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India By State - Madhya Pradesh - Business Opportunities


Business Opportunities

 

Introduction

The economy of Madhya Pradesh is largely natural resource driven, leveraging the state's advantage in agriculture and mineral resources. The key industries and sectors where Madhya Pradesh has competitive strength include cement, textiles, mining and food-processing. Its excellent location, bordering onto seven Indian States, allows easy access to the booming national markets of the country. The western belt of Madhya Pradesh has a large cotton growing area, because of which the textile units in the State are attracting large investments. The State is famous for its traditional handicrafts and handloom cloths. It is the leading producer of best quality wheat, rice, pulses and several other agricultural products. There exists ample scope for setting up and developing agro-based industries. The State is endowed with rich mineral resources, educated and skilled workforce as well as many high technology industries like automobiles, electronics, cement, etc. In addition, tourism and information technology sector provides immense opportunities for motivating investments into the State.

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Key Industries

Agriculture

Agriculture is the main stay of the State economy, with about 80% of the population dependent on it. The State's net sown area is estimated at about 12.47 million hectares. Madhya Pradesh is the third highest producer of food grains (14.10 m. metric tonnes) in the country. The major crops grown in the State are paddy, wheat, maize and jowar among cereals; gram, tur, urad and moong among pulses; soyabean, groundnut and mustard among oilseeds. The commercial crops like cotton and sugarcane are also grown in considerable area in few districts. The State is placed fourth in wheat production and eighth in rice production in the country. Thus, the agro-based industries have great potential for development in the State.

The State Government is also making all efforts for the development of horticulture in the State. State is known as a large producer of ginger, garlic, turmeric, chilli, coriander, banana, guava, tomato, oranges, papaya, etc. It has a vast scope to invest in this field. Besides, some medicinal crops and narcotic crops are also grown in the State.

Several AEZs (Agri Export Zones) have been set up for facilitating export of specific products from a geographically contiguous area. The commodities that have high potential are Potato Spices (in the western parts) Pulses (in the central part of the state, Wheat (in the western and central regions) and Oranges (South Districts) Of the total gross cropped area 59 percent is sown in the Kharif season AND 41 percent in the Rabi season.

Automobiles & Auto Components

Madhya Pradesh's location at the centre of India has led to its emergence as an important destination for automobile and auto component industry. The industrial belt around Indore has production facilities for a number of automobile manufacturers. A network of vendors supplying auto components to these plants is being established.

While Madhya Pradesh's current share in India's total automobile sector output is relatively small, it is expected to witness a significant increase. The projected growth rate for Indian automobile market is over 10 per cent per annum; this presents significant opportunity to the state. Prominent automobile and auto component players present in Madhya Pradesh are Kinetic Motors, Eicher Motors, Bajaj Tempo and Hindustan Motors.

Some investment in the pipeline in this sector are Baja Tempo's plans to invest US $80 million to manufacture heavy and light commercial trucks in technical collaboration with Maschinenfabrik Augsburg-Nurnberg (MAN) of Germany at Pithampur; Kinetic Motors new production line for manufacturing the Italjet range of scooters at Pithampur and Hindustan Motors plan to invest around US $16 million over a period of four years to manufacture and supply automobile engines and transmission units to Ford India.

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Cement

Madhya Pradesh is the third largest producer of cement in the country. With 3,625.98 million tonnes of limestone reserves the state has seven major cement plants, with an annual installed capacity of 15.97 million tonnes. The availability of quality raw material, cheap labour and good industrial infrastructure has made Madhya Pradesh, the perfect choice for cement producers in the country. The sector has a potential of attracting an additional US $2.5 billion of investment.

Edible Oils

Madhya Pradesh is among the leading producers of edible oils in India and the largest producer of oilseeds among the states. In 2002-03, the state produced 3 million tonnes of oilseeds, representing over 20 per cent of India's production. The state government has taken steps to facilitate further development of the food processing industry in the state. These include setting up Food Parks with private investment. At present, six Food Parks are under implementation in various parts of the state. Prominent investors in Madhya Pradesh's edible oil industry are Ruchi Soya, MP Glychem and Vippi Industries. Ruchi Soya is expanding the capacity of its edible oil refinery at Indore from 600 tonnes per day to 1,000 tonnes per day. Prosoya Foods, a subsidiary of ProSoya Inc. Canada has set up a soya milk extraction plant in Madhya Pradesh.

