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From Site Selection magazine, September 2010

Home Away From Home

A new, master-planned business city fast-tracks MNCs’ new Indian operations.

Ravindra Sannareddy, Co-founder and Managing Director, Sri City

hat do a crane manufacturer and one of the world's largest coffee-makers have in common? Not too much, at first glance. Both companies in these markets concluded their search for suitable manufacturing space in India when they selected sites in Sri City — an industrial park with a Special Economic Zone (SEZ) and Domestic Tariff Zone (DTZ). Located in Southern India, Sri City is 55 km. from Chennai, the capital city of the state of Tamil Nadu. Kobelco Cranes Co. Ltd ., a wholly owned subsidiary of Japan's Kobe Steel Ltd., and Italy-based Lavazza join multinationals from around the world in locating production facilities in South India's largest, operational, multi-product business city. Master-planned by Jurong Consultants, Singapore, development work in the 3,240-hectare Sri City began in August 2008.

Not only do these investors have land to establish and expand their operations, but they have access to onsite residential, entertainment, retail and leisure amenities which they would otherwise have to travel some distance to reach in other such developments.

Kobelco Cranes is investing about US$13 million in a new plant that will make crawler cranes ranging from 90 to 250 tons when it begins production in late 2011. The facility will be located adjacent to Kobelco Construction Machinery Co. Ltd.'s hydraulic excavator plant. The excavator plant is currently under construction and will begin production in January 2011. The close proximity of the plants will enable the two companies to share distribution and information, which will increase the business efficiency of their Indian operations. Kobelco Construction Machinery (Japan) is also a group company of Kobe Steel.

"We are here to start our first project in India at Sri City as it offers a strategic location for our business and provides us with critical industrial infrastructure," says Mr. Kotani Shigeto, President and CEO, Kobelco Construction Machinery. "The hassle-free approval process will help us to go operational at the earliest."

Rockworth Furniture Systems, a joint venture between Dubai-basedAl-Reyami Group and Thailand-based Rockworth Furniture is building a facility in Sri City with 24,000 sq. m. of production space and 7,000 sq. m. of warehouse and logistics space. Rockworth has a similar operation in Thailand.

"We chose Sri City to set up our first manufacturing facility in India as it is a well-planned business destination that integrates world-class infrastructure with all the necessary business and lifestyle amenities," says Sheikh Al Reyami, Chairman of the company.

"Proximity to Chennai, the commercial and industrial hub of South India; and well-established connectivity makes it an ideal location for our business."

Besides its SEZ area for export-oriented manufacturing and services, Sri City has a Domestic Tariff Zone (DTZ) for manufacturing for the Indian market. These zones are well demarcated for industrial sectors like automotive, engineering, IT and business process outsourcing (BPO), biotech and pharmaceuticals, food processingand renewable energy, among others. A Free Trade and Warehousing Zone (FTWZ) caters mainly to companies trading in imports and re-exports, packaging, storage and distribution in the local markets.

State-of-the-Art Infrastructure

"Sri City benchmarks with internationalstandards and is designed to handle industrial operations and traffic density," says Ravindra Sannareddy, Co-founder and Managing Director, who hails from the same region. "Among India's top five industrial locations, Sri City today has MNCs from over 10 countries," he relates. "It is our endeavor to make Sri City a 'home away from home' for multinational corporations and a world-class destination for our Indian companies."

Infrastructure assets at Sri City include:

Roads: A 68-km. network of roads designed to support industrial cargo activity and vehicular density. Roadways feature landscaped berths and medians, solar streetlights and underground utilities.

Power: Sri City has a 450-megawatt allocation of power from the state of Andhra Pradesh (the development is on the state border) and is dual-fed to ensure the reliability of supply.

Water: The state of Andhra Pradeshallocates 85 million liters of water per day to Sri City.

Sewage Treatment: All industrial, commercial and residential units will be connected to the central sewage system. Recycled water is then supplied for horticulture and other purposes.

Educational Zone: Over 200 hectares have been set aside in Sri City for development of a knowledge campus for educational institutions, universities, training and R&D centers.

A Deeper Shade of Green

Sri City is green in more ways than one. In addition to the green surroundings of adjoining forest reserves and the landscaping at Sri City, the principles of environmental preservation are followed as a dictum — 10 million plants would have grown by the time the business city is complete. Sri City has its own 12-hectare nursery and has allocated 330 hectares for green belts within the development. Sri City is the only industrial development in India that uses solar-powered street lighting and traffic control systems. Other green initiatives at Sri City include electric vehicles for internal shuttles, bio-gas generation and solar power generation.

Story in Pictures

Kobelco Cranes will begin building crawler cranes like this one at a site in Sri City in 2011.
Click for a larger view.
Click for a larger view.

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