Tamil Nadu Industry Scenario-Sept

Economy &
Industry Monitor
Tamil Nadu
Vol.809 September 2008
CONTENTS
EXECUTIVE SUMMARY.........................................................................................................2
Investment News....................................................................................................................2
Sectoral News .........................................................................................................................2
Policy News............................................................................................................................2
Companies in News ................................................................................................................2
STATISTICS ..............................................................................................................................3
INDUSTRY FOCUS ..................................................................................................................4
Cement Industry .....................................................................................................................4
Indian Scenario ...................................................................................................................4
State Scenario......................................................................................................................5
Key Players .........................................................................................................................5
Outlook ..............................................................................................................................5
SECTORAL NEWS ...................................................................................................................6
Power .....................................................................................................................................6
Information Technology.........................................................................................................6
Steel........................................................................................................................................6
POLICY NEWS .........................................................................................................................6
INVESTMENT NEWS..............................................................................................................7
UPCOMING PROJECT ............................................................................................................8
UPCOMING EVENTS .............................................................................................................9
© Cygnus Business Consulting & Research Pvt. Ltd. 2008 1

Economy & Industry Monitor – Tamil Nadu September 2008
EXECUTIVE SUMMARY
Investment News
Elango Industries to set up 80mw power plant
Medium and small steel manufacturer Elango Industries Ltd is planning to set up an 80mw coal-based
power plant at Gummudipoondi near Chennai, Tamil Nadu.
Vodafone to increase 3G penetration in Tamil Nadu

3G mobile telephony is around the corner for Vodafone Essar that is already present in the 3G services
space globally. The company is readying itself for launching its operations in India once the Union
Government's policy related to 3G is clarified and licenses are issued to cellular operators.
Sectoral News
Power
Elango Ind plans coal-based power plant near Chennai
Elango Industries Ltd, a company listed with the Bombay Stock Exchange, plans to set up an 80mw coal-
based group captive power plant at Gummidipoondi, near Chennai.
Information Technology
Tamil Nadu to create 3m jobs in IT sector
Tamil Nadu's Information Communication Technology (ICT) Policy 2008-09, aiming to provide
employment to three million people in the next three years was unveiled by Chief Minister M
Karunanidhi.
Policy News
TN policy focuses on spread-out growth in IT

The Tamil Nadu Government unveiled the Information, Communication and Technology Policy, 2008,
with a thrust on incentivising units set up in smaller towns and villages and developing the full eco-system
for the development of the industry.
TN gets new ICT policy

Karunanidhi, Chief Minister of Tamil Nadu, recently released Information and Communication
Technology (ICT) Policy 2008-09 for the state.
Company in News
¾ Madras HC's direction to TISCO

STATISTICS
Foreign Trade
1100000
Exports and Imports (2005-06)
800000
Rs m
500000
200000
-100000
By Sea By Air
Source: Tamil Nadu Statistics; Cygnus Research
State Income
3000000 4000
State Income (Rs m) State Income (Rs m)
2500000 3500
2000000 3000
1500000 2500
GDP at C urrent GDP at C onstant Percapita income at Percapita income at
Prices Prices C urrent Price C onstant Price
Source: Tamil Nadu Statistics; Cygnus Research

INDUSTRY FOCUS
Cement Industry
The world cement industry is a complex structure of local, national,
regional and global markets and cement/clinker movements. The
structure is ever changing, being closely tied to changes in a range of
variables – including macro-economic growth, housing sector booms,
public spending levels, trade protectionism, and transportation costs.
With a relatively small number of multinational companies dominating
cement capacity in many markets throughout the world, the cement
sector has become even more globalised in recent years. With
increasing multinational presence in growing Chinese, Indian, Middle East and Latin American markets,
the structure of world trade in cement and clinker continues to be dynamic, with the dramatic changes in
shipping costs adding a further layer of complexity to trading patterns. The next 15 years are set to
witness further extensive change in cement supply/demand patterns, as different regions/countries enjoy
very different development profiles.
Indian Scenario
The Indian cement industry with a total
capacity of 151.2m tonnes (including mini 180 Cement-Indian Scenario
plants) in March 2003 has emerged as the C apacity Production
second largest market after China,
surpassing developed nations like the USA 160
in mn tonnes
and Japan. Per capita consumption has