IT & ITeS

Madhya Pradesh has set up over 24,000 km of Optical Fibre backbone to cover all its 313 Developmental blocks across 45 Districts. Four Software Technology Parks (STP units) are in the pipeline to be setup in Bhopal, Indore and Gwalior. There are presently 38 IT Engineering colleges providing a suitable learning ground for future IT professionals and the country's first ever Indian Institute of Information Technology and Management (IIITM) is at Gwalior

IT/ITeS exports from Madhya Pradesh are valued at US $655 million, Software exports are valued at US $11 million and IT enabled services are valued at US $644 million.

Mining & Minerals

Madhya Pradesh is endowed with significant mineral resources. With 604,000 carats of proven diamond reserves it accounts for 99 percent of India's total reserves. It is the sole producer of diamonds in the country.

It also leads the country in the production of copper ore, slate, pyrophillite, diaspore, and is second in production of rock phosphate, clay and laterite. The state has the country's largest open cast copper mine at Balaghat and the thickest coal seam of Asia at Singrauli coalfield in Sidhi district.

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Pharmaceuticals

By leveraging the existing manufacturing base, along with a low cost resource pool Madhya Pradesh has a potential to further develop the pharmaceutical industry in the state. Ranbaxy, India's leading pharmaceuticals company, has a bulk drug and formulation plant at Dewas in Madhya Pradesh. IPCA Laboratories plans to invest US$ 22 million to expand its formulations capacity at Ratlam and invest US$ 14 million to set up a new export oriented formulations unit in Indore. The plant will come up in the SEZ and will be built according to USFDA specifications. Nicolas Piramal is investing US$ 7 million to invest in its ophthalmology products facility at Pithampur. Biofill Pharma plans to invest US$ 25 million in Pithampur and Lupin Laboratories is expanding its manufacturing plant at Mandideep with an investment of US$ 4.5 million.

Textiles

Madhya Pradesh has got the best business opportunity in the field of textile manufacturing. There are a large number of cotton textile mills located in Indore, Ujjain and Burhapur. Some of the key industry players in the state are Bhaskar, Bhilwaras, Indo-Rama, Maikal Oswals, Parasrampuria and S Kumar's.

Textile Infrastructure in Madhya Pradesh

Composite Mills 20
Exclusive Weaving Units 8
Export-Oriented Spinning Units 12
Handlooms 47,000
Looms 6,500
Power Looms 43,290
Power Loom Units 17,524
Rotors 14,348
Spindles 14,14,000
Spinning Units 40

Tourism

The tourism sector in Madhya Pradesh has been identified as one of the key propellers of growth for the State by the State Government. The domestic tourist inflow has been approximately 8 million in 2005-06, whereas the foreign tourist arrival was relatively less at 0.6 million.

The State has innumerable sites for tourist attraction ranging from preserved medieval cities and wildlife sanctuaries to pilgrim centres. It includes monuments, archaeological sites, carved temples, stupas, forts, palaces, and much more.

The State government has sanctioned US $12.2 million for the development of 17 Tourist Spots across the State, in addition to improving air connectivity to and from other states. Madhya Pradesh has taken initiatives to promote Eco & Adventure Tourism as well as promoting Medical and Herbal Tourism in association with private parties.

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Key Players

ACC Ltd

ACC is one of the largest cement manufacturing companies in India, with a cement production capacity of 16 million tonnes per annum. In 2004-05, ACC revenues stood at US$ 1035 million. ACC is a pioneer in cement and RMC, a leader in refractories and one of the pioneers in the area of advanced materials. The company has a countrywide distribution network and manufactures all types of cement. In Madhya Pradesh, ACC has a 1.7 MTPA cement plant at Kymore. The company plans to invest US$ 3.3 million to expand its manufacturing capacity of roofing products at Kymore. This will increase its production from 68,000 tonnes of asbestos roofing to 78,000 tonnes.

Accenture

Set up in 1997, Accenture India, a wholly owned subsidiary of the USD 16.65-billion global management consulting and outsourcing firm is goading commendable progress in the state. There are a total number of 35,000 employees; including 10,000 in the BPO (business process outsourcing) space and the remaining 25,000 people in the business consulting and systems integration and technology divisions to serve global clients.

