesh has taken an in-principle decision to support the project in
an appropriate manner to make this project a meaningful investment proposition for the strategic
partner and as a part of identification of strategic partners/developers.
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Section 2: The Present Study /
Methodology
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NEED OF THE STUDY
Industrial sector occupies an important position in the Indian economy and has a pivotal role to
play in the rapid and balanced economic development. There is a need to assess and evaluate,
objectively and realistically, the changes in the growth, composition and structure of organized
manufacturing sector comprising activities related to manufacturing processes, repair services,
gas and water supply and so on. In this context, a survey has been conducted on APSEZ,
Atchutapuram which is located 50 km south from the city.
The Type of Industry, Scope of operations in terms of volume of business, amount of capital
funds required, size of the risk, continuity of the concern, adaptability of the company,
comparative tax advantage, costs, procedures and relative freedom from government regulations
are the key factors for any organization. Keeping in view these factors Government provides a
broad infrastructural and institutional set-up for the accelerated growth s for industrial parks and
SEZ‟s.
OBJECTIVE OF THE STUDY
The objective of the study is to shed light on three issues a)Infrastructure facilities in special
economic zone b)the effects of inadequate facilities on firms operation (hence on productivity
and economic development in general) c)future course of action.
Infrastructure of a company(SEZ) assessed by learning about the investment, financial aid, size
of the company, current line of activity, the technology deployed, source of raw-materials. Effect
of inadequate facilities evaluated through attrition rate and attributes like water, power,
telecommunication, medical facilities and so on. Future course of action estimated through the
diversification plans.
SCOPE OF THE STUDY
The Government of India (GOI) has formulated a policy for setting up Special Economic Zones
(SEZ) in India. SEZs are proposed to be specially delineated duty free enclaves for the purpose
of trade operations, duty and tariffs. These zones would be self-contained and integrated having
their own infrastructure and support services.
The survey extends to all the industries that fall under the SEZ POLICY and in Andhra Pradesh
Special Economic Zone (APSEZ), Atchutapuram, Visakhapatnam.
This study is mainly focused on financial institutions supporting these companies, FDI‟s in this
SEZ, kind of technology and raw material used by industries in this SEZ, present and future
needs of employment, the infrastructure facilities in SEZ.
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RESEARCH DESIGN
Methodology
Research Design : Descriptive research i.e., description of the state of affairs as it
exists; usually includes surveys and fact – finding enquiries
Sample Size : 8 samples out of 12 industries in this SEZ. 66.67% of sampling is
done
Data collection
The sampling design employed here is non-probability sampling otherwise called as
convenience sampling. The data here is being collected for the first time, hence the primary
data. The method employed to collect primary data is questionnaire method. This method of
collecting data through questionnaires is most extensively employed in various economic and
business surveys. This method is appropriate when the universe is large and wide geographically.
It is free from the bias of the interviewer, answers are in respondents own words. Respondents
have adequate time to give well thought out answers. Respondents, who are not easily
approachable, can also be reached conveniently.
In order to test the accuracy of the questionnaire „pilot study‟ (Pilot survey) has been conducted.
The questionnaire used in the survey is structured form where the questions are both closed and
open ended.
Data tabulation
Here, simple tabulation used, i.e., result of one – way table which supply answers to questions
about one characteristics of data only. Data is tabulated in percentages and represented in form of
pie-charts and bar diagram.
Analysis method
Analysis of data, for closed ended data is tabulated in percentages and represented in form of
pie-charts and bar diagram. For some open ended data, maximum respondent‟s answers were
compared and selected answers which are same for all respondents and given as the common or
majority answers opted by them.
Tools and techniques used : Descriptive Statistics - simply describing what is or what the
data shows.
Limitation (Very Important )
• Limited to APSEZ only, and so the interpretation of the study may not be taken on the
basis for other SEZ‟s or Industrial Parks.
• There was some weak response from the part of the respondents.