increased from 28kg in 1980-81 to 110kg
in 2003-04. In relative terms, India’s 140
average consumption is still low and the
process of catching up with international
averages will drive future growth. 120
Capacity Vs Production
The capacity and the production of the 100
2003 2004 2005 2006
cement are simultaneously increasing
steadily. The growth in the capacity of Source: Indiastat; Cygnus Research
Indian cement industry is showing
400 Cement Scenario in 2007
constant rate around 4% when capacity in
Large Plants Mini Plants
the years 2003-2006 are compared, while
the production is showing a greater rate 300
than that of capacity. When the
production in the year 2004 is compared 200
with that of 2003 there is an increase of
6.15%, when the production of the years 100
2004 and 2005 are compared, there is an
increase of 8.6% and comparing the 0
production of the years 2005 and 2006,
there is an increase of 10.7%. This shows
-100
the steady increase in the production of
No. of Plants C apacity(m Production(m
Indian cement industry. tonnes) tonnes)
There are 132 large plants and 365 mini
Source: CMA India; Cygnus Research
plants in India. Production capacity is
166.73m tonnes and 11.1m tonnes for large and small plants respectively. The actual productions for the
large and small plants are 155.66m tonnes and 6m tonnes respectively.

State Scenario
18 18
Capacity (in m tonnes) Production (in m tonnes)
16
16
14
14
12
12 10
2003 2004 2006 2007 2003 2004 2006 2007
Source: Indiastat; Cygnus Research
Tamilnadu is a leading manufacturer of cement in India. During 2007 the production of cement in the
state stood at 16.48m tonnes and the capacity in that year was 16.83m tonnes, indicating the maximum
utilisation of the installed capacity in the state. The capacity of the state in the year 2007 has been
increased to 16.83m tonnes from 14.56m tonnes in the year 2006.
Key Players
• ACC 20
Capacity (in m metric tonnes)
• Madras Cements
• India Cements 15
Outlook
10
Cement companies are fast developing
plants to provide for a rapidly expanding
economy. The cement industry is therefore 5
poised to add 111 million tonnes (mt) of
annual capacity by the end of 2009-10 (FY 0
2010), riding on the back of approximately
141 outstanding cement projects.
According to a report by the ICRA -5
AC C Madras C ements India C ements
Industry Monitor, the installed capacity is
expected to increase to 186mt per annum Source: IBEF; Cygnus Research
(mtpa) by the end of FY 2008, and 219mtpa by the end of FY09, and further up to 241mtpa by FY10-
end. As a result, India's cement industry will record an annual growth at 10% in the coming years with
higher domestic demand resulting in increased capacity utilisation. In Tamilnadu, the capacity as well as
the production of the plants are increasing simultaneously, which are essential factors for the
development of the industry.

SECTORAL NEWS
Power
Elango Ind plans coal-based power plant near Chennai
Elango Industries Ltd, a company listed with the Bombay Stock Exchange, plans to set up an 80mw coal-
based group captive power plant at Gummidipoondi, near Chennai. The plant is estimated to cost
Rs4150m, of which the equity component works out to about Rs1250m and the balance will come
through debt. A group captive power plant is one where companies take up to 26% equity stake and is
assured of up to 51% of the electricity generated from it. Elango Industries was earlier into manufacturing
steel ingots and wound this up in 2003, following the downturn in the steel processing sector. It has set
up a 7MW gas-based group captive power plant at Mayiladuthurai in Tamil Nadu, with GAIL supplying
gas for this plant.
Information Technology
Tamil Nadu to create 3m jobs in IT sector
Tamil Nadu's Information Communication Technology (ICT) Policy 2008-09, aiming to provide
employment to three million people in the next three years was unveiled by Chief Minister M
Karunanidhi. The state will invest Rs2.5 billion for expansion of existing IT-ITES facilities in Chennai,
Thiruvallur and Kancheepuram districts. Units employing over 100 workers would be eligible for capital
subsidy of Rs3 million and electricity tax exemption for two years. This exemption would increase up to
five years if new IT-ITES firms invested Rs2 billion and employed over 400 direct workers.
Steel
Madras HC's direction to TISCO
The Madurai bench of Madras High Court has directed Tata Iron and Steel Company (TISCO) to
approach the Union Ministry of Environment and Forest or Tamil Nadu Pollution Control Board for
clearance to its titanium dioxide mining project in Tuticorin district. Disposing of a petition filed by
Kuttan Theri Tharisu Membattu Vivasayigal Sangam seeking to quash a MoU signed between the
company and Tamil Nadu government for acquisition of 12,000 acres of land for mining. A division
bench comprising Justices Elipe Dharmarao and M Venugopal said statutory authorities should take into
consideration the representations made by petitioners while taking Environment Impact Assessment. The
petitioners should also be given opportunity to represent their grievances personally.
POLICY NEWS
TN policy focuses on spread-out growth in IT

