Study on Investment Potential of Kerala- Final Report

Study on Investment Potential in Kerala

Kerala State Industrial Development Corporation Ltd

30 October, 2017

KPMG.com/in

© 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Study on Investment Potential in Kerala Disclaimer and Notice to Reader

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Study on Investment Potential in Kerala Document Controller

Revision History

Version Author Date Revision

Interim Report Abhishek Agarwal, 22-Aug-16 Initial version (Version 1.0) Hariharasubramanian

Interim Report Hariharasubramanian, 25-Sep-16 Incorporated comments (Version 2.0) Rekha Joy from KSIDC

Draft Report Hariharasubramanian, 3-Oct-16 Sectoral Analysis (Version 1.0) Rekha Joy, Kiran Mathi, incorporated Varun Reddy

Draft Report Hariharasubramanian, 6-Nov-16 Incorporated comments (Version 2.0) Rekha Joy, Kiran Mathi, from KSIDC, More sectors Varun Reddy, Siddhartha included for study Jayandayala

Final Report Hariharasubramanian, 2-Dec-16 Project Profiles and (Version 1.0) Rekha Joy recommendations prepared

Final Report Hariharasubramanian, 12-Jan-17 Incorporated comments (Version 2.0) Rekha Joy from KSIDC

Final Report Navneet Vallat, Rekha 12-Feb-17 Incorporated comments (Version 3.0) Joy, from ACS Hariharasubramanian

Final Report Navneet Vallat, Rekha Joy 30-Oct-17 Final report comprising of (Version 4.0) all review comments and project profiles

Review History

Version Reviewer Date Comments

Interim Report Prasad Unnikrishnan 24-Aug-16 Contents, Quality review (Version 1.0) Interim Report Prasad Unnikrishnan 29-Sep-16 Format review (Version 2.0) Draft Report Prasad Unnikrishnan 6-Oct-16 Quality Assurance (Version 1.0) Draft Report Prasad Unnikrishnan 8-Nov-16 Contents, Format, (Version 2.0) quality review Final Report Prasad Unnikrishnan 4-Dec-16 Overall Review (Version 1.0) Final Report Prasad Unnikrishnan 14-Jan-17 Final review (Version 2.0)

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Study on Investment Potential in Kerala Version Reviewer Date Comments Final Report Prasad Unnikrishnan 13-Feb-17 Final review (Version 3.0) Final Report Prasad Unnikrishnan 25-Oct-17 Final review (Version 4.0)

Release Note

Version Released To Release mode Release Date Interim Report MD KSIDC Email 29-Aug-16 (Version 1.0) Interim Report MD KSIDC Email/Print 29-Sep-16 (Version 2.0) Draft Report MD KSIDC Email 6-Oct-16 (Version 1.0) Draft Report MD KSIDC Email 10-Nov-16 (Version 2.0) Final Report MD KSIDC Email/Print 6-Dec-16 (Version 1.0) Final Report MD KSIDC Email/Print 16-Jan-17 (Version 2.0) Final Report MD KSIDC Email/Print 14-Feb-17 (Version 3.0) Draft project G Unnikrishnan Email 2-Aug-17 profiles (28 small/medium/large project profiles) Draft Project G Unnikrishnan Email 9-Sep-17 Profiles (24 Mega project profiles post review and approval of designated entities/officers) Final Project MD KSIDC Email 20-Oct-17 Profiles (Updated G Unnikrishnan with review comments and suggestions provided on review meeting held on Oct 16 2017)

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Study on Investment Potential in Kerala Contents

Executive Summary 9

Introduction 11

Objective and methodology of study 12

Understanding of Kerala’s Strategic Advantages 13 Comparative analysis with other states 14 Kerala – State SWOT analysis 16

Demographic and Infrastructure Assessment 20

District Profiling 23

Central and state level sector support incentives and initiatives 31 Central government support initiatives 31 Support initiatives offered by states 32 Existing policy framework of Kerala 36 Key takeaways for the state 37

Brand landscape of Kerala 38

Sector Assessment 38 Sector assessment framework 39 Sector listing 39 Sector Assessment – Key Findings 42

Detailed Sector Assessment 62 Agriculture and Allied Activities 62 Minerals and Mining 74 Manufacturing 75 Electricity, Gas, Water Supply & other Utility services 108 Construction 111 Trade, hotels and restaurants 113 Transport, Storage and Communication 116 Financial Services 123 Other Services 124

Kerala’s potential sectors 135 Ranking Methodology 135 Potential sectors – Top 20 sectors 136 Potential Sectors – MVA Ranking 137 Potential Sectors – TIVA Ranking 138

Roadmap – Way forward to achieve Kerala’s sector development aspirations 139 Thrust sectors of Kerala 140 Make in Kerala Sectors 140

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Study on Investment Potential in Kerala Kerala’s 5-point Sector Development Strategy 141 MSME Cluster Development 143

Project Profiles 146 Mega projects 146 Electronic Park 147 Multi-modal Logistics Park 151 Free Trade Warehousing Zone (FTWZ) 155 Light Metro - Kozhikode 162 Medium Density Fibreboard (MDF) Plant 166 Abattoir and Modern Meat processing unit 169 International Exhibition cum Conference Center 174 PVC Manufacturing 183 Super Absorbent Polymer 185 Elevated Highway 188 Inland Waterways and Cruise Development 190 Aerotropolis 193 Aquaculture and Seafood Exports 195 Integrated Manufacturing Cluster (IMC) 198 Petrochemical Park 202 Kerala Maritime Cluster 204 Small Hydro Power 208 Holistic Medical Village 213 Large projects 216 Cultural Zone and Theme Park 217 Domestic LED lights manufacturing 219 Medicinal Plant Preservation & Processing Unit 222 Natural Colours, Herbal Extracts and Oleoresins 225 Sports Complex 228 Experience Sharing Theme Parks 233 Micro, Small and Medium projects 237 Fruit Processing & Canning 237 Inflight Catering Unit 240 Integrated Coir Processing Unit 242 Home Based Bakery Brand 244 Household Farming Cold Storage 247 Hospital Medical Furniture 250 All-Service Portal and Training Center 254 Home-based Solar Micro generation 258 A-Z Online Delivery Portal 262 Contact Centres 266

Page 6 of 269 Study on Investment Potential in Kerala List of Abbreviations

BEML Bharat Earth Movers Limited BHEL Bharat Heavy Electrical Ltd BPO Business Process Outsourcing CAGR Compound Annual Growth Rate CGS Co-Generating Stations CIAL Cochin International Air Port Ltd CUSAT Cochin University of Science and Technology DHQ District Head Quarters DHS District Health Society DIC Directorate of Industries and Commerce DMRC Delhi Metro Rail Corporation DPR Detailed Project Report EDI Entrepreneurship Development Institute EDU Economic Development Units EMU Electrical Multiple Units ERP Enterprise Resource Planning FDI Foreign Direct Investment FY Financial Year GDDP Gross District Domestic Product GDP Gross Domestic Product GSDP Gross State Domestic Product HAL Hindustan Aeronautics Ltd HT Cables High Tension Cables ICTT International Container Transshipment Terminal IIM Indian Institute of Management IPP Independent Power Producers IT Information Technology ITES Information Technology Enabled Services ITI Industrial Training Institute KASPL KPMG Advisory Services Pvt Ltd KFRI Kerala Forest Research Institute KINFRA Kerala Industrial Infrastructure Development Corporation KM Kilometer KMRL Kochi Metro Rail Ltd KMRP Kochi Metro Rail Project KSEB Kerala State Electricity Board KSIDC Kerala State Industrial Development Cooperation KSRTC Kerala State Road Transport Co-operation KWA Kerala Water Authority LT Cables Low Tension Cables

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Study on Investment Potential in Kerala MDL Mazagon Dock Limited MDR Major District Roads MEMU Main Line Multiple Units MPEDA Marine Product Export Development Authority MRTS Mass Rapid Transit System MS Ingos Mild Steel Ingos MSME Micro Small Medium Enterprise MT Metric Tons MW Megawatt NW National Waterway P Provisional Estimate PMEGP Prime Minister's Employment Generation Programme PWD Public Works Department Q Quick Estimate R&B Roads and Bridges R&D Research and development REC Regional Engineering College RTE Ready-to-Eat SEZ Special Economic Zones SH State Highway SIDCO Kerala Small Industrial Development Co-operation SME Small and Medium Enterprise TKM Thangal Kunju Musaliar TMT Thermo Mechanical Treatment TTI Teachers' Training Institute

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Study on Investment Potential in Kerala

Executive Summary

Kerala is at the forefront of social empowerment in India. The business environment in the country is broadly changing in favour of new-emerging sectors including agriculture, food processing and high value-added manufacturing aided by various Central and State Government initiatives. With the increasing focus on entrepreneurship by the State Government, the time has never been so ripe for businesses, both young and old, both traditional and disruptive, both risk- averse and risk-taking. With unique demographic and economic profile, the State is well placed to take prime position in the ever growing economy of the Country.

With its unique economic profile, the state is well placed to take prime position in the new changing Indian economy. Kerala is keen to identify the emerging new sectors for focused development through both policy and support. The study is focussed on understanding the investment potential (IP) in Kerala. Agriculture plays a vital role in Kerala’s economy. A major portion of the rural households depend on agriculture as their principal means of livelihood. Agriculture, along with food processing, is one of the largest contributors to the Gross Domestic Product (GDP) of the State.

The broad methodology of the entire study comprises of assessment of: • Kerala’s Strategic Advantages and Positioning • Demographics and Infrastructure • District Profiling • Sector Landscape • Profiling of Potential sectors and projects • Recommendations

The sectoral assessment was conducted basis the below methodology and project profiles were prepared for high potential sectors. The assessment also incorporated inputs from the detailed district profiling exercise to understand potential districts and their industrial infrastructure. Various sectors were listed based on primary, secondary and tertiary sector analysis. Based on relevance and presence in Kerala, sub-sectors were shortlisted and detailed assessment of sectors were done based on certain set of parameters. The key findings from the study helped in identifying existing and new thrust sectors for Kerala and overall investment potential for the state. Kerala is doing well in certain cash crops and horticulture produce that is supporting growth of food processing industry which is poised to enter the path of high growth trajectory. Kerala is the major producer of Spices, Cashews, Coconuts, Cocoa, Coffee and Tea and Fruits like Banana and pineapple. Kerala accounts for 97 per cent of country’s pepper production, 70 per cent of Cocoa production, 25 per cent of Coffee production, 42 per cent of Coconut and 16 per cent of Cashew production

Kerala presents itself with a variety of opportunities in the food processing sector including food processing setups, custom hiring centres for farm implements etc. Kerala has a food processing infrastructure comprising of nearly 1274 Food processing units, 2 Agriculture Export Zones, 3 Food parks and 1 Incubation centre. In addition to the existing infrastructure, Kerala has been sanctioned 2 Mega food parks (Alappuzha and Palakkad) and 2 cold chain projects by MOFPI which will further improve the prospects of food processing industry in the state. Kerala has 197 cold storage units with a combined capacity of ~78000 MT. The Government of Kerala is committed to enable further growth in this sector and has laid out multiple initiatives to help achieve the same. Recently, the sector has attracted heavy investments, both from Indian and international investors looking to capitalize on the opportunities. Rising consumerism coupled

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Study on Investment Potential in Kerala with strong policy support and digital innovations has led many food processing players to change their business models. This has indirectly led to efforts being directed towards bridging the tremendous ‘yield gap’ between the average yields of farms when compared to global peers. The varied opportunities include:

Kerala also has a well-established transportation infrastructure with an all-weather seaport at Kochi, port at Vizhinjam and good connectivity through road and rail infrastructure. With its vast coastline and increasing port strength, Kerala contributes to nearly half of India’s marine fish landing of sardines, shrimps, lobster, cuttlefish, squid, Tuna. Marine products lead the list of food products exported from the state. The aquaculture scenario in Kerala is mostly dominated by shrimp culture especially in coastal area, and recorded rapid progression in production and makes a significant contribution to the foreign exchange earnings through exports. The diversification of production by introducing new commercial species, adoption of new technologies and introduction of seafood export units (with cold storage and processing facilities) for value added products shall help open a new set of opportunities in the fisheries sector.

Rubber and rubber based industry has always been a key contributor to the State’s growth. The state has a well-equipped footprint of rubber-based industries such as tyre manufacturing, footwear manufacturing (market size of Kerala values at INR 700 Cr) and other rubber-based product industries. Various tyres and footwear brands have gained global recognition and have high export demand and potential. Though Kerala contributes about 82 per cent, Kerala’s plantation sector has been severely hit due to the unrestricted import of cash crops with the total value of production in the state has declined by nearly 17 per cent during 2012-16 period with value summing to INR 9,751 crore in 2016-17. According to the Association of Planters of Kerala (APK), import of plantation commodities, coupled with the inability of planters to move up in the value chain, have made the sector a low-end commodity producer.

The key thrust sectors of Kerala are: • Tourism & Hospitality • IT & ITES • Electronics • Wood – Furniture making • Healthcare • Food Processing • Gems and Jewelry • Rubber based products • Bakery & Confectionery

In order to achieve key development objectives to bring about a transformation in Kerala’s sectoral development, the state will undertake a combination of policy, investment promotion, infrastructure, skilling and other interventions to channelize efforts into attaining prominence in the thrust sectors: • Repositioning Kerala to imply a ‘business-friendly’ and ‘investment-attractive’ destination - A review of policies and infrastructure in Kerala suggests that the state has moved ahead in doing the right things for aiding businesses • As Kerala has long coastal line, state can focus on building a Port-led manufacturing cluster with internal transport linkages • Focusing on a major policy push to build Brand Kerala - Focused promotional activities should be on-boarded for thrust sectors • Development of an entrepreneurial ecosystem in the state to promote local enterprises in the industrial and in the technology space • Building expert skill development base focusing on multiple sector specific skill zones supported by world-class infrastructure

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Study on Investment Potential in Kerala

Introduction

Kerala has for many years and continues to lead India on the social development front. Being the state with the highest female sex ratio1 and highest literacy rate2, it recently declared itself “open defecation free”. Kerala is viewed as role-model state for its healthcare development with its child development indictors (IMR 6) levels being comparable to that of the US and other developed nations.3 This investment in human development has provided a strong foundation to Kerala’s surging economy. A recent working paper4 by World Bank placed Kerala at the second position in the Investment Climate Index ranking. Government of Kerala, in its budget 2018-19, proposed an outlay of US$ 1,131.75 million for the Agriculture, Animal Husbandry and Co- operation. The State is home to the first international transhipment terminal in India. With a design capacity of around 4 million TEUs it provides improved connectivity between Kerala and other ports in India thus further propelling easy trade and cargo movement. Kerala currently has 29 approved Special Economic Zones, in addition to another 25 notified SEZs in the pipeline for approval. A cyber-park, spread over a 68-acre campus, is being developed in Kozhikode. Kerala has been promoting knowledge-based industries such as IT/ITeS, computer hardware and biotechnology. IT Parks at three cities (Trivandrum, Kochi & Kozhikode) and at smaller towns have being employed around 75,000 – 80,000 IT professionals. It is the first state having a technology park with CMMI level 4 quality certification and a world-class IT campus in Thiruvananthapuram5. Such world-class infrastructure and well-trained human resource, along with the recent commitment shown by the state government, has positioned Kerala at the second rank, followed by Karnataka. Kerala is a 100% literate6 and a 100% digital state7 that provides land of opportunities.

Kerala is strategically located on the trans-national trade corridor, offering rich and diverse natural resources. Straightforward and transparent procedures for trade provide the state the conducive nurturing environment for investments in major sectors such as tourism, IT/ITeS, manufacturing and mining. Kerala’s economic growth is built upon three sectors- agriculture, mining, fishing, and quarrying being the primary with manufacturing and construction industry comprising of the secondary sector domain. Kerala’s distinctive heritage and cultural diversity have attracted world tourists making tourism, hotels and transportation as their third growth sector. A travel survey conducted by BBC rated Kerala as the most preferred tourist destination by foreign travellers. An increase in foreign tourist arrivals by 5.71%, during 2016 over 2015, the state footfall is expected to reach as high as 3 million by 2021.5

Looking at the promising growth areas in Kerala, it is imperative for the state government to provide encouragement to boost investments in the State. Research enquiries and feasibility studies that successfully identify the prospective investment areas and strategies to catapult its growth story shall be promoted. To tap the full potential of state’s educated work force, Kerala is keen to identify the emerging new sectors for focused development through both policy and support. The study is focussed on this theme and is in line with the below stated objective.

1 Census 2011, http://censusindia.gov.in/Census_Data_2001/India_at_glance/fsex.aspx 2 Census 2011, http://censusindia.gov.in/Census_Data_2001/India_at_glance/literates1.aspx 3 https://thelogicalindian.com/health/infant-mortality-rate/ 4 The Investment Climate in 16 Indian States , World Bank http://documents.worldbank.org/curated/en/897181468044086527/pdf/WPS4817.pdf 5 India Brand Equity Foundation , March 2018 6 https://timesofindia.indiatimes.com/india/Kerala-becomes-1st-state-in-country-to-achieve-100-primary- education/articleshow/50540263.cms 7 http://trak.in/tags/business/2015/08/17/kerala-100-mobile-density-eliteracy-complete-digital-state/ © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Study on Investment Potential in Kerala

Objective and methodology of study

The study aims to identify the overall investment potential in Kerala by undertaking the below key tasks namely:

Understanding of Kerala’s strategic advantages and positioning

Demographics and infrastructure assessment

District profiling

Sector selection and assessment

Identification of potential sectors

Profiling of potential projects

Way Forward - Roadmap

The various sectors which are of relevance in the Kerala context and assessed based on the following methodology and key thrust sectors of Kerala are identified.

Figure 1: Methodology

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Study on Investment Potential in Kerala

Understanding of Kerala’s Strategic Advantages Kerala is the 13th most populated state in India, with an area of 38 thousand sq. km, population density of 859/Km2 which is much more than the national average of 382 persons per sq. km. Also sex ratio of 1083 better than the national average of 943 with a higher male literacy (96.02%) and female literacy (91.98%) than the national average. Culturally, the state is rich and vibrant in heritage and tradition with a lineage of ancient structures with ornate architecture. Arts forms like Kadhakali and Mohinyattom etc. attracts many tourists. Blessed with several pristine beaches and backwaters it is also “God’s own country”. Its unique topography in form of the wooded Eastern Ghats, a fertile river basin and a long coastline are the thriving reservoirs for a vast variety of wildlife and floral ecosystem. Kerala represents only 1.18% of the total area of India but has 2.76% of the total population of the country. With a 3.09 lakh Cr economy, the production of pepper and natural rubber provides significant contribution to the total national output. The state shares its borders with Tamil Nadu, and Karnataka, and a 585 km long coastline with the Indian Ocean. Table 1 below shows the demographics, economic and social indicators of Kerala along with comparative indicators for India.

Economic Indicators Kerala India

Population growth rate (2001 to 2011) 4.9% 17.6%

Literacy Rate (Census 2011) 94% 74%

Real Growth Rate of GSDP/GDP (2014-15) (%) 6.67 7.40

Contribution of Agriculture to GSDP/GDP (%) 12.9 18 (2013-14)

Rate of growth of manufacturing sector (%) (2014- 8.9 8.2 15)

Contribution of Service sector to GSDP (%) (2013- 66% 57% 14)

Rural/ Urban Unemployment Rate 21.7/18 4.9/9.2

Table 1: Key Economic Indicators of Kerala Source: Economic review 2015, KPMG in India analysis 2018

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Study on Investment Potential in Kerala Comparative analysis with other states

Under this section a comparative analysis of Kerala is done with neighbouring/comparable states and states leading in the region from a macro-economic perspective.

Leading states in the region w.r.t industry performance and GSDP

Neighbouring States

Figure 2: States selected for Comparative Assessment

The economic growth of Kerala hasn’t kept pace with that of leading states Maharashtra 8.90% during the ten year period between Gujarath 9.30% FY05 and FY15. Andhra Pradesh 10.20% Top 10 states contribute 4% and above Karnataka 7.20% each to the manufacturing output of the country. Kerala’s share is as low as Tamil Nadu 9.10% 1.6%. Kerala 9.30%

Figure 3: Growth Rate of GSDP across States (Real FY05-FY15) Source: Economic Review 2015, KPMG in India Analysis 2017

Gross State Domestic Product

Kerala has an average annual growth Kerala Tamil Nadu Karnataka rate of 14.29% and the contribution Andhra Pradesh Gujarat Maharashtra 20.00% to all India GDP is 3.78%. Based on annual growth rate for past ten years 15.00% Tamil Nadu is the leading state with 16.38% share and Maharashtra 10.00% contributes maximum share of all- India GDP contribution, with 14.42% 5.00% contribution. 0.00% Figure 4 GSDP Comparison of States 13.50 14.00 14.50 15.00 15.50 16.00 16.50 17.00

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Study on Investment Potential in Kerala

Source: GSDP of States, NITI Aayog; KPMG Analysis

Agriculture Sector Kerala lags behind in agricultural Kerala Tamil Nadu Karnataka production portraying a negative growth Andhra Pradesh Gujarat Maharashtra rate in recent years. Gujarat leads in average growth rate for Agriculture 30 sector. Andhra Pradesh’s agriculture 20 sector contributes the highest to the state’s GSDP. 10 0 -2.00 0.00 2.00 4.00 6.00 8.00 Figure 5: States comparison in agriculture sector Source: GSDP of States, NITI Aayog; KPMG Analysis

Industrial Sector Annual growth of Industrial sectors are Kerala Tamil Nadu Karnataka taken in X – Axis, Percentage Andhra Pradesh Gujarat Maharashtra contribution Industrial sectors to GSDP 50.00 of states (2014) are taken in Y – Axis, and the size of the bubble shows the 40.00 GSDP of the states. 30.00 Gujarat contributes 40% to states GDP from industries. Also the growth rate is 20.00 almost 8%. 2.00 4.00 6.00 8.00 10.00 Kerala is slightly ahead of Tamil Nadu and Andhra Pradesh in terms of growth Figure 6: States comparison in industrial sector rate. Also has same GSDP contribution Source: GSDP of States, NITI Aayog; KPMG Analysis as that of Andhra Pradesh. Tamil Nadu and Maharashtra are in second and third position for percentage of contribution by industrial sector to states’ GSDP. Manufacturing clusters are widespread in the Gujarat- Maharashtra-Western UP area, Chennai-Bangalore cluster and the in Central India.

Services Sector Kerala Tamil Nadu Karnataka Average annual growth rate for past Andhra Pradesh Gujarat Maharashtra seven years of sates in services sectors are taken in X – Axis, Percentage 70.00 contribution Services sectors to GSDP of states (2014) are taken in Y – Axis, and the 65.00 size of the bubble shows the GSDP of the states. 60.00 Kerala has got the highest contribution to GSDP among all the states being compared, and has got better growth rate 55.00 than Andhra Pradesh and Karnataka. 7.00 8.00 9.00 10.00 11.00 Gujarat is leading with 10.22% average Figure 7: States comparison on Services sector growth rate in this sector. Source: GSDP of States, NITI Aayog; KPMG Analysis

Kerala can capitalize on the overall growth pattern of the country and seize the opportunity to become the leading hub of the region for new opportunities, catering not only to the regional market but also becoming an export hub for South East Asian countries.

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Study on Investment Potential in Kerala

Kerala is positioned well in the services sector and with at par industrial growth with leading states, the state has immense potential to increase its industrial landscape and in effect increasing manufacturing output of the state

Kerala – State SWOT analysis

Strengths

• Strategic Location Kerala is situated on southern tip of India bordering the Arabian ocean. Its location allows it to act as the gateway to all Middle East nations and neighbouring countries.

• Steady state economy Kerala has one of the steady growing economies in the country, over the past two-plus decades (1990 to 2015), Kerala has grown at an impressive rate of over 6.3 per cent. Not only did economic growth increase, but the poverty rate also fell from over 65 per cent to less than 15 per cent during this period.

• Infrastructure Kerala is amongst the well performing states in India and holds significant industrial potential in good infrastructure facilities like transport system, airports, port and harbours. Transport infrastructure of the State consists of 3.31 lakh Kms of road, 1257 Kms of Railways, 1687 Kms of Inland Waterways and 111 statute miles of Airways and 18 Ports.

• Long Coastline With a 585 km coastline, Kerala has great avenues for food processing, exports and sea- based resources.

• Access to ports Kerala has a major port at Kochi and 17 other ports, which are mostly seasonal. Of them developments are taking place in Vizhinjam, Thankassery, Alappuzha, Munambam, Ponnani, Beypore and Azhikkal. Figure 7 shows the share of traffic in each port as on 2014-15. The total traffic of Ports in south India was 2, 31,371 tonnes.

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Study on Investment Potential in Kerala

Kamarajar Vishakapatanam, (Ennore), 13% 25% Cochin Port, 9%

V.O Chidabaranar, 14%

Chennai, 23%

New Manglore, 16%

Figure 8: Share of Port Traffic in South India Source: Cochin Port Trust

Cochin Port handles 9% of port traffic. Vishakhapatnam handles the highest traffic with 25% share followed by Chennai port of 23% and New Mangalore port of 16%. Up gradation of existing port facilities can provide Kerala an advantage.

• Communication Network Compared to the national tele-density of 77.12, Kerala has a high tele-density of 96.74

• Water Availability Kerala is one of the few Indian States with abundant supply of potable water. Its rivers, lakes and backwaters ensure that if used efficiently and conscientiously, they meet the domestic and industrial water needs. There are 53 reservoirs, and 44 lakes in Kerala. In industrial parks run by agencies such as KSIDC and KINFRA, the operators have their own water sources and supply lines.

• Literate Population Kerala has a highest literacy rate (94%) than any other state (national average rate of 74%)

• Access to talent pool Kerala has presence of excellent academic institutions like IIM, IIT, NIT, CET, IIST, IITM-K, IISER and many more technical institutions. There is an abundant talent pool with nearly 16 thousand students graduating per year in Electronics & allied branches from the big network of professional colleges, polytechnics, industrial training institutes and engineering colleges.

• India's most advanced tourist destination Total revenue from tourism during 2015 had shown an increase of 7.25%, compared to 2014 and total FOREX earning in 2015 has increased by 8.61% as compared to 2014. Foreign and Domestic tourist arrival during 2015 showed an increase of 5.86% and 6.59% respectively.

• Industrial Clusters The state has got different industrial clusters. This could be utilized for new opportunities emerging in various industries.