• Cost effectiveness
• Time constraints as well as the unwillingness of managers to give the information.
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Section 3: Organization Profile
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(a) Industry Profile FACTORS INFLUENCING AN ENTREPRENEUR OR AN
ORGANIZATION TO START UP NEW PLANT OR A COMPANY IN
VISAKHAPATNAM
Location
Visakhapatnam, Visakha/Vizag or Vizagapatam/Vizag City) is a coastal, port
city, often called "The Jewel of the East Coast", situated in the Indian state of
Andhra Pradesh, located on the eastern shore of India, and nestled among the
hills of the Eastern Ghats and facing the Bay of Bengal to the east.
Visakhapatnam is the second largest city of Andhra Pradesh with an area of 550
km², it is primarily an industrial city, apart from being a tourist destination.
It is known for its unspoilt beaches, nearby scenic Araku Valley and Borra
caves, the 11th-century Simhachalam temple and ancient Buddhist sites like
Thotlakonda spread across the area.
Demographic Characteristics
• The population of the district is 38.32 lakhs as per 2001 Census and this
constituted 5.0% of the population of the State while the Geographical area
of the District is 11161 Sq. Km. which is only 4.1% of the area of the state.
Out of the total population 19.30 Lakhs are males and 19.02 lakhs are
female.
Literacy
• There are 20.02 lakhs literates forming 52.25% of the total population of the
District. Male literates constitute 30.56% while female literates forming
21.69%. The literacy rate is 60% in the district.
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Economy
Educational Facilities (According to 2006 census)
There are 4218 schools, 196 junior, Degree and Professional Institutions during 2004-05.
Prestigious education universities and institution like Andhra University, Gitam University,
A.V.N. College , Andhra Medical College, Gayatri Vidya Parishad College of Engineering,
St. Aloysius Anglo Indian High School located in Vizag.
Ample Technical Manpower available with
Engineering Colleges - 10 (Graduate Level)
Poly-technique - 5 (Diploma Level)
I T I's - 30 (Certificate)
(Electrical / Fitter / Plumber / Turner / Machinist / Civil / Mechanical, Draftsman etc)
Managerial / Professional Man Power:
MBAs / MCAs / Foreign Trade - 15
Medical Colleges - 2
Agriculture
Agriculture is the main stray of nearly 70% of the households. Some important food crops of
the district are Rice, Paddy, Raggi, Bajra and Jowar and Cash Crops such as Sugarcane.
Groundnut, Sesamum Niger and Chillies are important.
Minerals
The district has mineral deposits of Bauxite Apatite (Rock Phosphate) Calcite, Crystalline
Limestone confined to tribal tracts at Aruku and Ananthagiri mandals.
Tourist attractions: Beaches, Hillocks, Resorts
Buddhist important places like Thottlakonda, Bavikonda, Bojjannakonda
Hill Station 100 Km Away - ARUKU
Amusement Park
Naturally formed Deep Caves (BORRA CAVES)
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VISAKHAPATNAM – THE INDUSTRIAL HUB
Visakhapatnam also known as Vizag has emerged into an industrial hub and has
seen tremendous growth. The city‟s growth has mostly been due to its heavy
industries (both state owned and private such as:
HPCL Oil refinery
Visakhapatnam Steel Plant – Rashtriya Ispat Nigam Ltd (RINL)
Hindustan Shipyard Ltd,
BHPV, HSL, NTPC, Cormandal Fertilizer
Rain Calcining Limited, Essar Pelletization Plant
Its traditional importance in ship building if conferred by the fact that India‟s
first ship, the “Jala Usha” was launched in Vizag
Vizag is also one of Industrial India‟s main fishing ports, has a dedicated harbor
for the fishing industry and handles a large percentage of India‟s Seafood
exports.
