Scores of women are hard at work in a large, open tailoring hall. High quality fabrics are being fashioned into suits here; some are giving the finishing touches with the buttons before the jacket is placed on a hanger; some are tailoring in suit linings while others are piecing together the arms of the suits and elsewhere, suits are being ironed. MSR Garments is a 100 per cent export-oriented unit at Sri City, an integrated business city in Andhra Pradesh, around 60 kms north of Chennai.
This unit makes bespoke suits and shirts for the UK’s Saville Row, Cad & The Dandy, as well as for its own brand in the US, Ten Acres, and suits for brands such as Fielding & Nicholson, Jeffrey Scott, Manuel Martinez among many others. Of the 135 people in this unit, 105 are women, says Suresh Viswanathan, Director, MSR Garments Pvt Ltd. Measurements and fabric— from corduroy, velvet, cashmere, denim, linens, wool, birdseye fabric — are sent to this unit from the UK to be tailored. Around 450-500 suits and 750 shirts are tailored in a month here. In 2019, this unit made around 70 suits for the blockbuster movie, Men in Black International, the fourth of the MiB series.
Or, take Italian company Everton Tea’s unit at Sri City, which makes a huge range of flavoured and herbal teas, all for export. A large posse of women are busy packing tea sachets in cartons as the packaging machines spews them out rapidly. Roshan Gunawardhana, Director, says the unit buys teas from all over India — from the Nilgiris to Darjeeling and Assam.
The ingredients ranging from chamomile, peppermint, orange peels, aloe vera, hibiscus and raspberry, among others, which are blended with the teas, are imported mostly from Europe (Croatia, for instance) and some from Mexico and Argentina, and stored in a vast cold room. This unit, which consumes 3 to 3.5 tonnes of tea a day, produces 2.5 million tea bags a day. Gunawardhana says its tea is supplied to 70 per cent of supermarkets in Italy; to Carrefour in West Asia, Coles in Australia, Sam’s Club in Mexico, Walmart in the US and elsewhere.
MSR Garments and Everton Tea are just a cross-section of the multifarious units that are operating out of Sri City. Founded in 2008, it now sprawls over 8,000 acres comprising a special economic zone, a domestic tariff zone, a free trade warehousing zone and an electronic manufacturing cluster. At present over 205 companies (140 of which are operational) from 28 countries have invested in Sri City — from automotive to electronics, FMCGs to food processing. Sample this from units operating in Sri City:
*Colgate-Palmolive Ltd makes two million toothbrushes a day.
*Isuzu Motors India rolls out 25,000 pick-ups a year
* Alstom makes 480 coaches a year for metro rail in India and for exports; supplied fully-automated driverless metro trains to Sydney and Montreal
* Mondelez makes 6,300 Cadbury chocolate bars a minute; its ₹1,250 crore plant spread over 134 acres, is Asia’s largest chocolate factory.
* Panasonic Life Solutions, which will eventually invest ₹600 crore in a unit, makes Anchor and Panasonic switches and wires and cables with a capacity of 80 million units a year
MNCs come in droves
Apart from the several well-known MNCs, including Pepsi and Kellogg’s, which have set up shop in Sri City, Bharat FIH Ltd, a Foxconn Technology Group company, began its journey in India when the first manufacturing unit was set up in 2015 at Sri City, for final assembly of mobile phones. Today, apart from mobile phones, this unit is also involved in the final assembly of TVs and wearables. The company has about 18 production lines in Sri City alone and is the largest electronic manufacturing services provider in India combining its other two factories set up in Chennai. “The campuses of Bharat FIH have averaged over 20,000 women in the workforce over the last eight years of operations constituting approximately 85 per cent of the total strength of the employees and a significant number were part of Sri City operations,” says a company spokesman.
Total investments so far in Sri City has been ₹34,500 crore while cumulative exports tot up to $2 billion from the time it was established with goods ranging from light engineering products, auto components, automobiles, metro coaches, toys, solar modules, precision engineering, food ingredients, and, of course, teas and handmade suits.
Sri City is making other strides too. According to Sri City’s Founder and Managing Director, Ravindra Sannareddy, the city has emerged as the second largest agglomeration of Japanese industries, with 29 companies operating in the city, vis-a-vis a cluster of 40 Japanese companies in Neemrana. So much so, around four Japanese restaurants have sprung up in Sri City’s vicinity to cater to the Japanese working in the City. “Also, we are home to major air-conditioner brands such as Daikin, Blue Star, Amber, Havell’s, Epack... so when all these factories — some are still under construction — are built and they start production in phases, it is estimated that almost 50 per cent of the air conditioners made in India will be from Sri City. And to make it happen, we are also encouraging a lot of ancillary industries here,” he says.
Driving around Sri City, one can see it’s come a long way in its effort to green the city with large tree banks and broad, leafy avenues. As Sannareddy points out, only non-pollutant industries are permitted to operate in line with its aim to becoming a carbon-neutral manufacturing zone. Nor are chemical processing industries allowed in the City. As he says, impressed with his observation of industrial towns he saw during his long stay abroad in the US and elsewhere in China and Malaysia, the city is developing on the principles of ‘live, learn, work, play’.
Is it a liveable city?
Ask him if the city has achieved these objectives, he is ruminative. On the industry front, of course, Sri City, which had revenues of ₹185 crore in FY 22-23, has made great strides. The city, which has invested ₹2,000 crore since inception, in land acquisition and developing plots for the units, has developed roads, sewage systems, ensured good power supply, and is self-sufficient in its water supply with rain water harvesting all round. Apart from industry, a couple of schools have come up in the city as well as Krea University.
“There were some challenges. Our initial project plan was ten years and to create 80,000 jobs. But, due to the financial crises, and then the recent Covid, each event pushes us back one to two years on our original business plans,” he says.
As an industrial estate, he says, Sri City has been successful as the best of brands have come there. “But to make it liveable we have a long way to go. After the establishment of the company, people ask, where do we live, where do our children go to school, or parents to a hospital, and spouses to shop. It’s a chicken and egg problem. People won’t invest in social infrastructure if there isn’t enough demand. And, if there isn’t enough social infra, people won’t come and live here. We have to synchronise all of this. I can build housing but if there isn’t a good school, then people won’t come here (now two schools have come up). It’s a work in progress, it will take time. Ten years was too ambitious, but we are much ahead of others (other private SEZs),” he elaborates.
Sri City has come up in a backward area of Chittoor district, AP state, and prior to the City coming up, the region was dominated by subsistence farming of a single crop of paddy and marked by frequent crop loss. A study in 2021 by Aradhana Agarwal, a professor from Copenhagen Business School, Denmark, who has been researching SEZs in India, said that Sri City coming up has been economically beneficial as the villagers have moved from a subsistence to a commercial economy while incomes have risen multi-fold from ₹10,000-25,000 per year to ₹20,000 per month. The study noted that many have concrete houses now with all variety of gadgets at home. The project too has been environmentally sustainable with all pre-existing water bodies intact and with extensive rain water harvesting and no tapping of ground water.
Sannareddy says Sri City is profitable, but in a constant state of needing investments as it expands. “We keep on investing. With surplus cash, we think of some development project. As we get positive cash flow, we add more land, initially it was only 5,800 acres, now we have more land, around 8,000 acres, and we are also investing in building factory space and handing over to the companies. It’s more of asset building now; we need to add more power lines, roads, waste water and water treatment plants, it goes on,” he says, though he won’t deny it’s a happy space to be in, literally and figuratively.