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Study on Investment Potential in Kerala

Minerals and mining

General Engineering, wood, offset printers Agro based products, minerals and mining General Engineering, food processing, rubber, General engineering, wood, Footwear rubber, garments,

Terra tiles, canning, Agricultural handlooms and implements, powerlooms sericulture

IT, Offset printers, general engineering, furniture, rubber, Rubber, food, soft garments, plastic, plywood toys, engineering

Garments, coir, General engineering, food processing, food processing Printing and Publishing

IT, handlooms and Wood, food processing, powerlooms, Rubber, garments textiles, cashew, oil mills, minerals and mining

Figure 9: Key Industrial sectors of Kerala Source: KSIDC, KPMG in India Analysis 2017

Challenges

• Labour force Though Kerala is an exporter of manpower to the world, they experience a shortage of labour force, thus making labour expensive. Both male and female workforce participation for Kerala is lower than the national average with high wage rates.

• Branding deficit and low visibility Kerala suffers from a branding deficit, it is known mostly in the context of tourism.

• Power Kerala faces with shortage of power, being one of the prime obstacle in the industrial development. The need for power is ever increasing and the state hasn’t been able to cope up with the growing demand. The current sources of energy are essentially Hydel power. Of the total installed capacity, hydel contributed the major share of 72%; while 15% was contributed by thermal projects, and NTPC (National Thermal Power Co-operation) contributes 13%.

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Study on Investment Potential in Kerala • Consumer state Kerala is considers to be consumer state. Agriculture production is very low compared to neighbouring states Tamil Nadu, Karnataka and Andhra

• Ease of Doing Business According to the survey carried out by World Bank, Kerala is perceived to have a few business opportunities without a favourable business climate and ranked 18 (2015). Difficulty in governmental procedures such as registration of the businesses.

• Inadequate International connectivity The state needs to gear up its International connectivity with more flights connecting the state with Americas, Europe & South East Asia.

Threats

• Competition from other states Due to a change in the investment climate in the country, several new states are reaching out to investors to attract investments and boost the local economy.

• Clustering of new sectors New sectors, that are currently not geography specific, such as, ESDM, Defence Manufacturing, Technical Textile; there is increased competition from other states. This poses a threat to Kerala as the first-mover advantage in these sectors will set the tone for its development in the next ten years.

• Land availability Less Land available for Industrial development, and also land cost is high compared to nearby states

• Skilled resources Thought Kerala is supplier of skilled resources, the availability in local market is a challenge. Resources from other states are capturing the local market.

Opportunities

• Significant untapped potential With regards to Natural resources, port advantage and emerging infrastructure, Kerala has a significant domestic potential waiting to be untapped

• Opportunity to be the leading state in south zone Western and Eastern India has deficiency of a full-grown industry unlike the Kerala’s coast leaving space for ample opportunities. With its advantages, Kerala could be the industry forerunner in the region.

• Attract investments from SE Asia Strategic location gives an opportunity for trade with South Asia.

• Significant Export Potential Kerala has a huge export potentials in exports of marine products, spices, coir and other traditional items like Ayurveda products. Gold Jewellery can also act as a high export potential product.

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Study on Investment Potential in Kerala Demographic and Infrastructure Assessment

For businesses to flourish and generate revenue in an economy, it is imperative that adequate and well-connected infrastructure is available. This section evaluates the as-is situation of infrastructure and demographics in Kerala, the key takeaways of which will form basis for selection of potential sectors for investments. Demographic and infrastructure development of a state contributes to the State GDP leading to urbanization. Infrastructure acts as support to many industries and in-effect creates employment opportunities in the State. Under this section, Kerala’s Demographic, Mineral Resource and Infrastructure profile is assessed and key gaps are identified. These parameters are considered for analysis because of the following considerations.

• Demographic Profile – Geography and population profile are important considerations while evaluating trade and market demand prospects • Mineral Resource Profile – Resource endowments increases possibility of attracting investments • Infrastructure Connectivity – Mobility options are necessary for effective functioning of all operations across any business value chain • Social Infrastructure – Key factor to assess job creation prospects • Industrial Infrastructure – State-of-the-art facilities to support industrial development is a key element for attracting entrepreneurs The key takeaways of this analysis would be used in identifying sectors/industries with potential investment opportunities in Kerala. Demographic snapshot of Kerala • Hydel & Thermal Generation accounts for major share. Solar and Wind marginal additions • Higher energy availability • Actual energy shortage was 0.5% against anticipated shortage of Power 14.2% • Minimal energy shortages compared to TN, AP&T and KN – 0.3- 0.5% • Maximum power consumption revenue collected from Industrial segments

• Quality of shallow groundwater better than other states Water Supply • Highest open well density in India with 200 wells per sq.km

• State government priority to develop national highways to 45m width • Better placed than other states w.r.t road length; However condition Road of roads deteriorating • Easy accessibility of pastoral areas - • Scattered pattern of urbanization a challenge

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• Performed better in terms of rail density than national average • Government has planned new projects such as Suburban train Railways services, Metro, Light Metro Rail • Increased efforts in establishing railway sector

• Lacks well connected city gas pipeline network – Only 1 CGD Gas Pipelines network authorized in Ernakulam district

• 3 operational airports, 1 planned airport Air Travel • Key mode of transport catering to the tourism sector

• Cochin port handled only 3.71% of all-India major ports cargo traffic • Minor ports underdeveloped hence not able to attract sufficient Ports vessels • 5.4% increase in port traffic during Apr-Aug 16 period over last year compared to 10.8% increase in Vishakhapatnam port

Digital & • Highest tele-density and penetration of optic fibre cable in the Telecommunication country Table 2: Demographic snapshot of Kerala

Detailed demographic and infrastructure assessment is available in Annexure I.

Industrial Infrastructure snapshot of Kerala

Kerala Industrial No. Investment Infrastructure Infrastructure District of Name s (INR Utilization (%) Development Parks Lakhs) Cooperation (KINFRA) Export Promotion 21 Parks 12157 100% Industrial Park Industrial Ernakulam 4 NA 100% Park

Hi Tech Park 1903 NA

Rubber Park NA NA Integrated Industrial & 52749 56%8 Textile Park

WISE Park NA 88%8 Palakkad 4 Not Project in operational Defence Park planning (Planning stage stage)

8 Infrastructure availability for new units © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Not Project in Mega Food operational planning Park (Planning stage stage)

Textile Centre, 1282 34%8 Kannur 3 Thaliparamba Industrial 4194 92%8 Park

International 3982 93%8 Thiruvananth Apparel Park 2 apuram Film & Video NA 93%8 Park

Food Processing 1164 100% Park Malappuram 2 Techno Industrial 11648 73.6%8 Park

Industrial 3010 46%8 Park Pathanamthit 2 ta Food Industrial 5962 81%8 Park

Alappuzha 1 Seafood Park NA NA

Industrial Thrissur 1 225 100% Park

Industrial Wayanad 1 5842 94%8 Park Industrial Kasaragod 1 7971 88.9%8 Park

Small Industries Development Corporation (SIDCO) • 17 Major Industrial Estates • 36 Mini Industrial Estates • 923 Industrial sheds • 7 Industrial Parks • 9 Production units

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(Unit in no of jobs generated)

• KSIDC has acquired land at four industrially backward locations in Kerala State Industrial Kannur, Kozhikode and Alappuzha districts Development • KSIDC aims to ensure basic infrastructural facilities such as road, Cooperation (KSIDC) water, power, telecommunication etc. are available to these districts • 3 Growth Centres • Two mega projects are in progress namely Electronic Hub at Ernakulam and Mega Food Park at Cherthala Average Utilization of District DA DP Others Infrastructure (%)

Thiruvananth 1 1 - 100% apuram

Kollam - 2 - 93% Pathanamthit - 1 - 100% ta

Coir Park – Alappuzha 2 2 95% 2 Directorate of Industries & Commerce (DIC) Kottayam - 3 - 100% • 37 Industrial Development Idukki - 1 - 100% Plot/Areas Ernakulam 4 2 - 100%

Thrissur - 4 - 100%

NIDA Palakkad - 3 82% Kanjkode

Industrial Malappuram - - Estate 67% Manjeri

Kozhikode - 1 - 100% Kannur - 1 - 100% Kasaragod 1 2 - 80% Table 3: Industrial Infrastructure snapshot of Kerala

Detailed industrial infrastructure assessment is available in Annexure II.

District Profiling

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Districts are studied to understand their administrative setup, Gross District Domestic Product, Agriculture and Allied activities, Industrial profile, Connectivity and Social Infrastructure. The key findings are provided in subsequent sections. Detailed district profiling is available in Annexure III.

Figure 10: District Profiling Assessment Framework

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S No. District Name Industrial Clusters Major Exports Industrial Sector Manufacturi Top 3 GDP Industrial Growth ng sector Contributing Infrastructure (Investment (I), GDP sectors9 Employment (E), contribution No. of Registered Units (U))

1 Kasaragod • General • Cashew and • I – 42% 0.66% • AA (20%) • KINFRA Small Engineering allied products • E – 19% • THR (19%) Industries Park at • Food Processing, • U – 26% • RBL (14%) Seethangoli • Rubber Industries 2 Kannur • General • Textiles • I – 10% 3.58% • THR (22%) • KSIDC Industrial Engineering • Wood • E – 6% • RBL (13%) Growth Center • Wood Products • U – 10% • C (13.4%) • KINFRA Small • Offset Printers Industries Park • KINFRA Textile Park, Cyber Park

3 Kozhikode • General • Footwear • I – 26% 3.74% • THR (22%) • Cyber Park Engineering • Marine • E – 61% • C (15%) (Nellikode) • Food Processing Products • U – 32% • RBL (14%) • Industrial Growth Rubber • Software Centers (KSIDC) • Footwear • Food Products • Umbrellas • Batteries 4 Thrissur • Canning • Ayurvedic • I – 4% 6.59% • THR (21%) • KINFRA Small • Handlooms Products • E – 11% • RBL (14%) Industries Park, • Power looms • Handicrafts • U – -14% • C (13%) • KINFRA Industrial • Terra Tiles • Textiles (decrease) Park

9 M – Manufacturing AA – Agriculture & Allied Activities C – Construction TSC – Transport, Storage & Communication THR – Trade, Hotels & Restaurants RBL – Real Estate, Business, Legal © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• Coconut • Food Products • Dry Fish • Rubber Products • Coconut Oil • Spice Oil • Food Processing • Machineries • Concrete Product Machineries

5 Ernakulam • IT, Offset printers • Tea • I – 15% 15.5 % • THR (17%) • Infopark, • General • Cashew • E – 13% • C (16%) • Cochin SEZ Engineering • Coir Products • U – 21% • M (15.5%) • KINFRA Export • Furniture • Coffee Promotion • Rubber • Sea food Industrial Park • Garments products, • KINFRA Food • Plastic • Spices Park • Plywood • Vanilla • KINFRA Small • Electronics • Agro & Food Industries Park, Rubber Park • Inkel Business Towers (WE space)

6 Alappuzha • Garments • Shrimps • I -18% 5.9 % • THR (19%) • Seafood Park • Coir • Coir Products (decrease) • RBL (16%) • Industrial Growth Centre of KSIDC

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• Food Processing • E -20% • TSC (13%) • Mega Food Park (decrease) for marine • U -18% processing (decrease)

7 Kottayam • Rubber • Rubber • I – 19% 4.3 % • AA (16%) • Nil • Food Products • E – 23% • THR (18%) • Soft Toys • Ethnic Food • U – 28% • RBL (14%) • Engineering • Engineering Tools • Spice Extracts 8 Wayanad • Agro-based • Spices • I – 15% 2.7 % • AA (25%) • KINFRA Small • Minerals & • E – 2% • RBL (17%) Industries Park Mining • U – 13% • THR (13%) 9 Malappuram • General • Food Products • I – 12% 3.73 % • THR (19%) • KINFRA Engineering • Treated rubber • E - 14% • RBL (16%) Neospace • Wood • U – 18% • C (12%) wood furniture • Rubber • Garments 10 Palakkad • Agricultural • Coconut Oil • I – 68% 10.9 % • THR (18%) • Western India Implements, • Sortex rice • E – 12% • RBL (15%) KINRA Ltd. • Sericulture • Processed • U – 22% • AA (14%) • Light Engineering Tamarind Industrial Park • Dry Ginger • Mega Food Park • Coffee powder KINFRA • Curry Masala Powders

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• Pickles • Garments • Ayurvedic Products • Agricultural Implements

11 Idukki • Rubber • Spices • I – 7% 4.1 % • AA (32.4%) • KINFRA Standard • Wood • E – 9% • RBL (16%) design factories • Engineering • U – 12% • THR (11%) at Rajakumari • Agriculture 12 Pathanamthitta • General • Oleoresin • I - -1% 1.9 % • AA (15.7%) • KINFRA Industrial Engineering • Spice Oil (decrease) • RBL (16.5%) Park • Food Processing • Food Products • E - -26% • THR (13%) • KINFRA Food (decrease) Processing Park • U - -29% (decrease)

13 Kollam • Wood, • Cashew • I – 10% 3.9 % • THR (17%) • Industrial Estates • Food Processing, • Seafood • E – 5% • RBL (16%) promoted by • Garments • Coir • U – 13% • AA (13%) SIDCO • Handloom • DIC • IP Promoted by KINFRA

14 Thiruvananthap • Handloom • Handloom • I – 27% 7.5 % • THR (15.21%) • Technopark, uram • Coir & products • E – 19% • RBL (14.41%) KINFRA Handicrafts • Handicrafts • U – 22% • TSC (12.7%) International Apparel Park

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• Software • Film & Video Park Products

Table 4: District Profiling – Key takeaways

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Districts that have fared well in each of the assessment parameters are mentioned below:

Parameter Highest Lowest

Industrial Sector Investment (I) Palakkad Alappuzha growth

Industrial Sector Employment (E) Kozhikode Pathanamthitta growth

Industrial Sector No. of Kozhikode Pathanamthitta Registered Units (U) growth

GDP Contributing District in Ernakulam Kasaragod Manufacturing (M)

GDP Contributing District in Idukki Alappuzha Agriculture and Allied Activities (AA) GDP Contributing District in Ernakulam Wayanad Construction (C)

GDP Contributing District in Ernakulam Wayanad Transport, Storage & Communication (TSC)

GDP Contributing District in Ernakulam Wayanad Trade, Hotels & Restaurants (THR)

GDP Contributing District in Real Trivandrum Wayanad Estate, Business, Legal (RBL)

Industrial Infrastructure Ernakulam Kottayam

Table 5: District Assessment Parameters – Top districts

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Central and state level sector support incentives and initiatives

Government of Kerala is dedicated towards its commitment to make Kerala investment friendly. The state government has formulated a wide range of fiscal and policy incentives for businesses under the Industrial and Commercial Policy and has well-drafted sector-specific policies. Through IT, Tourism, labour and startup policies, the Government offers range of fiscal incentives, standard investment subsidies (SIS) concessional power tariffs and exemptions. To further attract investments across automated robotic car parking system, a tax reduction from 14.5% to 5% 10 has being proposed by the State Government. To encourage investments from NRI community, the State Industrial Development Corporation has detailed a “NRI zone” that act as a one-stop platform to apprise the NRIs on the investment opportunities and various FDI, FT policies and procedures & clearances required. Stamp duty exemption for land acquisition, refund or exemption of value added tax, exemption from payment of electricity duty are some additional incentives by the State. To further boost the investment scenario in India, the Central Government provides investment allowance (additional depreciation) at the rate of 15 percent to manufacturing companies that invest more than INR 1 billion in plant and machinery. To strengthen the manufacturing sector in the country, incentives are given for unit’s set-up in Special Economic Zones (SEZ), National Investment & Manufacturing Zones (NIMZ). Additionally, exports incentives like duty drawback, duty exemption/remission schemes, focus products & market schemes are also extended by the central government to encourage healthy investment in the States.11

Central government support initiatives

Figure 11: Snapshot of Central Government Support Schemes12

10 IBEF 11 Make in India, http://www.makeinindia.com/policy/foreign-direct-investment 12 http://indianexpress.com/article/business/budget/a-new-pradhan-mantri-flagship-for-micro-irrigation-this-time/ ; http://www.soilhealth.dac.gov.in/ 3. http://dahd.nic.in/about-us/divisions/cattle-and-dairy-development/rgm-rashtriya-gokul-mission; © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Detailed assessment of Central Government schemes are available in Annexure III.

Support initiatives offered by states

Tamil Nadu

Type Description Sector/Industry

• Investment Promotion subsidy/soft loan is provided to the investors if they double the Incentivizing committed employment levels within the additional investment period. All sectors employment • Training Subsidy will be provided as an incentive – generation based on the capacity of employment generation and the potential for significant improvement of skills

• Government is providing higher incentives /concessions and can provide relaxation on certain conditions of the policy by giving due weightage to Incentives for • Investment Manufacturing • Direct/Indirect employment generation Manufacturing sector • potential for attracting further investment

• For expanding business also incentives are provided, the benefits are provided based the years of existence in the state

• Capital Subsidy and Electricity Tax Exemption - based on employment and investment in fixed assets Standard • Stamp Duty concession - for projects located in Manufacturing incentives Industrial parks • Environmental Protection Infrastructure subsidy – for setting up waste disposal facility Subsidy for Quality • Reimbursement of expenditure for getting BIS, ISO certification / 9000 / 14000 or any other national or international All sectors Patent certification or patent registration registration

http://nmsa.dac.gov.in/ 5. http://agri-insurance.gov.in/Login.aspx; http://www.projectstoday.com/WeekAtGlance/Punjab-Telangana-to-get- mega-food-parks ;Indiamart.com ;Supportbiz ; http://nmfpodisha.nic.in/ ; http://www.digitalindia.gov.in/ ;http://www.ciol.com/electronics- development-fund-will-boost-esdm-start-ecosystem-iesa/ ;http://www.ncflexe.in/ ;http://www.electronicsb2b.com/ ; http://mhrd.gov.in/rashtriya-avishkar-abhiyan; http://www.pmkvyofficial.org/ ; ddugky.gov.in ;www.orissadiary.com 19. http://www.yarnsandfibers.com/ ; start up India ; standupindia ; hridayindia.in ;Dcmsmse © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Incentives for Research and • VAT rebate is provided on Capital goods for R & D All sectors Development facilities Facilities

Structured • Depending on the investment range, fiscal package of Manufacturing incentives are provided as investment promotion incentives Karnataka Type Description Sector/Industry

• Floor Area Ratio (FAR) has been increased in industrial areas Land Manufacturing • Regulatory procedures are simplified for industrial land purchases

• Reimbursement of expenses for setting up of Rain Green Industrial water harvesting, Environmental and Water audit, MSME Growth Wastewater treatment and reuse facilities. These are mandatory

• Promotion of technology up-gradation in manufacturing sector in the state Technology up- • Technology transfer programmes will be run to MSME gradation scheme create shelve of projects with specific emphasis on export orientation

Incentives for R & • Capital subsidy is provided on Capital goods for R Manufacturing and D Facilities & D facilities allied

• Anchor unit subsidy for early birds • Exemption from stamp duty & concessional registration charges • Exemption from electricity duty / tax for aerospace Defence and Special Incentives units Aerospace Sector • Interest free loan on VAT • Reimbursement of CST over a period • Entry tax exemption for aerospace units

• A venture fund has been set up for specifically Automobile, Special Incentives focused on boosting MSME Pharmaceutical • Grant for setting up Effluent treatment plants Pharmaceuticals Special thrust for • Additional market development assistance to encouraging entrepreneurs availing incentives under SC/ST, Women, Government of India programme for Trade Related MSME Minority, PH and Entrepreneurship Assistance and Development Ex-Servicemen Scheme for Women entrepreneurs

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Promotion of Khadi, Artisan • Power subsidy, subsidy on working capital loans Handicrafts and Coir sector Andhra Pradesh Type Description Sector

Land Land is being allotted for 99 years of lease All sectors GoAP has set up Andhra Pradesh State Skill Development Corporation (APSSDC)on lines of the Labour and Skill National Skill Development Corporation (NSDC), All sectors Development The objective is to • Generate additional employment • Promote skill development

Investors who are eligible for Central subsidies for Fiscal Incentives All sectors setting up in AP

All Manufacturing units Incentives for • Stamp duty – one time reimbursement of expenses Apparel, Food Large industry • VAT/CST/GST concession for a period of time processing, units and MSMEs Biotech, Automobile

Assistance are provided to foreign investors to attract more FDI. They provide assistance in: • Provide bespoke investor facilitation International Desk All sectors • Handholding services in the form of local information and expertise • Comprehensive portal with business opportunity related information

• Zero rated category schedule of the VAT Act - Incentives for Providing Encouragement to companies engaged Manufacturing Swachh Andhra in recycling waste into environment friendly products, Bio gas industry, etc.

• Special incentives are provided to SC/ST entrepreneurs, BC entrepreneurs, women Special package entrepreneurs like Stamp duty exemption, rebate All sectors of incentives on land, power rate exemption, Seed capital assistance Maharashtra Type Description Sector/Industry

• Customized package Scheme of incentives Promotion of • Additional incentives to projects providing twice Ultra Mega/ Mega Manufacturing more employment opportunities than committed Projects • Providing higher exemptions on case to case basis

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• Industrial Integrated cell to simplify procedures

• Exemptions are provided for a period of time – Promotion of Industrial promotion subsidy, Water and energy Manufacturing Large Scale audit, Stamp duty exemption, Power duty Food Processing Industries exemption, • Additional benefits

• Package of schemes are provided to MSMEs to promote higher growth of industries Incentives for • These includes - Industrial promotion subsidy, Manufacturing MSMEs Water and energy audit, Stamp duty exemption, Food Processing Power duty exemption • Additional benefits Promotion and Facilitation centre for • Investment raising • IEC activities Industrial • Setting promotional events All Sectors Integrated Cell • Project Consultancy • Foreign investors cell • Investor after care cell - Hand holding activities

Gujarat

Type Description Sector/Industry

Plastics Industrial Infrastructure Focus Sectors Specialty and fine chemicals - Auto and Auto Components Food and agri Business

Various sector specific promotional incentives Incentive Separate incentives for MSME All Packages • Special scheme incentives for startup and innovation

• Promotion of labour intensive industries Human Resource • Support to young entrepreneurs All • Special centers for skill enhancement

• Ease of Doing Business initiatives Business • Centralised clearance system All ambience • Business development initiatives • Business facilitation centres

• Thrust for large and mega projects • Support for Industrial and connectivity Infrastructure Infrastructure All • Enhancement of facilities in environmental infrastructure

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Table 6: Policy/Incentives offered in various sectors at State level

Existing policy framework of Kerala

Sector/ Name of Policy Policy Objectives Sub-sector Ensuring quality visitor experience, focus on benefits for the community from tourism, enabling environment for investment, marketing Kerala as a Tourism 2012 Tourism visible global brand in domestic and international markets, Developing quality human resources in tourism and hospitality Vision of the policy is to transform Kerala into a Kerala Industrial & vibrant entrepreneurial society through inclusive, Commercial Policy Industries ecofriendly and sustainable economic growth. The Amended - 2015 policy gives boost for industries of agriculture and traditional manufacturing sectors Vision of the policy is to make Kerala as the No1. Kerala Technology Startup IT Destination in India for startups and amongst the top Policy, 2014 5 startup ecosystems in the world The policy envisions to make Kerala as one of the Information Technology most preferred IT investment location in India. Also IT Policy 2012 envisages to improve citizen service delivery through integrated eGovernance framework The labour policy aims at creating a peaceful work environment, increasing productivity while protecting Labour Policy All sectors rights of workers and to create a cordial relationship between the owners and workers The policy goal is to develop a dynamic and Sports Policy, 2015 (Draft) Sports innovative culture that promotes and celebrates participation and excellence in sports Vision is to brand Kerala as Global Capital Of Ayush Kerala Ayush Health systems for health care delivery, academic excellence, Health Policy, 2016 and research and quality drug industry by the year 2025. Policy aims to provide quality healthcare to general Health Policy Kerala, 2013 Health public through its referral network and maximizing efficiency at reduced cost Kerala Small Hydro Power Power The main objective of the policy was to enhance (SHP) Policy 2012 contribution of small hydro projects which will ultimately contribute in increment in installed capacity Kerala Agricultural Agriculture Major objective of the policy is optimum and Development Policy, 2015 sustainable use natural resources. Also encouraging farmers in using modern farming techniques and ensuring flow of cash to the agriculture sector The organic farming policy seeks to make Kerala’s Kerala State Organic Agriculture farming sustainable, rewarding, and competitive and Farming Policy, 2008 ensuring poison-free water and food to every citizen.

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Sector/ Name of Policy Policy Objectives Sub-sector The main objective of the policy is to meet challenge National Policy for Skill of skilling with speed, standard, and sustainability. Development and All Sectors It has identified a skill gap of 1097.3 Lakh resources Entrepreneurship 2015 (incremental human resources) requirement in India alone in 24 key sectors by 2022 National Intellectual Major objectives of the policy are IPR awareness Property Rights (IPR) All sectors creation, generation of IPRs, service oriented IPR policy 2016 administration, Commercialisation of IPR Increase manufacturing sector growth to 12-14% over National Manufacturing Manufacturing the medium term to make it the engine of growth for Policy 2011 the economy. Table 7: Key policies of Kerala

Key takeaways for the state

• Government can provide incentives for the new business ventures by evaluating investment, employment generation and future growth envisaged. • Capital subsidy can be provided for manufacturing/engineering firms • For promoting startups in all thrust sectors more than IT following may be considered • Exemption from stamp duty & concessional registration charges • Exemption from electricity duty / tax for aerospace units • Interest free loan on VAT • Reimbursement of CST over a period • Entry tax exemption • For encouraging new and innovative ventures, subsidy may be provided for patent registration, national and international accreditation • Steps may be taken for promoting handloom and handicrafts sector • As part of Haritha Keralam incentives may be provided to companies taking measures for recycling the waste into environment friendly products • As Kerala has long coastal line, special boost may be given for port led manufacturing and ship building activities

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Brand landscape of Kerala They key brands of Kerala were assessed and the top performing sectors of Kerala were identified.

Figure 12: Brand Landscape of Kerala Source: Dhanam Publication “Hot Brands of Kerala” Vol-I, 2016

Manufacturing, Banking and finance, Tourism an hospitality, IT, Food processing, Healthcare and Gems & Jewellery are the key sectors where popular brands emerged. Sector Assessment The sectors of the state were identified based on contribution of primary sectors of the economy to the state GSDP. Further sub-sectors were listed which are of relevance in the Kerala context.

