November 1, 2019
The state, with over 65 textile mills, 17,000 power looms and 600,000 hectares under cotton cultivation, is a textile powerhouse
The state’s other traditionally sectors such as food processing, pharma, cement, and auto industries have attracted interests
The auto cluster in Pithampur has over 120 large units and 450 small and medium units with an investment of over US$11.3 billion
The summit drew US$56.3 million commitment from Japan’s Bridgestone, US$12.68 million offer from US-based Tenneco Automotive
Avgol India, a subsidiary of Israel based Avgol Nonwovens, a global leader in the production of nonwoven fabric solutions, has been in India since 2011. The company, which manufactures hygiene products for senior citizens, babies and women from its plants in Israel, USA, Russia, and China, is now all set to build a nonwoven fabric production facility in India at the industrial township of Pithampur in Madhya Pradesh (MP), with a capital investment of over US$169 million.
The Avgol India investment, which has been on the anvil for some time, was announced at a press meet by Chief Minister Kamal Nath at the recently concluded one-day Magnificent Madhya Pradesh (MMP) Investors Summit 2019 at Indore. The Ludhiana based US$1 billion Trident Group, which has set up one of its largest composite textile projects in Budni, including a home textile plant, too promised to invest US$422.5 million in Madhya Pradesh in the next 24 months, which includes an art and craft village.
This is good news for the new MP government, which since it came to power in December 2018, has been striving to transform the state into a major textile hub. The state, which hosts more than 65 textile mills, 17,000 power looms with a total area of 600,000 hectares under cotton cultivation, has been offering attractive government incentives and policy support such as 100 per cent FDI in textile sector, facilitating textile parks (work on four textile parks has already started), special packages for textile sector and encouragement to farmers and private players to grow silk.
In the last decade, major textile companies have invested in the state either in greenfield projects and expansions, such as Trident Group; SEL, which has India’s largest spinning unit at Sehore district; and Pratibha Syntex Ltd, which produces over 60 million pieces of garments annually supplying to over 20 international leading garment brands across the globe. This company has a major manufacturing unit in Pithambur Industrial area in MP. Vardham with its yarn manufacturing and fabric weaving units; Grasim Industries, the largest producer of spun dyed specialty fibre; Century Textiles with its yarn and denim production units; and Nahar are other big players in the state. The state is famous for its iconic and famous Chanderi cotton, Bagh print (which has GI tag) and Maheshwari sarees as well and has a rich tradition for weaving and knitting.
According to a report on the textile sector by MP Department of Commerce, Industry & Employment, and Madhya Pradesh Trade and Investment Facilitation Corporation Ltd, investment opportunities exist across the textile industry value chain from fibre production to garment manufacturing and in a new emerging area, such as technical textiles.
MP has an edge over other states when it comes to the textile sector. Besides the large pool of skilled labour in this sector, MP also has the advantage of abundant raw material resources like cotton. MP is the fifth-largest cotton-producing state in the country and the largest producer of organic cotton, accounting for 43 per cent of the country’s total production and 24 per cent of the world’s organic cotton production. Many farmers in places like the Chhindwara district in MP have shifted to organic cotton farming under a project by the World Wide Fund for Nature, India; the C&A Foundation, a Swiss-based corporate foundation; Neutral, a leading Danish company making 100 per cent certified organic cotton products and Srijan, a local NGO. These groups joined forces under the Organic Cotton Project launched in 2015-16, to promote organic cotton agriculture in the state.
The state’s other traditionally thriving sectors such as food processing, pharma, cement, and auto industries attracted investments as well at the summit. For example, consumer foods major, ITC has plans to invest US$98.6 million and set up a modern food processing centre in MP, for which the FMCG has already obtained the land.
Besides producing all its famous brands, including Ashirwad and Bingo, the plant would dehydrate locally sourced vegetables to be sold across the country. “We’ll make it a showcase food processing facility of the state, where there is enormous potential for the sector,” Sanjiv Puri, the chairman and managing director of ITC Ltd, told the gathering at the inaugural session of the summit. Stressing on the tremendous potential for horticulture in the state, Puri said that work is underway to develop a medicinal and aromatic plant precision farm on 100 acres land in MP.
“We’ve piloted certain species and demonstrated them to farmers. The farm will in coming years be expanded to 10,000 acres land, which will go a long way in doubling the farmers’ income,” he said in his address. MP hosts other food product giants such as Parle, Mondelez India Foods Pvt Ltd, Coco-Cola, and Hershey, among others.
The state’s pharma sector too saw traction from existing players. For example, Sun Pharma, who has invested close to US$70.4 million in the state, is planning to expand its facilities at Dewan and Malanpur. The possibility of FDI inflow into this sector comes from Israeli pharmaceutical giant Teva Pharmaceutical, who has submitted a US$36.3 million proposal, while an American pharma company Par Pharma has made a US$52.8 million investment offer.
MP auto sector is also growing, and Indore has already emerged as an automobile and engineering hub. The auto cluster in Pithampur has over 120 large units and 450 small and medium units with a combined investment of US$11.3 billion. A Central Farm Machinery Training & Testing Institute in Budhni, which offers training and testing facilities for farm equipment mechanisation, provides cutting-edge technology for the development of the automobile sector. The summit drew attention to a US$56.3 million investment proposal by Japanese auto and truck parts manufacturer Bridgestone, and a US$12.7 million investment offer by US-based company, Tenneco Automotive (a global leader of designer, manufacturer, and distributors of clean air and ride performance products), which are ostensibly in the final stages of approval, according to reports.
The largest investments at the summit, however, came from India’s leading industry goliaths such as India Cements and Reliance Industries. The former has promised to invest US$352.1 million, while Reliance is poised to double the number of petrol pumps and retail outlets in the state and has invested nearly US$2.8 billion in the state over the last few years.