Tidco to set up SEZ for auto parts

KAVITHA VENKATRAMAN
Posted online: Wednesday, November 29, 2006 at 0135 hours IST

CHENNAI, NOV 28: Tamil Nadu Industrial Development Corporation Ltd
(Tidco) will soon join hands with a well-known entrepreneur to set up an
auto component special economic zone (SEZ). The sector specific SEZ will
come up in about 2,000 acres of land with an investment of Rs 400 crore.
According to a government official, “Auto companies in the US and
Europe, to keep their prices at reasonable levels, have started
outsourcing auto component manufacturing to India. They will only do the
assembling at their country. An auto entrepreneur, to give leverage to
this outsourcing wave in the automobile industry, has come up with the
idea of setting up a project exclusively for the auto industry. The auto
entrepreneur is scouting for 2,000 acres of land to house the project.
Application has been filed with board of approvals, ministry of commerce
for obtaining SEZ status for the project”.

The entrepreneur has approached Tidco to be the local partner. The
government agency will take part in the project with minimum investment.
Tidco will pick up anywhere between 2% and 11% stake in the equity of
the project. The project will call for an investment of about Rs 20 lakh
per acre. The debt-equity ratio of the project could be 3:1 or 2.5:1.5,
which is yet to be finalised.

The idea behind Tidcopicking up stake in the huge project, they said, is
basically to focus on large projects. The state agency has decided to
invest in big projects instead of investing in many small projects. The
agency has about 10 SEZs at various stages of implementation including
Hosur, Perambalur, Reliance ADAG, Ascendas, Nanguneri and Ennore SEZ. It
is also planning for two more SEZs in the state, one in Coimbatore and
another in the outskirts of Chennai.

http://www.financialexpress.com/fe_full_story.php?content_id=147559