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India By State - Himachal Pradesh - Business Opportunities


Business Opportunities

 

Key Industries

Agro-based

Agriculture is the prime occupation of the people of Himachal Pradesh. Agriculture provides direct employment to about 65 % of the total workers. The climate, rainfall, availability of water, and manpower are some of the most important factors for the huge growth in the agriculture sector. The area under fruits increased to 200,502 hectares during 2007-08. Apple is the most important fruit grown in Himachal Pradesh. It constitutes about 46 % of the total area under fruit crops and about 83 per cent of the total fruit production. Other important fruits include nuts, citrus fruits, dry fruits, mangoes and other sub-tropical fruits.

Growth of fruit production

Tourism

Tourism is one of the most important sectors in the state, in terms of foreign exchange earnings as well as creation of employment opportunities. The major attractions include tribal areas, pilgrim centres, mountaineering and winter sports. The state has more than 2,000 temples attracting thousands of devotees from all over the country.

Growth of foreign tourists

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Mineral-Based

Minerals constitute a fundamental component of the state's economic base. The state has considerable mineral resources including rock salt, limestone, gypsum, silica-sand and baryte. The high availability of quality limestone, a key raw material has made the cement industry flourish. Many domestic companies and MNCs have established their manufacturing facilities in the state.

The cement plants of ACC and Ambuja Cements have a total capacity of over 4 million tonnes with plans of future expansion. Jai Prakash Associates plans to set up a unit with an investment of USD 1 10 million. Besides these, there are many other mineral-based units like stone crushing, calcium carbonate units, hydrated lime units etc.

Pharmaceuticals

Pharmaceutical units set up in the state enjoyed an income tax holiday for five years till 2007 and a concessional rate of income tax for the next five years. The cost of production is also considerably lower. It is becoming a hub for pharmaceuticals manufacturing, with over 300 pharmaceutical firms.

With a proactive policy of the Government, the state has managed to attract significant investment in the recent past. The investment, particularly from the pharmaceuticals sector has been impressive, clearly vindicating the special incentives policy pursued by the Government.

Ranbaxy, Torrent, Indoco Pharma, Nectar Life Sciences, Indo-Swift Pharma, Dr Reddy's Laboratories and Cipla are some of the pharmaceutical companies that have manufacturing facilities in the state. UniChem plans to invest over USD 8.7 million in its third formulation manufacturing facility. Indoco plans a formulation facility and Pulse Pharma plans its second plant for therapeutic nutrition in Baddi. Torrent, Zydus, and Cadila are also planning to set up formulation facilities in Baddi.

Textiles

Textile industry in Himachal Pradesh is mainly focusing its attention on spinning yarns. Companies such as Vardhman are also operating in weaving and dyeing. The growth rate in the textile industry has grown at 2.78 % CAGR during 2002-2005. The handloom and carpet weaving industry have also developed as small-scale in the state. Some of the key players operating in the state are Birla Textile Mills, Winsome, Vardhman and Malwa Cotton.

IT and Electronics Industry

Himachal Pradesh's IT policy and the incentives offered to the IT industry are aimed at promoting the state as an attractive destination for the industry. The state has proposed to set up software technology parks; several incentives are being offered to IT firms; attractive packages for investment proposals above US$ 2.5 million. The state has launched a venture capital fund dedicated to the IT industry with a corpus of roughly US$ 4.8 million; it is funded jointly by Small Industries Development Bank of India (SIDBI) and other State Government agencies.

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Key Players

Associated Cement Company (ACC)

ACC is India's foremost manufacturer of cement and concrete with 14 factories, 19 ready mix concrete plants, 19 sales offices, and several zonal offices. ACC has a 3.52 metric tonnes per annum (mtpa) capacity plant at Gagal, Bilaspur district, and the capacity of which was recently increased to 4.4 mtpa. Associated Cement Company is the largest cement producer in the country with an installed capacity of 16.1 million tonnes per annum and a turnover of more than USD 745 million. ACC is the country's first name in cement, concrete and refractory's. The Super-brands Council of India named ACC as a 'Consumer Super-brand' making it the only cement company to achieve this status. The company plans to expand its current capacity from 2.8 million tonnes to 4.4 million tonnes at its Barmana plant with an investment of USD 38 million.