Bajaj Tempo Ltd

Bajaj Tempo is a US$ 190 million manufacturer of utility and light commercial vehicles, agricultural tractors and diesel engines. It has an automobile manufacturing plant at Pithampur near Indore. Bajaj Tempo plans to invest US$ 80 million to manufacture heavy and light commercial trucks in technical collaboration with Maschinenfabrik Augsburg- Nurnberg (MAN) of Germany at its existing site at Pithampur near Indore.

Birla Corporation Ltd

Birla Corporation Ltd is the flagship company of the MP Birla Group. The company's main areas of business are jute, cement, synthetic yarn, calcium carbide, industrial gases, PVC coated fabrics, PVC floor coverings, auto trims, healthcare and education. Birla Corporation has joint ventures and collaborations with world leaders like DLW AG of Germany, Rhone Poulenc of France, Sweden-based Ericsson Cables & AB and ABB, GE, Toshiba and AEI Cables. In 2003-04, the company's revenues were US$ 276 million and profits over US$ 9 million.

The company is setting up a captive power plant of 27 MW in Satna in Madhya Pradesh with an investment of US$ 42 million. It is also investing US$ 62 million for various capital expenditure programmes across the country.

Cadbury India Ltd

Cadbury India is a subsidiary of Cadbury Schweppes, the world's largest confectionery and third largest soft drinks company. Cadbury India had sales of over US$ 150 million in 2003.The company employs nearly 2000 people across India. Cadbury India has one of its main production plants at Malanpur, near Gwalior.

Century Textiles and Industries Ltd

Century Textiles and Industries Ltd is the flagship company of the B K Birla Group. Century is involved in diversified businesses including cotton textiles and yarn, viscose filament yarn and rayon, tyre, industrial yarn, cement, paper and pulp. In 2004-05, it registered sales were over US$ 500 million. Century has presence in Madhya Pradesh through a cement plant at Satna. The company is expanding the production capacity of its cement plant at Satna by 0.8 million tonne per annum. It also has a 100 per cent export oriented cotton yarn and denim production plant near Indore. The unit has an ISO-9002 certification.

Coca Cola India

Coca-Cola India, one of the largest companies in the beverage market, has invested more than US$ 1 billion in India over the past decade. Coca-Cola is one of top international investors in India. In 2003, Coca-Cola India pledged to invest a further US$ 100 million in its operations. In Madhya Pradesh, Coca-Cola has a plant at Pilukhedi in Raisen district, near Bhopal. The company plans to invest US$ 6.7 million for expanding the operations in its plant at Pilukhedi.

Eicher Motors Ltd

Eicher Motors, part of the US$ 355 million Eicher Group, is a significant player in the Indian automobile industry. Eicher Motors manufactures and markets commercial vehicles with Gross Vehicle Weight (GVW) ranging from 5 to 25 tonnes. It is one of the leading manufacturers of commercial vehicles in India. The company has a manufacturing facility is Pithampur, Madhya Pradesh. This state-of-the-art plant has a total area of 72 acres with 18000 sq mt as the covered area. It houses some top-of-the-line equipments, a robust infrastructure and has an annual production capacity of 30,000 vehicles. The company has a world-class R&D centre that has helped the company successfully developed a wide range of commercial vehicles including trucks and buses. The company recently invested US$ 22 million for manufacturing heavy commercial vehicles at its Pithampur plant.

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Grasim Industries Ltd

Grasim Industries is the flagship of the AV Birla Group, one of the most prominent Indian business houses. With the recent acquisition of cement business of L&T, Grasim has become the largest producer of cement in India. Grasim is also the largest producer of Viscose Staple Fibre (VSF) in India and one of the largest textile and yarn manufacturers. In Madhya Pradesh, Grasim has a presence through a cement plant at Jawad, a VSF plant at Nagda and textile & fabric manufacturing plants near Gwalior.

