Building New Heavy Engineering Factory in India

alaskabob

Sort of a strange thread I know but I wondered if anyone had any advice..
A friend of mine works for a company that plans on building a new engineering factory somewhere in India.
The factory needs to be near good freight transportation links (roads/rail/port) but also needs to be somewhere where there is already a skilled and well educated workforce (both in mechanical engineering and in business fields)
Someone has suggested Delhi as a location but that doesnt seem too convenient for shipping/ports etc
Anyone here got any ideas? The time scale is fairly short; they are hoping to be up and running within the next few months!
This is a genuine, though unusual query.
Thanks

PeakXV

Mumbai's IIT - Mechanical Engineering department is large & port is there too!

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Shaktipalooza

I'd agree Delhi is nowhere near the coast.

Ernakulam? Kerala has a very high literacy rate.

Your friend should probably research the cost of hauling freight via trains in India. My understanding is that freight charges subsidize the passenger costs, therefore could be higher than expected.

Yes but considering it also has some of the most expensive real estate in the world I would think it might be too costly.

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ddevadatta

My own suggestion is Bangalore. Today Laloo Prasad has cut the freight rates, the Indian Railways is running at a record profit and so transportation is in a much better shape that ever before.

I say Bangalore for all the other reasons you suggest as being important. I also suggest Chennai because of the port.

If you need a construction company that is reliable let me know. my friend who I was with just two weeks ago has a pre-fabricated commercial building company. He was the first in india and does a fine job. E-mail me at dandeva@earthlink.net

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alaskabob

Yes, I should have mentioned cost. There is a reasonably substantial budget but they are not willing to set up in an area no matter what the cost.
I gather they have been quoted prices in the region of $3million per acre close to Delhi and are not willing to spend that much money (unless all other factors are favourable)
(ps many thanks for replying so quickly)

cyberhippie

Chennai or Andhra Pradesh offers much of what you are looking for. Around Chennai or further North in Visakhapatnam where the land costs may be cheaper but also has a port!

Visakhapatnam also has a background in heavy engineering, like ship building and ancillary industries.

It's well linked by rail and road,

ISN

Chennai would be the ideal candidate for your requirement; I am posting a couple of links to backup my claim. Hope it helps.

Detroit's Next Big Threat http://www.washingtonpost.com/wp-dyn...120401094.html

India Trade Mission Attracts Record Number of Participants http://www.ita.doc.gov/press/publica...india_1006.asp

Chennai - The Detroit of India http://chennai.metblogs.com/archives..._india.p html

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Shaktipalooza

Hey. My wife is originally from Andhra. If you need to hire an expat engineer type I might make her available

Ok, to be honest she's a computer engineer...

crvlvr

Here is a list of ports in India.

http://www.indiaonestop.com/ports.htm

A much more thorough assessment needs to be performed rather than going off the opinions of a few on this board. Land, water and power and the biggest challenges in India. Finding skilled people is easier, as they are more mobile.

pan_nv

I would suggest Ankleshwar, Gujarat it is close to mumbai and close to Baroda and Surat both big cities in gujarat. Also the land price there is much cheaper then kerala/Bangalore

GoanCanuck

I will second that. Tamil Nadu is these days attracting the largest investments as far as engineering and manufacturing is concerned because of the lower prices of land as well as the presence of a skilled workforce that can be hired at a much cheaper cost as compared to Mumbai, Bangalore or Delhi. Another big advantage for Tamil Nadu is the aggressiveness of the state government which goes all out to get overseas investment by offering very attractive options.

Another point to be kept front and centre is that using Chennai port will help you in clearing your imports and exports as compared to Mumbai which is clogged with excessive traffic and hence has a huge backlog.

capt_mahajan

alaskabob, frankly, there is insufficient information to make a recommendation.

-What exactly do you need port connectivity for? For example, with ICD's (Inland Container Depots) you can move normal shipments from anywhere, unless they are either project engineering kind of pieces or very large volumes, or oversized cargoes.

-Land and project cost. NCR (Delhi region), Mumbai, Bangalore, Chennai will be very expensive. Hyderabad/AP, Kerela, Gujarat is cheaper

-Captive power. If you don't envision this, then you have to look at States and areas where power is not a problem.

-Labour issues. Kerala and West Bengal are quite notorious in this regard, though the WB govt is making the right noises for the software industry.

I see two kinds of possibilities
-major cities, with higher costs. More easily available workforce, though

-Second tier cities :Gujarat, Andhra are good possibilities. Workforce is not that easily available in smaller places in Gujarat and Andhra, though. But depending on requirements it may be good enough.

Hope this helps.

concoran

Hi Bob,
India works quite differently than US. In India all the utility companies such as Electricity, water, garbage are state government owned. As a result, basic services should be considered essential, along with the ones you mentioned.

There are 7-8 states in Deccan part of India (south) that have easy access to the ports. Of those, Gujarat, Maharastra and Tamil Nadu have business friendly environment, in that - the governments have transformed large, empty areas into Industrial Development Corporations where mid-sized industries are located next to each other and have much better supply of basic needs (electricity and water), and have tax benifits. You may want to research such areas.
In Maharastra, these areas are called MIDC (Maharashtra Iindustrial Development Corporation)(www.midcindia.org), in Gujarat it is JIDC (http://www.gidc.gov.in/). These areas are fairly free of local politics and you can go about doing your own business. (All most) All of these places have access to freight train.

This is in sharp contrast with starting a venture elsewhere, where, it's hard to get basic services, have to pander to local politics and generally get everything done by the virtue of bribing everyone in the food chain. Karnataka is a good state with very high number of technical schools which produces an enviable number of technical graduates each year. But, except for software, growth has largely stunted for the lack of IDCs and govt support. Mechanical/Chemical graduates from here largely migrate to M/G/TN.

I would suggest looking at Gujarat/Maharashtra/TN closely. If you not happy check out Karnataka or Andhra. Try to avoid Kerala and Goa. Kerala has it's own problems (communism) and Goans are lazy, happy more inside the Bar than in work environment.

Hope this helps.

julesa

is the company going to try and set it up itself? is it worth considering engaging an indian based contractor to manage implementation and other 'negotiations'?

alaskabob

Thanks everyone. I've passed on all your replies to my friend. He has more information than me on what exactly the entire project involves which is why my thread was so vague Im afraid. Im sure he'll find it all helpful. I'll try to let you know where the final site will be.