The Tamil Nadu Government unveiled the Information, Communication and Technology Policy, 2008,
with a thrust on incentivising units set up in smaller towns and villages and developing the full eco-system
for the development of the industry. Explaining the thrust of the policy, the state IT Secretary, Dr C
Chandramouli, said that the policy for 2008 is different from the previous policies on two major counts.
First, it channels investments into Tier-II and Tier-III cities, for more secular growth across the state, by
providing incentives and capital subsidy to units set up there. Second, it addresses the entire eco-system
— encompassing education, finishing schools, industry-academia partnership, civic amenities, branding.
TN gets new ICT policy

Karunanidhi, Chief Minister of Tamil Nadu, recently released Information and Communication
Technology (ICT) Policy 2008-09, for the state. The policy aims at making Tamil Nadu the IT hub of
South Asia by 2011, by creating a knowledge driven ecosystem leveraging entrepreneurship and
promoting socially growth to achieve a 25% production share of Indian ICT industry. At present Tamil
Nadu has 11% share, at US$5.7 billion of the total ICT production of US$51 billion. The new policy
comes after a gap of almost six years and aims to approximately three million jobs directly and indirectly.

INVESTMENT NEWS
Elango Industries to set up 80mw power plant
Medium and small steel manufacturer Elango Industries Ltd is planning to set up an 80mw coal-based
power plant at Gummudipoondi near Chennai, Tamil Nadu. It has considerably progressed to implement
the power plant and is expecting the financial closure before December 2008. The company has also
shifted its focus from steel industry to power generation and distribution. In fact, in 2006 it
commissioned a gas-based power plant at Mayiladuthurai Tamil Nadu, through a SPV viz Kaveri Gas
Power Ltd. The group captive plant completed two years of successful operation and declared dividend
to their investors.
Vodafone to increase 3G penetration in Tamil Nadu

3G mobile telephony is around the corner for Vodafone Essar that is already present in the 3G services
space globally. The company is readying itself for launching its operations in India once the Union
Government's policy related to 3G is clarified and licenses are issued to cellular operators. The acquisition
of BPL Mobile Cellular Ltd in 2006 has helped the company's growth trajectory in terms of customer
reach. At present, VESL has a subscriber base of US$5m in Tamil Nadu of which Chennai accounts for
US$3.8m .The company expects to increase its penetration further by another 10% during 2008-09.

UPCOMING PROJECT
Power
1. Project Name Coal Based Power Plant
Elango Industries Ltd, a company listed with the Bombay Stock Exchange, plans
Highlights to set up an 80mw coal-based group captive power plant at Gummidipoondi,
near Chennai.
Cost Rs4150m
Duration 2008-NA
Agency Elango Industries Ltd
Transportation
2. Project Name Road Project
A committee on public private partnership cleared as many as 10 road projects
Highlights
estimated to be worth of Rs105070m.
Cost Rs13451.4m
Duration 2008-NA
Agency NA
Industries
3. Project Name Industrial Projects
Tamil Nadu Government has cleared seven proposals for setting up new
Highlights
industrial projects in the state at an investment of more than Rs100,000m.
Cost Rs100,000m
Duration 2008-N.A
Agency NA
Real Estate
4. Project Name Mega Integrated Township
ETA Star Property Developers Ltd, an offshoot of the Dubai-based $6 billion
Highlights ETA Star conglomerate, is planning to set a mega integrated township in a
sprawling 400 acres of land at Sriperumbudur.
Cost Rs75,000m
Duration 2008-NA
Agency ETA Star Property Developers Ltd
Power
5. Project Name Hydra Power Plant
Bharat Heavy Electricals bagged a contract worth Rs21,750m for setting up a
Highlights
600mw thermal power plant in Tamil Nadu.
Cost Rs21750m
Duration 2008-NA
Agency Bharat Heavy Electricals Limited

