Madhya Pradesh: Means Business

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Madhya Pradesh Means Business
Logistics Industry
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Overview
Overview
Madhya Pradesh (MP) State that means business

• MP is the second largest State in the Country
  stretching over 308,000 sq kms.
• The State is blessed with large mineral resources
  of coal, diamond, limestone, methane etc.
• MP is among the top 4 states of the Country for
  industrial investments.

Economic Snapshot
Madhya Pradesh is emerging as a key growth center
for the Country

• Per capita GSDP USD 369
• Manufacturing sector USD 8.5 bn
• (Registered Unregistered)

• Gross state domestic product (GSDP) USD
  23,983.63 Mn
• Average growth rate 5.5 per annum

Advantage MP
Madhya Pradesh has one of the upcoming industrial
base in India

• The State is centrally located
• Investor friendly Government policies

• Total electricity generation capacity
  6,449.25 MW
• Indias first greenfield SEZ
  Indore SEZ
• Industrial Centers 8

Power
Electricity generation capacity at present is
6,449.25 MW and estimated to rise to a surplus in
2008-09

• MP is rich in low grade coal suitable for power
  generation.
• Potential of hydro-energy generation.
• Installed power capacity (MPs share)
• Hydel Power Generation 852.7 MW
• Thermal Power Generation 2,147.5 MW

Ministry of Power (powermin.nic.in)
Source Indiastat.com (as on 23 Feb 2006)
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Enabling Infrastructure

• The State is well connected with the rest of
  India with almost 425 trains passing through the
  State on a daily basis. Of these 175 trains pass
  through the State capital Bhopal alone.

MP IS CENTRALLY LOCATED AND WELL CONNECTED WITH
ALL MAJOR CITIES IN INDIA
RAILWAY NETWORK

• 25 airstrips.
• Convenient air links from key Indian cities like
  Delhi Mumbai to Bhopal, Jabalpur, Gwalior,
  Indore and Khajuraho.
• 5 operational airports.
• Indore airport has the capability of handling
  international cargo.
• An international airport proposed in Bhopal.

GWALIOR
KHAJURAHO
AIRPORTS
INDORE
BHOPAL
JABALPUR

• The total length of roads spanning MP is 67,600
  kms.
• National highways of 5,200 kms run through the
  State.
• 18 National highways including trunk routes of
  Delhi-Mumbai, Delhi-Chennai, Delhi-Bangalore,
  Delhi- Hyderabad.
• The total length of State highways in the State
  is 9,885 kms.
• Convenient linkages to western ports i.e. Kandla
  Port, Jawahar Nehru Port Trust.

ROAD NETWORK
Source Department of Road Transport Shipping
(morth.nic.in)
Source www.destinationmadhyapradesh.com
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Madhya Pradesh A Preferred Investment Destination
31 of the State under forest cover with a
largely unexploited species of rare, valuable
medicinal- herbal plants
Over 2,000 kms of roads being developed with
Private Partnership (BOT)
Offers diverse tourists destinations catering to
various segments of tourism such as religious
(Bhojpur), eco/ adventure (Panchmari), heritage
(Sanchi, Khajuraho) tourism etc.
Indias 1st operational Greenfield SEZ at Indore
Third largest producer of cement in India
Over 100 agricultural farms with an area of over
20,000 acres is available on lease to investor
Favourable climatic conditions for cotton and
over 40,000 power-looms are driving the textile
industry
Various blocks available for power, cement, iron
and steel units
Largest producer of pulses and oilseeds in the
Country (75 of soyabean production)
Over 18,000 technical graduates and 230,000
graduates add to workforce each year
12 blocks with reserves totalling 2,585 million
tons of coal has been identified
Over 144 BCM of coal bed methane reserves
available
Availability of coal and natural gas (G.A.I.L
pipeline) along with support from Government to
make investment in Thermal Power Plants lucrative
Source www.mpsidc.org Brochure MP Means
Business
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MP The Right Place with the Right Environment
Savings in Office Space Rates (A comparison of
rates in Central Business Districts)
DESTINATION MADHYA PRADESH
Fastest mover in overall performance among the
big States in the Country.
Fastest mover in agriculture
Fastest mover in infrastructure development.
Bhopal and Indore have substantial cost
advantages, even when compared to other Tier III
and IV cities.
Savings in Land Cost
Ranks 2nd in terms of governance.
(Estimated Values for Multi-product SEZs)
Ranks 3rd in terms of law order
Cost of skilled labour is USD 2.4/day vis-a-vis
USD 3.5 USD 4.0/day in metros
The cost of land is one of the lowest in the
Country. Even central hubs such as Indore and
Bhopal fare well against other cities in terms of
low land cost.
MP is centrally located. The State is at an easy
distance from all the key consumer markets in the
Country.
Fastest mover is the State where the rate of
improvement between 2003 2006 was greater than
that between 1991 2003
Source (Reference RK Swamy)
- Distances rounded off
Source India Today (September 06 Issue)
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Industrial Policy Catalyst for the Investments