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Sector assessment framework

Figure 13: Sector assessment framework

Sector listing

Sector Sub-sector Industry Agriculture Production Rice Agriculture Production Mango Agriculture Production Banana & Arecanut Agriculture Production Cocoa Agriculture Production Pepper & Cardamom Agriculture Production Nutmeg Agriculture Production Coffee Agriculture and Allied Agriculture Production Tea Activities Agriculture Production Rubber Agriculture Production Coconut Agriculture Production Cashew Nut Agriculture Production Palm Oil Agriculture Production Tapioca Agriculture Production Turmeric & Chillies Agriculture Exports Marine Marine Production & Exports Mining and Quarrying Minerals & Mining Agriculture Equipment Manufacturing Automobile Production Automobile assembly Automobile Production Auto components

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Sector Sub-sector Industry Textile Technical Textiles Textile Handlooms Textile Handicrafts

Chemical Industry Engineering Shipbuilding Drugs and Pharmaceuticals Wood Timber Processing Wood Furniture Making Wood Plywood industry Coir Coir based products Food Processing Fruit & Vegetable Processing Food Processing Dairy Processing Food Processing Marine Processing Food Processing Rice Brands Food Processing Oleoresins Food Processing Instant Food Products Bamboo Bamboo based Products Rubber/Rubber-based Tyre Rubber/Rubber-based Footwear Rubber/Rubber-based Others Electronics Construction Materials Cement Gems & Jewelry Electricity, Gas, Water Power Generation Supply & other Utility Renewable Energy services Construction Construction Tourism Trade, hotels & Tourism Hotel restaurants Tourism Restaurants Travel Travel and tour operators Transport/Logistics Road Transport/Logistics Water (Costal/Inland) Transport, Storage & Transport/Logistics Air Communication Transport Rail Storage Communication Telecom Communication Infotainment Financial Services Non-Banking Financial Services Healthcare Service delivery Other Services Healthcare Insurance Healthcare Medical Equipment

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Sector Sub-sector Industry IT & ITES Software development IT & ITES Hardware support Education Skill Development Beauty & Wellness Bakery & Confectionery Table 8: Sector Listing

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Sector Assessment – Key Findings

Sl. Existing Market Competitive Potential Job Overall Sector Sub-segments Growth (5 years) Market Potential No. Size Landscape Capabilities Rating

In the FY 2014-15, The rice production Kerala had was worth 900 Cr in revenue of ~INR FY15, compared to 30000 Cr from neighbouring states Opportunities in Agriculture The agriculture the potential is low agricultural sector Agriculture & The cultivable land cultivation. growth pace is are good, with 1. Allied Production is reducing every minimal with CAGR supportive Activities Kerala was in first year 0.5% (2010-15) position in Coconut government Agriculture cultivation, but now schemes contributed 5% to Tamil Nadu and Kerala's GSDP Karnataka have surpassed Kerala

Opportunities for scientists, engineers,

Fruits, fruit pulp and More than 60 export technologists, sales and marketing Agriculture & Current exports of processed fruits companies 54.34 % (Since manpower 2. Allied Exports USD 252.57 Mn form the major part registered with 2005-06) Activities (INR 1692 Cr) of exports (INR APEDA in the India has enormous 448.8 Cr) agriculture category potential as an exporter of agricultural commodities

Kerala has the More than 40 highest share (49%) Not a highly 12% in Inland fish Marine export of marine fish employment production companies (as per landings in South- intensive industry. Total fish MPEDA) Agriculture & Marine Potential for production in west region 3. Allied Production & research scientists Kerala during Activities Exports Indian mackerel is to increase 2014 was 0.8 MT Decreasing trend in the major landed 3 Ornamental fish production of new Marine production resources with 29% exporters (as per varieties of marine and exports share in total landed MPEDA) catch resources of India

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Sl. Existing Market Competitive Potential Job Overall Sector Sub-segments Growth (5 years) Market Potential No. Size Landscape Capabilities Rating

Deficiency in supply Increasing demand of qualified trained workers like for minerals across blasters, mine India and globally mates, foreman, surveyors

Indian mining Scope for industry has exploration and potential to create 6 mn additional total production, jobs by capacities need to Nearly 10 key 2025,accounting for Mining & Minerals & INR 2587 Cr be improved 12% of the new non- 4. -0.52% players operate in Quarrying Mining (Kerala) farm job gap the minerals sector Most of the M&Q activities in the State continue to Incremental demand follow human of 56000-76000 intensive and Mining engineers, 14000-19000 classical methods, Specialised skills- opportunities to geologists/geo- modernise sector physicists during especially through 2009-25 period Technology adoption

4 Agriculture Indian Tractors Mechanization in Machinery Potential for Exports value of Kerala is very low manufactures in upcoming business INR 4354.3 Cr in compared to other Kerala as per establishments that provide farmers 2015. India states Directory of AMMA- 12-14% Indian with specialised India Agriculture Tractors and Tillers farm equipment and 5. Manufacturing Equipment but Kerala has Improved various amenities to improve crop yield negligible share availability of credit KAMCO is one of Kerala has less through the and focus on the largest than 1% share in adoption of latest

total Indian tractor productivity is producers of Power agricultural sales driving farmers for Tillers in India technologies can mechanization

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Sl. Existing Market Competitive Potential Job Overall Sector Sub-segments Growth (5 years) Market Potential No. Size Landscape Capabilities Rating

increase potential job opportunities Potential for increasing

penetration

Auto Mission plan 2006-2016 aims to Sector contributes Indian market ~ contribute over 10% Kerala Automobiles to approx. 7-8% of INR 394690 Cr & to India’s GDP Ltd. is the only PSU India’s employment exports value of Sector contributed operating in Kerala (High) INR 71044 Cr Indian sector to approx. 22% of and has growth rate of ~ India’s Automobiles & international 10% over the last manufacturing GDP 6. Manufacturing Auto presence. But, few years but Components company ran into minimal presence Opportunities accumulated loss of in Kerala available states like INR 25 Cr (2014) due Demand for High Kerala’s Gujarat, to policy Precision Machining contribution is Maharashtra and capabilities minimal Tamil Nadu have ramifications (Medium) first mover advantages

Kerala received order of INR 2 Cr n Sector with high from Tamil Nadu for 17 operating textile 12% in India employability and stabilizing 50 km mills in Kerala diverse skillsets long roads with geotextiles Indian market size of ~INR 1,50,000 Integrated Skill Textile - Cr and India total All mills of state More than 20 Development 7. Manufacturing Technical textiles exports textile corporations players in the Scheme to spend Textile value is at USD 40 Key players in are incurring losses garment exports INR 1900 Cr to train Bn garments segment market. Kitex, 1.5 Mn workers in Kerala recorded Dinesh Apparels an average CAGR amongst leading Technical textile of 15% Home furnishing garment industry requires products are major manufacturers in upgradation of exportable product the state technical skills of manpower

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Sl. Existing Market Competitive Potential Job Overall Sector Sub-segments Growth (5 years) Market Potential No. Size Landscape Capabilities Rating

employed in Garment Industry

Cotton yarn, Additional followed by knitted Manpower garments and requirement in India fabrics are major is expected to reach products 6.3 Mn by 2022

Employment Average Earning of 7.81% in generation in this Handloom production of industry has got Households in handlooms in the Many Handloom decreasing trend in Kerala is INR state clusters in recent years with Textile - INR 258 Cr 40,000/annum 8. Manufacturing Balaramapuram, Handlooms (Kerala) CAGR of -8.71% Azhicode, Kannur, The number of Palghat, Kozhikode Kerala constitutes looms in operation for 0.42% of the 6.9% in exports is in a diminishing total handloom trend worker households

Major handicrafts products from the state are Bamboo products, Coconut coir based products, Art-metal-ware and wooden-art Incremental Kerala has seen a Demand for Textiles decreasing trend in & Garments in the Textile - No significant 9.47% CAGR in Largely government 9. Manufacturing no. of exhibitions tune of 19100 during Handicrafts revenues reported exports corporations held and financial 2012-17 period and assistance 21500 during 2017- 22 period KLETRON has launched an ecommerce portal “kelebuy.com” including handloom and handicrafts products

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In India, Chemical There are seven Employment Production of sector contributes public sector opportunities are chemical products about 2% of GDP of undertakings and 10. Manufacturing Chemical 3% less in this sector, are 10,000 MT per the nation with total three private generating about year production of 9600 companies as the 1000 vacancies Metric Tonnes major players

Good growth in High value, Indian Engineering technology-driven sector due to light engineering increased manufacturing is a investments in preferred choice for industrial Kerala's highly production and skilled workforce infrastructure

Indian Kerala has potential Engineering for Light Indian sector 5 PSUs operating in Industry has sector is worth Engineering / 11. Manufacturing Engineering recorded growth of Kerala in the prospects to attract INR 12 Lakh Cr) Precision tool 11% engineering sector engineers if and exports of manufacturing requisite on-the job INR 4.6 Lakh Cr MSMEs experience and Kerala has relatively training is provided

few engineering at colleges and industries and are aspirations of these very small in size students are in line when compared to with job offerings in such units in other the engineering industrially space in Kerala developed states

Kerala is one Indirect potential of amongst the 4 shipbuilding major centres for industry in Cochin Shipyard shipbuilding employment Limited (CSL) is one Indian industry generation and of the major 12. Manufacturing Shipbuilding market of INR 2-3% contribution to GDP Cargo traffic at shipbuilding and 8708 Cr is high as industry Indian ports maintenance has spin offs to growing at about 8- facilities in India 10% YoY in last few other industries, years including steel, engineering

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Study on Investment Potential in Kerala

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equipment, port infrastructure, trade, shipping services etc.

Huge investments by GoI for development of Inadequate skills & Tankers; Bulk infrastructure Ports and Water ways – increasing carriers; Platform availability for supply vessels; conducting Cochin Shipyard the potential for Patrol boats; Diving research. Annual revenue ~ ship building support vessels are Shipbuilding sector INR 1942 Cr Huge capital the major products has an average investment and manufactured in 1500-2000 absence of a strong Kerala employees for a 1 ancillary industry Million Ton facility poses major challenges

Kerala has the least number of Drug inspectorate (47), manufacturers (87) and Pharmacies (15000) 12200 and 13100 Incremental demand In order to bolster Drug processing manpower the capacity of drug There are 90 Drug Drugs and capacity of the requirement in samples/annum, manufacturing units 13. Manufacturing Pharmaceutical Kerala State Drug Chemicals & Kerala has opened a registered in Kerala s lab is 5000 – 6000 Pharmaceutical new drug testing as per KDC Samples/Year industry in 2012- facility at Thrissur 2017 and 2017-2022 Percentage of drug period respectively expenditure to overall health expenditure is highest for Kerala (13% ~ INR 31 Cr)

INR 8373 Cr 15.4% CAGR in Demand for timber Approximately 600 Forest-based Wood - Timber 14. Manufacturing market of Indian Timber exports of in India is about 123 timber processing industries are job- Processing Timber India million cu.mts while units are currently intensive compared

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Processing supply is only 68 mn functioning all over with other industrial Industry cu.mts the country sectors and largely falls in small-scale Kerala produces informal sector about 17540 Cu. Demand for timber Mts of timber Most of wood from in India is about (2012) forests in Kerala 123 million cu.mts (82%) is used as fuel Kerala’s wood while supply is (Low) imports are worth only 68 mn cu.mts about Rs.1,500 crore annually

Malappuram The southern state Ernakulum Kerala accounts for of Kerala produces Taliparamba are 6.41% employment 95 % of the total important wood in Furniture making supply of rubber furniture industry with ~ 1.4 wood in India manufacturing lakh employees Kerala has around zones 10,000 manufacturers Proposal of the and merchants. Of newly constituted these, at least Zamorin’s Furniture Demand for 4000 are Consortium to set furniture in India manufacturers up a world-class Deficiency in skilled Wood – surged at 12% with the majority Common Facility labour 15. Manufacturing Furniture annual rate over being micro- Centre at Kozhikode Making 2007-2012, and in enterprises. The has consent from 2013 it increased at rest are traders Central and State There are large a rate of 15% and distributors, governments number of Furniture some of whom manufacturers and also manufacture, Kerala is a key state retailers in Kerala Zamorin’s Furniture but all do not own for Wooden home Consortium aims to showrooms furniture which is provide quality the biggest segment training for over 1,200 craftsmen High-end home every year in the production and furniture is a potential segment designing of furniture products

Wood - Indian plywood 5.5% in India’s Demand for Large number of Huge number of 16. Manufacturing Plywood industry is INR Exports of plywood is at an plywood migrant labour in

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5,000 crore Plywood, veneered increasing trend. manufacturers and the workforce which equivalent panel and similar However, increased traders (~200-300 in largely comes from laminated wood difficulty to find new total) presence in Assam, West land for new Kerala Bengal, Orissa, industrial units Bihar and also from Bangladesh. Migrant Maximum utilization labours are causing of existing facilities significant is also causing challenges for many serious players with respect environmental 85 plywood to Housing of issues manufacturing migrant labours , India export value Occupational Health While the total industrial units are of INR 160 Cr and other Labour quantity of wood functioning in issues associate processed may be Ernakulam district with migrant labour massive, the individual size of the industry still remains small

Coir Board “Golden Fibre Plus” scheme in Cherthala - Kerala Coir Coir is the largest Modernization of products Exports - cottage Industry in coir industry INR 6.45 Cr Kerala through flow of Total number of credit to workers coir units in Kerala registered with Coir Board of India Coir industry is a increased from Total private sector labour -intensive Coir-based 8790 coir units in 17. Manufacturing India accounts for 8649 units in 2009 units registered with industry which products 2013 more than two- to 8790 units in Coir Board was provides thirds of world 2013. However, % highest for Kerala in employment to production of coir share to national 2015, (8811) more than 7,00,000 and coir products count is at a accounting for 58% persons in India decline share. majority from rural areas

In India, 8 % of Kerala is the home Provide ample the coir and coir of the Indian coir opportunities for the products are industry, particularly development of exported to white fibre technology also

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foreign countries accounting to 61 % facilitating transfer and remaining 92 of coconut of technology % is domestically production and over consumed 85 % of coir and coir products

Coir units are unable to compete with other small scale industries due to non-availability of modern technology

Two thirds of Kerala’s total export INR 250 Cr 17% Food processing is income comes from There are nearly an important sector processed food 1,274 food in value addition processing units in Domestic and employment Kerala alone consumption of generation. processed fruits is low

Government of India Food target of raising the Good scope of food Processing – share of processed technology courses 18. Manufacturing Fruit & Food processing in food in total food which offer vegetables Exports value INR Kerala is one of the basket to 10 % in KINFRA Industrial numerous job

247 Cr fastest growing 2015 and 25 % in Parks at Nellad & opportunities in sectors 2025, from the Malappuram are various areas. present 1.3 % prominent food processing zones of Food technologists, Quality and safety Kerala technicians, bio issues is key to technologists and become a successful engineers are player in this required in this industry industry

Kerala exported Availability of high Increased growth of 20% of India’s total Food 550 Tonnes of quality water and the dairy industry 3.0 % CAGR in Milk milk is further 19. Manufacturing Processing – dairy products power, an active has created demand Production processed by Dairy during the year local market and a for indigenous organized sector. 2015-16 very large expatriate production of dairy

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community ensures equipment's, a captive market increased quality abroad for Kerala standards and production of various milk products

Growing domestic More than 3600 co- demand for safe, operative societies

nutritious milk are registered in Vast career products Kerala opportunities for Overall exports of Technical good dairy INR 17 Cr from Presence of many innovation in milk engineers to run India Milk product processing is a dairy plants manufacturers and necessary growth efficiently distributors in driver for the Kerala industry

Availability of raw materials, especially sea food

Frozen Squid and Marginal increase Cuttle account for in total fish major share of 358 Dried/Salted production during exports Fish Handling 2010-14 period; Centres CAGR of 1.6% Increased demand Pre-processing job for processed and skills needs Food Kerala export ready-to-eat marine upgradation which 20. Manufacturing Processing – revenue of INR products in is largely Marine 5166 Cr in 2014-15 domestic and constituted by foreign market women

State with highest Significant increase Dried/Salted Fish in value of product Handing capacity exports over 2010- 50210 Cold Storage 14 period - 26%. Marine products facilities However, Kerala lead list of food share reduced from products exported from the State

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18% in 2011 to 15% Ornamental Fish in 2014 Exports has increased high value potential

India Exports Basmati rice Kerala is one of the worth INR 30,000 largest markets for Large presence of

Cr and Non- Domestic basmati branded/ processed rice millers in Kerala New units set-up Basmati worth demand has been rice in India would require INR 22,341 Cr growing at 15% in additional resource Food volume terms as requirement. 21. Manufacturing Processing – India Packaged Government of India branded products However, matured Rice Brands rice industry - INR has set a target of Periyar, Pavizham, 15,000 Cr. are accepted more raising the share of Nirapara, Double technology with growth of processed food in Horse, Nilavilakku demands less of Basmati accounts food retail the total food basket Rice amongst the new skills for 75% of to 10 % in 2015 and top rice brands of branded rice 25 % in 2025, from Kerala market the present 1.3 %

The Synthite The Indian spice ~15% Growth was 70% of Global commands 30% of Skilled job Food oleoresin market 22. Oleoresins shown from 2009 Production is from the Global market, requirement is there Processing is about INR 600 to 15 India and more players in the market crores. are coming up

As per new Kerala Industrial policy food processing is The number of Kerala has ~ INR among the thrust Total number of registered food Kerala accounts 5500 per capita sectors people engaged in Food processing units in 23. Instant Foods for ~20% of total expense on food Spices, cashews, food processing Processing 2004 was 300 and it food exports which highest in the marine foods, tea, industry in Kerala is has grown 2300 in country coffee, coconuts, ~14.5 Lakhs 2015 fruits are the major food processing items

Kerala’s demand Thrissur city has India’s share in In the year 2013-14 market of ~20% of around 2500 Gems & the global Growth rate of this Kerala contributed 24. Manufacturing total India market household units Jewellery jewellery trade is industry is 5.4% 30% of total exports Major players in employing about 5.6% of India. India is from Kerala 30,000 persons

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Unique feature of the Kerala bamboo 25,0002 weaving industry is that 67.3 families are

Bamboo is a % of the extracted dependent on State major export item bamboo comes Bamboo corporation in India, with a from home gardens Gaining global market Kerala Bamboo Fest prominence with 554 bamboo units valued at INR Mats and baskets - platform for Bamboo-based 50,000 Cr increased registered with 25. Manufacturing are two important beneficiaries to products marketing efforts of Kerala state products catering to widen market and State Bamboo Bamboo mission house-hold industry acquire new product Mission development info

Traditionally a large Kerala produced Furniture and number of artisans 2,20,000 Tonne of interior products are are dependent on Bamboo in 2014 gaining popularity bamboo craft for their livelihood

Tyre export was in decreasing trend during 2015-16 due Indian tyre demand New units require to pressure from grew at 4%-5% huge manpower low-priced Chinese during 2015-16 requirement Apollo Tyres Tyres, resulting in (annual price cuts across consolidated reve industry segments nues of Rs 117.1 Indian Tyre Imports billion (USD1.8 fell from 17% (FY Tyre industry facing Apollo Tyres , MRF billion) in March Rubber-based – 2015) to 12% (FY), substantial growth Tyres and Tollins 26. Manufacturing 2016) and Tollins Tyre again due to inflow due to surge in Tyres have a Tyres are Kerala of Chinese tyres in automobile demand presence in Kerala based Tyre various market Mature market companies. Other technology. global players Tollins Tyres Availability of skilled have presence in Indian tyre (Ernakulam based workers not a major Kerala Revenues saw company) is the first challenge decrease of 2%. Indian brand to Prices of Natural survive in the tough Rubber fell by 15% market supplying to during 2016 the US market as well

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Indian Domestic Increased Footwear Industry employment estimated to be opportunities for INR 20,000-25,000 women in the 90% of states Out of the total 125 Cr footwear manufacturing units footwear production manufacturing depends on local units, 85 units were industry as it Kerala market size market in Kozhikode Growth of Indian involves a lot of is estimated at footwear sales processes that can Rubber-based – INR 700 Cr be handled by 27. Manufacturing increased to 17% in Footwear 2015, compared to women 16% in 2014 Manufacturers Footwear design based in Kozhikode Paragon, VKC, offers a wide range is emerging as the Odyssia, Premier, of bright Exports in India second non-leather Lunar, Doc & Mark, employment valued at INR footwear hub after CEE VEE, Hywalk PU opportunities in 2847 Cr in 2016 Delhi, recording an and Stylo are few of technical, designing 132% rise in the Kerala brands and management business area

Kerala has Maximum number Indian Rubber highest number of Indian Non-tyre of units are into Kerala has the products industry rubber products rubber moulded goods, highest number of Rubber-based - consists of ~4500 28. Manufacturing manufacturing manufacturing tread rubber rubber products Others units generating units (~900) and sector saw CAGR products, dipped manufacturing units about 5.5 Lakhs major units are in of 9.8% goods and (~900) direct jobs MSME sectors adhesives

Green Field Indian Electronic Electronics Proposed Electronics hub in Hardware INR Manufacturing 171000 Cr clusters are being Key players are Kerala would setup in Ernakulum KELTRON, TELK, require science and technology skilled 12% TRACO, Startup Indian electronics Companies village, CDAC, FCI, personnel. Quality 29. Manufacturing Electronics and hardware increasingly BPL etc. skilled and semi- industry expected spending on R&D skilled workers to reach INR 8.7 and stepping up needed for the Lakh Cr by 2018 innovation industry which can be sourced from India Exports Growth in the Increasing Many global existing engineering account for ~20% hardware segment penetration of high- electronics majors

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of total 10.1% over the end electronics have a presence in and polytechnics in production same period products such as the State the state High Definition TVs Electronics (HDTVs), LCDs, industry in Kerala LEDs, and tablet was valued at INR 670 Crore (2012)

Indian exports

value INR 968 Cr Facing challenges in The industry has Kerala stand 19th availability of the around 65 A new 12 MTPA new in terms of State main fuel coal companies having plant is expected to wise production 30. Manufacturing Cement 9.7% around 200 cement generate Housing sector plants across India employment for Kerala produced accounts for a with most brands nearly 4,000 0.53 Million Tons significant 64 % of available in Kerala of cement in 2012 the total cement (0.29% share) demand

Renewable energy contributes to only 8% of the total Energy production in Kerala

Potential for Wind 39 MW of wind (2000 MW) and Presence of solar Solar (500 MW) installed capacity panels and grids Innovation in 5-7% energy however it is and 0.03 MW of installation renewable energy Power necessary to identify solar capacity companies in Kerala technologies are 31. Electricity Generation/Ren potential energy potential area for ewable Energy producing new skill geographies by development considering land use patterns and technology constraints

Total revenue Su-Kam is bringing Suzlon Energy plans Energy demand is from tariff and solar power for INR 550 Cr Wind expected to grow revenue from technology to power project in by 8-10% YoY for non-tariff income various homes and Kerala

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estimated by the next 10 to 15 offices for meeting KSEBL for the years their power needs year 2014-15 is and has total INR 9126.41 Cr capacity of over 600 KW in 14 districts

10,000 rooftop solar power plants programme by ANERT was launched in Kerala

High contribution Limited manpower High potential as to GSDP at 16% as availability and high construction compared to cost of Land industry in the state national average of Large presence of acquisition posing is in a growth stage 8-9% home builders, challenges contracting 32. Construction Construction INR 56051 Cr companies, Luxury Incremental Commercial manpower demand 20% CAGR. High home builders etc. Integrated projects by construction CAGR compared to in Kerala (Large retail market) sector - 298000 most Indian states evolving in Kerala during 2017-2022 period

In last three years state has provided hosting for more than 250 Lakhs More than 45,000 domestic and CAGR of earnings 4762 hotels in manpower foreign tourists, and 14.75% Kerala employed in Indian have generated Trade, Hotels Tourism/ Hotel/ INR 25,000 Cr Tourism Industry more than Rs. 33. and Restaurants/ (Kerala revenues Restaurants Tour Operators from tourism) 7,50,000 Lakhs with an avg growth rate of 7.53%

In 2015 12% of total Employment Maximum number 5.13% contribution foreign tourists generated in Hotel of restaurants are in to GSDP visited came to Industry in FY14-15 Trivandrum Kerala were ~ 1,85,000

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Total income 5.23% contribution Ernakulam, Incremental 35 approved Kerala generated from to foreign Trivandrum , Idukki, manpower demand based tour restaurants in exchange earnings and Alappuzha by sector of 34000 operators in Kerala Kerala in FY14-15 attracts 85% of the during 2017-2022 Hotels CAGR of as on June 2015 was INR 5500 Cr 10.2% tourists period

Large presence of national payers and local players in transportation There is high segment. potential for Multi- As per NSDC Transport, Logistics/ Indian logistics Mode Transport Freight movement INR 27592.23 Cr is analysis, there will Storage & Transport – industry grows at Operator. The through coastal and 34. the market size of be 25 Million skilled Communicatio Road, Coastal, the rate of CGAR of technology inland logistics industry job requirement in n Inland, Air 10% intervention will transportation has next five years provide more growth rate of 29% opportunity Logistics industry contributes more than national average to GDP

In wireless market - Idea leads the Indian telecom market with 30%, industry has the 1.51% followed by potential to generate 40 Lakhs Transport, Vodafone and BSNL Telecom subscriber job in five years Storage & with 22% market 35. Telecom INR 8500 Cr base in Kerala is 366 Incremental Communicatio share. Lakhs manpower demand n Wired line is in by communication

decreasing trend In wired line BSNL sector - 275000 has 95% share during 2017-2022 Wireless is in a period positive trend

Transport, Among all regional Indian media & There is a high Storage & channels Malayalam Entertainment demand of skilled 36. Infotainment INR 8225 Cr CAGR – 12.47% Communicatio viewership has 5.6% industry was worth people for TV, n share USD 19 Bn in 2015 animation media

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As the food There are multiple As the demand for Transport, processing sector is players in this storage facilities are Storage & booming in Kerala, segment. There are 37. Storage INR 196 Cr CAGR of 7.6% improving the job Communicatio there are high around 3000 players opportunity also has n potential for storage in this industrial sub potential segment segment