This availability of a highly educated workforce allowed the entry of many
B.P.O. companies such as HSBC, thus providing the roots for the beginning
IT/ITES industry in the city. The city has around 50 small and medium software
and call centre units, of which about 10 units started their operations during the
year 2005-07
The Vizag Special Economic Zone, Duvvada plays a vital role in the industrial
Growth of the city.
Infrastructure facilities Connectivity through AIR, Road, Rail, & Port
Air
Domestic Airport at Vizag is upgraded to International Airport. Daily flights to
Hyderabad, Chennai, and Mumbai. In Jan 2010, International Flights to Singapore
going to be started. Operators such as Indian Airlines, Sahara, Kingfisher & Air
Deccan offer excellent connectivity. Existing Hyderabad International Airport
(Flying time 45min from Vizag)
Roads Network
Located on National Highway 5: Part of the 4-line Golden Quadrilateral Highway.
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Rail Connectivity
Key rail link between Southern and Eastern India
Berth connectivity to Gangavaram and Visakhapatnam Port
Port
Visakhapatnam Port
Largest cargo handling port in India (56 million tones in 2005-06) with a draft of
15km.
Only port in India accredited with international systems of ISO 9001, ISO 14001,
OSHAS 18001
Modern deep draft container terminal at Port – Managed by Dubai Ports World.
Dredging depth – The deepest in the country. Capable of accommodating main
line container vessels up to 14.9 mtrs draft.
Excellent road and rail connectivity and independent road connectivity to NH-5
Development of express highway as joint venture with National Highway
Authority (December 2005)
Traffic handled in 2007-08: 64.60 MMT*
Gangavaram Port
All-weather Greenfield Deepwater Port
To be India‟s deepest port
Dry bulk & container - 21 m draft
Liquid handling facilities within harbor - 24 m draft
Single Point Mooring - 35 m draft to handle ULCC*
Phase I commissioned in July 2009 for 20 MMTPA* with 5 Berths.
Jetties to handle different tanker sizes
Tank farm area for storing Crude / POL / chemicals
Rail / Road / Pipeline connectivity to SEZ / PCPIR via dedicated Special
Logistics Corridor and / or Coastal Corridor
MMT - Million Metric Tons
MMTPA - Million Metric Tonne per Annum
ULCC - Ultra Large Crude Carrier
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Power
Power consumption by industries is 408.88KWH while it is 357.44 for agriculture purposes.
Global leading player to manage the power infrastructure. Advantageous mix of thermal , hydro
and gas power. Most Competitive Industrial Power Tariff in the Country (Present tariff below
Rs. 2.75(estimated) per unit). NTPC Power Plant at Visakhapatnam (1000MW); expansion of
additional 1000MW is under construction. Dedicated substations at every Industrial Parks and
SEZ‟s
Water Supply (I think not applicable to all industries)
365 days assured industrial water supply through Visakhapatnam Industrial Water
Supply Company Limited (VIWSCO). India‟s first dedicated industrial water
supply project.
Table 1: Abstract Information about Industries investment and Employment in VIZAG District
ABSTRACT Sl No Catogery No Investment
in Rs. Crores
Employment
in No
1 Public Sector
Under takings 8 13918.23 26286
2 Cooperative Sector 4 32.1 2335
3 Private SEZ 1 150.00 2500
4 Private Sector 52 7559.24 14067
Total 65 21659.57 45188
Source for Table 1: District Industries Center, Industrial Estate, Marripalem, Visakhapatnam
Date for Table 1: 26-11-2008 (Old data)
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Fig. 1& 2: Location of Visakhapatnam
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(b) Organization Profile
Andhra Pradesh Industrial Infrastructure Corporation Ltd
Andhra Pradesh Industrial Infrastructure Corporation Ltd is the premier organization in the state
of Andhra Pradesh, vested with the objective of providing industrial infrastructure through the
development of industrial areas. The corporation has so far developed over 270 industrial parks
spreading over an extent of about 32,932 acres. Besides, the Corporation is also developing
sector focused parks like Apparel Park, food processing parks, leather parks in the state.
