Publication:Times Of India Hyderabad; Date:Feb 10, 2006; Section:Front Page; Page Number:1
City pulls off Fab coup By Ganesh S Lakshman/TNN
Hyderabad: In a stunning coup, Hyderabad beat IT heavyweight Bangalore to bag the Fab City project, which will host India’s first major silicon chip manufacturing facility. The project will see a veritable watershed of foreign investment in Shamshabad, with 3 billion dollars to be brought in by the anchor company SemIndia in collaboration with the international chip major AMD, and more by other chip manufacturers. Just SemIndia is likely to create 5,000 jobs directly and thousands more indirectly through the influx of about 200 suppliers and ancillaries.
“We have decided to position Fab City in Hyderabad.” That announcement by SemIndia president and CEO Vinod K Agarwal rippled through a press conference like a streak of lightning at chief minister Y S Rajasekhara Reddy’s camp office on Thursday. Hours earlier, Union IT and communications minister Dayanidhi Maran had declared that Hyderabad—a brash pretender to Bangalore’s primacy as a destination for IT investment—had won the race for the prestigious project. In a delicious irony, Maran’s announcement was made in Bangalore.
Agarwal said three states had been shortlisted to host Fab City—Andhra Pradesh, Karnataka and Tamil Nadu. “However, Tamil Nadu did not evince much interest. After careful consideration of all the relevant factors, we decided on Hyderabad,” he said. These factors included the weather, roads, availability of a semi-skilled work force, electricity, water and proximity to an international airport.
Fab City is to be located on 1,200 acres of land to be given by the AP government in Maheshwaram mandal near Shamshabad. The groundbreaking ceremony will take place in a month’s time. The project is to be executed in two phases, the first involving investment of $ 1 billion and the second $ 2 billion. There will be two projects in the first phase. The first project, which will begin right after the groundbreaking ceremony, will involve the setting up of assembly and testing facilities in which about 5,000 people will be employed. Production will start a year later. The second involves the construction of the actual chip manufacturing facility, known in the trade as a fab. This will be a two-year endeavour. The buildings will come up in the first year followed by the installation of the equipment in the second. The job creation will gather force in the third year, with about 5,000 people streaming into the facility.
Regarding spinoff employment potential, Agarwal said Fab City would create employment for lakhs of people, mainly through the aegis of some 200 suppliers likely to set up shop around the SemIndia fab. “Unlike the IT industry, where 80 per cent of the requirement is of skilled workers, chip manufacturing needs only 20 per cent skilled workers, the remainder being non-skilled and semi-skilled workers. Such a work force is available in plenty in Hyderabad. The first batch of skilled workers will be brought in from abroad along with their families, but most of them will be of Indian origin,” he said.
As for the financing part, Agarwal said the $ 1 billion required for phase one will be raised through strategic partners, debt financing and subsidies from the government of India and AP. “The central government needs to invest $ 250 million. We are waiting for a response from it,” he said and added that the deal with the AP government on land allocation, supply of power and water and the Special Economic Zone status for Fab City will be announced later.
Throughout the press conference, Rajasekhara Reddy preferred to give centrestage to Agarwal, his adviser and venture capitalist Pratap ‘Bob’ Kondamuri, B V Naidu of the Software Technology Parks of India and his own IT adviser C S Rao.
BILLION DOLLARS
Seen anything like it
Some facts to put the Fab City’s 3 billion dollars into perspective
Total FDI inflow into India in 2004-05:
$3.75 billion
Total FDI expected this year: $7 billion
What Intel planned to invest in Bangalore: $ 1 billion
What Bill Gates planned to invest in India:
$1.7 billion
Total investment by Japan in India: $2 billion
WHAT FAB’S 3 BILLION CAN DO
5,000 jobs by 2009 10-14 lakh spinoff jobs in 10 years 200 ancillary industries
City pulls off Fab coup By Ganesh S Lakshman/TNN
Hyderabad: In a stunning coup, Hyderabad beat IT heavyweight Bangalore to bag the Fab City project, which will host India’s first major silicon chip manufacturing facility. The project will see a veritable watershed of foreign investment in Shamshabad, with 3 billion dollars to be brought in by the anchor company SemIndia in collaboration with the international chip major AMD, and more by other chip manufacturers. Just SemIndia is likely to create 5,000 jobs directly and thousands more indirectly through the influx of about 200 suppliers and ancillaries.
“We have decided to position Fab City in Hyderabad.” That announcement by SemIndia president and CEO Vinod K Agarwal rippled through a press conference like a streak of lightning at chief minister Y S Rajasekhara Reddy’s camp office on Thursday. Hours earlier, Union IT and communications minister Dayanidhi Maran had declared that Hyderabad—a brash pretender to Bangalore’s primacy as a destination for IT investment—had won the race for the prestigious project. In a delicious irony, Maran’s announcement was made in Bangalore.
Agarwal said three states had been shortlisted to host Fab City—Andhra Pradesh, Karnataka and Tamil Nadu. “However, Tamil Nadu did not evince much interest. After careful consideration of all the relevant factors, we decided on Hyderabad,” he said. These factors included the weather, roads, availability of a semi-skilled work force, electricity, water and proximity to an international airport.
Fab City is to be located on 1,200 acres of land to be given by the AP government in Maheshwaram mandal near Shamshabad. The groundbreaking ceremony will take place in a month’s time. The project is to be executed in two phases, the first involving investment of $ 1 billion and the second $ 2 billion. There will be two projects in the first phase. The first project, which will begin right after the groundbreaking ceremony, will involve the setting up of assembly and testing facilities in which about 5,000 people will be employed. Production will start a year later. The second involves the construction of the actual chip manufacturing facility, known in the trade as a fab. This will be a two-year endeavour. The buildings will come up in the first year followed by the installation of the equipment in the second. The job creation will gather force in the third year, with about 5,000 people streaming into the facility.
Regarding spinoff employment potential, Agarwal said Fab City would create employment for lakhs of people, mainly through the aegis of some 200 suppliers likely to set up shop around the SemIndia fab. “Unlike the IT industry, where 80 per cent of the requirement is of skilled workers, chip manufacturing needs only 20 per cent skilled workers, the remainder being non-skilled and semi-skilled workers. Such a work force is available in plenty in Hyderabad. The first batch of skilled workers will be brought in from abroad along with their families, but most of them will be of Indian origin,” he said.
As for the financing part, Agarwal said the $ 1 billion required for phase one will be raised through strategic partners, debt financing and subsidies from the government of India and AP. “The central government needs to invest $ 250 million. We are waiting for a response from it,” he said and added that the deal with the AP government on land allocation, supply of power and water and the Special Economic Zone status for Fab City will be announced later.
Throughout the press conference, Rajasekhara Reddy preferred to give centrestage to Agarwal, his adviser and venture capitalist Pratap ‘Bob’ Kondamuri, B V Naidu of the Software Technology Parks of India and his own IT adviser C S Rao.
BILLION DOLLARS
Seen anything like it
Some facts to put the Fab City’s 3 billion dollars into perspective
Total FDI inflow into India in 2004-05:
$3.75 billion
Total FDI expected this year: $7 billion
What Intel planned to invest in Bangalore: $ 1 billion
What Bill Gates planned to invest in India:
$1.7 billion
Total investment by Japan in India: $2 billion
WHAT FAB’S 3 BILLION CAN DO
5,000 jobs by 2009 10-14 lakh spinoff jobs in 10 years 200 ancillary industries