As Kochi Metro rail As railway is a is in place ,and there public sector Transport, is a possibility of segment, there are Low job potential Storage & mono rails at no opportunity for Kochi metro 38. Rail INR 1,345 Cr CAGR – 1.86% Communicatio Thiruvananthapura private sector other demands skilled job n m, and Kozhikode. than in support and requirement So there is good other contracted market potential jobs

NBFCs have ~47% share in retail financial market There is high Non-Banking There are 335 NBFC has shown with banks Private Sector Financial demand of 39. Financial Kerala based ~28% growth rate players lead the Services Top performing graduates in this Services NBFCs as of 2013 in last ten years segment NBFC is only 5% sector less in size with the top performing private sector bank

Rising income and Medical value travel health awareness can generate USD 1 to increase billion by 2020 Private sector healthcare contributed to 78% expenditure of the of hospital beds state (Kerala has High demand for Healthcare Total Indian Kerala has fairly the highest per Govt. has quality (Service healthcare market large number of capita expenditure introduced various nurses/paramedical delivery, is INR 670000 Cr small/medium scale 40. Other Services on health in the initiatives to address staff from state medical medical product country during the challenges of equipment, manufacturing 2014, at Rs.7,636 medical devices insurance) companies against India industry average of INR3,800)

Total Indian Health Insurance Healthcare related 132 insurance Incremental Medical Insurance penetration in India apps and brokers in the state manpower demand

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market is INR is only 0.7% . technology by sector of 52000 23436 Cr Growth primarily solutions are during 2017-2022 driven in order to gaining prominence period increase in view of rapid penetration (High) digitalization of the sector

Around 75,000 IT Growth of software professionals exports more than working in double of National Trivandrum, Kochi average and at other centres Four new IT parks Kerala is poised to 41. Other Services IT & ITES INR 12000 Cr 25% operating across the be a key investment state Incremental hub due to rapid manpower demand development of by sector of 91000 infrastructure, high during 2017-2022 literacy rate and period favourable policies

International International School Schools - Indian - Only 13 International International School international School market is IB schools have -State with highest schools in the state emerging market grown in ~14% NRI population and (partial affiliation and is estimated remittances with IB - 2 & CIE - Incremental to be ~INR 2,500 11) manpower demand Cr of 193000 during 42. Other Services Education Per capita GSDP is 2017-22 period Higher Education Higher Education - at par with best (Education and Skill - Kerala has Majorly small to performing states Development around 40 medium sized Higher education and spending Services) colleges per one players focusing on growth driven by capacity is high lakh population single stream Govt Higher Education - with Gross No private High spending Enrolment Ratio university (Large capacity of (GER) of 27% players) in the state population

19 – 20 Lakhs Skill Creation - High Reskilling of 1.2 Mn Current skilling Skill creation - Large Skill Incremental Volume – Low workforce who have 43. Other Services capacity of 16 number of existing Development workforce Margin model (12 % returned from Lakh per annum Large to Small size requirement - 16 % Margins) Middle East is a key

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players: Low cost of challenge and a big entry opportunity for Kerala (Very High) Skill enhancement - Very few existing players with Skill Enhancement - dedicated COE for Skill enhancement Low Volume- High advance training Skill enhancement - Nascent Market Margin model (20 % and Research - 25 % Margins) targeting Industry and corporates: Higher initial capital investment

Employees in beauty and wellness Kochi is home to industry are usually the largest number sourced locally. of high profile Workers from Kerala salons and spas in are preferred for the state rejuvenation services

Besides beauty treatments, hair treatments, hair Presence of large styling, many number of beauty Indian Beauty and salons offer services Other Beauty & parlours, Spas, Over 50 % of the 44. Wellness amounts 17.5% like clothing Services Wellness Luxury salons and workforce are to INR 1 Lakh Cr consultations, of national and women. makeup lessons and international brands jewellery advice based on the requirements of the client

Employment expected to grow at a CAGR of 20%, with International majors 23% in organized open salons in state and 15% in unorganized segments

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Estimated current Kerala Bakery Indian market INR business has been 5000 Cr on a growth track Bread & Biscuits Around 60% of for many years hold 82% revenue production takes with surge in share in bakery place in the Indian exports growth in the products unorganized sector Around 10,000 INR 1289 C recent years with bakery units in 15% CAGR Kerala employ more

Bakery industry than 1 lakh people Changing lifestyles, mainly popular in Of the total 50,000 both directly and About 50% of this increased the states of bakeries in the state, indirectly bread segment is consumption of Andhra Pradesh, only 5-10 per cent organized, at a ready to eat bakery Maharashtra, are in the organised rapid rate of 14- products in urban West Bengal, sector and the rest 15% per year households main Karnataka, Tamil are micro units. Bakery & drivers 45. Other Services Confectionery Nadu and Kerala Around 20,000 Kerala cake unorganized industry bakeries are registered a functioning in the Up gradation of turnover of INR Revenue realization state, comprising skills required in 900 crore Cakes and pastries in cakes and small units, cottage unorganized are growing at pastries unit volume and household type bakeries about around 18-20% per is higher due to Increase in advanced year higher value domestic sales manufacturing addition and the huge 40 % of production practices demand for takes place in Kerala-baked unorganized sector cakes in Europe and Gulf regions Table 9: Sector assessment – Key Findings

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Detailed Sector Assessment

Agriculture and Allied Activities

Agriculture plays a vital role in Kerala’s economy. A major portion of the rural households depend on agriculture as their principal means of livelihood. Agriculture, along with food processing, is one of the largest contributors to the Gross Domestic Product (GDP) of the State. In order to tackle the labor shortage problem in farming sector and to reduce the cost of cultivation, mechanization has been adopted by the state and a number of plan schemes were formulated by both State and Central Governments in this regard. The sector faces issues pertaining to the small farm sizes due to which farmers often cannot afford mechanization. Hence, the sector has a long way to go with respect to increasing productivity by adopting new cultivation models and imbibing latest techniques to increase yield from agricultural produce. With the onset of organic farming revolution, the sector is likely to build in sustainability to the existing farming systems inviting many entrepreneurs to this space. However, Kerala is doing well in certain cash crops and horticulture produce that is supporting growth of food processing industry which is poised to enter the path of high growth trajectory. Kerala is the major producer of Spices, Cashews, Coconuts, Cocoa, Coffee and Tea and Fruits like Banana and pineapple. Kerala accounts for 97% of country’s pepper production, 70% of Cocoa production, 25% of Coffee production, 42% of Coconut and 16% of Cashew production. The agriculture sector in Kerala is expected to generate better momentum in the next few years due to increased investments in agricultural infrastructure such as irrigation facilities, warehousing and cold storage. Factors such as reduced transaction costs and time, improved port gate management and better fiscal incentives would contribute to the sector’s growth.

Agriculture Production 1. Rice13

Revenues CAGR % contribution to Potential Exports GSDP Districts

` Palakkad INR 903 cr -3.0% - USD 29.12 mn Alappuzha

13 KPMG in India analysis 2016, www.agriexchange.apeda.gov.in © 2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved. 62

Study on Investment Potential in Kerala

Annual production of Rice in India Area under paddy cultivation in and Kerala ('000 tonnes) Kerala (hectares)

10000 300000 917.9 933.5 966.9 991.8 890.9 959.8 1053 1052.4 1065 831.3 280000 1000 275742 India 260000 263529 100 240000 234265 Kerala 234013 6.70 6.30 6.40 5.30 5.90 6.25 5.20 5.70 5.10 5.10 228938 10 220000 213187 198159 208160 200000 1 197277 199611 180000

Kerala is showing a steady decline in rice production while rice production in India has shown a CAGR of 2.8% in the last decade. The average farm price of rice was INR 1613 per quintal in 2015. The rice industry is facing seasonal shortage in labour supply due movement of workforce to other sectors. High cost of labour is another challenge. Productivity of rice in Kerala is about 2837 kg/hectare which is lower than large states which is usually 3200 kg/hectare resulting in high cost of cultivation. Area under rice cultivation has been decreasing due to urbanization (land cost increase) or due to alternative choice of cultivation of other commercial/cash crops.

2. Mango

Revenues CAGR % contribution to Potential Exports GSDP Districts

` Kannur INR 1085 cr -1.1%13 - USD 2.7 mn Kollam

Annual production of Mango in Area (hectares) and Production India and Kerala ('000 tonnes) 600000 (tonnes) of Mango in Kerala

18002.4 18505.3 500000 15200 511131 15188 400000 460424 457067 India 408143 434129 12750 373168 10200 300000 Area 11829.7 200000 Production 5200 Kerala 87965 75559 77158 100000 69482 63751 445.423 485 392.916 380.859 441.033 434.129 77301 200 0

The production of Mango in Kerala shows a declining trend up to 2010-11 and then a slight increase upto 2014-15 with 434 thousand tonnes of production in 2014-15. Similarly area shows

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a declining trend up to 2009-10 and then an increase. Cost of production of Mango has been increasing over the years and seasonal variations are effecting the production. The average per quintal prices of Mangoes in 2015 was INR 2500. Due to decrease in exports Mango production is facing challenges in Kerala.

3. Banana & Areca Nut

Revenues CAGR % contribution to Potential Exports GSDP Districts

` Palakkad INR 1867 Cr 1.4%13 - NA Wayanad

Annual production of Banana Area of production of Areca Nut in India and Kerala ('000 tonnes) in India and Kerala ('000 tonnes) 30000 35000 600 680.7 640 545 608.72 Kerala 514 515 650 491 26217 30000 463 439 435 500 Kerala 000 Tonnes 000 Kerala 550 000' Tonnes 26509 473.23 481.3 478.1 25000 475 483 India 28455.1 400 406 450 20000 452.7 17646.81 300 350 15000 16608.71 12104.5 200 250 105 Keral 10000 11710.3 119 124 127 118a 125 India 110 114 99 100 100 5000 100 150 India annual Production annual India 0 0 50

While the production of Banana in India is showing a rapid growth, Kerala growth rate is slow with production of 0.54 MT in 2014-15. Areca nut production saw a CAGR of 1.8% during 2004- 14 period with 0.13 MT production in 2014-15. However, area of production unlike other crops is not decreasing. Due decrease in paddy production, farmers are shifting to Banana thereby increasing the production since 2010. Also other factors such as availability and cost of labour are also influencing the production. Since it is a common trend that Banana is usually grown along with Areca Nut, the production of Areca Nut shows a similar trend.

4. Cocoa

Revenues CAGR % contribution to Potential Exports GSDP Districts

` USD 14.18 Mn INR 50.68 Cr Idukki 0.2%13 - (Cocoa (2012) Ernakulum products)

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Annual production of Cocoa in India Cultivation of Cocoa in Kerala and Kerala ('000 tonnes) (hectares) 16050 18000 15133 14436 15200 India 12900 15261 11820 14404 9250 10180 10200 13013 13183 Kerala 12488 7105 13000 5900 5850 6100 6136 6000 10708 13257 12764 12113 5200

9570 200 8000

Kerala produces almost 50% of Cocoa in India. While CAGR of Cocoa production shows a healthy rate of 5.7% for India, Kerala is showing a decreasing trend of 0.2% CAGR during 2004-14 period with production of 6000 tonnes in 2014-15. Cost of Labour, inefficient mechanization and global factors influence the production of Cocoa. It is estimated that Cocoa production in India will reach 30000 MT by 2025. Kerala is poised to capture a major share of this.

5. Pepper and Cardamom

Revenues CAGR % contribution to Potential Exports GSDP Districts

` Idukki INR 296 Cr 2%-8.2% - - Wayanad

Annual Production of Pepper Annual production of Cardamom in India and Kerala ('000 tonnes) in India and Kerala ('000 tonnes) 105000 25000 20700 92900 India India 20000 17800 18400 85000 15700 15450157201600015800 87605 15000 16900 13400 69010 16000 65000 51020 47400 40600 Kerala 14000 47060 52600 10000 64264 52000 48700 9765 10222 8545 8550 45000 7800 7935 41952 Keral 5000 8616 7031 45267 46298 42459 40690a 33991 37501 29408 25000 0

Kerala produces 95% pepper in the country. However the productivity achieved is very low in Kerala which is only about 1/10th of the productivity of Vietnam which is the largest producer of pepper in the world. Productivity of pepper has been steadily declining during the last decade

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with a CAGR of -8.2% during 2004-15 period. High cost of cultivation (labour, resources) coupled with low productivity as well as low or uncertain prices is making the farming of pepper unviable. However, Cardamom production has seen a CAGR of 5.7% during the same period with production of 16000 tonnes in 2014-15.

6. Nutmeg

Revenues CAGR % contribution to Potential Exports GSDP Districts

` Thrissur ~ USD 30 Mn 12.5 MT14 26 0.16%14 Ernakulum (2016) Idukki

Annual production of Nutmeg in India and Kerala ('000 tonnes) Export trend

202.6 50.00% 205 202.6 14.19 16

11.249 12.4212.4212.53 14 11.911 40.00% 200 11.361 11.269 37.73% 201.7 12 30.00% 195 10 195.8 8 193.6 20.00% 190 192.2 192.2 India 6 190.1 10.00% 2.746 188.1 4 185 0.56% 0.00% Kerala 2 FY13 FY14 FY15 FY16 180 0 -10.00% -10.75% -9.50%

-20.00%

Nutmeg largely grows in coastal regions equipped with fertile soil. Thrissur (33%), Ernakulam (30%) and Idukki (15%) districts contribute to highest area under nutmeg cultivation in Kerala. Only 10% of total Nutmeg production is being exported. Area under nutmeg cultivation saw increase of 5% in 2014-15 over last year with 20,627 ha area under cultivation. Indian nutmeg is discounted by 20% than the spice from Indonesia, the largest producer.14

7. Coffee

Revenues CAGR % contribution to Potential Exports GSDP Districts

` INR 229 Cr Wayanad USD 731 Mn 2.5% - (2012) Idukki (India)

14 Spices Board, Nutmeg report, , www.agriexchange.apeda.gov.in

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Annual production of Coffee Cultivation of Coffee in India and Kerala (tonnes) in Kerala (hectares) 400000 86000 327000 318200 85359 85359 302000 288000 276600 300000 84931 84796 85359 85359 India 85000 84571 84696 275500 200000 84115 Kerala 84644 84000 70550 69200 10000054300 59475 57200 65650

0 83000

Like other agri-based activities coffee plantations are also suffering from key challenges such as conversion of farms for production of other profitable crops such as Rubber, Pepper etc., lack of mechanization which minimizes the cost of production, high costs of labour, pests etc. The production of coffee in Kerala stood at 69200 tonnes in 2014-15 with area of cultivation remaining constant during 2011-14 period. Coffee prices are also unstable due to international market fluctuations.

8. Tea

Revenues CAGR % contribution to Potential Exports GSDP Districts

` Idukki USD 664 Mn INR 1152 Cr 2.7% - Wayanad (2014) India

Annual production of Tea Cultivation of Tea in India and Kerala (tonnes) 40000 in Kerala (hectares) India 35010 10000000 35000 36845 37028 9860000 9790000 9800000 11000000 36131 35043 9450000 12080000 1000000 30000 30205 30205 Kerala 100000 25000

62963 64900 49508 53659 51726 57291 10000 20000

Kerala is an important tea-growing region of India, and tea is one of the most important crops in the region. Munnar in Idukki district is an attractive destination with the world's best and renowned tea estates followed by those in Wayanad, Palakkad and Trivandrum. There are more

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than 50 tea estates in and around Munnar. Some of the major tea estates include Kanan Devan Hills, Harrison Malayalam, AVT tea, Michael's tea, Brooke Bond etc. These house most of the popular tea brands such as Kanan Devan, AVT Tea etc. Munnar is also one of the biggest centers of tea trade in India with local tea brands gaining popularity amongst tourists.

Production of tea in India for the period 2016-17 stands at 1250.49 M Kgs as against 1233.14 M Kgs, which is an increase of 17.35 M kgs (1.41%) as compared to last year. South India production decreased by 17.20 M.Kgs (-7.66%) of which Tamil Nadu is a major contributor with 17.82 M.Kgs (-11.03%). Kerala accounts for 5.03 per cent of the area and 6.3 percent of the total domestic production of tea in the country. Also the state has a higher per capita tea consumption than the whole of the country. The sector however faces various challenges due to labour costs, cost of production and prevailing market prices. Green Tea powdered extracts are becoming increasingly popular in the ready to drink tea market and health and wellness sector. Estimates derived from statistics on total per capita tea consumption from the Indian Tea Board and Euromonitor data suggest that unbranded tea products may account for as much as 56% of the at-home tea market in India. Unpackaged tea is particularly popular in rural areas. This indicates an opportunity for somewhere between US$ 2 and 2.5 billion in yet untapped tea sales. For attracting rural markets through lower price points achieved through small packaging or tea dust brands will be key.

9. Rubber

Revenues CAGR % contribution to Potential Exports GSDP Districts

` Kottayam INR 13677 cr -3.0% - NA Pathanamthitta

Annual production of Rubber Cultivation of Rubber in India and Kerala ('000 tonnes) in Kerala (Hectares) 600000 950000 India 903700 913700 852895 864500 861950 825345 831400 850000 802625 774000 798940 549955 749000 550000 539565 645000 750000 800450 548225 780405 783485 770580 539565 739225 753135 745510 534230 525408 650000 517475 690778 Kerala 500000 512045 648220 502240 550000 494400 507700 450000 450000

Similar to other plantation crops like cardamom, pepper and coconut, rubber occupies a predominant portion of the total cropping area and agriculture income of Kerala. Due to decrease in the price of crude oil in the international market, synthetic rubber, a by-product of crude oil is considered as the best alternative to natural rubber for manufacturing purposes. Import of

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natural rubber experienced a steep increase in the last decade affecting the rubber prices thereby production.

10. Coconut

Revenues CAGR % contribution to Potential Exports GSDP Districts

` Kozhikode - 0.2% - NA Malappuram

Annual production of Coconut in India and Kerala (Million nuts) 25000 23351.22 22680.03 21665.19

20000 16918.4 16942.92 15840.4 15729.75 India 14811.1 14743.56 15000 12832.9 Kerala 10000 6054 5641 5802 5667 5287 5941 5799 5921 5902 5000 6326 0 2004-05 2005-06 2006-07 2007-08 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

S Area ('000 % to all Production % to all Yield per State No. Hectares) India 000 MT India hectare

1 Kerala 798.2 37.4 3990.4 25.6 4999

2 Karnataka 513.1 24 4169.9 26.7 8127

3 Tamil Nadu 465.1 21.8 4760.7 30.5 10236

4 Andhra Pradesh 128.9 6 1330.4 8.5 10321

5 Odisha 54.3 2.5 262.2 1.7 4829

6 West Bengal 29.2 1.4 254.2 1.6 8704

7 Maharashtra 28.1 1.3 129 0.8 4595

8 Goa 25.7 1.2 84.5 0.5 3285

9 Assam 22.2 1 110.3 0.7 4977

10 Andaman& Nicobar 21.9 1 89.5 0.6 4088

11 Gujarat 21.1 1 221.9 1.4 10506

All India 2136.5 100 15609.1 100 7306

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About 38% of the total area under coconut palms in India is in Kerala but with respect to production of coconut, Kerala’s share is only 26.8% due to low yield with 5902 million tonnes production in 2014-15. Like other agri-based activities coconut farms are also suffering from conversion of coconut farms into the production of other profitable crops, high cost of labour etc.

11. Cashew Nut

Revenues CAGR % contribution to Potential Exports GSDP Districts

` Kannur INR. 53.16 cr 2.9% - NA Kasaragod Annual production of Cashew Nut Cultivation of Cashew in India and Kerala 800 100000 in Kerala (hectares)

700 757 725 753 695 600 665 653 620 613 78285 500 573 India 70463 400 544 50000 58381 53007 5405252086 Kerala 48972 49105 300 43848 45436 200 64 67 72 78 75 66 71 73 76.16 83.12 100 0 0

Productivity of Cashew in Kerala has been steadily declining during the last two decades. Cashew is subject to international market volatility as it is export oriented. Processing of Cashew as an industry has stagnated in the last decade. Also, labour availability is affecting the cost of production.

12. Palm Oil

Revenues CAGR % contribution to Potential Exports GSDP Districts

1 INR 32.64 Cr 0.9% - Kottayam NA

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Annual Production of Palm Oil 180000 171354 in India and Kerala (tonnes)

150000 India 138568

120000 110542

90000 73532 66353 51328 53397 60000 45403 43965 Kerala 30838 30000 5793 6478 6888 5750 7400 6600 6900 7500 7378 6303 0 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Global production of palm oil is around 50-52 million Tonnes of which 85% is produced by Indonesia and Malaysia. India is world’s largest importer of edible oil and imports 60-65% of its needs. Hence, India’s share of palm oil production is small, accounting for 0.2% share in the total world produce. Andhra Pradesh produces 86 % of country’s production, followed by Kerala (10%) and Karnataka (2%). Kerala produced 6303 tonnes of Palm oil in 2013-14 and cost of production is ~$773/MT.

13. Tapioca

Revenues CAGR % contribution to Potential Exports GSDP Districts

` Kollam INR 5047 Cr 2% - NA Thiruvananthapuram Annual production of Tapioca Cultivation of Tapioca in India and Kerala ('000 tonnes) in Kerala (hectares) 10000 95000 90539 9623 India 90000 8000 9056 8746.5 8232 8076 8139 7854.9 8059.9 85000 87128 87241 7236.6 6000 7462.8 80000 83990 Kerala 4000 75000 2712.114 2943 2518.999 2408.962 2479 74925 74498 75493 70000 72284 2000 2400.043 69586 65000 67589 0 60000

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Tapioca production has shown an increasing trend during 2004-13 period with production of 2.94 million tonnes in 2013-14. Tapioca has a strong potential to be the staple food across other states if marketed well hence with adequate agriculture development policies tuned to better commercialise the crop would boost growth of Tapioca food industry.

14. Turmeric & Chillies

Revenues CAGR % contribution to Potential Exports GSDP Districts

` 4.2% Kozhikode INR 54.9 Cr 7.0% - Palakkad NA (Chilies) Thiruvananthapuram

Annual production of Turmeric Annual production of Chillies in India and Kerala (tonnes) in India and Kerala (tonnes) 5000000 5000000 993000 1228900 718100 786750 821200 1202940 1375500 5000001185500 1242110 1276300 500000 971100 India 50000

50000 Kerala 5000 1415 1601 1393 1453 8237 9980 7946 8132 8355 6244 7434 6364 6066 6198 823 5000 500

India and China contribute close to 87% of the world’s Chilli production. Kerala produced 1322 tonnes of Chillies in 2013-14. India exported 0.23 MMT of Chillies in 2014-15. India and China contribute close to 70% of the world’s Turmeric production. India exported 8% of total production in 2014. Kerala produced nearly 7946 tonnes of Turmeric in 2013-14 with price per quintal at INR 6918 in 2015. Turmeric is losing out to other competing crops especially in Tamil Nadu and Kerala.

Agriculture Exports

Revenues CAGR % contribution to Potential Exports GSDP Districts

` Idukki, - NA 11.4% Kottayam, USD 252.57 mn Kozhikode

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Agri-based exports of Kerala $300.00 $252.57 $230.46 $250.00 $219.68 $199.36 $200.00 $163.54 $150.00 $105.63 $91.22 $87.99 $94.93 $100.00 Million USD Million $50.00 $3.29 $5.89 $- 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Rubber 70.43% Pepper 67.89% Clove 49.03% Cardamom 42.79% Coconut* 37.78% Tapioca 29.60% Tamarind 22.48% Arecanut 22.13% Coffee 20.83% Cocoa 18.57% Papaya 12.48% Banana 7.76% Pineapple 7.28% Tea 6.21% Cashew 4.86% Ginger 3.42% Mango 3.07% Turmeric 1.04% Paddy 0.45%

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00%

Agriculture exports show a CAGR of 54.34 % since 2005-06 with Kerala exports value reaching USD 252 million in 2015. Fruits, fruit pulp and processed fruits form the major part of exports with USD 69 mn followed by vegetables (USD 53 mn) and Rice (USD 29 mn).

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Marine Production and Exports

Revenues CAGR % contribution to Potential Exports GSDP Districts

` INR 36576 Cr 14.1 % - Alappuzha USD 327 Mn (India)

Fish (Marine, Inland)production and Marine Products Export (India) since Export of Kerala 2005

6000 18.78 718.22 18.26 18 18.22 20 16.62 18 5000 6 15.52 15.88 16 5.98 Exports % of India's 5.86 5.83 5.7 4000 5 5.6 5.53 14 5.31 5.22 12 3000 4

10 Million USD 3 2000 8 1.86 1000 2 1.4 1.49 6 1.03 1.17 1.21 0.8 0.91 4 1 0

Production Fish (Lakh Tonnes) 2 0 0

Fresh Shrimp Fresh Fin Fish Fresh Cuttlefish Fresh Squid Marine Dried items Live items Inland Frozen items Other marine products

Total fish production in India in 2014-15 was around 10.06 million tonnes with Andhra Pradesh being the largest producer of fish with estimated fish production of 1.9 million tonnes during 2014-2015.The total fish production in Kerala during 2014-15 was 0.8 million tonnes. Kerala contributes nearly half of Indiaʹs marine fish landing of Sardines, Shrimps, Lobster, Cuttlefish, Squid, Tuna15. India’s marine exports is not growing as per expectations due to increased competition and anti-dumping duties (on shrimp etc.) by US and European governments.

Minerals and Mining Revenues CAGR % contribution Potential Exports to GSDP Districts

` Kannur, Kasaragod, INR 2587 Cr -0.52%16 Kollam, (4 year CAGR) 0.65% - (Kerala) Thiruvananthapuram, Alappuzha, Palakkad

15 www.mpeda.gov.in 16 KPMG in India analysis 2017; values based on 2013-14 Kerala GDP report

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Production in Tonnes Percentage contribution to GSDP

Ilmanite 0.81%

Laterite/ 0.70% Bauxite

0.54% Limestone

Lime Shell 0.36%

Silica Sand

China Clay

0 500000 1000000 2011-12 2012-13 2013-14 2014-15 2013-14 2012-13 2011-12 2010-11 2009-10

Increasing demand for minerals arises across India and globally. Huge scope for exploration and production, however capacities need to be improved. There are limited mineral based industries in Kerala. Wide forest cover and environmental clearances may be a challenge for exploration and mining including land acquisition challenges. Minerals industry has the highest GVA in Kerala. Production is consistent in China clay, Limestone and Ilmanite. Key players in Kerala include English Indian Clays Ltd. (EICL), Thiruvananthapuram, Indian Rare Earths Ltd. & Kerala Minerals and Metals Ltd., Chavara Kollam, Kundara Ceramics Kollam, Excel Glass industry, Alappuzha, Travancore Cements Ltd., Kottayam etc.