With the advent of economic liberalization the Corporation has reoriented itself to the changing
needs of economy and assumed the role of facilitator. The corporation is the principle facilitator
in Mega Projects like Special Economic Zone, Visakha Industrial Water Supply, Gangavaram
Port, Convention Centre, Pharma City & Mega Industrial Parks at Parawada, Pashamylaram
Financial District Hardware Park at Hyderabad etc.
Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC) was incorporated on 26th
September, 1973 with Authorized Capital of Rs.20.00 crores and paid up capital of Rs.16.33
crores. APIIC is a wholly owned Undertaking of Government of Andhra Pradesh. It has so far
acquired 32,932 acres of land spread over 270 Industrial Parks, Autonagars, Commercial
Complexes, and Housing Complexes etc. The Corporation has also constructed 3500 industrial
sheds, 4800 dormitory units, 466 commercial shopping complexes.
The Industrial Areas ranges from 15 acres to 2500 acres. The Industrial Areas are equipped with
approved layouts, internal roads, water supply and power supply.
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(c) Topic Profile in the organization
ANDHRA PRADESH SPECIAL ECONOMIC ZONE
(APSEZ)
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Introduction:
The main strength of our state AP lies in its diversified industrial base. The state has taken
advantage of the SEZ policy of Government of India; the State has taken concrete steps to
develop its Special Economic Zone concept into a pragmatic business plan.
These steps taken gave birth to APSEZ, an SEZ which is looked at as a private sector initiative
supported by the policy framework & structure of the state. The state interventions such as State
SEZ policy, initiation on land acquisition and external linkage infrastructure development form a
comprehensive framework for ensuring the success of the SEZ
The Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC) is the nodal agency to
develop and implement the APSEZ project on a Public- Private Partnership mode.
APIIC has undertaken a detailed background study of different site options and identified a
suitable site 50 Km south of Visakhapatnam Port for APSEZ. A total of 5449 acres of land has
been acquired for the project in Atchutapuram and Rambilli Mandals of Visakhapatnam district.
Some of the important site characteristics that make the selected site suitable for setting up the
SEZ include
The site topography and soil conditions
No major displacements and an area that is not environmentally sensitive
A natural contour that slopes towards the sea reducing the cost of developing utilities
The Key considerations which lead to the selection of the location is its proximity to the Port
City of Visakhapatnam with a well developed industrial & infrastructure base including its
airport.
Ministry of Commerce, Government of India has issued gazette notification conferring SEZ
status.
Industrial Location:
Location: APSEZ is located 50km south of the Visakhapatnam port.
Area: APSEZ occupies 5449 acres of land which was obtained from the Atchutapuram and
Rambilli Mandals of Visakhapatnam district.
Major Road: Major road is NH5 which is 18Km
Airport: 40km from APSEZ
Railways: 18Km from Yellamanchilli and Anakapalle Railway Station
Power: 220/132/33 KVA with 100 MW substation is dedicated to APSEZ to provide
uninterrupted power supply to the units inside the Zone.
Water: 60 MLD (Millions Litres per Day) is supplied to APSEZ.
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Table 2: List of Companies – Employment Proposal,
Investment Proposed, Proposed Line of Activity
Name of the
Organization
Plot
No/
Area
Proposed Line
of Activity Stage of work
Investment
proposed(crores)
Employment
Proposed
Uniparts India
Ltd
47/
30.01
Acres
Tractor &
heavy
equipment parts
Working. Factory
structures in brisk
progress. The unit
started commercial
production partly
and released one
consignment on 24 -
10 - 2008
100 Crores 150
Pokarna Ltd
45 /
39.53
Acres
Pre-Engineered
Granite Slabs
Working. Factory
structures in brisk
progress. The unit
started commercial
production in
12/2008
160 Crores 200
Pilkington
Automative Pvt
Ltd
1 /
25.26
Acres
Automobile
Glass
Manufacturing
Unit
Working. 685 Crores 500
W.S. Industries
(India) Ltd
31 /
47.77
Acres
High Pressure
Porcelain
Insulators Working. 200 Crores 300
Brandix Apparel
City India Ltd
1000
Acres
Garments
Manufacturing
One unit is
Working. Factory
buildings under
progress and one
unit construction
completed and
started
500 Crores 60000
Southern Online
Biotechnologies
Ltd
45A /
10
Acres
Bio Diesel
Site Clearance
completed.