Cipla

Cipla is one of the leading pharmaceuticals companies in the country. Established in 1898, the company has an excellent process R&D capability and local distribution network which helped the company strengthen its position in both domestic as well as global markets. The company has one of the largest product portfolios in the industry with over 1,000 products in the domestic market. It launched over 55 products in 2004 alone. Cipla's anti-asthma brand, Asthalin, is ranked seventh among the top 10 retail brands. Cipla has five manufacturing facilities for bulk drugs and formulations and plans to establish one at Baddi with about USD 1 million in 2005. Cipla recorded an annual total income of over USD 425.5 million in 2004.

Dabur India Ltd

Dabur India Ltd is the fourth largest FMCG Company in the country with interests in healthcare, personal care and food products. Building on a legacy of quality and experience for over 100 years, Dabur has a turnover of USD 282.7 million with powerful brands like Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real. The company entered the specialised healthcare area of cancer treatment with its state-of-the-art oncology formulation plant at Baddi.

Dharampal Satyapal Group

Dharampal Satyapal Group is a diversified conglomerate with business leadership across a wide spectrum of products like chewing tobacco, food & beverages, hospitality and technology solutions. During 2000-03, the group's turnover surged by over 250 per cent. The company's brands include Rajnigandha and Pass-Pass. The group has two plants at Baddi, Dharampal Satyapal Ltd and Dharampal Satyapal Ltd SRF.

Gabriel India Ltd

Gabriel India Ltd, a leading name in the Indian auto component industry, manufactures ride control products and engine bearings. It is the flagship company of the USD 400 million and Automotive Systems, a leading manufacturer and supplier of the widest range of automotive components and systems in the country. Gabriel India, with a turnover of over USD 94 million, is a major supplier to all segments of the market - OE, aftermarket and exports. The plant is equipped an in-house chemicals and metallurgical laboratory, a non-ferrous powder foundry, sinter lines, semi-automatic presses, high-speed broaching machines, electroplating and sophisticated testing facilities. The state-of-the-art QS 9000 plant at Parwanoo has a manufacturing capacity of 20 million units per annum.

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Himachal Futuristic Communications Ltd (HFCL)

Himachal Futuristic Communications Ltd is one of the leading telecom equipment manufacturers in the state. Established in 1987, the company has interests in manufacturing transmission equipment, optical fibre cable, accessories and terminal equipment. HFCL's reputation is built on its technological expertise and sophisticated manufacturing plants. The two sprawling units at Solan are accredited with ISO 9002 certification and produce the best in wireless and wire line technologies. Employing over 1,500 professionals, HFCL is the first Indian telecom company to have successfully subscribed its GDR issue. The company's well-equipped R&D facility is involved in exploration of new technologies and designing of radio & optical transmission equipment.

Malwa Cotton Spinning Mills Ltd

Malwa is among the top ten textile mills in the country. Malwa Cotton Spinning Mills Ltd, a subsidiary of VSO Group, has a facility at Paonta Sahib. The plant, which was set up in 1988, manufactures cotton, acrylic, polyester, viscose and other synthetic fibres. The Government of India awarded the group for consistent performance in exports and ISO 9002 for quality assurance.

Purolator India Ltd

Purolator, a joint venture between Anand Group and ArvinMeritor Inc, USA, a global provider of integrated automotive systems, modules and components for OEMs and the aftermarket with annual sales turnover of USD 7 billion approximately, is the largest manufacturer and exporter of filters in the country. Purolator has been manufacturing, marketing and distributing filters since 1923. The purolator brand includes more than 2,000 parts for automotive, light truck and heavy-duty applications. It manufactures air, oil, fuel and hydraulic filters for application in automotive, railways and aviation industries. All facilities of the company are QS 9000 certified and are now working towards ISO 14000. Purolator's Parwanoo plant is the largest filter facility in the country, established in 1976. Spread over an area of 9,000 sq mt, the plant primarily manufactures filter inserts for the domestic and export markets and also serves the defence and aviation segments. Parwanoo plant has the distinction of being the first filter facility in the country to be accredited with ISO 9001 certification.