• The Government of MP has devised an investor
  friendly industrial policy, which is aimed at
  achieving global competitiveness. The policy
  emphasizes on industrial growth in the state
  through adopting cluster approach, establishing
  specialized infrastructure and offering
  favourable incentives.
• The main thrust of this policy is
• Establishment of a Madhya Pradesh Trade and
  Investment Facilitation Corporation which would
  take decisions about rationalization of taxes,
  facilities of mega projects and other related
  matters.
• Enacting an Industrial Facilitation Act and to
  change the rules of business with a view to make
  single window system decisive and result
  oriented.
• Developing infrastructure for supporting the
  identified industrial clusters
• Reviving closed down/ sick industrial units by
  granting special packages.
• Attractive incentive schemes.

SPECIAL INCENTIVES

• Special package for Mega Projects on project
  basis by apex level investment promotion
  empowered committee headed by the Chief Minister.
• Industrial investment promotion assistance 50
  to 75 of commercial tax for 3-10 years
• Concessional registration charges and stamp duty
  exemption for Term Loans.
• Interest subsidy on term loan for 5 years _at_ 3
  to 5.
• For thrust sector industries, 25 capital subsidy
  would be provided limiting up to a maximum of USD
  56,000
• Land on 75 concessive rate for Mega Projects
  limited to USD 4.4 million.
• Entry tax exemption for 5 years.
• 5 years electricity duty exemption on captive
  power generation
• 15 capital subsidy to SSI up to USD 33,000 in
  backward areas
• Infrastructure grant up to USD 0.22 million crore
  for developing private sector industrial parks
• Partial reimbursement for Project report, ISO
  Certification, Patent and Technology Purchase cost

• CLUSTER APPROACH
• Indore Pharmaceutical, Textile, Food
  Processing, IT, Auto Components
• Bhopal Engineering, Biotechnology, Herbal, IT,
  Food Processing
• Jabalpur Garment, Mineral, Forest Herbal,
  Food Processing
• Gwalior Electronics, IT, FMCG, Engineering,
  Food Processing
• Rewa Refractories, Lime Stone, Forest Based
• Sagar Mineral Processing

SPECIALIZED INFRASTRUCTURE
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Doing Business Made Easy Through MPAKVN
In a bid to build a competitive environment
industries and their ancillaries would be
promoted in clusters based on the availability of
raw materials, skilled labour and market
potential. Under this Industrial Policy through
Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd
(MPAKVNs) scheme, the State Government, has
identified industrial clusters. Many of the
industrial giants have their establishments in
these areas, however 44 of developed area is
still untapped and open for investment.
Area Developed 2,262 Hectares Allotted 800
Hectares Units established 326 Major Groups JK,
Surya Roshini, Godrej, Grasim, Cadbury, Hotline,
Crompton Greaves Special Infrastructure ICD,
Food Park
Area Developed 273 Hectares Allotted 115
Hectares Units established 121 Major Groups
Birla, Jaypee Special Infrastructure Integrated
infrastructure development centres (IIDC)
Area Developed 790 Hectares Allotted 125
Hectares Units established 52 Major Groups
Raymond, Hindustan Petroleum, PBM, Ayur Special
Infrastructure Stone Park, Food Park
Area Developed 1,330 Hectares Allotted 618
Hectares Units established 286 Major GroupsHEG,
Crompton Greaves, PG, Godrej, Lupin, IFB, Oswal,
Nahar Special Infrastructure ICD, Food Park
BHOPAL AKVN
GWALIOR AKVN
JABALPUR AKVN
REWA AKVN
Area Developed 2,492 Hectares Allotted 1431
Hectares Units established 575 Major Groups
Tata, Ranbaxy, Eicher, Bridgestone, Hindustan
Motors, Kinetic, SRF, S Kumars, Gajra, Nicholas
Piramal, Indorama, IPCA, Bhilwara Special
Infrastructure SEZ, Crystal IT Park, Food Park,
Apparel Park
Malanpur, Malanpur Phase II, Banmore, Chainpura,
Siddhgawan, Pratappura
Rewa, Waidhan
INDORE AKVN
Mandideep, Pillukhedi, Mandideep Phase II
Borgaon, Maneri, Purena
Pithampur, Kheda, Dewas, Maksi, Megh Nagar
Source MPSIDC
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Logistics
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Sector Profile Logistics
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Logistics Evolving Landscape in India