Foundations is
under progress
100 Crores 150
Confidence
Petroleum(I) Ltd
49 / 10
acres
Gas Cylinders
and CNG
Cylinders
Civil works is under
Progress 46 Crores 400
HPCL 1500
acres
Ethylene HPCL
Naptha / Gas
Crackers
The possession of
land was not
delivered to the
party
23000 Crores 5000
Source: APIIC, Industrial Estate, Marripalem, Visakhapatnam
Date: 09-05-09
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Name of the
Organization
Plot No/
Area
Proposed Line
of Activity Stage of work
Investment
proposed(crores)
Employment
Proposed
Rain Calciner
Ltd
45D /
43.36
Acres
Calcined
Petroleum Coke
with generation
of Electric
power
The possession of
land was not
delivered to the
party
280 Crores 600
Baba Atomic
Research
Centre(BARC)
Land
2131.43
Acres
Research and
Development
Layout plan
completed. Geo
Technical
Investigations
Completed.
2500 Crores 5000
Anjaney Alloys
Ltd
42,43,44/
60 Acres
Ferro Alloys
Project
Possession
handover the
party on 04-10-
2008. The party
yet to start the
civil works
203.98 Crores 573
Vizag Marine
Anchor Chain
(P) Ltd
53A/5
Acres
Anchor Chains,
Naval Chains
and Marine
Chains etc.
Possession is not
given 29.60 Crores 76
Nagarjuna
Agrichem Ltd
(NACL)
80 Acres Agricultural
Fertilizers
Possession is not
given 150 Crores 150
Source: APIIC, Industrial Estate, Marripalem, Visakhapatnam
Date: 09-05-09
NACL added recently in July 2009. Source: APIIC. This company is not included in our survey.
Table 3: Total no. of companies, Investment and Employee Proposed in APSEZ
Total Investment Proposed
(Specify Units) 27,804.58 Crores
Total Employees
Present
Future 72949
Total no.of companies exist at present 13
Total no.of companies Working 5
Total no.of companies Under construction 2
Total no.of companies Yet to start construction 6
No. of samples Taken 6
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Source: APIIC, Industrial Estate, Marripalem, Visakhapatnam
Date: 09-05-09
Section 4: ANALYSIS
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ANALYSIS
Scale or Category of Organizations in this SEZ (Not sure)
a) Micro; b)Small ; c) Medium ; d) Large;
33%
67%
Micro Small Medium Large
Majority of the companies in this SEZ are large scale units (8) and then followed by medium
scale (4) industries.
Investment 20 Crores – 100 Crores – Medium Scale Industry
Investment above 100 Crores – Large Scale Industry
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Are you supported by Financial Institutions?
A. Yes B. Self Support
83%
17%
Financial Institution Support
A B
We found that 83% of organizations has supported by Financial Institutions and 17% of
organizations are self supported. Majority of organizations are supported by financial institutions
in this SEZ.
Financial institutes which supported the organization in this SEZ SBI, Union Bank of India, HDFC, ING VYSYA, CITY BANK, ABN AMRO, KOTAK
MAHINDRA, BNP PARIBAS
Majority of the organizations are supported by private sector banks followed by public
sector banks in this SEZ.