UPCOMING EVENTS
1. Event Taitronics India
Date Sep 11-13, 2008
Venue Chennai Trade Centre
Taitronics India will constitute an exclusive space devoted to the new lifestyle
that forms part of the digital existence. Major firms and representatives of the
Highlights
industry gather to demonstrate, live, to the audience the latest products,
services and technologies that are changing our lifestyles.
Taiwan External Trade Development Council Centre 1, 11th Floor, Unit No.
Contact Details 8, World Trade Center, Cuffe Parade, Mumbai, India.
Tel: +(91)-(22)-22163074; Fax: +(91)-(22)-22163078
2. Event Alu India 2008
Date Oct 17-18, 2008
Alu India 2008 is the most important and comprehensive aluminium industry
event in India. More than 600 international companies will gather for three
Highlights
days to present the latest processing technology and product innovations from
raw material to the end product.
YA Trade Fair Private Limited
Contact Details 6-3-885/7/b, Raj Bhavan Road Somajiguda, Hyderabad - 500 082, India.
Tel: +(91)-(40)-65594411; Fax: +(91)-(40)-66684433
3. Event Auto Serv 2008
Date Nov 7-9, 2008
Confederation of Indian Industry, India's Premier Industry Association is
organising Auto Serv 2006 and the event will focus on the opportunities in the
rapidly growing automotive aftermarket business in India. The event will
Highlights
showcase the latest equipment, products, services and trends in automotive
services, maintenance and care, repairs and recovery, automotive components
and spare parts, aftermarket products, accessories and automotive services.
Confederation of Indian Industry, 98/1, Velacherry Main Road,
Contact Details Guindy, Chennai - 600 032, India.
Tel: +(91)-(44)-42444 555; Fax: +(91)-(44)-42444 510
4. Event India International Adhesives and Sealants Expo (IIASE)
Date Nov 13-15, 2008
A first-of-its-kind event, the IIASE promises to be an ideal platform to
showcase products and services, meet industry majors, forge alliances and
explore new avenues amongst the players in this segment. Drawing
Highlights
participation from across a large segment of adhesive, sealant and allied
product manufacturers and consumers from India, this event also attracts the
presence of players from the global market.
Virgo Communication; #132, 1stFloor, 5thCross,
Contact Details Cambridge Layout, Bangalore, India.
Tel:+(91)-(80)-25567028; Fax: +(91)-(80)-25567028

5. Event Knit Expo

Date Dec 12-15, 2008
Venue Velan Hotel Fair Ground, Tiruppur
Textile is the single largest industry accounting for about 20% of the total
industrial production. Textile and clothing exports account for about 31.1% of
Highlights
the total value of exports from the country. 19% of the total share of exports
from the industry occupies a position of prime national importance.
Network-Textile Library#16/8-A,Thennampalayam Extension,
Contact Details Kamaraj Road, Cross Road, Tirupur, India
Tel: +(91)-(421)-5324407, Fax: +(91)-(421)-5324407
6. Event Tex Tech Show
Date Dec 19-21, 2008
Venue Thiruvalluvar Ground, Tamilnadu, India
Tex Tech Show is the largest exhibition of Machinaries, Accessories & Fabrics
for home textile industry. This show is a unique platform to enter into the
Highlights
Karur market. Demand is rising across the textile industry spectrum. Major
investment in technology and modernisation are in the pipeline.
Knit Show, 372-A, Lakshmi Complex, Mangalam Road, Tiruppur, India
Contact Details
Tel: +(91)-(421)-2247494, Fax: +(91)-(421)-4326494
7. Event IndiaMART Fastener Expo 2008
Date Dec 19-21, 2008
IndiaMART Fastener Expo 2008 will feature a high proportion of
international exhibits, comprehensive product range from market leaders and a
highly professional exhibition management, thoroughly structured and planned
Highlights
for the complete visitor acceptance. IndiaMART Fastener Expo 2008 will be
the confluence of the international and national hand tools and hardware
manufacturers and traders.
Unitech Exhibition Private Limited, Expo House, # 216, 3rd Link Street,
Contact Details Nehru Nagar Indl. Estate, OMR, Chennai, India.
Tel: +(91)-(44)-24543322, Fax: +(91)-(44)-24543321
8. Event Travel & Tourism Fair-Chennai
Date Jan 9-11, 2009
Travel & Tourism Fair is India's leading exhibition for the travel and tourism
industry. Since 1989, it provides an annual opportunity for organisations from
Highlights
India and abroad to showcase their products and services to a large cross
section of the travel trade and consumers across major markets in India.
Fairfest Media Limited, E-8 Green Park, New Delhi, India
Contact Details
Tel: +(91)-(11)-26866874, Fax: +(91)-(11)-26868073
9. Event International Auto Show
Date Jan 9-12, 2009
International Auto Show is the most dazzling extravaganza of automobiles in
the Southern part of the country. The presence of overseas participants in this
exposition is an index of popularity and global appeal of this event and will
Highlights
emerge as a worthy forum that connects buyers from all over the country and
abroad in the field of automobiles, besides contributing to the economy as its
fifth largest foreign exchange earner.
Triune Exhibitors Private Limited, #25, 8th Main Road, Vasanthnagar,
Contact Details
Bangalore, India; Tel: +(91)-(80)-22352770, Fax: +(91)-(80)-22352772

