Tamil Nadu leather industry finds Krishnapatnam too attractive to ignore !!

As reported in Economic Times


Leather industrialists of Tamil Nadu are deliberating whether a seaside industrial complex at Krishnapatnam in Andhra Pradesh would fit the bill for expansion or even relocation. Besides cheaper land, labour and steady power supply , the Krishnapatnam International Leather Complex offers the advantage of safer effluent disposal, a conundrum that shut hundreds of tanneries and made it near-impossible to open a unit in Tamil Nadu later. For Tamil Nadu, this could mean a challenge to retain an industry that generated a business well above Rs 2,000 crore last year,and generated employment to lakhs of people.

From over 825 tanneries in Tamil Nadu about three years ago, the number has dropped to 470 now.Many smaller units that came under the pollution authority’s axe never got back their licences as the effluent treatment systems proved prohibitively costly . For the Krishnapatnam Internaional Leather Complex, the USP lies in waste management. Located about a kilometre from the Bay of Bengal, this project will let out treated effluents into the sea through a tunnel, a set-up the Andhra Pradesh government plans to have private contractors to build, own and operate effluent treatment plants. This model had worked with other clusters the state had built over the years, said TL Ramachandran, a former head of the Andhra Pradesh Industrial Investment Corporation, now tasked with garnering entrepreneurs for the leather complex.

  1. The water supply will be from a desalination plant budgeted in the Rs 313-crore plan.
  2. The project has received its environmental clearance.The Department of Industrial Policy and Promotion will soon release Rs 125 crore, in addition to the state’s contribution of Rs 50 crore.
  3. A dedicated substation built at a cost of Rs 22 crore will make power supply uninterrupted.
  4. Another draw is the 385-acre land bank that is priced in the range of Rs 20 lakh 30 lakh an acre, with a development cost of Rs1,800 per sq ft.

“Though the cost of land has not been finalised, it will be in the range of a small entrepreneur’s affordability . The prices will pick up as the parcels get taken up, meaning the firstmover will have a cost advantage,“ Ramachandran explained to about 100 entrepreneurs who had turned up for the investment presentation at the Radisson Blu hotel in Chennai last week.

The AP government has begun canvassing for the project and players have begun to show interest. Tata group company Tata International, which makes leather footwear and apparel, is said to be inquiring for 70 acres in the leather complex.

Krishnapatnam industrial leather complex



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