Manufacturing Agriculture Equipment

Revenues CAGR Total Output Potential Total Exports Districts

USD 650 MN - 12%-14% 190 Cr (KAMCO) Ernakulam (Tractors)2015

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Machinery at various stages of Agricultural production

State Tractor Sale of Tractors & Tillers - India 17 Density 800 700 Haryana Tractors (CAGR 12.2%) 84 600 500 UP 76 400 300 India 33 200 Tillers (CAGR 14.2%)

'000 Units 100 Kerala 4 0

Tractors, Power tillers and Threshers constitute maximum of agriculture machinery used in India. Mechanization level in India is about 40-45 percent. Developed countries have up to 95% mechanization. Mechanization in Kerala is very low compared to other India states. Kerala has less than 1% of total tractor sales in India. Improved availability of credit and focus on productivity is driving farmers for mechanization. Kerala Agro Machinery Corp (KAMCO) is one of the largest producers of Power Tillers in India.18

Metal Working & Smelting

Demand CAGR % contribution to Potential Total Exports Market (2014-15) GSDP Kerala Districts

` Palakkad, 1,30,00019 8.067 ~0.01%20 Ernakulam, NA Tonnes Kozhikode,

Malappuram

17 Tractors per 1000 hectares of net sown area 18 http://www.ibef.org/download/Agricultural_Equipment_171109.pdf, http://farmech.dac.gov.in/, http://un- csam.org/publication/PB201402.pdf 19 OPEC report, KPMG analysis 20 Business line 22-Dec-04, Kerala steel manufacturers demand continuous power supply

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YoY Percentage growth of steel consumption (2010-15) 14.00% 13.17% 12.00% 11.97% 10.00% 8.00% 6.93% 6.00% 4.00% 3.52% 3.90% 2.00% 0.82% 0.00% FY10 FY11 FY12 FY13 FY14 FY15

India is in 4th position in the world steel production. In FY15, the consumption of finished steel in India was 77 MT. In Kerala 95 per cent of metal products manufacturing companies are in MSME sector21. As of 2004 there were 55 - 60 steel manufacturing units in Kerala. The industry was providing direct employment to ~15,000 persons22. The sector contributed INR 75 Crores as revenue to the state as taxes and cess in 2004. Tube mill segment has monthly turnover of INR 9023 Cr in 2016 and employs around 500 people24. In 2004 the demand for steel was 60,000 Tonnes and 35000 tonnes were produced in the state. The Demand – supply gap is widening, seen in terms of strong and rising import ratio.

Select Key Players – Kerala • Kerala Sponge Iron Ltd • Scot Free Steels • SIDCO Steel manufacturing unit • Surabhi steels • Kairali Steels • Minar steels • Paragon Steels • AP Steels • Prince Steels • Kalliyath TMT • SJ Steels • Distributors of RINL, SAIL

Automobiles & Auto Components Manufacturing

Revenues CAGR % contribution Potential Total Exports (2014-15) to GSDP Kerala Districts

` ~ 39469030 ~ 7-8% of India’s Thiruvananthapuram, ~ USD 10 ~ 10% Lakhs (India) GDP Ernakulam Billion (India)

21 A Study on Issues Facing The Steel Re Rolling Mills, International Journal of Industrial Engineering. 22 Business line 22-Dec-04, Kerala steel manufacturers demand continuous power supply 23 OPEC report, KPMG analysis. 24 Business line 09-Feb-16 – Kerala Tube mills 4. International Journal of Scientific and Research Publications, Volume 3, Issue 12, December 2013.

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Two Wheelers (Units) Commercial Vehicles (Units) 1000000 20000000 800000 15000000 600000 10000000 400000

5000000 200000 0 0

Production Domestic Sales Export Production Domestic Sales Export

Passenger Vehicles (Units) Automobile Statistics (Units)

30000000 4000000 25000000 3500000 20000000 3000000 2500000 15000000 2000000 10000000 1500000 1000000 5000000 500000 0 0

Production Domestic Sales Export Production Domestic Sales Export

Automobiles & Auto Components manufacturing sector contributes to approx. 7-8 per cent of India’s GDP, 7-8 per cent of India’s employment and 22 per cent of India’s manufacturing GDP with a consistent growth rate of approx. 10 per cent over the last few years.25

Automobile exports contribute to approx. 17-18 per cent of the production. Two wheelers contribute to 80 per cent of market share and passenger vehicles at 13 per cent. Passenger vehicles sales grew by 16.7% and two wheelers by 22% approx. in August 2016

Auto Mission plan 2006-2016 aims at contributing to over 10 per cent of India’s GDP. Kerala’s contribution to Indian Automobile Manufacturing is minimal. Kerala Automobiles Ltd. is a public sector unit manufacturing 3 wheelers and exports them mainly to Egypt. Opportunities are available but land acquisition and manpower availability may be a challenge and states like Gujarat, Maharashtra and Tamil Nadu have first mover advantages

25 KPMG Analysis; data basis Society of Indian Automobile Manufacturers, IBEF report

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Textile 1. Technical Textiles and Garments

India Market CAGR % Potential Key CAGR of Size contribution Districts Investments Total to GSDP Exports

Thiruvananthapuram, INR 1,50,000 Geo Textiles 12%26 Ernakulam, Thrissur 8.06%27 Cr - (USD 10Mn) Palakkad, Kozhikode

Percentage of fund spent by the Operating textile Mills in Kerala state for modernization compared (2007 -15) to total spent by all states 50 40 38 38 22.76% 36 36 25.00% 40 34 34 30 20.00% 14.64% 12.52% 13.58% 17 15.00% 20 10.00% 10 5.00% 0 0.00% 2011-12 2012-13 2013-14 2014-15

Profit/Loss by National Textile Corporation (NTC) Mills (Lakhs) 500

0 2009-10 2010-11 2011-12 -500

-1000

-1500

India recorded total exports of US$ 40 Bn in 201528. In textile mills total of 6444 employees were there on rolls as of 2015. Gujarat has emerged as a hub for textile sector by contributing 25% of total production29. Cotton yarn, followed by knitted garments and fabrics are the major products. Cotton textile industries are concentrated in Thrissur and Palakkad followed by Ernakulum and Kannur. Home furnishing products30 are the major exportable product from the state which is manufactured in Kannur. State textile corporation’s all seven mills are incurring loss. Kerala had received order of INR 20 Mn6 from Tamil Nadu for stabilizing 50 km long roads with geotextiles.

26 http://www.thehindu.com/news/cities/Coimbatore/potential-for-investments-huge-in-technical-textiles/article7821015.ece 27 Indiastat 28 Indiastat, KPMG Analysis 29 Assocham Textile sector study 2012, http://www.business-standard.com/article/companies/gujarat-is-emerging-as-technical-textiles- hub-assocham-study-112020700024_1.h 30 .echnicaltextile.gov.int

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Also orders are in pipeline from countries like Saudi Arabia, South Africa for INR 50Mn Kerala has three textile parks being set up in Thiruvananthapuram, Palakkad, and Kannur. Select Key Players – Kerala • Anna Group- Kitex Garments • Hantex • V-Star • Prince Fashions There are numerous small-scale exporters of lady garments and many export companies. Ladies nightwear Textile – Garments Case Study

Kitex31 Limited is Anna Groups weaving unit established in 1975. Engaged in production of fabrics made of cotton, other blends, grey cloth bedsheets, lungies. Kitex has a 100% export oriented unit – Kitex Garments Limited. Kitex Garments solely exports readymade garments. Different products include: • Hosiery • Polar fleece • Shirts • Kids wear • T-shirts • Nylon • Jackets • Pants • Night wear • Cotton undergarments • Knitted cotton wears etc. They have standardized production units and also offer tailor-made customer specifications

Key Statistics • Revenue (FY16) – 56,563 Lakhs (CAGR – 15.15%) • Number of Employees - ~ 4000 • Production Capacity – 50 Tonnes/ day • Export Contribution to revenue – 76.50% • Company listed in BSE & NSE

Areas of concern

• Issues with trade unions • Corporate governance issue with operation of another entity Kitex Children wear Limited in the same facility of Kitex garments • Banking issue - Non-conversion of EEFC cash (~INR 200 Cr) for a company of post-tax profit ~ INR 100 Cr (As per RBI guidelines • Employee Attrition – Key personnel leaving the firm - Independent director, CFO

31 Dhanam Publication “Hot Brands of Kerala” Vol-I, http://capitalmind.in/2016/02/what-went-wrong-with-kitex-garments/

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2. Handlooms

India Market CAGR % Potential Key CAGR of Size contribution Districts Investments Total to GSDP Exports

` Thiruvananthapuram, Largely INR 25800 7.81% 0.06% Kollam, Kozhikode, Government 6.9%33 Lakhs32 Kannur Schemes

45000 40153 40000 36978 36141 35000

30000 25800 25000 22287 22408 21793 20214 19096 20000 21057 15000

10000 2010-11 2011-12 2012-13 2013-14 2014-15

Number of looms Value of Production (Rs.in Lakhs)

Though there is an increment in revenue, the number of looms in operation is in a diminishing trend. Employment generation in this industry has got decreasing trend in recent years with CAGR of -8.71 per cent. In FY2015 total export value worth of 224600 Lakhs rupees were made from India. Kerala constitutes for 0.42 per cent of the total handloom worker households.34 Handloom clusters are in Balaramapuram, Azhicode, Kannur, Palghat and Kozhikode. Average Earning of Handloom Households in Kerala is INR 40,000/annum. KELTRON has launched an ecommerce portal “kelebuy.com” including handloom and handicrafts products.

Select Key Players – Kerala • Hantex • Kasavu Kada • Hanveev • Kuthampully • Karal Kada • Kairali Exports

32 Economic Review 2015, State Planning Board 33 Handloom Export Promotion Council 4. Indiastat, KPMG Analysis 34 Development commissioner of Handlooms

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Textile – Handlooms Case Study

Balaramapuram Handloom Cluster • Major handloom clusters of Kerala are • Balaramapuram/Thiruvananthapuram of the Travancore region • Koothampalli and Chendamangalam of the Cochin region and • Kannur, Kasargod and Kozhikode of the Malabar region. • Balaramapuram is a small township located in Thiruvananthapuram district of Kerala. • Handloom sales is one of the major activity in Balaramapuram and the weaving or part of handloom making process is done by all communities in and around Balaramapuram • The major items manufactured from Balaramapuram are Kasavu Sarees, Set Mundu (Pudava and Kavani), Dhoti (Mundu), Neriyathu (Kavani) and Ladies Dress Material (Salwar Kurta)

Kaithry.com • Kaithary.com is aiming at helping these weavers community by promoting online sales of the handloom and other handmade items like jewellery • A percentage of the profit from this initiative will be used for charity purpose mainly to help the children of all weaving community members for education • The product range offered in the site includes Handloom Sarees with and without Kasavu (silk), Set Sarees, Churidar Sets, Dhothis (Mundu), readymade apparels, Towels and other handloom items. • They also offer stitching options and customized blouse, pavada, churidars, nighties and other innerwear

Immense Potential • Kaithary.com can get wider recognition and customers worldwide by investing in branding • The website can feature products from other handloom clusters as well and form a regional brand for Kerala Handlooms • The website look and feel needs improvement with additional

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3. Handicrafts

India CAGR % contribution Potential Key CAGR of Market Size (2011-15) to GSDP Districts Investments Total Exports

` Thiruvananthapura, 981.3 Lakh35 9.47% - - - Ernakulam, Thrissur

Palakkad, Kozhikode

State-wise Number of Handicrafts Fairs/Exhibitions Organised and 49 Financial Assistance Provided in India 56 2000.0 1857.1 60 42 50 1500.0 40 1000.0 30 20 18 21 14 15 425.1389.9 13 10 12 10 20 500.0 9 8 6 7 7 7 166.1152.1 117.7 82.0 80.5 61.5 58.5 54.3 50.4 49.1 47.9 44.6 43.3 37.1 36.6 10 0.0 0

Financial Assistance Provided Number of Exhibitions

Percentage of central fund Number of Handicrafts received by the state of all the Fairs/Exhibitions Organised and states Financial Assistance Provided in Kerala 100 40 65.3 36.6 5.00% 4.26% 12 50 26 10 20 4.00% 3.00% 16.9 2.00% 0 0 0.61% 1.00% 0.44% 2012-13 2013-14 2014-15 0.00% Financial Assistance Provided 2013-14 2014-15 2015-16 Number of Exhibitions

In FY16, Central released INR 93036 Lakhs, for development & promotion of the industry. Incremental Demand for manpower in Textiles & Garments is in the tune of 19100 during 2012- 17 period and 21500 during 2017-22 period (Medium). 19,00037 crafts persons are covered under various schemes of government.

35 Indiastat - State-wise Funds Released for Development and Promotion of Handicrafts Sector under Handicrafts Schemes in India 2015-16 36 Indiastat, KPMG Analysis 37 Lok Sabha Starred Question No. 297, dated on 23.07.2009, KPMG analysis

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Kerala has seen a decreasing trend in no. of exhibitions held and financial assistance provide. Major handicrafts products from the state are Bamboo products, Coconut 7 coir based products, Art-metal-ware and wooden-art-ware. The major buyer countries are USA, UK, Germany, Italy and France Select Key Players – Kerala • Development Commissioner Handicrafts • SURABHI – apex society • Handicrafts Development Corporation • Artisans Development Corporation • Bamboo Development Corporation • Palmyra Development Corporation • SMSM Institute • Kairali Exports

Chemical Industry

Production CAGR % contribution to Potential Total Exports GSDP Kerala Districts

Ernakulam, - ~10,000 MT 3 Thiruvanathapuram, - Kollam

Product Mix

DyesAlkali Pesticides 4% 3% 16%

Organic 9%

Inorganic 68%

Chemical sector contributes about 2%38 of GDP of the nation with total production of 9600 Metric Tonnes. The chemical industry consists of:-

• Alkali chemicals • Inorganic chemicals • Organic chemicals • Pesticides • Dyes

38 Report on Chemicals Jan 2016, India Brand Equity Foundation

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India is world’s third largest consumer of polymers. The Index of Industrial Production 2014 - 15 for Chemical industry was 118.839. The export was valued USD12 Bn in the FY15. 100% FDI is allowed in this sector. Gujarat and Maharashtra are the leading states in the market. Chemical sector industries contributes ~80%40 of total profits of Kerala Public Sector Enterprises. Employment opportunities are less in this sector, generating about 1000 vacancies. Travancore Cochin Ltd is pioneer in chlor-alkali manufacturing and it supplies close to 100 tonnes2 of chlorine to Kerala Water Authority every month.

Select Key Players – Kerala • The Travancore- Cochin Chemicals Ltd • Hindustan Organic chemicals Ltd • Kerala Minerals & Metals Ltd • Phillips carbon black Ltd • Travancore Titanium Products Ltd • Hindustan Insecticides Ltd • Fertilizers and Chemicals Travancore Ltd • Nitta Gelatin India • Merchem • Petrogas International

Engineering Industry

Revenues CAGR % contribution Potential Total Exports to GSDP Kerala Districts

~ 8% of India’s ~ INR 12 Lakh ~ 11% Thiruvananthapuram, ~ USD 70.6 GDP Cr Ernakulam Billion (India)

Exports of principal commodities

9% 12% 34% 22% 23%

Auto components Iron & Steel Products Industrial Machinery Non ferrous metal products Others -medical, scientfic, office, etc

39 Index of Industrial Production – Kerala, 2014 -15, Ecostat 40 Financial Health Of Public Sector Chemical Industries In Kerala, IJESMR Jan 2016

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FDI inflows in Engineering sector (US$ billion) 30 25 20 15 10 5 0 2010 2011 2012 2013 2014 2015

Good growth in Indian Engineering sector due to increased investments in industrial production and infrastructure. 100% FDI is allowed in this sector. Cumulative FDI of over US$ 20 Billion in FY2001-2015 with a YoY growth of over 25%. Sector contributes a CAGR of over 11% (FY2008- 2015).41 The export was valued over US$ 70 Billion in FY2015. The two major segments are heavy engineering & capital goods – expected to reach US$ 125 Billion by FY2017 and Light Engineering and Electrical Equipment – market expected to reach US$ 100 Billion by FY2022. Telecom equipment market is approx. US$ 18 Billion, and is expected to reach US$ 20 Billion by the year 2020. Make in India – a big push for the industry. Key challenge is huge investments required for heavy engineering. Light Engineering / Precision tool manufacturing MSMEs may be considered – based on the location of OEMs.

Ship Building

Revenues CAGR % contribution Potential Investment Total to GSDP Districts Potential Exports Kerala `

Thiruvananthapuram, Manufacturing INR 8708 - Alappuzha, Clusters ~ 2-3% - Cr Ernakulam,

Kozhikode

Cargo handled by major ports (in '000 Tonnes)

600000 581344 580000 570032 561090 560139 555487 560000 545790 540000 530533 520000 500000 2009 2010 2011 2012 2013 2014 2015

41 KPMG Analysis; data basis IBEF report

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Container traffic (in '000s) 150000

100000

50000

0 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Shipbuilding has spin offs to other industries, including steel, engineering equipment, port infrastructure, trade etc. Water transportation is the cheapest mode of transportation. Cargo traffic at Indian ports growing at about 8-10% YoY in last few years42. More than 90% cargo handled by foreign vessels. Huge investments by GoI for development of Ports and Water ways and increase in defence and naval budgets – increasing the potential for ship building. Ship building also has a huge potential for exports. Kerala one among the 4 major centers for shipbuilding and availability of long coastline. High initial investment could be a major challenge.

42 KPMG Analysis; values based on Indian port Association website

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Drugs and Pharmaceuticals State wise % to India, number of Inspectorate, manufactures and Pharmacies (2015)

20% 18% 18% 15% 15% 13% 13% 13% 12% 13% 12%

10% 8% 6% 6% 5% 5% 5% 4% 3% 1%1% 0% Maharastra Tamil Nadu Gujarat Karnataka Kerala Andhra Pradesh

Total number of Drug Inspectorate Number of manufacturers Number of Pharmacies

Drug expenditure as % of health expenditure 60000

50000

40000

30000 43657 20000 24861 23458 20882 10000 15431 14831 0 12% 13% 5% 8% 6% 10% Maharastra Tamil Nadu Gujarat Karnataka Kerala Andhra Pradesh Drug Expenditure Overall govt health expenditure

Kerala consumes 10 per cent of the total medicines sold in the country. In order to bolster the capacity of drug samples/annum, (the main laboratory at Trivandrum), Kerala has opened a new drug testing facility at Thrissur. Kerala has the least number of Drug inspectorate (47), manufacturers (87) and Pharmacies (15000) Tamil Nadu leads in total inspectorate and Pharmacies of 138 inspectorates and 1, 01,240 pharmacies. Andhra Pradesh has the highest number of manufacturers of 1071. Though Tamil Nadu govt., spends the maximum on health expenditure (Rs 43,675 Lakhs), followed by Kerala (Rs 24,861 Lakhs), percentage of drug expenditure to overall health expenditure is highest for Kerala (of 13% or Rs. 3107 lakhs), followed by Tamil Nadu (of 12% or Rs 5326 Lakhs). In order to bolster the capacity of drug samples/annum, (the main laboratory at Trivandrum), Kerala has opened a new drug testing facility at Thrissur. The drug processing capacity of the Kerala State Drug lab is 5000 – 6000 Samples/Year.43

43 SDRA Websites, Press Releases, Media Reports, Universal Health Coverage, 2011, http://pharmatips.doyouknow.in/Articles/Pharma- Companies/List-Of-Pharmaceutical-Companies-In-Kerala.aspx, http://www.tutorialwatch.in/top-pharmaceutical-companies-kerala/ © 2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved. 88

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Few Pharmaceutical companies in Kerala: • Kerala State Drugs & Pharmaceuticals Ltd. • Southern Union Pharmaceuticals • Medi Pharma • Aykara Pharmaceuticals • Chetana Pharmaceuticals

Wood 1. Timber Processing

Revenues CAGR % contribution to Potential Total Exports GSDP Kerala Districts

INR 8373 - USD108 MN 15.4% Exports Kozhikode Cr (2014 India)

Reclaimed Timber Imports Wood

Forest Agro Private

Areas Farming Plantations

Timber Statistics of India: Quantity – 000’ cu.m. Value $ 000’

Unit 2009 2010 2011 2012 2013 2014 CAGR

Production 156710 158890 161070 NA NA NA 0.9% Quantity

Exports Quantity 112 75 218 265 248 279 16.5%

Exports Value 45820 57038 53717 60135 98207 108266 15.4%

Imports Quantity 13820 14906 18261 18783 18647 20996 7.2%

Imports Value 3353454 3992394 5547061 5995001 6183456 6773216 12.4%

The total annual market for timber and furniture in India is estimated to be USD 1.25 billion about 90% of which is for wooden products. Asia Pacific region has over 4500 varieties of wood- yielding species and has some of the best known and most highly priced tropical hardwoods. Approximately 600 timber processing units are currently functioning all over the country. Demand for timber in India is about 123 million cu. mts while supply is only 68 million cu.mts

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About 28% of Kerala’s total land mass is forest cover. Kerala produces about 17540 Cu. Mts of timber (2012) and wood imports are worth about INR 1,500 crore annually.44

2. Furniture Making Industry

Revenues CAGR % contribution to Potential Total Exports GSDP Districts

INR 66990 Ernakulam, 15% 0.5% (India) - Cr Malappuram

Furniture Industry Value Chain

Designing • Raw material • Processing, Distribution procurement Assembling & Finishing (Wood, Metal • Designing • Direct, etc.) furniture for Wholesale Home, Office, Retail(brick & Contract etc. motor, e- tailing) Procurement Production

Furniture usage(India)

35% Domestic

65% Commercial

44 Economic Review, Annual Survey of Industries 45 http://www.nsdcindia.org/sites/default/files/files/Furniture-Furnishing.pdf, Annual survey of industries 2008-09, http://initiatives.sampitroda.com/innovationclusters/resources/caselets/Ernakulam_Caselet.pdf

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• Demand for furniture in India surged at 12% annual rate over 2007-2012, and in 2013 it increased at a rate of 15% • India is a net importer of furniture and furnishing products • Indian wood and furniture sector is predominantly in the hands of unorganized small units • There are around 1420 registered furniture making units across India with Maharashtra alone having 222 units • Southern state of Kerala produces 95 % of the total supply of India rubber wood • Proposal of the newly constituted Zamorin’s Furniture Consortium to set up a world-class Common Facility Centre (CFC) at Kozhikode has won the approval of the Central and State Government. • Kerala is a key state for wooden home furniture which is the biggest segment. • Malappuram Wood Furniture, Ernakulum Wood Furniture, Taliparamba Wood Furniture are 3 important furniture manufacturing zones of Kerala

Key challenges faced by the industry include • Restricted supply of raw materials • Limitations of design due small size units • Deficiency in skilled labour • Market access as most small units depend on local buyers

3. Plywood Industry

Revenues CAGR % contribution to Potential Total Exports GSDP Districts

Ernakulam, INR 5000 5.5% Wayanad, USD 24 Mn Cr - Kozhikode, (2015)

Kasaragod, Idukki

Major product categories - veneer sheets, particle board panel etc. Indian plywood industry is as big as INR 5,000 crore equivalent and industry accounts for 15% of total wood production producing, some 30 million sqm of plywood and block boards. Manufacturing of plywood, veneers etc. are labor Intensive. One of the biggest specificities about the plywood industry in Kerala is the presence of large number of migrant labour in the workforce which largely comes from Assam, West Bengal, Orissa, and Bihar and also from

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Bangladesh. Demand for plywood is at an increasing trend. However, difficulty to find new land for establishing new industrial units increase.46 Large number of plywood manufacturers and traders (~200-300 in total) presence in Kerala with 85 plywood manufacturing industrial units functioning in Ernakulam district alone. While the total quantity of wood processed may be massive, the individual size of the industry still remains small. Presently around 24 small scale plywood industries have formed a consortium - Perumbavoor Plywood Manufacturers Consortium Pvt. Ltd.