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Foreign Direct Investment (FDI) Percentage or Amount and sources of FDI’s
in this SEZ
There are 3 companies at present have FDI‟s. Uniparts India Ltd, Pilkington Automotives
Pvt Ltd, Brandix Apparel City India Ltd. [Brandix is having FDI‟s. This information is
not given by Brandix. We know the info informally. They have not given the
questionnaire till date. It can be deleted if necessary]
Uniparts India Ltd has Rs. 75 crores from AIG
Pilkington Automotives Pvt Ltd has 100% FDI from Pilkington Group
Organization in this SEZ is 100% exported oriented. Organizations in this
SEZ export their goods to countries like:
USA, UK, Europe, JAPAN, North America and Gulf Countries
Majority of companies export their goods to USA, UK, European countries.
The socially related activities’ (Corporate Social Responsibilities) which are
taken up by organizations in this SEZ
Uniparts India Ltd Donation to Local Villages developments.
Donation to Voluntary Social welfare association namely Akshay Pathra
Other activities Generating of Employment
Employment to locals
Safety of the People – Safety training
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Kind of technologies employed by organization in this SEZ A. Indigenous B. Imported C. Both
33%
17%
50%
A B C
Majority of the organizations in this SEZ use imported and indigenous technologies i.e., 50%
followed by indigenous technology i.e., 33% and only imported technology of 17%.
Source raw materials for the organization in this SEZ
A. Indigenous B. Imported C. Both
100%
A B C
Majority of the organizations in this SEZ use imported and indigenous technologies i.e., 100%.
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Human Resource Requirement in this SEZ TOTAL REQUIREMENT: 72949
Weight age of Human Resource according to degree on date: May 2009
5.87%
1.30%
0.44%
0.65%
5.00%0.87%
1.00%
14.13%
55.04%
3.70%
12.00%
Engg
MBA
MCA
CA
Graduate (Technical)
Graduate (Commerce)
Graduate (Other - Arts)
Diploma In Engg.
ITI
Skilled Labour
Unskilled Labour
Majority of human resource potential is there for unskilled labour, followed by ITI
- 55.04%, Diploma in Engg. – 14.13%, unskilled labour - 12%, Engineers - 5.87%,
Graduates – Technical – 5%, Skilled labour – 3.70%, MBA‟s – 1.30%, Graduates
– Others (Arts) – 1%, Graduates – commerce - 0.87%, CA - 0.65% as on May
2009.
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[Analysis given on the basis of employee data of one or two companies. This is the
projected data. This approximate ratio will be there in coming year. There are good
opportunities for ITI‟s, Engineers, MBA‟s in coming future.]
Rate of attrition for the organization in this SEZ
A. 0-10% B. 11-20% C. 21-30%
100%
A B C
All organizations in this SEZ has rate of attrition in the range of 0-10%. This SEZ has started
recently. Very less percentage of changing jobs from one company to other
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Infrastructure Facilities
0%
20%
40%
60%
80%
100%
120%
50
%
16
.67
%
33
.33
%
50
%
83
.33
%
66
.67
%
83
.33
% 50
%
66
.67
%
16
.67
%
16
.67
%
16
.67
%
16
.67
%
16
.67
%1
6.6
7%
Excellent Good Average Below Average Poor
Majority of the companies in APSEZ are satisfied with major infrastructure facilities
like Roads in this SEZ are good.
Good accessibility of railways, port, airport accessibility from this SEZ.
Majority of the organization in this SEZ satisfied with Power, water facilities are
good.
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Infrastructure Facilities
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
33
.33
% 50
%
50
%
50
%
66
.67
% 50
%
16
.67
%
16
.67
%
33
.33
%
33
.33
%
33
.33
%
33
.33
%
33
.33
%
33
.33
%
83
.33
%
33
.33
%
90
%
16
.67
%
66
.67
%
66
.67
%
50
%
10
%
16
.67
%
66
.67
%
50
%
16
.67
%
Excellent Good Average Below Average Poor
Most of the organizations in this SEZ say that Telecommunication, Bandwidth, law
and order (Security) is Average and feels that there should be improvement need in
this area.