• Indian logistic market from the manufacturing
  sector alone is estimated to be around US 14.3
  bn in 2004 and is expected to increase to US
  19.54 bn by 2009 with a CAGR of nearly 6.4. The
  contribution of logistics industry to countrys
  GDP has increased from 7.4 in 1999-00 to 9.3 in
  2004-05.
• India spends around 13 of its GDP on logistics,
  compared to a global average of 10-11 . Globally
  better supply chain management has reduced
  logistics costs by nearly 1 over last 10 years.
  However Supply Chain Management still remains a
  very new concept for Indian industries which are
  increasingly looking to gain competitive edge by
  adopting logistics and Supply Chain Management
  concepts and practice.
• Key trend in the industry is towards outsourcing
  logistics requirements to Third Party Logistics
  (3PL) players. The demand is specially driven by
  the entry of MNCs and increasing export focus of
  Indian companies .The estimated market for 3PL
  players in 2003 was US 250 mn and is likely to
  grow at a CAGR of more than 20 during next five
  years.
• Consistent good performance of the economy (over
  8 growth rate), is the key force, driving the
  growth in the logistics sector. Vibrant economic
  scenario of the country has ignited the
  activities in manufacturing/infrastructure
  sector.

US Bn
Key Contributing Sectors
Estimated Cost Saving by Reducing Logistics Cost
by 1
Indian companies can save substantial cost by
adopting modern supply chain and logistics
solutions
(source Credit Analysis Research Limited)
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Logistics Evolving Landscape in India
Indias Infrastructure Snapshot
Overview of Logistics Industry
Channels of Logistics
Components of Freight Logistics
Freight
Snapshot of Logistics Operations via Major
Channels
(source Business Standard)
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MPs Infrastructural Backbone of Logistics
Industry
State Wise Length of National Highways

• Madhya Pradesh has a well developed transport
  infrastructure of roads, rails and airports. 5200
  km of National Highway runs across the state with
  total length of the roads in the state estimated
  around 67,600 km. The state also has 5000 km of
  rail networks with 425 trains passing through the
  state daily.
• MP has 5 operational domestic airports. The
  Indore airport has the capability to handle
  international flights. The mammoth transport
  infrastructure of the state provides connectivity
  with all the key cities and major ports.
• Under the National Highway Development Programme
  of NHAI, 1254 km of the existing roads are being
  converted into four lane highway.

Km
3rd largest network of National Highways among
states
Madhya Pradesh
Maharashtra
Bihar
Gujarat
Tamil Nadu
Karnataka
orissa
Rajasthan
AP
UP
Road Map of MP
Equidistance Connectivity - Key Strength
Distances of key Cities from Bhopal
Madhya Pradesh is striving to create
state-of-the art infrastructure essential to
sustain modern supply chain and logistics
industry with a vision to transform the state
into a key logistics hub of the country.
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Warehousing A Value Proposition

• The state requires an immediate addition in
  capacity at strategic locations to ensure quality
  services to the target market.
• The partition of the state has affected its
  warehousing capacity. The Government is taking
  several initiatives to promote investments in
  this area to rebuild its warehousing and
  logistics might.
• The state offers a lucrative utilisation rates of
  80-85, which can be as high as 90-95 at
  strategic locations.
• The Governments also invites private developers
  through lucrative business value propositions.
• The economic growth of the country is further
  facilitating the growth of the industry in the
  State.

Item-wise Break-up of Warehousing Capacity 2005-06
Changing Utilisation Trend of Storage Capacity
Partition of State
Capacity Usage Utilization Rate
2005-06
2003-04
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Warehousing - Building Capacity

• Along with the logistical hub for the Country, MP
  also has a substantial internal demand for
  warehousing.
• Post partition, around 32 of states capacity was
  given to Chhattisgarh. This has created a
  significant shortage in warehousing capacity.
• Government is taking several initiatives to
  upgrade the existing capacities and building
  capacities in the State.
• Madhya Pradesh Warehousing Logistics
  Corporation is the nodal agency of the GoMP with
  1.2 million MT of capacity and presence in 232
  locations.
• Government also invites private players to take
  part in its drive to position MP as the
  logistical hub of the Country.
• The Government has identified 11 locations as the
  hubs requiring immediate attention and have the
  capacity to become the major distribution centers
  for logistical activities and management.
  Further, 23 other locations require capacity
  building to meet requirements.