India’s Exports of Plywood, veneered panel and similar laminated wood (000 USD)

Plywood Export (Top 7) 2011 2012 2013 2014 2015 CAGR

Turkey 10721 5734 6500 11493 5734 -11.8%

United Arab Emirates 1146 2792 3543 4879 4013 28.5% Saudi Arabia 158 515 800 1085 1796 62.6% Netherlands 1168 897 1175 1033 1606 6.6% Thailand 44 134 991 1311 1518 103.0% Maldives 122 349 178 370 1063 54.2% Bahrain 136 430 653 1202 879 45.2% World 18814 17696 22568 31019 24622 5.5%

Key Players: Kitply Industries, Century Ply Industries, Green Ply Industries, National Plywood

Coir based Products47

CAGR % contribution to Potential Total Exports Revenues GSDP Districts

` Alappuzha, - 0.4%48 - Thiruvananthapuram, ~ USD 1 Mn Kottayam, Kozhikode

Number of Coir Units Registered with Coir Board and % share to India 62% 8900 61% 62% 60% 8800 59% 58% 60% 8700 8600 58% 8500 56% 2009-10 2010-11 2011-12 2012-13 2013-14

No. of Units Percentage to India

46 http://www.trademap.org/Country_SelProduct_TS.aspx?nvpm=1|||||4412|||4|1|1|2|2|1|2|1|1 47 Economic review 2015, Indiastat, MSME state profile 2015, Ecostat report, Kealatourism.org 48 Growth in number of units (2009-13)

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Export of coir products from Kerala in Lakhs

800 736 645 700 600 500 400 325 258 300 205 200 100 0 2010-11 2011-12 2012-13 2013-14 2014-15

Total number of units in Kerala registered with Coir Board of India increased from 8649 units in 2009 to 8790 units in 2013. However, % share to national count is at a decline. Coir the largest cottage Industry in Kerala with total number of Exporters - 102 and total number of Importers – 12. Total number of private sector units registered with Coir Board was highest for Kerala in 2015, (8811 units 58% share). In addition there are 3 public sector units. White fibre - 61% of coconut production & over 85% of coir products. Nearly 50% of the available coir husk is used to produce coir products Coir industry is a labour -intensive industry which provides employment to more than 7,00,000 persons in India of whom majority are from rural areas. Ample opportunities for the development of technology also facilitating transfer of technology. Coir Board “Golden Fibre Plus” scheme in Cherthala offers modernization of coir industry through flow of credit to workers. Major Coir Products49 • Coir Yarn and Ropes • Door Mats • Fiber Mats • Coir Door Mats • Coir Mattings • Sisal Mattings • Grass Mattings • Jute Mattings

Government of Kerala Agencies • Kerala State Coir Corporation Ltd. • Foam Mattings (India) Limited (FOMIL) • Kerala State Co-operative Coir Marketing Federation (COIRFED) • Central Coir Co-operative Societies • Primary Co-operative Societies

49 MSME state profile 2015

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Fruit & Vegetable Processing

CAGR % contribution to Potential Total Exports Revenues GSDP Districts

` INR 250 USD 37 Mn 17% - Kannur, Kollam Cr (2015)

Categories: Ready to serve beverages, fruit juices and pulps, dehydrated and frozen fruits and vegetable products, tomato products, pickles, convenience veg‐spice pastes, processed mushrooms and curried vegetables

Kerala Exports Category India Exports 2015 2005 (All India) 2015

Cucumber & $15.21 MN NA $9.8 MN Gherkins Dried & Preserved $13.94 MN $.3.59 MN (26%) $ 4.99 MN Vegetables

Other processed $44.27 MN $34.15 MN (77%) $10.85 MN fruits and Veggies CAGR (17%)

Food processing industry in Kerala is one of the fastest growing sectors. Nearly 1,274 food processing units in Kerala alone. Two thirds of Kerala’s total export income comes from processed food. Domestic consumption of processed fruits is low. The smallness of units and their inability for market promotion is the main reason for low domestic market Infrastructure facilities key for development of food processing in the State. Only 3 food parks in Kerala. Quality and safety issues is key to become a successful player in this industry. KINFRA Industrial Parks at Nellad and Malappuram are prominent food processing zones of Kerala.50

Dairy Processing

CAGR % contribution to Potential Total Exports Revenues GSDP Districts

` USD 2.6 MN Thiruvanthapuram, - 3.0 % - (2015)- Dairy Palakkad Products

50 foodprocessingindia.co.in/fruits-and-vegetables.html, Economic Review 2015

© 2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved. 94

Study on Investment Potential in Kerala

Per capita milk availability - All India vs Kerala

350

300

250

200

gms/day 150

100

0 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

All-India Kerala

51 Milk Production (Million Tonnes) • 20% of India’s total milk is further processed by Year India Kerala organized sector which includes government supported dairy cooperatives and licensed 2004-05 92.5 2.03 private sector. • Overall dairy exports are minimal (30,000 2005-06 97.1 2.06 Tonnes/annum) due to high domestic 2006-07 103 2.12 consumption • Top 14 states including Kerala produces almost 2007-08 108 2.25 90% of milk in India. • There are more than 3500 co-operative societies 2008-09 112 2.44 registered in Kerala. 2009-10 116 2.51 • Kerala exported 550 Tonnes of dairy products during the year 2015-16 2010-11 122 2.65 • MILMA stands on 9th rank in the list of top 10 dairy Companies of India 2011-12 128 2.72 • Technical innovation in milk processing is a 2012-13 132 2.79 necessary growth driver for the industry • More than 3600 co-operative societies are 2013-14 138 2.66 registered in Kerala

2014-15 146 2.71 CAGR 4.7% 3.0%

Important growth drivers for dairy processing • Huge population of Milch cattle • Growing domestic demand for safe, nutritious milk products • Governments Initiative

51 http://www.nddb.org/information/stats/milkprodstate, http://www.dairy.kerala.gov.in/

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• Technical innovation in milk processing • Potential to catapult India as major dairy exporting country

Marine Processing

Revenues CAGR % contribution to Key Investments Potential GSDP Districts

INR 5166 53 KINFRA Seafood Park Kozhikode 52 26% 1.07% Cr at Alappuzha Alappuzha

800000 Marine Products Quantity Value (INR 600000 (Tonnes) Lakh) CAGR (Value) – 26% 400000 470636 516608 298833 343585 200000 200210 CAGR (Quantity) – 7.55% 124615 155714 166399 165698 0 166754 2010 2011 2012 2013 2014

Processing of fish into canned and frozen forms is carried out mostly for exports.

Quantity % Share in country’s marine Value (Tonnes) products's exports (INR Lakh)

18.5 18 18.22 18 17.93 17.5 18.06

17 16.84 16.5 16 15.86 15.5 15.52 15 15.58 15.45 14.5 15.33 14 13.5 2010 2011 2012 2013 2014

52 Economic Review 2015, MPEDA, 1 Kerala exports value, The Marine Products Export Development Authority (MPEDA), Economic Review 2015 53 Fisheries sector contribution to Gross State Value Added 2014-15 (quick estimates)

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Total Seafood exports from Kochi Port 72% production is Marine fish; Marine fish 185922 MT | INR 3337 Cr | CAGR 7.67% landings during 2014-15 were 5.24 lakh (2011-14) tonnes

Marine products lead the list of food products exported from the State, followed by spice products & cashew. Significant increase in value of product exports over 2010-14 period with a CAGR of 26%. However, share of Kerala has reduced from 18% in 2011 to ~15% in 2014. High value species among the fish catch is less. However, significant among them are Seer fish, Prawn, Ribbon fish and Mackerel. Frozen Cuttle continued to be the major export value accounting for share of ~44% of total India marine export earnings. Andhra Pradesh was the highest contributor to total fish production in 2014-15, Kerala at 5th position. Kerala has the highest Dried/Salted Fish Handing capacity in India. Marginal increase in total fish production during 2010-14 period; CAGR of 1.6%. Increased demand for processed and ready-to-eat marine products in the domestic and foreign market.

Top Export Products • Frozen Shrimp | 12.71% share54 • Frozen Fish | 12.54% • Frozen Cuttle | 44.44% • Frozen Squid | 37.04%

Rice Brands Processing

CAGR % contribution to Potential Total Exports Revenues GSDP Districts

- 15% - Palakkad, Alappuzha USD 29.1 Mn

54 2014 % share of total India exports (in value terms)

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Kerala (Rice Exports) $ MN India exports of packaged basmati and non basmati rice 6000 Year Basmati Non-Basmati 5000

2010-11 0.017 1.60 4000

2011-12 0.05 24.1 3000 2000 2012-13 0.04 21.8 India (Basmati) 1000 India (Non-Basmati)

2013-14 0.04 26.6 Value in $ Millions 0 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2014-15 0.112 27.1

India exports Basmati rice worth $4518 mn and Non-Basmati worth $3335 mn 2015. India accounts for 80 % of the world’s trade in Basmati. Almost half of the India’s rice (basmati) is exported to the Middle East, US, UK, and Australia. The size of the packaged rice industry in India around INR 15,000 Cr. Basmati accounts for 75% of the branded rice market. Punjab, Haryana and Western UP are largest producers of packaged rice. Middle East the key importer of branded rice and any instability in the area will affect the exports. Kerala is one of the largest markets for branded/ processed rice in India. Periyar, Pavizham, Nirapara, Double Horse, Nilavilakku Rice are the Top five rice brands of Kerala. Domestic basmati demand has been growing at 15% in volume terms as branded products are accepted more with growth of food retail. New unit’s set-up would require additional resource requirement. However, matured technology demands less of new skills.55 Top rice processing companies (India) • KRBL Rice (India Gate Brand) • REI Agro (Rain Drops) • LT Foods (Daawat Brand) • Kohinoor Foods (Kohinoor Brand) • Chaman Lal Sethia Exports (Maharani Brand)

Instant Food Products Processing

Revenues CAGR % contribution to Potential Potential GSDP Investments Districts

Alappuzha, ~INR 350 INR 30,000 Cr58 - Thrissur, 1.26%57 9% Cr56 Food parks Palakkad, Wayanad

55 http://www.indiainfoline.com/article/news-sector-agriculture/industry-eyes-growth-in-the-indian-branded-rice-market-rabobank- report-115092400562_1.html, http://www.phillipcapital.in/Admin/Research/775800759PC_-_GV_Nov_15_issue_20151126074753.pdf, http://agriexchange.apeda.gov.in/IndExp/PortNew.aspx 56 Economic review 2015 57 CAGR of no. of units 58 KINFRA report on food processing, FICCI report on Indian Food & Beverage Sector

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Share of food processing sector – India

Others 31% Dairy 35%

Fruits & Vegetables 2%

Poultry Marine 6% 26%

Spices, cashews, marine foods, tea, coffee, coconuts, fruits are the major food processing items. Kerala accounts for nearly 20% of total food exports. Kerala has INR 55001 per capita expense on food which highest in the country. There are nearly 23002 food processing units in the state. Government has approved 1382 cold chain projects during 2009-2015. Total number of people engaged in food processing industry in Kerala is ~14.5 Lakhs. Food processing industry has 23% of share of total manufacturing units registered in Kerala. As per new Kerala Industrial policy food processing is among the thrust sectors.

Oleoresins Processing

Revenues CAGR % contribution to Potential Exports GSDP Districts

1 3 - INR 600 Cr 5% Ernakulam, Palakkad USD 285 Mn

Oleoresin Applications

Others Food & Beverage Flavours Pharmaceuticals (Meat canning, sauces, confectionary, perfumery & soap and as a base in various seasoning applications)

Spice oleoresins are characterized by high potency of active components which enables their usage in small dosages. Usage of spice oleoresins leads to standardization in taste and consistency in flavor. Oleoresins find application in Beverages, Confectionery, Meat Canning, Sauces, Pharmaceuticals, seasonings etc. Flavors accounted for over 35% of the overall market and emerged as the leading segment followed by food & beverages. India accounts for 70% of the world oleoresin production. Brazil, China and India are the market leaders and spice farms in

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Kochi is the hub of oleoresin manufacturing. The global requirement of various oleoresins such as paprika, chilly, turmeric, pepper, ginger, and cardamom is about 15000 tonnes and the global spice oleoresin market is values at US$ 1 Mn. Kerala is home to a variety of spices and is well- known for producing some of the best quality spices when it comes to cardamom and pepper. Synthite Industries Limited, a Kerala based company alone commands for nearly 30% share in the global Oleoresin market.

The sector faces high entry barriers as Oleoresin extraction process involves huge investments in the preliminary stages and high raw material costs as the output to raw material ratios range from 1/10 to 1/600. Also, spice oleoresins have to meet global standards when they are exported and solvent residues in the oleoresins should not exceed 30 ppm. The demand for Spice oleoresins us largely in the snacks, instant and fast food industry where oleoresins help producing a standardized effect on taste and other benefits including longer shelf life, easy blendability etc. The market for spice oleoresins is largely untapped as Indian homes are still not familiar with the product. Urbanisation and increased marketing of the product in the home market is likely to encourage the use of products like oleoresins. The current market is largely focused on the B2B sector as B2C sector demands an efficient logistics and supply chain.

The high price of spice oleoresins is also a key challenge in its usage in India as in the B2C segment as Home users require a very small quantity of spice oleoresins which otherwise may pose a logistical challenge to distribute small quantities. The concerns of pesticide residues in extraction of oleoresins also needs to be addressed and Spices Board is working towards mitigating this risk.

As of now, the sector focus in on export markets and the industrial segment like hotels, bakeries etc. Huge scope exists for expanding the market to include home users, caterers and industrial canteens. The usage of spice oleoresins is largely used for Italian, Mexican and other continental dishes and not much in Indian and especially Kerala cuisine. Wide research and development is key to explore use of oleoresins in Kerala or India cuisine where in the current scenario the level of research has been sub-optimal. Research to find new applications and new markets for spice oleoresins is lacking and is to be explored. Aggressive marketing for increasing usage of Oleoresins in the home users market will create new avenues for expansion in the B2C segment.

Bamboo-based products59

Revenues CAGR % contribution to Potential Exports GSDP Districts

Bamboo is major export item in India, Wayanad, Kozhikode, - - - with global Kannur market valued at INR 500 Bn

59 Kerala agriculture dept. 2. State profile of Kerala MSME report 2014-15, http://www.financialexpress.com/archive/kerala-plants- chinese-tech-for-rs-100-cr-bamboo-profit/1263634/ Bamboo crafts of Kerala, State Bamboo Mission 5. Forest Survey of India 6. National Bamboo Mission, Kerala Research Programme

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State wise % Distribution of Bamboo Areas In Recorded Forest to India (2011) 10% 8.2% 8% 5.9% 5.9% 6%

4% 2.9% 2.3% 1.6% 2%

0% 1 Andhra Pradesh Gujarat Karnataka Kerala Maharashtra Tamil Nadu

Usage of Bamboo Paper

Internal 17.24% Consumption 22.99% Scaffolding

10.34% 21.84% Handicrafts

27.59% Miscellaneous

Major Bamboo products: Mats and Reeds, Bamboo Ply, Curtains, Furniture, Handicrafts Bamboo the “Poor man’s timber” is a major export item in India, with a global market valued at INR 500 Bn. In Kerala as of 31-Mar-14, 2,20,000 tonnes of Bamboo were available. A unique feature of the Kerala bamboo industry is that 67.3 per cent of the extracted bamboo comes from home gardens rather than from forests. 25,000 weaving families are dependent on State Bamboo Corporation. There are about 554 bamboo units registered with Kerala state bamboo mission. Furniture and interior products are gaining popularity. The current level of global and national trade in bamboo and bamboo products put together is estimated at over $ 4.5 billion in 2005. Mats and baskets are two important products catering to the house-hold industry.

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Tyre Manufacturing60

Potential Revenues CAGR % contribution to Districts Exports

GSDP

` Kottayam, 60 - - ~12% - Ernakulam, Palakkad

Tyre Sector Demand (2015-16) Tyre Product Mix (2015-16)

Off-the- Road Vehicles Others Auto Tractors 1% mobile 1% Exports 9% companie 11% 2 s Wheelers 28% 6% Passenger Vehicles Customer replacem 23% Vehicles ent 60% 61%

Tyre Sector Demand (2015-16) 25% 20% 22% 15% 13% 10% 5% 5% 5% 0% -2% 2010-11 2011-12 2012-13 2013-14 2014-15 -5%

60 Report on Tyre Sector, by ATMA-ICICI direct research, Indian Tyre Industry – ICRA Report 2015-16 © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Select Key Players – Kerala • Apollo Tyres –Invested INR 300 Cr plus in Cochin plant for producing industrial tyres for abroad market • MRF Tyres – Produces tyre, tubes, and flaps • Tollins Tyres – It has manufacturing unit in Kalady, Ernakulam Tyre export was in decreasing trend during 2015-16 due to pressure from low-priced Chinese Tyres, resulting in price cuts across industry segments. Imports fell from 17% (FY 2015) to 12% (FY), again due to inflow of Chinese tyres in various market segments. Revenues saw decrease of 2%. Prices of Natural Rubber fell by 15% during 2016 leading to operating margin expansion to 19.1%. Indian tyre demand grew at 4%-5% during 2015-16, with 3% growth in volume demand from Original Equipment Manufacturer (OEM) segment. Indian tyre demand is expected to grow 6-7 % during 2016-19). Revival in auto mobile sector demand and economic activity driving urban purchases contributing as main factors for increased demand. Truck and bus radial tyres is the fastest growing category in the Tyre industry. Tollins Tyres (Ernakulam based company) is the first Indian brand to survive in the tough market supplying to the US market as well.

Footwear Manufacturing61

Kerala CAGR of % contribution to Potential CAGR of India Market Size Indian Market Kerala GSDP (2013) Investments Exports (2013)

` 20.28% Kozhikode, 700 Cr 15 – 20 % 0.18% USD 425.67 Malappuram, Thrissur Mn (India)

Footwear Manufacturing units

Other Districts 32%

Kozhikode 68%

61 http://www.business-standard.com/article/economy-policy/kerala-footwear-industry-becomes-a-rs-700-cr-sector- 113112700227_1.html#, Indian Footwear Industry – 2015, ICRA Research, Economic times © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Increased employment opportunities for women in the footwear manufacturing industry as it involves a lot of processes that can be handled by women. Footwear design offers a wide range of bright employment opportunities in technical, designing and management area. Size of Indian Domestic Footwear Industry is estimated to be worth 20,000-25,000 crores. Growth of Indian footwear sales increased to 17% in 2015, compared to 16% in 2014. China is the world leader in footwear production. 87 % of shoes are made in Asia, with China as the main producer. India exports about 115 million pairs of which 95% of its produce meets its own domestic demand. Majority of footwear made in the country is non-leather. Out of the total 125 footwear production units, 85 units were in Kozhikode. 90% of states manufacturing units depends on local market. Exports of Footwear in India valued at to $ 425.67 Million in 2016 ($ 1446.70 Million in 2015). Manufacturers based in Kozhikode is emerging as the second non- leather footwear hub after Delhi, recording a 132% rise in business.

VKC Case study62 • VKC group was established in 1968 known for plywood and match industries then • VKC has 20 manufacturing units in Kerala, Tamil Nadu, Seemandhra, Karnataka, Gujarat and West Bengal • VKC products are available in the Gulf countries, Singapore and Malaysia • VKC manages its extensive supply chain through a combination of units and depots spread across 14

states in India • VKC footwear – The brand developed after introducing Hawai slippers in 1986 and with making changes according to fashion trends, newer fashionable models emerged in the market • The foresight of Mohammad Koya paved way for the phenomenal growth of VKC group • Current brand portfolio is led by VKC Pride followed by VKC Lite, VKC Trendz, VKC Junior, Walkaroo, Skalino, and Vestire • They have more than 400 designs for Gents, Ladies and Kids across Sandals, Floaters, Shoes,Flip-flops and Hawai

62 http://www.vkcgroup.com/aboutus.php, Dhanam Publication “Hot Brands of Kerala” Vol -i © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Rubber – Other Products63

% Potential Production Key Investments CAGR contribution Districts Exports

to GSDP

` Kottayam, Surgical Pharma Idukki, - 9.8% - USD 2.6 Bn Products Alappuzha, Ernakulam,

Rubber Product Mix (2013-14)

Tread rubber 30% 36% Dipped goods

Rubber matings

10% Rubberised coir, jute products

13% 11% Others

Turn over YoY Growth rate (2010-15)

13.60% 10% 6.90% 5.50% 3.20%

2010-11 2011-12 2012-13 2013-14 2014-15

Though Kerala contributes about 85% of total production of rubber, state lags behind producing rubber products. Indian Rubber products industry consists of nearly 4500 units generating about 5.5 Lakhs direct jobs. India imports 50.000 tonnes of rubber annually and China is the main competitor in rubber

63 Report on Non-Tyre rubber manufacturing, Rubber skill development council; Asian Business Media - Rubber Asia report; Rubber Industry in India, Report No. 119 of Rajya Sabha; http://www.business-standard.com/article/markets/import-of-non-tyre-rubber-products-jump-32-in-two- years-115100800724_1.html ; http://www.indianmirror.com/indian-industries/rubber.html © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Study on Investment Potential in Kerala products industry. Other upcoming players are Vietnam, Thailand and Malaysia. Kerala has the highest number of rubber products manufacturing units (~900). Maximum number of units are into molded goods, tread rubber products, dipped goods and adhesives and the major units are in MSME sectors. Major Product segments include surgical pharma products, Rubberized fabrics, Rubber covered rollers, Auto cycle parts, Rubber covered rollers, Sheeting, Rubberised coir, jute products, Moulded products, extruded products, Foam products, Beltings, sports goods, cables, Tubes, Hoses, adhesives etc.

Electronics – Hardware64

Indian % Investment Potential Market CAGR of contribution potential Districts Exports size Kerala to GSDP

` INR 12% ~1.5% Electronics Park ~ Thiruvananthapuram, ~20% of total 171000 20000 Lakhs Ernakulam, Kannur, production 2 Cr Palakkad

India Market 50.00% Production growth

Strategic 40.00% Computers Equipment Consumer 10% Electronic 30.00% s 30% 20.00% C&BIndustrial Electronic 10%Electronic Compone 10.00% s nts 0.00% 21% 21% FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 -10.00%

-20.00%

Green Field Electronics Manufacturing clusters are being setup in Ernakulum. CAGR of Power Control Instruments is 13.74%. Mobile devices are expected to grow at a high CAGR of 33.4 % between 2013 and 2020. Increasing demand for defence equipment's has boosted the production of electronics goods. Companies increasingly spending on R&D and stepping up innovation. Increasing penetration of high-end electronics products such as High Definition TVs (HDTVs), LCDs, LEDs, and tablet. Growth in the hardware segment is expected to far outpace the overall growth of electronics goods production in the country (CAGR of 10.1% over the same period). As per Make in India Initiative, Electronic Development Fund Policy has been approved which would rationalize an inverted duty structure. Indian electronics and hardware industry is expected to reach US$ 110-130 billion by 2018. Key Players: KELTRON, TELK, TRACO, KSIDC, KINFRA, IT Parks, Startup village, T-TBIC, CDAC, OEN, SFO, FCI, BPL etc.

64 Dept. of Electronics & Information Technology, Make in India, KPMG analysis,Industrial Brand Equity report © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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V-Guard Case Study65

• Across India, V-Guard is now synonymous with high-quality electronic, electrical and electromechanical equipment • Their products ranges from trailblazer voltage stabilizer to pumps and water heaters and wires and cables. The company now manufacturers and markets voltage stabilizers, digital UPS, inverter and inverter batteries, electric water heaters, solar water heaters, domestic pumps, agricultural pumps, industrial motors, domestic switch gears, distribution boards, wiring cables, industrial cables, induction cook tops, mixer grinders and fans. • V Guard is now present in 29 states, and is looking for acquisitions to expand its reach • It has over 500 distributors, 5,000 direct dealers, 20,000 retailers and service centres across the country

65 Dhanam Publication “Hot Brands of Kerala” Vol -i © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Gems and Jewellery

% Potential Revenues Key Investments CAGR contribution Districts Exports

to GSDP

` Kalyan Jewellers – Exports INR 900 Cr contributed ~ INR Thrissur, 5.4% 6 to 7%67 Joy Alukkas – INR 14.8%66 to total 80,00066 Kozhikode 1500 Cr for setting up exports of new outlets India

YoY export growth percentage

50 43.4 39.2 40 43 36.3 30 29.4 35 20 10 0 FY10 FY11 FY12 FY13 FY14 FY15

In the year 2013-14, Kerala contributed 30% of total exports of Gems and Jewellery of India. India’s share in the global jewellery trade is 5.6%68. In Kerala, there are 300 medium, small, and micro units registered. 70%69 of Kerala’s jewellery is manufactured in Thrissur. The city has around 2,50070 household units employing about 30,000 people. Further, a Gem and Jewellery park is being set up in KINFRA Park, Puzhakkal, Thrissur. Kerala’s demand market for gems and jewellery makes up around 20% of the total Indian market for this segment. Select key players are Kalyan Jewellers, Alukkas, Atlas, Chemmannur, Bhima, Alapatt, Malabar Gold and Josco.

Electricity, Gas, Water Supply & other Utility services

1. Power Generation

% contribution Potential Revenues CAGR Exports to GSDP Districts

66 Gem & Jewellery Export Promotion Council, 2015 – 16 report 67 IBEF report on Gem and Jewellery 68 http://www.thehindubusinessline.com/news/national/food-processing-jewellery-hold-promise-for-kerala-exports/article7522860.ece 69 GEPC report 70 Report on Gold ornaments cluster, MSME, 2008 © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Kozhikode, Palakkad, INR 9126.41 ~ 5-7% - Thiruvananthapuram, - Cr71 Ernakulam

Kerala Energy Production (MW) Southern States Energy Requirement (2012-13) v/s Availability (in MU) (2016-17)

Puducherry 2429 2437 49948 Telangana 247.225 50254 TN 96586 97277 432.04 Karnataka 60971 64302 AP 50366 2412.73 50437 Hydel 23194 Kerala 23318 Thermal 0 50000 100000 150000 Renewable Availability (MU) Requirement (MU)

The five southern states/Union Territories – Kerala, AP, Karnataka, Telangana, Tamil Nadu and Puducherry have an overall shortage of electricity. These states have a total annual shortage of 4532 MU. Kerala’s shortage of electricity is met by purchasing power from the central pool. While energy demand is expected to grow by 8-10% YoY for the next 10-15 years, the energy demand in Kozhikode, Palakkad, Trivandrum and Ernakulam is estimated to grow at a pace above the national average.

2. Renewable Energy

% Potential Revenues Key Investments CAGR contribution Districts Exports

to GSDP

Idukki, Palakkad, - - - INR 550 Cr72 - Thiruvananthapuram

71 Total revenue from tariff and revenue from non-tariff income estimated by KSEBL for the year 2014-15 72 http://www.thehindubusinessline.com/todays-paper/suzlon-plans-rs-550cr-wind-power-projects-in-kerala/article1734061.ece © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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India 40000 35000 30000 25000 20000 15000 10000

Production in MW Production 5000 0 2010 2011 2012 2013 2014 2015 India 16817.04 19970.76 24914.24 28067.26 30873.986 34351

Kerala 250 212 202 194 200 186 172 165 165 162 158 150 137 150 134

100 39 37 35 35 35

50 28 Production in MW Production 0.84 0.03 0.03 0.03 0.03 0.03 0 2010 2011 2012 2013 2014 2015

Total Wind Small hydro Solar

The annual energy consumption in Kerala is more than the energy generated and there is an increasing power mismatch. To identify potential energy producing geographies, land use patterns and technology constraints need to be considered. Renewable energy contributes to only 8% of the total Energy production in Kerala. Kerala has about 2400 Sq. Km waste land which can harnessed. There is also huge potential for Wind and Solar energy; 2000 MW and 500 MW respectively. For handling and executing the transition, it is necessary to build institutional capabilities as the transition would require substantial capital and manpower resource investments in capacity building, training, new recruitments, consultancy assignments and awareness programs. There is an opportunity for renewable energy, but it must be considered taking into account the availability of surplus power in the northern states. The Key Players for this segment are Suzlon Energy Ltd, Energy Management Center Kerala, and Agency for Non-conventional Energy and Rural Technology (ANERT).