Ranbaxy Laboratories

Ranbaxy is the country's leading pharmaceuticals company with a strong international focus. The largest exporter of drugs from India, it has business operations in 40 countries and manufacturing facilities in 6 countries. The company's major strengths are in the therapeutic areas of anti-infective, dermatology, GI tract, orthopaedics and cardiovascular. The company with a strong R&D focus has a manufacturing facility in Paonta Sahib, where it produces tablets and soft gelatine capsules. The plant also has a state-of-the-art fermentation block. Ranbaxy has been exporting pharmaceuticals to USA and Europe, among other countries, from the Paonta Sahib plant for several years.

Torrent Pharmaceuticals Ltd

Torrent is one of the largest pharmaceutical players in the domestic market, manufacturing bulk drugs and formulations with about 6 in the top 250 products in the market. Established in 1973, the company has a market share of 5.4 per cent and 2 per cent in cardiovascular and anti-diabetic segments respectively. Torrent is one of the first pharmaceutical enterprises in the country to realise the vital role of research. The company has also set up its R&D facility at Baddi with an investment of USD 20 million and employee strength of 160. It is involved in developing new formulations for the company. The facility at Baddi would enjoy fiscal benefits like zero excise, sales tax and income tax for the next 10 years and mainly caters to the domestic market.

Vardhman Group

Vardhman, a major integrated textile producer in the country, has a modern state-of-the-art manufacturing facility at Baddi with an installed capacity of over 80,000 spindles. The group was set-up in 1962 at Ludhiana in Punjab. Since then, the group has expanded manifold and is today, perhaps, the largest textile conglomerate in the country. The group recorded a turnover of USD 439 million in 2003-04. Its portfolio includes manufacturing and marketing of yarns, fabrics, sewing threads, fibre and alloy steel.

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Export profile

Export contributed to a larger section of the growth of economy in the state of Himachal Pradesh. In 2004-05, the total exports from the registered industries were recorded to be at USD 409 million in the state. The state is a large exporter of textiles, with a strong traditional industry base, which contributes around 65 % to its total exports. The exports to be ranked are chemicals followed by machinery. Another major source of foreign exchange earnings for Himachal Pradesh is export of apples. The Agriculture Produce Export Development Authority has approved in principle to set up an agri-export zone for apples in Himachal Pradesh to help provide apple growers gain easier access to the international market, enabling them to get remunerative returns on a sustainable basis.

Himachal Pradesh's exports increased by and estimated 15.6 per cent in 2008-09 as compared to the previous year.

Major exports from the state were from the pharmaceuticals, textiles and ferrites industries. The state had an export growth of over 100 per cent in 2003-04 over the previous year.

Investment

The aggressive policy pursued by the State Government to attract investment has paid off. Several MNCs from various sectors have set up their facilities in the state. Spice Communications, India and TCL Mobiles, China have initiated the process of setting up a manufacturing facility for mobile handsets in the state. Besides catering to the domestic market the facility would also export to the Middle East and South African countries.

Assam annual exprt growth

The state enjoyed a good investment climate in the recent past. Many projects in the power sector are in the pipeline, constituting about 99 per cent of the total proposed projects in the state.

Factors influencing investment climate in Himachal Pradesh:

  • Availability and ease of use of factor inputs such as land and labour;
  • Availability of adequate physical and social infrastructure, such as power, telecom, urban infrastructure, water supply, hospitals, and educational institutions;
  • Governance and regulatory framework in terms of rules and regulations governing entry, operation, and exit of firms, stability in regulation, integrity of public services, law and order and investment facilitation;
  • Provision of incentives and access to credit.

MG Rover, UK has signed a joint venture to set up a manufacturing facility at Baddi with an investment of US$ 45 million and production capacity of 24,000 units. Compact International plans to shift its cosmetic products manufacturing facility from Noida to Baddi. FMCG majors such as Johnson and Johnson and Hindustan Lever as well as other corporate majors like Titan are also in the process of setting up manufacturing facilities in the state.

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More Information on Himachal Pradesh

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