Karnataka-based Aequs Infra, a group company of Aequs Private Limited, has partnered with the Government of Karnataka to develop the second phase of the Hubballi-Dharwad FMCG cluster. According to Ullas Kamath, Chairman of the FICCI Karnataka State Council and Chairman of the Vision Group, this collaboration is the first FMCG park being developed as a public-private partnership.
The project is expected to attract ₹10,000 crore in investments over the next 5 to 10 years and will be developed in three phases. Phase one is currently underway, while phase two is being developed in collaboration with Aequs Infra at the Hubballi Consumer Cluster (HDC), which is projected to attract ₹2,500 crore in investments, Kamath told businessline.
“The Aequs FMCG park will enable FMCG companies to access constructed facilities on a rental basis. Many businesses prefer this option, as it eliminates the need for substantial investments in land, building construction, utilities like water and power, and lighting. This approach is particularly appealing to companies that want to avoid the costs associated with facility development,” he added.
The FMCG park is set to be developed in Itigatti in Hubballi, located just nine kilometres from the Hubballi airport. The 200-acre plot earmarked for the FMCG project has been acquired, he noted.
The FMCG park is part of the Karnataka government’s Kalyan Karnataka and Beyond IT/BT initiative, aimed at establishing Karnataka as a manufacturing hub in India. “Historically, Karnataka has been the manufacturing hub of the entire country. However, that phase is no longer present, and we want to return to manufacturing,” he stated.
- Also read: E-commerce led by quick-commerce emerges as fastest growing channel in Q2 for FMCG companies
As part of this initiative, the government is offering incentives for goods produced in Karnataka, including both food and non-food consumer goods. These incentives include a subsidy of 20 per cent of the value of fixed assets, subject to a maximum of ₹25 crore, and a performance-linked incentive of 3 per cent on annual turnover for five years, capped at 100 per cent of the value of fixed assets.
FMCG majors have shown interest, said Kamath. “Many have already signed up for phase one, including Jyoti Labs and MDH Masala,” he mentioned.
In the budget speech for 2020-21, the Karnataka government announced the development of a health and wellness district in Shivamogga and an FMCG manufacturing cluster in Dharwad district. A vision group was formed to establish the FMCG district, identifying the Mummigatti Karnataka Industrial Areas Development Board (KIADB) industrial area in Dharwad as the designated site for the cluster. This FMCG park is expected to create approximately 50,000 to 100,000 jobs in each phase.