Companies feel that transport, Crèche, hotels and leisure , education and schools, and
health care / medical facilities are poor, employee residential quarter are below
average.
Cost of residential space is expensive for that area. As this is in outskirts of the city,
they feel that cost of residential space should be low.
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Section 5: Findings, Suggestions and
Conclusions
a) Findings
Attractive SEZ Policy Scheme with fiscal incentives like
100% Income – Tax exemptions for a block of 5 years, 50% tax exemption for 2
years and up to 50% of the profits ploughed back for next 3 years under the Income
Tax Act.
Exemption from duties on all imports for project development.
Exemption from excise/VAT on domestic sourcing of capital goods for project
development.
Allow entrepreneurs and organization to start up an unit who motive is 100% export
oriented business.
Full authority to provide services such as water, electricity, security, restaurants and
recreational facilities within the zone on purely commercial basis.
Majority of the organizations has supported by financial institutes like SBI, Union Bank
of India, HDFC, ING VYSYA, CITY BANK, ABN AMRO, KOTAK MAHINDRA,
BNP PARIBAS.
Majority of the organizations are supported by private sector banks followed by public
sector banks in this SEZ
Organization in this SEZ is 100% exported oriented. Organizations in this SEZ export
their goods to countries like:
USA, UK, Europe, JAPAN, North America and Gulf Countries
Majority of companies export their goods to USA, UK, European countries.
Majority of the organizations use raw materials and technologies of both imported and
indigenous.
Organizations in this SEZ show interest in social activities like donations to village
developments, welfare associations, generating employment, giving employment to local
people and land losers, giving safety training to locals and employees.
There is a chance of good human resource requirements in this SEZ. There is high
requirement for ITI‟s, unskilled labour in this SEZ. There is good chance of increasing
employment for professional course like Engg, MBA, MCA, CA. The total human
resource requirement in this area is 72949 in coming years.
All organizations in this SEZ has rate of attrition in the range of 0-10%.
Majority of the companies in APSEZ feel that major infrastructure facilities like Roads in
this SEZ is good, Railways, Port, Airport accessibility is good from this SEZ.
Majority of the organization in this SEZ feel that Power, water facilities are good.
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Most of the organizations in this SEZ say that Telecommunication, Bandwidth, law and
order (Security) is Average and feels that there should be improvement need in this area.
Companies feel that transport, Crèche, hotels and leisure , education and schools, and
health care / medical facilities are poor, employee residential quarter are below average.
Cost of residential space is expensive for that area. As this is in outskirts of the city, they
feel that cost of residential space should be low.
As service oriented businesses in this area like telecommunications, internet facilities,
transport, hotels and leisure, education and schools, health care / Medical facilities are
poor, one set up a service units in of the above areas, can generate employment and also
get good profits.
There is a good chance of reality boom in this area. Huge opportunities for construction
oriented companies.
b) Suggestion As service oriented businesses in this area like telecommunications, internet facilities,
transport, hotels and leisure, education and schools, health care / Medical facilities are
poor in this areas, APIIC has to improve these infrastructure facilities by encouraging
one to set up a service units in of the above areas, can generate employment and also get
good profits.
APIIC has to see that these service providers/ dealer should belong local village
surrounding that APSEZ as there is a need for employment generation and very low
monthly earnings by the villagers in surrounding areas.
APIIC has to develop and keep a proposal to Government on one business policy for
these villagers who want to startup services oriented business by providing tax and VAT
exemptions even for them, help them by getting easy permissions to start their business
and providing them bank loans at lower interest rates.
APIIC has to monitor that these services are provided in effective way by regular
supervisions.
APIIC has to monitor that the maximum employment in the organizations in this SEZ are
localites.
APIIC has motivated the companies to give some funds for developing villages
surrounding this SEZ‟s, provide funds for the local people to start up service oriented
business.