The Proposed Hubs For Logistics Warehousing
Most Suitable Locations - Identified hubs for
capacity building on the basis of expected
demand, urgency of demand, road-rail connectivity
and availability of land.
Based on estimated demand an additional capacity
of 2.16 Million MT was to be generated between
2002-06. However, only 1 million MT was created
during the same period. Hence, there is a
shortfall of 1.6 million MTs in capacity.
Other Potential Locations - Identified on the
basis of expected demand, road-rail connectivity
and availability of land.
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MP Offers a Strong Value Proposition

• Central location of MP facilitates equidistance
  connectivity with major Indian cities. The
  strategic location is the key incentive for
  various industries to establish their logistics
  hub in the state.
• MP is the connecting link between the northern
  southern states and eastern western states of
  the Country. All major highways and rail routes
  passes through the state.
• On completion, the North-South and East-West
  corridor passing through the state will provide
  further impetus to the logistics sector due to
  improved connectivity with key metro cities.
• Companies can save a maximum of 25 of the
  transportation cost by locating their warehouse
  in MP via locating it in North. Similarly saving
  of 17, 23 and 16 can be made in MP via
  locating it in southern, eastern and western part
  of the country.
• Since 90 of the operational cost of a logistics
  company lies in transportation, substantial
  savings can be made by locating the company in
  the central region.
• The peaceful labour environment in the state
  makes MP a favorable business destination.
• Well developed infrastructure of roads and
  airports facilitates timely and expedite movement
  of goods across the country.

Key Ingredients of a Logistic Hub
MP has Advantage Across All
Matrix of Distance From Central vis-à-vis Others
parts of country
MPs inherent strength coupled with advantage of
connectivity and cost makes it an ideal
investment destination
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MP A Preferred Investment Destination

• MP provides an ideal combination of location,
  cost and infrastructure, factors critical for the
  efficient operations of the logistics industry.
  The State offers opportunities for logistic
  service providers specially the 3PL players as
  more and more companies are outsourcing their
  logistics requirements to specialized companies.
• The Container Corporation of India has three
  operational inland ports in the state, at
  Mandideep Bhopal, Pithampur Indoor and Malanpur
  Gwalior.
• Companies in the FMCG, manufacturing and
  textiles, sectors are increasingly looking at MP
  for establishing their storage and distribution
  networks.

Container Corporation of India has 3 operational
dry ports in Madhya Pradesh
For entire FMCG products PG have located their
central warehouse in Bhopal
Malanpur, Gwalior
Mandideep, Bhopal
Proctor Gamble, the international FMCG giant
choose Bhopal to located their central warehouse
for all FMCG products. The cost saving due to
critical location has helped the company in
slashing the price of their products, thus
gaining a vital competitive edge in the price
sensitive market.
Pithampur, Indore
Proposed MPs Sectoral Hub
Government Proactive Initiatives
MP 3Cs Cost Advantage
Cost
Logistics Dependent Sectors
Infrastructure is the key
Connectivity
Conveyance
Creative Conducive and Competitive business
environment to support your business
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Way Forward

• Madhya Pradesh offers multiple opportunities in
  the logistics sector specially for companies
  engaged in manufacturing and distribution
  activities.
• A central warehousing facility would facilitate
  uninterrupted supply of raw materials and speedy
  distribution of finished goods across the
  country. Decrease in lead time will further
  result in substantial cost saving for the
  company.
• Cold chain facilities have the potential to cater
  to the needs of pharmaceutical, biotechnology and
  food processing companies. A central unit will
  facilitate distribution in the wider area without
  locking investment in creating such expensive
  facilities in multiple places.
• Madhya Pradesh State Industrial Development
  Corporation (MPSIDC) is planning to construct a
  state-of-the-art Integrated Transport Terminal,
  which will provide one stop-shop solution for all
  the logistics requirements of a company. The
  State Government is willing to partner with
  private players, foreign investors and other
  domestic and international companies in its
  endeavour.
• The investment opportunities are ideal specially
  for 3rd Party Logistics and 4th Party Logistics
  services provider to make MP as the key hub for
  their various services component operations.

Integrated Ware-housing Hub
Proposed MPSIDC project
Key Investment Opportunities
The untapped opportunities of the sector has the
potential to render key competitive and strategic
advantage for companies establishing their
logistics operations in Madhya Pradesh.
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Connecting Further
Madhya Pradesh Warehousing Logistics
Corporation
www.mpwarehousing.com
M.P. State Industrial Development Corporation
http//mpsidc.org,com
Madhya Pradesh Road Development Corporation Ltd.
http//www.mprdc.nic.in
http//www.mp.nic.in/
Madhya Pradesh Portal
Government of Madhya Pradesh
http//www.mpgovt.nic.in