Hindustan Lever Ltd (HLL)

Hindustan Lever Ltd is India's largest fast moving consumer goods company, with leadership in home & personal care products and foods & beverages. Its parent company, Unilever a Fortune 500 transnational holds 51 per cent of the equity. HLL has a plant for synthetic detergents in Chindwara district of Madhya Pradesh. In 2002, HLL launched the "Vindhya Valley" project in association with the Madhya Pradesh government to help increase the income of the farmers and small town entrepreneurs engaged in agro processing and cottage industries in the state by providing support infrastructure for marketing and distribution of their products.

HLL also has an alliance with Rallis India, a Tata group company, for a contract farming of wheat in Madhya Pradesh. This is mainly intended to help farmers grow and sell wheat and for making basmati rice for export in Madhya Pradesh.

Infosys

Set up in 1981, Infosys reached a revenue of USD 4.18 billion in 2007-08 recording a 35 per cent growth over revenues of USD 3.12 billion in 2006-2007. The company is an active participant in the areas of IT consulting, modular global sourcing, business process re-engineering, and BPO services. Infosys has operations in Australia, China and US and has established marketing and technological alliances with FileNet, IBM, Intel, Microsoft and Orcale etc.

IPCA Laboratories Ltd

IPCA Laboratories is one of India's leading pharmaceutical companies with a strong thrust on exports. The Group's principal activities are manufacturing and distributing drugs and pharmaceuticals. Its products include tablets, capsules, basic drugs, orals, liquids and injectables. The company has a bulk drugs and formulation unit at Ratlam and a bulk drug facility in Indore in Madhya Pradesh. IPCA Laboratories plans to invest US$ 22 million to expand its formulations capacity at Ratlam. It also plans to invest US$ 14 million in the first phase to set up a new export oriented formulations unit in Indore.

Kinetic Motors

Kinetic Motor Company Ltd is part of the Kinetic group of companies, a leading manufacturer of two wheelers in India. The company has a state-of- the-art manufacturing facility at Pithampur, near Indore. The facility is ISO-9001 certified. Kinetic Motors is setting up a production line for manufacturing the Italjet range of scooters at Pithampur in Madhya Pradesh.

Nicholas Piramal India Ltd

Nicholas Piramal India Ltd (NPIL) is one of India's leading pharmaceutical and healthcare companies with sales of US$ 280 million. NPIL is ranked fourth in domestic formulations sales and second in total domestic pharmaceuticals sales. Its Pithampur plant in Madhya Pradesh is accredited by reputed organisations like Allergan, Novartis, Solvay and IVAX, among others. Nicolas Piramal plans to invest US$ 45 million to enhance its research and development activities besides strengthening its manufacturing facilities.

Procter & Gamble

Procter & Gamble India is one of India's fastest growing FMCG companies. The company has a turnover of over US$ 200 million. The company has a high technology detergent manufacturing plant in Raisen district in the state.

Ranbaxy Laboratories Ltd

Ranbaxy Laboratories Ltd, India's largest pharmaceutical company, manufactures and markets world-class generics, branded generic pharmaceuticals and active pharmaceutical ingredients. It is ranked amongst the top ten generic companies worldwide. Ranbaxy has joint ventures/subsidiaries across the globe and its products are sold in over 100 countries, it has manufacturing operations in 7 countries and ground presence in 44 countries. In 2004, the company's global sales crossed US$ 1 billion. Ranbaxy has manufacturing facilities in seven countries (including India), most of which are USFDA approved. Ranbaxy is investing US$ 100 million for expanding production capacity of Indian, Brazilian and US manufacturing utilities. In Madhya Pradesh, the company has a bulk drug and formulation plant at Dewas.

Ruchi Soya Industries Ltd

Ruchi Soya Industries Ltd is the largest edible oil company in India engaged in refining and trading of edible oils, soybean oil extraction, and export of soybean meal. It has an annual turnover of over US$ 550 million. In 2003, the company embarked on an expansion programme at its edible oil refinery at Indore. The plant capacity is being raised from 600 tonnes per day to 1000 tonnes per day.

Wipro

Wipro is established in 1945. The company reached revenues of US $4.97 billion in 2007-08 recording a 36 per cent growth over revenues of US $3.56 billion in 2006-07. The company is engaged in areas of IT services, product engineering, technology infrastructure services, BPO and other consulting solutions. Wipro offers services, such as application development, business intelligence, deployment and maintenance, CRM. The company has 54 development centres and 30 offices spread across India, N. America, Middle East and Europe.

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