interview Sri City’s Ravindra Sannareddy
Sri City-gearing up for the new normal
INDUSTRIAL ECONOMIST (IE): How will the new normal in the wake of Covid-19 play out for your special economic zone (SEZ)?
RAVINDRA SANNAREDDY [RS]: While the long-term impact of Covid-19 remains uncertain, companies need to rethink the way they do business through cost efficiencies and greater automation.
Covid-19 has created new challenges to manufacturing units. These face drastic shifts in customer demand, material supply and factory closures.
Many units in Sri City faced disruptions to supply and demand. Several of these re-configure their production, supply chains and services to deliver critical supplies to first-line clients as also to essential service providers. For instance, some of the companies offered their facilities to manufacture ventilators and Personal Protective Equipment (PPE) kits and masks.
Tech-intensity will play a stronger role than ever before. I believe Industry 4.0, digital transformation and smart connected manufacturing are the ways to go. The Internet of Things (IoT) revolution is turning out to be a game changer in manufacturing.
It will be imperative to design geographically dispersed supply chains for better control of warehousing and fluctuating volumes. Data analytics will play a big role in addressing supply chain risks.
HUGE OPPORTUNITY FOR EXPORT…
IE: How do you intend to leverage the Make-in India thrust to your advantage?
RS: There is enormous opportunity for building India as an important export base and not just a producer for the domestic market.
The Aatmanirbhar Bharat Abhiyaan breathes fresh air for Indian manufacturers. Increase in the state governments’ borrowing limits, privatisation of public sector enterprises (PSEs), collateral-free business loans, MSME corpus and subordinate debt, disallowing foreign firms in government tenders up to Rs 200 crore, reduction in tax rates are welcome steps. There is a further need to bring in labour and land reforms.
IE: WHY SRI CITY?
RS: Sri City is among the 10 most preferred locations in India. It houses 187 companies from 27 countries. There is a huge presence of 25 Japanese companies operating in Sri City. Due to the presence of major Fortune 500 multi-nationals from the USA, many American companies actively consider Sri City for their planned investments.
IE: Social distancing will become a new routine for going forward. What standard operating procedures are you planning to put in Sri City to conform to this?
RS: We have to adhere to the WHO guidelines on personal and environmental sanitisation, social distancing… These have a profound impact on corporate practices with the priorities shifting from profit to prevention, with business continuity and employee safety becoming paramount.
Arogya Setu app will be made compulsory on the employees’ mobile phones. Entry to Sri City will be allowed only if the app status is green and displays “You are Safe.”
Shop-floors will have more automation and artificial intelligence, to ensure social distancing and push for higher productivity.
We have created a Standard Operating Procedure (SOP) Manual that ensures safe manufacturing in consonance with government guidelines .
‘PLUG AND PLAY’ INFRASTRUCTURE…
IE: Creation of alternate supply chains, production linked incentives… How these will be attractive?
RS: Covid-19 has highlighted the fragility of the supply chain leaning much on a single country. So more businesses are likely to set up onshore manufacturing units to secure uninterrupted supplies and also look for alternative supply chains. Countries will continue to depend on each other for trade and can enter India to serve global markets as also to tap its huge domestic market.
Government initiatives like the production-linked incentive (PLI) scheme for electronics manufacture have already attracted great interest from global majors. Sri City houses top electronics system design and manufacturing (ESDM) companies such as Foxconn and hopes to get more such companies entering India.
Similarly the recent expansion of the PLI scheme to 10 focus sectors will attract the businesses reorganising their supply chains.
India’s new foreign direct investment rules make it a competetive destination to attract foreign investments. Availability of low wage skilled labour makes India an attractive business destination. Anticipating foreign investors to shift manufacturing from China, Andhra Pradesh government has initiated steps to turn the state a preferred destination for investments. Sri City, with its plug-and-play infrastructure, has become one of the key industrial destinations in AP. Sri City, a private SEZ, is also getting featured in states’ list of clusters for investments. It has emerged a ‘must visit place’ for various national and international delegations. Proximity to Chennai gives Sri City further competitive edge.
‘WALK-TO-WORK’…
IE: How to cope with intra state and inter-state movement of workers?
RS: Covid-19 has given an opportunity to Sri City to think of self-sufficiency and self-reliance. In the wake of rising Covid-19 cases, employees faced challenges in commuting to their work places. Management of industrial units are working on the option of locating and retaining their staff in the park itself.
We have focused on creating residential complexes for the workforce on the concept of ‘walk-to-work.’ This in turn, will enable industrial units to have business continuity, even during restrictions on inter-state and intra-state movement. Sri City is working aggressively to add different categories of dwelling units, service apartments… –K T Jagannathan
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