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Construction

1. Construction Materials - Cement Industry73

Potential Revenues CAGR % contribution Districts Exports

to GSDP

- INR 1.8 Lakh Cr 9.7% Palakkad USD 144 Mn

Production of Cement (India) 300 270 248 255 250 230 206 216 186 200 161 174 150 100

Million Tonnes 50 0 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Cement Statistics (Kerala) – Million Tons & (% of Cement usage % share India India)

Year Capacity Production Consumption 18%

2011-12 0.62 (0.25) 0.53 (0.29) 7.59 18% 2010-11 0.62 (0.26) 0.58 (0.34) 7.21 64% 2009-10 0.62 (0.28) 0.42 (0.26) 7.27 2008-09 0.62 (0.28) 0.60 (0.33) 7.89 2007-08 0.62 (0.31) 0.57 (0.34) 7.13 Housing Infrastructure Commercial

With nearly 390 million tonnes (MT) of cement production capacity, India is the second largest cement producer in the world and accounts for 6.7 per cent of world’s cement output. Domestic cement consumption is 324 million tonnes in FY15. Indian government’s focus on infrastructure development to boost growth of cement. Housing sector accounts for a significant 64 per cent of the total cement demand. The industry has around 65 companies having around 200 cement plants across India. Kerala stand 19th in terms of State wise production of Cement. Andhra Pradesh and Tamil Nadu produces almost 90% cement in South India. The Industry has been facing insufficient availability of the main fuel coal. Malabar Cements, Travancore Cements and Penna Cements are key players in Kerala.

73 http://dipp.nic.in/English/questions/05122014/lu2247.pdf, http://www.cmaindia.org/cms/Kerala.php, http://www.ibef.org/download/Cement_Industry_171113.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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2. Construction Materials - Hardware74

Potential Revenues % contribution CAGR Districts Exports to GSDP

- INR 6699 Cr 17-18% Palakkad USD 24 Mn (2015)

Material handling equipment Earth moving equipment segmentation segmentation by market size by market size

18% 37%

51% 51% 26%

12%

Cranes Forklifts Others Excavators Backhoes Loaders Others

The organized construction sector accounts for 55% of Earth Moving and Construction Equipment (ECE) and Mining, irrigation etc. account for the rest. Equipment rental and leasing business in India is small relative to developed markets and has a strong growth potential. ‘Earth Moving’ and ‘Material Handling’ are the major segments. In 2010, Bharath Earth Movers began its manufacturing complex in Palakkad, Kerala.

74 http://www.icra.in/Files/ticker/SH-2016%20Construction.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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The key demand drivers of the industry are as follows:

• Revival of housing demand • Huge infra investment by governments • Stable land and Steel prices

Trade, hotels and restaurants

1. Tourism

% Potential Revenue (2014) Key Investments CAGR contribution Districts Exports

to GSDP

INR 25,000 14.75%76 5.13%77 - All Districts 5.23%78 Crores75

40.00% Trivandrum 36.31%

---- > 35.00% Kollam Pathanamthitta 30.00% 35.12% Alappuzha 25.00% Kottayam

20.00% Ernakulam Idukki 15.00% 9.23% 1.43% Thrissur 6.59% 10.00% Palakkad 4.80% 2.18% 1.02% Malappuram 5.00% 1.35% 0.71% 0.73%

% Contribution to state tourism tourism state to Contribution % 0.18% 0.12% Wayanad 0.00% 0.23% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% Kozhikode CAGR (2004 - 14) ----> Kannur Kasaragod

In the last three years Kerala has provided hosting for more than 250 Lakhs domestic and foreign tourists, and have generated more than INR 7, 50,000 Lakhs with an average growth rate of 7.53%. In the last five years central Government has approved 25 projects and INR 254 Lakhs, which is 3.4% of total amount sanctioned to all states. In FY15, USD1.13 million79 has been sanctioned to Kerala for development of tourism in the state. The tourism and hospitality sector is among the top five industry

75 Kerala average revenue, Department of Tourism, KPMG Analysis 76 Kerala average revenue, Department of Tourism, KPMG Analysis 77 Dept. of Economics & Statistics 78 Ministry of Tourism Govt. of India, KPMG Analysis 79 Report on Tourism, 2016, IBEF © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Study on Investment Potential in Kerala to attract the highest Foreign Direct Investment (FDI). Medical tourism, heritage tourism and rural tourism has high potential in the state. In the year 2015 12% of total foreign tourists visited India came to Kerala and Foreign Tourists arrival are high in the month of January. Key Players for the Tourism sector are DTPCs, Hotels, Travel agents and Tour operators. Ernakulam, Trivandrum, Idukki, and Alappuzha attracts 85% of the tourists arriving in the state. Kumarakom won the Responsible Tourism- UNWTO-Ulysses Award for Excellence and Innovation in 2015.

Attractions

No. of Major tourist spots district wise as on 2015

1 Kannur 3 1 Kozhikode 7 2 Palakkad 3 4 Ernakulam 8 10 Kottayam 1 2 Patahnamthitta 2 7 Thiruvananthapuram 5 0 1 2 3 4 5 6 7 8 9 10

Source: Kerala Tourism Statistics, Department of tourism, KPMG Analysis In 2014, Guruvayoor stood first in attracting domestic tourists, close to 21 Lakhs people visited. Followed by Kochi city and Thiruvananthapuram. Meanwhile, foreign tourists arrival was most in Kovalam, nearly 1.75 Lakhs tourists visited followed by Kochi and Poovar. In the FY16, the expected revenue generation from tourism is USD 6.1 bn80.

2. Hotels

Hotels available (2014) Hotels growth rate 5 Star Heritage/Classic Deluxe CAGR 10.20% 6000 3% 2% 2 Star 5000 8% 4 Star 5 Star 4762 19% 4% 4000 3238 3000

3 Star 2000 1854 64% 1000 1222

0 2000 2005 2010 2015

80 Report on tourism, 2016, IBEF © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Kerala has approximately 4762 hotels. As of Dec 2014, there are 409 classified hotels in the state81. Approximately 40% (1850) of the hotels have restaurant facilities. 50% of the hotels in Kerala are in Panchayat areas. Of the total hotels approved in 2014, Kerala has a 36.8%81 of share. There are 45,000 people working in this sector79. 50% of hotel accommodations are concentrated in Idukki, Ernakulam and Thiruvananthapuram82.

Thiruvananthapuram 17.89% Kollam 3.93% Pathanamthitta 3.15% Alappuzha 6.89% Kottayam 5.77% Idukki 15.73% Ernakulam 12.70% Thrissur 7.27% Palakkad 4.24% Malappuram 4.12% Kozhikode 3.91% Wayanad 8.67% Kannur 4.22% Kasaragod 1.51% 0.00% 5.00% 10.00% 15.00% 20.00%

In FY15, the total occupancy for hotels in Kerala was 53%. The total Income generated in 2014-15 is approximately INR 3, 60,000 lakh79.

3. Restaurants

Growth rate

Restaurant Tea&Snacks stalls CAGR 11.40% CAGR 10.73%

40000 36506 35000 30000 25000 20540 20000 16461 15000 12073 10137 8054 10000 6086 3951 5000 0 2000 2005 2010 2015

81 Kerala Tourism Statistics, Department of Tourism, KPMG Analysis 82 Dept. of Economics & Statistics © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Income Distribution(2014) District wise Distribution of Restaurants (2014) Catering Others, Thiruvananthapuram 11.79% services, 2.00% Kollam 6.72% 1.00% Pathanamthitta 2.86% Alappuzha 5.60% Kottayam 6.12% Idukki 4.64% Ernakulam 10.08% Thrissur 9.41% Palakkad 10.12% Food & Malappuram 10.41% beverages, Kozhikode 7.94% 97.00% Wayanad 2.61% Kannur 7.64% Kasaragod 4.05% 0.00% 5.00% 10.00% 15.00%

Source: Report on Hotels & Restaurants in Kerala – 2014-15, Dept. of Economics & Statistics, Kerala Total income generated from restaurants in Kerala in FY14-15 was INR 5, 50,000 Lakhs83. The employment generated from restaurants in FY14-15 was approximately 1, 85,00083. There are 50-6084 restaurant chains in the state. The maximum number of restaurants are in Kerala are in Trivandrum.

4. Tour Operators

Tour Operators (2014)

ALP TVM 3% 28%

EKM 69%

There are 35 approved Kerala based tour operators in Kerala as on June 2015. 25% of operators have offices abroad83. Ernakulam has the maximum number of operators. In FY15, Thomas Cook, the leading operator, had revenues of USD 711 Lakhs.

Transport, Storage and Communication

1. Transport/Logistics – Road, Air, Water

83 Report on Hotels & Restaurants in Kerala – 2014-15, Dept. of Economics & Statistics, Kerala 84 National Restaurant Association of India (NRAI) Report 2015 © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Revenue % Investment Potential (2014) CAGR contribution Potential Districts Exports to GSDP

Thiruvananthapuram, INR 27,592 Logistics ~10% 7.91% Ernakulam, Alappuzha, - Cr85 Cluster Kozhikode

Growth rate - Freight movement Value in Lakhs by Road Transport 2759223 3000000 2383735 20.00% 16.28% 2500000 2036179 1704876 15.00% 11.16% 12.11% 2000000 1465612 10.07% 1500000 10.00% 8.04% 1000000 10.08% 5.00% 2.00% 500000 0 0.00% 2008-092009-102010-112011-122012-13 FY06 FY07 FY08 FY09 FY10 FY11 FY12

Growth Rate - Freight movement Growth Rate - Freight movement by Air Transport by Water Transport 50.00% 35.00% 29.92% 30.00% 40.00% 41.18% 25.00% 30.00% 20.00% 20.00% 13.33% 12.50% 12.42% 7.14% 7.41% 15.00% 10.00% 0.00% 0.00% 10.00% 5.29% 0.00% 5.00% 2.52% -1.24% FY07 FY08 FY09 FY10 FY11 FY12 FY13 -10.00% 0.00% -5.00% 2009-10 2010-11 2011-12 2012-13 2013-14

Transport infrastructure of Kerala consists of 3.31 lakh Kms of road, 1257 Kms of Railways, 1687 Kms of Inland Waterways and 111 statute miles of Airways and 18 Ports. The sector has a high CAGR of about 10%. Contribution of transport to GSDP is 7.9%, higher than the national average of 5.6%. Kerala has high potential for organized water transport. Indian logistics is estimated to grow at 15 to 20%. In Kerala, The transport and logistics sector is expected to register growth at 1–1.5 x GDP, with EXIM expected to grow at 10 percent. Key trends driving this include:

• Higher levels of outsourced logistics • Increasing complexity of logistics services requirements • Increasing orientation towards global best practices

85 KPMG Analysis; values based on 2012-13, Kerala GDP report Dept. of Economics and statistics © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Development of multi modal transport systems in Kerala would be a major contributing factor for Kerala to be a logistics hub.

2. Transport/Logistics – Railways

% contribution Potential Revenues CAGR Exports to GSDP Districts

Ernakulam, INR 1,345 Crore 0.34% 1.86 Thiruvananthapuram, - (2014-15) (2014-15) Palakkad, Kozhikode

% contribution of Railway Sector of Kerala to GSDP of Kerala

0.50% 0.47% 0.47% 0.46% 0.45% 0.43% 0.43% 0.41% 0.40% 0.39% 0.40% 0.35% 0.35% 0.30% 0.30% 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Kerala has a rail density of 27 per 1000 Sq. km, which is better than the rail density compared to national average of 20 per 1000 Sq. km. As of September 2015, Southern Railway revenues was INR 4,546 Cr, an increase of 5.61% from 2014. Kerala provides the biggest share of revenues to Southern Railway. However, there is a declining trend in percentage contribution of Railway GDP to the total GSDP since 2008-09.

District wise GDP contribution of Railways to GSDP (2013-14) - constant price

30% 19.9% 20%

8.8% 10.4% 9.4% 10.3% 10% 7.6% 7.8% 7.6% 6.6% 4.8% 5.7% 0.9% 0.0% 0.0% 0% 1 Thiruvananthapuram Kollam Pathanamthitta Alappuzha Kottayam Idukki Ernakulam Thrissur Palakkad Malappuram Kozhikode Wayanad

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Thiruvananthapuram Central is an important hub for Southern Railways and is the largest and busiest railway station in Kerala, holding capacity of 1572 coaches. Palakkad contributes the highest GDP on railways among the other districts (19.9%), and Idukki the least. Upcoming key projects of Kerala include • Suburban train services (Thiruvananthapuram) • Kochi metro project • Light metro rail project (Thiruvananthapuram and Kozhikode)

3. Storage (Warehouse, Cold Storage, and Other Storage)

% contribution Potential Revenues CAGR Exports to GSDP Districts

Ernakulam, INR 196 Cr 20%86 0.06% - Thiruvananthapuram

Value in Lakhs 25000

20000

15000 19584 16227 10000 13577 11255 5000 9456

0 2008-09 2009-10 2010-11 2011-12 2012-13

As the food processing sector is booming in Kerala, there are high potential for storage segment. Multiple ports and huge requirement for storage space makes Kerala an attractive investment center for storage. Kerala has high untapped potential as compared to rest of the country. Government push for infrastructure development and upcoming Vizhinjam port are major contributing factors. There is a high potential for cold storages for export of Marine and Agro produce. However, high cost of land and land acquisition may be a challenge.

86 KPMG Analysis; values based on 2013-14 Kerala GDP report © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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4. Communication – Telecom

% Key Potential CAGR of Market CAGR contribution Investments Districts Total Size (2011-15) to GSDP Exports

~INR 8,500 Thiruvananthapuram, 1.51% 1.6% - - Cr87 Ernakulam, Palakkad

YoY Growth of Telecom Subscriber base 15.00% 34.29 Mn 10.00% 31.36 Mn 5.00% 0.00% -5.00% 2011 2012 2013 2014 2015 2016 -10.00% 3.3Mn -15.00% Wireless WireLine 2.3Mn

Availability of Service in % (Jan – Mar 2016)

Sistema (MTS) 99.98 BSNL 99.71 Tata 99.94 Reliance 99.93 Aircel 99.84 Idea 99.94 Bharti 99.49 Vodafone 99.08

87 Indiastat, KPMG analysis © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Wireless connections - Subscriber base Wireline connections - Subscriber base

Sistema Bharti Reliance BSNL (MTS)1% Vodafone Vodafone 2% 2% 22% 22% 0% Tata 1%

Tata 5% Bharti BSNL Reliance 13% 95% 6%Aircel Idea 1% 30%

In India, there are 10,588 Lakhs telecom subscribers. The telecom subscriber base in Kerala is 366 Lakhs88 (44.54% Rural subscribers) as of March 2016. Wireless customer base is grown with a CAGR of 2.18%88. Kerala has the tele-density of 102.271, which is second highest in India after HP. Smartphone subscriptions is expected to grow four-fold89. Kerala has 146 Lakhs88 internet subscribers in the state as of March 2016. Among the wireless connections operators, Idea leads the table with 103 Lakhs customers. For Wireline connections BSNL is the clear leader having 95% of the share. Indian telecom industry has the potential to generate 40 Lakhs job in five years. Incremental manpower demand by communication sector - 275000 during 2017-2022 period.

5. Communication – Infotainment

% Key Potential CAGR of Market CAGR contribution Investments Districts Total Size (2011-15) to GSDP Exports

INR 8,228 Thiruvananthapuram, 12.47%90 1.58%90 - - Cr90 Ernakulam, Kozhikode

88 The Indian Telecom Services Performance Indicators, TRAI 89 Telecom sector study, IBEF 90 Kerala Economics and Statistics GSDP 2011-15 © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Advertisement category share % YoY Growth – Revenue in Lakhs Out-of- Radio, 900000 822850 Home, 1.68% 800000 Gaming, 2.15% Music, 726738 2.29% 0.96% 700000 614025 578340 Digital 600000 Advertisin 500000 g, 4.24% 400000 Films, Animation 12.32% TV, 46.30% 300000 & VFX, 200000 4.38% 100000 Print, 0 25.68% 2011-12 2012-13 2013-14 2014-15

TV Industry Performance Cable & Satellite Penetration

14.62% Gujarat 79% 15.00% 14.53% 14.50% 13.91% Maharashtra 85% 14.00% 13.45% Andhra Pradesh 97% 13.50% 12.70% 13.00% 12.46% Karnataka 94% 12.50% Tamil Nadu 99% 12.00% 11.50% Kerala 93% 11.00% 2010 2011 2012 2013 2014 2015 0% 50% 100%

Source: India Media and Infotainment Report 2015, KPMG The Indian Media and Entertainment industry was worth USD 19 B91n (2015). Kerala has 98 Malayalam channels, 17 FM radio stations, and 6 private DTH operators registered. Among regional channels Malayalam viewership is 5.6%92. When looking at Advertisement Revenues - Print media leads with 39% of revenue, followed by TV (36%), Digital advertising (15%), OOH (5%), and Radio (5%). The big spenders in print media are FMCG, Auto, Education, Real estate, Garments, Jewelry. For television Media, the revenue breakup is 65% as subscription revenue and 35% as advertisement revenue92.

91 IBEF report on Entertainment - 2015 92 India Media and Infotainment Report 2015, KPMG © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Financial Services Non-Banking Finance Companies

Potential CAGR of Market Size (India CAGR Key Investments Districts Total in 2015) (2011-15) Exports

~ INR 5.1 lakh Cr93. 17.7% - All Districts -

YoY Growth of NBFC market

30.00% 26.15% 25.41% 25.00% 20.69% 20.00% 14.71% 15.00% 10.00% 5.00% 3.40% 0.00% 2010-11 2011-12 2012-13 2013-14 2014-15

NBFCs have ~47% share in retail financial market with banks. The top performing NBFC is only 5% less in size with the top performing private sector bank. The NBFC sector has shown ~28% growth rate in last ten years. There are ~35094 Kerala based NBFCs in the market. Private players lead the segment. Muthoot Finance, Manappuram Finance, Muthoot Fin Corp are the top three players in Gold loan segment. There is a high demand for graduates in this sector.

93 IBEF report on Financial services 94 MCA companies list © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Other Services 1. Healthcare – Service Delivery

% Key Potential CAGR of Revenues CAGR contribution Investments Districts Total Exports to GSDP `

Ernakulam, Kozhikode, 5-6% of medical - 15%95 6.5%96 INR 600 Cr97 Thiruvananthapuram tourism market98

Health Institutions

1255 1281 874 942 693 582

10 11 3 5

Allopathy (DHS) Allopathy (DME) Ayurveda (ISM) Ayurveda Medical Homeopathy Education

Beds

37750 38400

12035 10079 3044 1355 975 2860 1259 945

Allopathy (DHS) Allopathy (DME) Ayurveda (ISM) Ayurveda Medical Homeopathy Education

95 KPMG Analysis, CAGR of Indian Healthcare Service Delivery segment. Increase in medical tourism and higher affordability drives market growth of Service Delivery segment. Kerala aims to be a healthcare hub in 5 years 96 State Health Account 2013-14, State Healthcare expenditure 97 Aster DM Healthcare to invest INR 600 crore in Kerala in 3 years 98 ~USD 200 Mn (excluding wellness), Tamil Nadu attracts 40-50% of medical tourists © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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1831724 Inpatients 1601505

478097 347334 251141 53442 41102 9072 10564 45667

Allopathy (DHS) Allopathy (DME) Ayurveda (ISM) Ayurveda Medical Homeopathy Education

Outpatients

53057551 50168935

15543791 11690486 4544359 10481288 11839811 460756 3341592 386721

Allopathy (DHS) Allopathy (DME) Ayurveda (ISM) Ayurveda Medical Homeopathy Education

Healthcare expenditure in Kerala is expected to increase with rising incomes and health awareness. The state performed exceptionally well with respect to CMR99 and MMR100 health indicators but death rate has increased (2009-14). Kerala has the highest per-capita expenditure on health101. There is a high demand for quality nurses/paramedical staff from state. Kerala has a better skilled workforce - doctors and paramedical staff - compared to other states. The total number of doctors in the state is 20,554 and the total number of nurses is 33,382. Number of physicians per 1000 population is 1.263. The State has a strong medical education foundation and has 2,900 seats for MBBS.

Private Allopathic Health Institutions Medical Education Institutions 20 17 CAGR 1.94% Govt Private 7000 15 13 13 6000 10 5000 10 6 4000 3 3 5 2 3000 1 2000 0 Modern Dental Homoeo Ayurveda Siddha 1000 medicine UG 0 Seats 2900 166 250 900 50 1986 1995 2004 2015

99 Child Mortality Rate 100 Maternal Mortality Rate 101 National Health Profile 2015, Central Bureau of Health Intelligence © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Source: Ecostat – Health report, KPMG analysis, Kerala Medical Education State’s average annual expenditure on health is about INR25, 000 crore which is ~5%102 of State budget (2013). Total bed strength is 1, 00,687. Bed density in the state is in accordance with WHO standards of 3.6 per 1000 population. The average population served per bed is 9183. The private sector contributed to 78% of hospital beds. The state has the presence of large multispecialty hospitals. Medical Trust Hospital has 759 beds and KIMS has 650 beds. Government of Kerala launched e-Health project to build an Integrated Healthcare Cloud which will also be shared by the private healthcare institutions and practitioners in order to build single data repository of citizen health record. Health care services in Kerala is known to provide “International standard” treatments at “affordable prices”. Presently, the most preferred medical tourism destinations are Chennai, Mumbai, AP and NCR. Government & private sector are working in tandem to promote medical tourism in the state. Growth in medical tourism is expected to drive state-of-the art heath infrastructure in the state. Kerala has been synonymous with Wellness & Ayurveda and has the potential to attract medical value travellers.

2. Healthcare – Medical Insurance

Potential % contribution CAGR of Total India Market CAGR Districts to GSDP Exports

INR 23,436 Cr - ~0.31%103 All Districts -

General Insurance Density (INR)

1600 2006-07 2010-11 2012-13 1397.4 1400 1199.9 1200 1135.4 975 1000 923.7 836.7 769 800.2 800 709.2 689.1 651.8 624 641.5 596.8 559.6 600

400

200

0 Kerala Tamil Nadu Karnataka Andhra Pradesh Maharashtra

Penetration 1.16 0.58 0.73 0.63 0.84

102 Department of Health Services, Govt of Kerala, KPMG analysis 103 Penetration is % contribution GDP, 27% is the contribution of health to general insurance, IBEF Insurance market report, August 2015 © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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India details FY 15 Unit

Non-Life Insurance market size 14 USD Bn

USD to INR 61.5 INR

Non-Life Insurance market size 861 BN INR

Medical Insurance market share 27%

Medical Insurance market Size 23436 INR

Health Insurance penetration in India is 0.7%104. Among the total general insurance market, health insurance has got share of 27.8%105. Private sector players contribute 50% of total revenue generated in the industry.

Rashtriya Swasthya Bima Yojana is the Comprehensive Health Insurance Scheme of Kerala106. There are 4.13 Crores active smart cards users. Under the scheme, United India Insurance Company Ltd provides insurance at all 14 districts, which includes, 140 govt. hospitals and 165 private hospitals. Kerala’s percentage contribution to national claims increased by 3%, comparatively less than the other states under the RSBY scheme. However, there was an increase of 13.86% (from 76,751 claims in 2012- 13 to 87,390 claims in 2013-14) within Kerala. There are 132 insurance brokers in the state.

Key players include Star Health Insurance, Max Bupa, Reliance General Insurance, ICICI Lombard, Bajaj Allianz, Oriental Insurance, United India Insurance, New India Assurance, National Insurance.

3. Healthcare – Medical Equipment

Segmentation of Private Equity Investments in Health Care in India, 2015

60% 49% 50%

40% $ 85 million (of the total $ 1,584 million) 30% 18% 20% 15% 10% 10% 5% 1% 1% 0% 1 Pharma Hospitals Diagnostics Devices Biotech Wellness Others

104 Performance of Insurance Industry in India: A Critical Analysis, 2015, IJMSER, 105 IBEF report 2013 106 Indiastat, Arogya Keralam © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Source: KPMG report on India Healthcare start-ups

Indian Medical Equipment & Devices Market – USD 4.4 Bn

Medical Disposables and Supplies 19%

Medical & Diagnostic Medical Implant Equipment 25% 56%

Source: KPMG report on Indian Health sector

Per capita spending on medical devices (in $) 50 42 40 India has the 30 lowest at $3 21 20 7 10 3 0 Russia Brazil China India

Kerala has fairly large number of small/medium scale medical product manufacturing companies107. The Government has introduced various initiatives to address the challenges of medical devices industry. It is a largely unregulated market with many local players. These include

• 100% FDI in medical devices • Draft Drugs & Cosmetics Amendments Bill (2015) • Proposal to introduce Medical Devices Regulation Bill for maintaining national system of controls for medical devices

Medical devices industry in India is predominantly import driven accounting for over 65% of the total market sector. Imports and exports of medical devices saw growth rate of more than 10% annually (2011 to 2014 period). During the period April 2000 to March 2016, medical and surgical appliances received $ 1,097108 million (0.4% of total FDI in India. (Total FDI being $ 288,634 million). Medical

107 http://dir.indiamart.com/kochi/medical-equipment.html 108 FDI, DIPP Govt. of India © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Devices and Equipment Industry is growing at rate of 15%, which is much faster than the 10% growth rate of the entire Health Care sector.

4. IT/ITES

% Key Potential CAGR of Revenues CAGR contribution Investments Districts Total to GSDP Exports

Thiruvananthapuram, ~INR INR 7,000 USD 125 ~25%109 9-10%110 Ernakulam, 12,000 Cr Cr111 Mn112 Kozhikode, Thrissur

Technopark 47100 2010 2015

28000

10100 3850 4900 2040 200 355

Turnover (Including Investment Companies Employees Export Turnover)

CAGR 27% 24% 15% 14%

Infopark Cyber Park

3150 4 2000 0.981 237 0.254

Turnover Investment Companies Turnover Investment Companies (Including (Including Export Export Turnover) Turnover)

109 CAGR of Technopark (2011-15); 110 GDP Quick Estimates 2014-15 KPMG Analysis - Tourism & IT sector contributes maximum to Service Sector. Service sector contribution to GDP – 63%, 10-12% for Tourism, 13% for Other services 111 Economic Review 2015, Government of Kerala has provided an amount of ₹374.57 crore during 2015-16 for the development of core IT infrastructure, ITeS, e-governance activities and incentivising investment in the sector 112 2015 Combined exports of Technopark, Infopark and Cyber Park © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Karnataka is the leading state for IT/ITES with 37% share in Software Exports made by registered units through STPI113. Meanwhile, Kerala has emerged as key investment hub due to rapid development of infrastructure, high literacy rate and favourable policies. The growth of software exports is more than double of the national average. The industry is growing at a CAGR of about 25% creating immense opportunities in expanding the IT/ITES business sector. The State has a large employee base with around 75,000 IT professionals working in Thiruvananthapuram, Kochi and other centres. Technopark in Thiruvananthapuram, is one of the largest Technology parks in Asia, and had a 27% CAGR for its turnover for the period 2011-2015. Akshaya Centers had a turnover of INR 32.71 Cr in 2015. KSITL has 131 Companies and 1523 Employees. The key players for this segment are - Kerala State Information Technology Mission (KSITM), Indian Institute for Information Technology and Management – Kerala (IIITM-K), Technopark, Infopark, Cyberpark, Kerala State Information Technology Infrastructure Ltd (KSITIL), International Centre for Free and Open Source Software (ICFOSS), and Kerala Start-up Mission. The top exporters are – Tata Consultancy Services, Infosys, and Wipro.