APIIC and other organizations has to encourage and train to local fishermen‟s
surrounding this SEZ to start an export oriented units of Sea foods like Crab, Chilled
Fish, Dry Fish, Fishing Net and equipment.
APIIC has to develop greenery to large extent as there was very less greenery.
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c) Conclusion
The Government of India (GOI) has formulated a policy for setting up SEZ in India. SEZs are
proposed to be specially delineated duty free enclaves for the purpose of trade operations,
duty and tariffs. This policy is lying a benchmark for organizations and entrepreneurs who
want to start up unit which is 100% export oriented.
Andhra Pradesh Special Economic Zone (APSEZ) location is its proximity to the Port City of
Visakhapatnam with a well developed industrial & infrastructure base including its airport,
roads, railways, power, and water.
There was good demand for raw materials and technology from both India and abroad. In
coming days, there will good improvement in trading, across the globe from this SEZ. There
were good chances for many organizations to setup their units and generate huge employment.
There is a demand for ITI‟s, unskilled labour, Engineers, MBA this SEZ.
There are good opportunities for service sector development in this area like banking,
transport, telecommunications, internet, hotels and leisure‟s, medical facilities and education
sectors as these facilities are poor in this place.
APSEZ contribute to the annual economic growth rate very significantly. It also offers wide
range of opportunities for employment and development in future.
The untapped potential at the SEZ is so vast as can be seen from my study & the neglect of
these opportunities will result in the companies losing out on the market potential which is
available to be used from here.
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Bibliography or References
APSEZ Industries Record from APIIC.
AP PCPIR brochure, APIIC C.R. Kothari, Research Methodology Method and Techniques,
New Age International Publishers. www.apiicltd.com
http://en.wikipedia.org/wiki/Visakhapatnam
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Annexure - Questionnaire Objective: We would like to interact with you through this questionnaire so as to
enlighten ourselves on the current and future status of your company.
Name of the Organization: Investment:
Name: Designation:
Contact No.: Email ID:
1) What is the scale of your company?
a) Micro; b)Small ; c) Medium ; d) Large
2) Are you supported by Financial Institutions?
a) Yes b) Self-supported.
3) If yes, please name the financial institution/s which supports your company and the
percentage/amount of total amount out of total capital?
………………………………………………………………………………
4) What is the extent of Foreign Direct Investment (FDI) in your company? Could
you also name the sources of the FDI?
……………………………………………………………………………………
5) Your current line of activity is ……………………………..; What will be your
future line of activities? Will you be going in for diversification?
6) In your total production what is the proportion which is exported and what is the
proportion which is sold within the country? (Give Percentage)
Exported: Production for domestic consumption:
7) If you export, to which countries do you export to?
…………………………………………………………………………………..
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8) What kind of technologies have you employed?
a) Indigenous(Local) b) Imported c) Both
9) From where do you source your supplies like raw materials, etc?
a) Internally; b) Externally;
10) What are your present & future human resource requirements?(Ex: 200 & 200
))
Present Future
Total
Engg
MBA
MCA
CA
Graduates Technical
Commerce
Others(Arts)
Diploma In Engg.
ITI
Skilled Labor
Unskilled Labor
11) What is the rate of attrition in your company?
a) 0-10% b) 11-20% c) 21-30% d) 31-40% e) 41-50%
13) What are the socially related activities which you have undertaken? (Corporate
Social Responsibility)
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INFRASTRUCTURE FACILITIES:
(Please tick either one of them)
ATTRIBUTES Excellent Good Average Below
Average
Poor
Road
Railways
Port
Airport
Power
Water
Telecommunication
Bandwidth
Canteens
Employee
Residential
Quarter
Crèche
Workers Rest
Room
Hotels and Leisure
Cost of Residential
Space
Education &
Schools
Heath Care /
Medical Facilities
Law and Order
Comments on Infrastructure Facilities (Optional):
Comments on our questionnaire and survey (Optional):
We thank you very much for sparing your valuable time for us. Have a good day
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