10. Event Elasia-2009

Date Jan 9-12, 2009
Elasia 2009 will be the largest international exhibition on power, electrical &
Highlights industrial electronics. It provides an unrivalled global forum for product
information, first hand data and business contacts.
Triune Exhibitors Private Limited, #25, 3rd Floor,
Contact Details 8th Main Road, Vasanthnagar, Bangalore, India
Tel: +(91)-(80)-22352770, Fax: +(91)-(80)-22352772
11. Event Sheet Metal Fabrication Welding Coats and Paints Technology
Date Jan 21-25, 2009
Venue Codissia Trade Fair Complex
Sheet Metal Fabrication Welding, Coats and Paints Technology Exhibition
Highlights (Fabtec India 2008) will be accompanied by leading international companies
who have already gathered highly positive experience in the region.
CODISSIA Trade Fair Complex, G D Naidu Towers, Post Bag No. 3827,
Contact Details Huzur Road, Coimbatore, India
Tel: +(91)-(422)-2215182, Fax: +(91)-(422)-2214231
12. Event BuildMat 2009 (International Construction Trade Fair - 2009)
Date Jan 23-26, 2009
Venue Vijaya Fair Grounds, Tamil Nadu
BuildMat 2009 (International Construction trade fair - 2009) will present the
official, comprehensive and prestigious exhibition in building material and
Highlights component supporting services. This is a golden opportunity for building
material and professional supporting industry to introduce and showcase their
latest products and technologies.
ACCE, BAI & The Indian Institute Of Architects (IIA)
Contact Details 1054/32, Gowtham Centre Annexe, Avinashi Road,Coimbatore, India
Tel: +(91)-(422)-2249350, Fax: +(91)-(422)-4394538
13. Event Holiday Expo-Coimbatore
Date Jan 24-26, 2009
Venue TBA, Coimbatore
Holiday Expo is a leading travel and tourism event to take one’s business to a
level of growth and establish an opportunity to create a brand new market.
Medium sized Indian cities have emerged as one of the fastest growing
Highlights
markets for quality leisure products and 'Holiday Expo' is just the perfect
travel exhibition to reach out to this very market, thus ensuring one’s product
profits to its optimum potential.
Travel Media Networks, 473, 2nd Floor, 2nd cross,
Contact Details 9th Main, HAL 2nd Stage, Indira Nagar, Bangalore, India
Tel: +(91)-(80)-41152215, Fax: +(91)-(80)-25290708
14. Event India International Leather Fair
Date Jan 31-Feb 3, 2009
India International Leather Fair will offer global exporters and manufacturers
of leather goods and accessories the ultimate platform to showcase and launch
Highlights
their exquisite creations. The fair is designed to be a focal point for sourcing
leather and leather products from the Indian sub-continent.
India Trade Promotion Organization
Contact Details Pragati Bhawan, Pragati Maidan, New Delhi, India.
Tel: +(91)-(11)-23371390, Fax: +(91)-(11)-23371874

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Economy &

Vol.809 September 2008

© Cygnus Business Consulting & Research Pvt. Ltd. 2008 1

Vodafone to increase 3G penetration in Tamil Nadu

TN policy focuses on spread-out growth in IT

TN gets new ICT policy

© Cygnus Business Consulting & Research Pvt. Ltd. 2008 2

Source: Tamil Nadu Statistics; Cygnus Research

© Cygnus Business Consulting & Research Pvt. Ltd. 2008 3

and Japan. Per capita consumption has

© Cygnus Business Consulting & Research Pvt. Ltd. 2008 4

© Cygnus Business Consulting & Research Pvt. Ltd. 2008 5

TN policy focuses on spread-out growth in IT

TN gets new ICT policy

© Cygnus Business Consulting & Research Pvt. Ltd. 2008 6

Vodafone to increase 3G penetration in Tamil Nadu

© Cygnus Business Consulting & Research Pvt. Ltd. 2008 7

© Cygnus Business Consulting & Research Pvt. Ltd. 2008 8

© Cygnus Business Consulting & Research Pvt. Ltd. 2008 9

5. Event Knit Expo

© Cygnus Business Consulting & Research Pvt. Ltd. 2008 10

10. Event Elasia-2009

© Cygnus Business Consulting & Research Pvt. Ltd. 2008 11

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