5. Education & Skill Development

% Key Potential CAGR of Revenues CAGR contribution Investments Districts Total Exports to GSDP `

Deemed University INR 4,20,000 ~27% 3.29%114 Development All Districts - Cr USD 50 Million115

Education Sector - Market Size (INR Crore) 450000 400000 51000 350000 CAGR 79000 300000 K-12 16%

250000 Higher 19000 14% Education 200000 48000

150000 7000 Vocational 29000 28% 100000 Education Market Size MarketSize (INR Crore) 50000 88000 160000 290000 0

K-12 Higher Education Vocational Education

113 STPI – Software Technology Parks of India 114 2005 data (State Profile MHRD) 115 Source: IBEF, Byju’s, an education technology start-up, has raised US$ 50 million from the Chan Zuckerberg Initiative, founded by Facebook founder Mark Zuckerberg, and existing investors Sequoia Capital, Sofina SA, Lightspeed Venture Partners and Times Internet Ltd © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Education Sector Market Size - 2012 Breakup of Manpower 2012-2017 (INR Crore) 19000, Minimally 8% Skilled, Semi- 28% Skilled, 38% 48000, 21% 160000, 71%

Skilled, 34% Source: KPMG Analysis, KPMG Report on Education & Skill Development

In Kerala there is an incremental skilled manpower demand of ~1,500 thousands people across industrial segments. The proportion of incremental supply of minimally skilled manpower is expected to decline from 38% in the 2012-17 period to 32% in the 2018-22 periods. Incremental manpower demand of 193000 during 2017-22 period. The district of Ernakulam, Thiruvananthapuram and Thrissur account for almost 38% of the manpower requirement. The trend of migration is expected to be outward across skill levels. There are ~17,100116 schools in the state till Higher Secondary levels with enrolment of ~60116 Lakhs children. Pradan Mantri Kaushal Vikas Yojana - runs on a total of INR 12,000 crore budget, As of July, 2016 19.73 lakh students were trained. Indian International School market is emerging market and is estimated to be ~INR 2,500 Cr. The growth is driven by increasing awareness on quality education and expat/NRI movement. IB schools have grown at ~14% YoY in last 5 years. For Higher Education, growth driven by Government effort to increase the Higher Education GER. Kerala has around 40 colleges per one lakh population with GER of 27%. There are no large private universities in the state. The estimated enrolment in colleges is 5, 22,231 at the under-graduate level and 63,579 at the post-graduate level. In Kerala, there are 12 State Universities, 241 Engineering colleges, 60 Polytechnic colleges, 83 Management schools and 41 Pharmacy Colleges.

Type of college Private Private Aided Total Private Government Total Un-Aided # 720 196 916 193 1109

Enrolment 265906 215026 480932 92710 573642

Type of Hostel Boys Hostel Girls Hostel Others Total

# 614 1134 34 1782 Intake 69218 143658 2055 214931

116 DISE 2014-15, IB, CIE, Census 2011, AICTE, MHRD, DoTE – Kerala © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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In skill creation, there is a large number of existing Large to Small size players, attracted by a low cost of entry for this segment. (Education and Skill Development Services). Reskilling of 1.2 Mn workforce who have returned from Middle East is a key challenge and a big opportunity for Kerala. For Additional Skill Acquisition Programme, approximately 50,000 Candidates are trained in close to 1,000 institutions. At the Kerala Academy for Skill Excellence 1, 40,000 are trained annually. There is also the Skill Development Institute, ac collaboration of Kerala government and Bharat Petroleum Corporation Limited (BPCL).

6. Beauty & Wellness Industry

% Key Potential CAGR of Revenues CAGR contributio Investments Districts Total n to GSDP Exports

INR 1 lakh 17%117 - - All Districts - Cr.

Market Size of Indian Beauty and Wellness Industry 90000 80000 70000 60000 50000 40000 30000 20000 10000 0 2012 2013 2014 2015 2016 2017 (E)

Counter Sale of Beauty Products Beauty and Wellness Fitness and Slimming Rejuvenation

Source: https://www.statista.com/statistics/550507/indian-market-size-beauty-and-wellness-industry-by-category/

Segments Services Beauty Services and Cosmetic Products Salons & Beauty Centers, Cosmetic Treatments Fitness and Cosmetic Products Fitness & Slimming Centers Nutrition Dietary Supplements, Health food Treatments centers like Ayurveda, Unani, Alternate Therapy Homeopathy

117 http://www.dailypioneer.com/avenues/business-of-beauty.html © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Segments Services Rejuvenation Spas

Salons Day Spa Gym

Average Area (sq. ft.) 1200 - 1500 1200 -1500 4000 - 5000

Average capex (INR 40 - 45 40 - 50 180 - 220 Lakh)

Average revenues per 40 - 60 30 - 40 180 - 200 annum (INR Lakh)

Operating Margin (%) 25 - 30% 30 - 35% 40 - 45%

Payback Period 4 - 5 4.5 - 6.5 2.5 - 3.5 (Years)

The growth drivers for the Beauty & Wellness Industry are – • Increased purchasing power and discretionary expenditures • Favourable demographic age profile • Swelling urban population • Availability of world class products

The challenges faced by the industry are – • Lack of skilled hairstylists • High attrition • Lack of financing and bank funding • Scaling

Differentiators for this industry are – • Increased purchasing power and discretionary expenditures • Favourable demographic age profile • Swelling urban population • Availability of world class products

7. Bakery & Confectionary Industry

% Key Potential CAGR of Market Size CAGR contributio Investments Districts Total n to GSDP Exports

INR 5,000 Cr INR 8% - - All Districts (E) 1,289 Cr

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India’s exports to top 10 countries Quantity in MT Product: Bread, pastry, cakes, biscuits & other bakers118 Value in Mill. US$ Sl No. Importing Country QTY(2014) Value(2014) 1 USA 23,546.32 56.79 2 Canada 4,057.38 9.97 3 United Kingdom 3,371.20 8.65 4 Australia 3,358.87 7.49 5 United Arab Emirates 2,686.00 4.68 6 Singapore 1,410.01 4.14 7 Nepal 2,809.67 2.32 8 Saudi Arabia 655 1.37 9 Oman 564.09 1.18 10 New Zealand 375.33 1.07 Total 42,833.87 97.66

The drivers for the Bakery Industry are: • Changing lifestyles leading to an increased consumption of ready-to-eat bakery products in urban households for lunch and dinner • Rapid urbanization • Increased participation of private sector due to recent investments • Growth in organized retail

118 http://agriexchange.apeda.gov.in/ © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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The growth rate in sales is at 150%. The per capita consumption is still low, with 3 kg of bread per year and 1 kg of biscuits per year being consumed. Bread and biscuits hold 82% of revenue share in bakery products. The key players for this sector are Britannia, Parle, ITC, and QSR like McDonald’s, KFC etc. Kerala’s potential sectors

Ranking Methodology The methodology used to rank the potential sectors categorises the domains into different criteria’s and labels them with appropriate weightage as mentioned in the table below

Category/Criteria Description Weightage

Potential (Basis above) Very High and High Potential Very High weightage summary of findings sectors

• High GSDP Contribution • High Growth Potential Class 1 Criteria High weightage • High MVA/TIVA (wherever applicable)

• Contribution to Employment generation • Aligned to State Class 2 Criteria Medium weightage Government’s focus new growth sectors • Scope for large investments

High GSDP High Growth High MVA High TIVA Contribution Potential

High weightage

Contribution to Aligned to State Scope for large Employment Government’s focus investments generation new growth sectors

Medium weightage

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Potential sectors – Top 20 sectors

Key Sector Sub-sector Potential Potential Districts Rank Criteria

Trade, Hotels Tourism/Hotel/Restau and Very High All districts 1 rants/Tour Operators Restaurants Ernakulum, Healthcare (Service Kozhikode delivery, medical Other Services Very High Thiruvananthapura 2 equipment, m, Insurance - All insurance) districts

Thiruvananthapura Other Services IT & ITES Very High m, Ernakulum 3 Kozhikode, Thrissur

Bakery & Other Services Very High All districts 4 Confectionery

Instant Foods - Alappuzha, Food processing - Thrissur, Palakkad, Manufacturing Instant Foods, Very High Wayanad 5 Oleoresins Oleoresins – Ernakulam, Palakkad

Other Services Skill Development Very High All Districts 6

Manufacturing Gems & Jewellery Very High Thrissur, Kozhikode 7

Financial Non-Banking High All districts 8 Services Financial Services

Transport, Thiruvananthapura Logistics/Transport – Storage & m, Ernakulam, Road, Coastal, Inland, High 9 Communicatio Alappuzha, Air n Kozhikode

Ernakulam, Manufacturing Construction High Thiruvananthapura 10 m

Food processing - Fruits & Vegetables Manufacturing Fruits & Vegetables, High – Kannur, Kollam, 11 Dairy Dairy –

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Key Sector Sub-sector Potential Potential Districts Rank Criteria

Thiruvananthapura m, Palakkad

Wood - Furniture Ernakulam, Manufacturing High 12 Making Malappuram

Kozhikode, Rubber-based - Manufacturing High Malappuram, 13 Footwear Thrissur

Thiruvananthapura Manufacturing Engineering High 14 m, Ernakulam

Agriculture & Idukki, Kozhikode, Exports High 15 Allied Activities Kottayam

Trivandrum, Alleppey, Manufacturing Shipbuilding High 16 Ernakulam, Kozhikode

Other Services Beauty & Wellness High All Districts 17

Other Services Education High All Districts 18

Thiruvananthapura Manufacturing Electronics High m, Ernakulam, 19 Kannur, Palakkad

Transport, Thiruvananthapura Storage & Infotainment High m, Ernakulam, 20 Communicatio Kozhikode n

Potential Sectors – MVA Ranking Sectors and sub-sectors have been ranked based on their market value and the potential districts have been mapped against each.

Sector Sub-sector Potential Potential Districts Ranking

Wood - Furniture Ernakulam, Manufacturing High 1 Making Malappuram

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Sector Sub-sector Potential Potential Districts Ranking

Thiruvananthapuram, Manufacturing Engineering High 2 Ernakulam

Kozhikode, Manufacturing Footwear High 3 Malappuram, Thrissur

Bakery & Manufacturing Very High All districts 4 Confectionery

Manufacturing Gems & Jewellery Very High Thrissur, Kozhikode 5

Thiruvananthapuram, Manufacturing Electronics High Ernakulam, Kannur, 6 Palakkad

Food Processing – Alappuzha, Thrissur, Manufacturing Instant Food Very High 7 Palakkad, Wayanad Products

Food Processing - Manufacturing Fruit & Vegetable High Kannur, Kollam 8 Processing

Potential Sectors – TIVA Ranking Similarly, the ranking exercise has been done to rank the sectors and sub-sectors based on their Trade in Value Added (TiVA), mapping with their potential districts.

Sector Sub-sector Potential Potential Districts Ranking

Manufacturing Gems & Jewellery Very High Thrissur, Kozhikode 1

Thiruvananthapuram, Technical Textile Very High Ernakulam, Thrissur, 2 Textiles/Garments Palakkad, Kozhikode

Kozhikode, Manufacturing Footwear Very High 3 Malappuram, Thrissur

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Sector Sub-sector Potential Potential Districts Ranking

Instant Foods - Food processing - Alappuzha, Thrissur, Manufacturing Instant Foods, Very High Palakkad, Wayanad, 4 Oleoresins 0leoresins - Ernakulam, Palakkad

Bakery & Other Services Very High All districts 5 Confectionery

Manufacturing Wood - Plywood High Ernakulam, Kottayam 6

Agriculture & Allied Exports High All districts 7 Activities

Agriculture & Alappuzha, Kozhikode, Allied Marine Exports Medium 8 Ernakulam, Kollam Activities

Fruits & Vegetables – Food processing - Kannur, Kollam, Dairy – Manufacturing Fruits & Vegetables, High 9 Thiruvananthapuram, Dairy Palakkad

Roadmap – Way forward to achieve Kerala’s sector development aspirations

The industrial environment in the country is broadly changing in favour of new-emerging sectors in high value-added manufacturing aided by the central government’s vision of “Make in India”. Kerala can utilize the immense potential owing to its huge strategic advantages to tap its full potential in industrial development.

Strategic Advantages

Kerala has several strategic enablers to bank on for the long term industrial growth of the State

• Availability of educated human resource • Strategic location | southern tip • Kochi port, one of the largest on the southern Coast of the country • Competitive cost of doing business • Stable political leadership • Industrial Infrastructure being setup

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Opportunities

The State Government intends to harness key enablers stated below to create opportunities for the State in repositioning itself as a development hub and a major destination for investments.

• Claim the position of a leading industrial friendly state • Harness the significant untapped potential in the form of value addition to natural resources, good infrastructure, port advantage • Develop Kerala which is located in the southern coast, as a gateway to tap investments from as well as trade with Middle East Asia

Thrust sectors of Kerala

Wood – Tourism & IT & ITES Electronics Furniture Healthcare Hospitality making

Rubber Food Gems and Bakery & based Processing Jewellery Confectionery products

Make in Kerala Sectors

Processing Kerala Food Brands Processing Light Manufacturing Clusters Healthcare

Urban Infrastructure Nano portfolio Medical Village Service Hub Tourism Parks

Skill Development Logistics State-of-the-art training centers Agriculture cold storage

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Kerala’s 5-point Sector Development Strategy

To achieve key development objectives to bring about a transformation in Kerala’s sectoral development, the state will need undertake a combination of policy, investment promotion, infrastructure, skilling and other interventions to channelize efforts into attaining prominence in the thrust sectors.

1 2 Business- Manufacturin friendly g Clusters Destination

5 3 Expert Skill Brand Kerala Zone

4 Entrepreneu rial Ecosystem

1. Repositioning Kerala to imply a ‘business-friendly’ and ‘investment-attractive’ destination - A review of policies and infrastructure in Kerala suggests that the state has moved ahead in doing the right things for aiding businesses 2. As Kerala has long coastal line, State can focus on building a Port-led manufacturing cluster with internal transport linkages 3. Focusing on a major policy push to build Brand Kerala - Focused promotional activities should be on-boarded for thrust sectors 4. Development of an entrepreneurial ecosystem in the state to promote local enterprises in the industrial and in the technology space 5. Building expert skill development base focusing on multiple sector specific skill zones supported by world-class infrastructure

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Kerala’s 5-point Sector Development Strategy – Focus areas

1. Institutional Framework set-up for Investments • The state should constitute an Implementation Working Group for each sector and for large projects comprising all stakeholders • A time bound action plan has to be then finalized which constitutes the changes in the policy, along with the necessary interventions at each step • Investment facilitation project teams will have to be constituted for investment requests for major and mega projects • Web-based MIS should be established to capture information, data and research relevant to investment promotion and facilitation

2. Creation of Enabling Infrastructure • Continuous improvements in ‘Ease of Doing Business’ procedures to be done through continuous industry interactions, incorporating feedback and simplifying all clearances such that Kerala is ranked among the top 10 states. • In order to attract large-scale enterprises, the state will have to increase the size of the land bank substantially and earmark some pockets for large projects with auto-approvals. • A project monitoring committee can be constituted for tracking the progress of infrastructural developments recommended in the report and those envisaged by the government, especially common utilities required for overall development. • Continual digital communication with citizens, industry and all stakeholders on a frequent basis to highlight the progress of work done by the government.

3. Investor Facilitation • Dedicated sector desks should be set up for Investor Facilitation, especially in target markets • An online tracking mechanism should be established for investor prospecting to help take the association to closure • Focused outreach campaign for top 3 markets for each focus sector to be created • Sector wise communication plan to be developed with the help of state portal and the state department responsible for the sector

4. Focused Project Development • Detailed pre-feasibility profiles for each project have to be prepared before entering the project development phase • Focus on getting one large investment (INR 1000 crore) in each Sector as ‘Anchor Industry’ • 100% digitalization of single window facility with maximum turnaround time of 7 working days. • Fast track land and environment clearances for all investments above INR 100 crore to be monitored to ensure quick turnaround. Facility to be available in the single window clearance facility

5. Kerala – Brand Building

Business development activities • Focused promotional activities should be on-boarded for a every year to customize the existing promotion strategy of the government • Advertising in industry-specific publications with key messages of the focus sectors • Development of marketing collaterals through Fact sheets that elucidate strengths of Kerala

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Sector marketing activities • Adopt a pro-business stance and promote Kerala as the “destination for investment” • More than general investor interest, a more focused approach towards large-ticket investors in a sector is needed • KSIDC should tie up with trade missions, industry bodies for securing strategic partnerships, technology exchange

6. Skill Development • State should invest time and effort in skill enhancement activities which will boost the focus sectors development • In-depth skill requirement assessment to be done to know the market requirement • Tie-ups with industry players for skill building activities and build expert skill zones with high- end world class infrastructure facilities • Invest in R&D facilities to upgrade indigenous manufacturing techniques especially in traditional industries

MSME Cluster Development

A key strategy for enhancing the productivity and competitiveness as well as capacity building of Micro and Small Enterprises and their collectives in the country. The essential characteristics of enterprises in a cluster are as follows:

Similarity or complementarity in the methods of production, quality control and testing, energy consumption, pollution control, etc.

Channels for communication among the members of the cluster

Similar level of technology and marketing strategies/practices

Common challenges and opportunities.

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Objectives

• To ensure sustainable development of MSMEs by addressing common issues related to technology, skills, market access, access to credit/capital etc. • To build capacity of MSMEs for common supportive action through the formation of self-help groups, consortiums, joint ventures, collaborations etc. • To create/upgrade infrastructure facilities in the new/existing industrial areas/clusters of MSMEs. • To create common facility centres for MSMEs. • To deliver the required policy support to the MSME sector through the Government of Kerala’s Industrial Policy.

Key Activities

Diagnostic studies – To analyse business processes within the clusters and propose remedial measures along with a validated action plan.

Soft interventions – To provide technical assistance, capacity building, market development and other related activities for clusters.

Detailed Project Report (DPR) preparation – To prepare technically feasible and financially viable project reports for infrastructure development in new industrial clusters/areas or upgrading the current infrastructure in existing industrial clusters/areas.

Hard interventions – For creation of tangible infrastructure assets as per the requirements of the cluster. E.g.: testing facilities, design centres, training centres, effluent treatment plants, warehouses, sales depots etc.

Infrastructure development – Development of land, provision of utilities (power, water, drainage, sewerage, gas etc.), common facilities etc.

Program Delivery Model

• The MSME development program shall be delivered from MSME Business Facilitation Centres (MBFCs) that will be established in all District Industries Centre in Kerala in a hub and spoke model. • Kerala State Industrial Development Corporation shall serve as the hub of the MBFCs for the development of entrepreneurship and innovation, investment promotion agenda, knowledge management etc. while providing program management and guidance support to the project. • Officers of the respective District Industries Centres shall serve as the spokes of the MBFC to deliver the services of the program and ensure that its benefits are reaching the targeted groups. © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Program Monitoring Agency

• It is recommended that the Government of Kerala creates a Program Monitoring Agency (PMA) that will oversee the design, implementation, and review and impact analysis of the MSME development program. • The PMA shall work in close coordination with KSIDC, related Departments and Agencies of Kerala and the proposed Investment Facilitation Cell envisaged in M/s KPMG’s report on improving the Ease of Doing Business in Kerala.

Role of PMA

1.Provide assistance related to investment, technical knowledge, technology partnership, export, trade partnership, knowledge assistance, project preparation, etc.

2.Develop quarterly and monthly progress reports based on the parameters identified for performance measurement..

3.Plan roadshows in selected District Industries Centres or zones to create awareness of the program and highlight the support provided by the Government to MSMEs in Kerala.

4.Help build relationships with MSME associations to facilitate investments in the state.

5.Help build relationships with angel investors, venture capitalists, impact investors and NRIs/NRKs who may provide early stage seed capital for supporting new MSMEs.

6.Provide assistance in implementing Central Government schemes in the MSME sector.

7.Organise meets with key investors, donors etc. to help bridge the financing gap for new entrepreneurs.

8.Promote business and technical incubation, capacity building, investor facilitation and handholding support.

9.Analyse skill gaps and provide training and capacity building for officers of District Industries Centres.

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G2B and B2B portal for MSMEs

G2B Portal

• Provision for procurement of goods and services exclusively from MSME sector • Boost to growth of MSME sector • Efficient procurement process through prior registration of vendors and rates. • Transparency • Online payment

B2B Portal

• Online marketplace for MSMEs • Visibility and reach for products and services. • Reduced inventory and distribution costs.

Project Profiles Potential project profiles were identified based on findings from sectoral assessment, district profiling, demographic and infrastructure assessment. The key projects identified under thrust sectors are listed below.

Mega projects119

S Project Name Estimated Project Proposed Location No. Cost

1 Electronic Hardware Park INR 1200 Cr Amballur, Cochin

2 Multi-modal Logistics Park INR 1500 Cr Cochin (MMLP)

3 Free Trade Warehousing Zone INR 250 Cr Vizhinjam 4 Port based Cruise Tourism INR 100 Cr Vizhinjam

5 Light Metro- Trivandrum INR 4219 Cr Trivandrum 6 Light Metro - Kozhikode INR 2509 Cr Kozhikode

7 Marina at Allepey INR 100 Cr Allepey 8 Medium Density Fibreboard INR 200 Cr Ernakulam-Perumbavoor area (MDF) Plant

119 Classification Criteria 1. Small (Up to INR 5 Cr) 2. Medium (INR 5-10 Cr) 3. Large (INR 10-100 Cr) 4. Mega (> INR 100 Cr) © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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S Project Name Estimated Project Proposed Location No. Cost

8 Abattoir and modern meat INR 250 Cr Wayanad or Idukki processing unit

10 Air Taxi INR 1100 Cr Trivandrum, Alappuzha, Kottayam, Idukki, Ernakulam, Wayanad and Kasaragod

11 International Exhibition & INR 500 Cr Kakkanad, Cochin Conference Center 12 Cryogenic Warehouse – Cochin INR 300 Cr Puthuvypeen, Cochin Port Port Trust

13 Propylene oxide – Cochin INR 5000 Cr Kochi (BPCL-Kochi Refinery) Refinery

14 PVC manufacturing – Cochin INR 3000 Cr Kochi (BPCL-Kochi Refinery) Refinery

15 Super Absorbent Polymer – INR 900 Cr Kochi (BPCL-Kochi Refinery) Cochin Refinery

16 Elevated Highway INR 15000 Cr Multiple stretches between Trivandrum to Kannur

17 Inland Waterways and Cruise INR 1000 Cr Multiple (Rivers and development backwaters of Kannur and Kasaragod district)

18 Aerotropolis INR 850-1000 Cr Kannur

19 Aquaculture and Seafood Exports INR 10 Cr Vizhinjam Port (excluding land lease costs)

20 Integrated Manufacturing Cluster INR 10000 Cr Cochin to Palakkad (IMC)

21 Petrochemical Park INR 1864 Cr Ambalamugal, Kochi

22 Maritime Cluster INR 3500 Cr Cochin Port (Wellington Island) 23 Small Hydro Projects INR 850 Cr Idukki, Trivandrum, Kannur, (Multiple Projects) Kollam, Palakkad

Electronic Park Sector/Industry – Infrastructure Project Type – Mega Estimated Project Cost – INR 1200 Crores

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Proposed Location – Amballur

Project Description • An Electronics Park is proposed to be set up at an extent of 100 acres of land in Amballur where Kerala State Industrial Development Corporation Ltd (KSIDC) is the nodal agency. • The project aims to promote manufacturing and assembly of electronic hardware and would also include a research and development unit. • The proposed world class park is estimated to draw investment to the tune of INR 650 crore through manufacturing and assembling of electronic equipment ranging from television, refrigerator, washing machine, computer to mobile handsets and by attracting companies in the semiconductor and electronic components sector. • A rainwater harvesting system will also come up in 15 acres at the proposed electronics park at Amballur. It is expected that land acquisition and land development works shall be completed within two years and the Park shall be operational by 2020. • In the first phase, 50 incubation units is planned to be set up. KSIDC envisages implementing the project by PPP mode.

Market Scenario120 The electronics market in India is one of the largest in the world and it is growing and anticipated to reach USD 400 billion by 2022. The market is projected to grow at a CAGR of 24.4 per cent during 2012- 2020. In the current scenario, the Indian manufacturing industry contributes only about 2.2 per cent of the world’s total manufacturing output. This has resulted in India becoming a major importer of electronic materials, components and finished equipment. One of the initiatives expected to bring about a course correction in the area of electronics manufacturing will be the ambitious Electronics Park Project at Amballur in Kerala – one that will help the country keep pace with the growing local demand for electronic goods. The electronics industry in Kerala was valued at INR 670 Crore (USD 135 Mn) in 2012. Green Field Electronics Manufacturing clusters are being setup in Ernakulum. Companies are increasingly spending on R&D and stepping up innovation. There is an increasing penetration of high-end electronics products such as High Definition TVs (HDTVs), LCDs, LEDs, and tablet.

120 http://www.keralacm.gov.in/progress-report/, http://www.thehindu.com/news/cities/Cochin/govt-to-scale-up-amballur-electronic- park/article7510670.ece, Pre-feasibility report March - 2016 Electronic hardware manufacturing cluster at Tirupati, http://environmentclearance.nic.in/writereaddata/FormB/TOR/PFR/18_Mar_2016_145417407LBF95SDWpfr.pdf, http://timesofindia.indiatimes.com/city/Cochin/Rainwater-harvesting-for-Amballur-electronic-park/articleshow/51174671.cms, http://www.constructionopportunities.in/IssueDetailPage?IssueMenuMasterId=3790&ParentMenuId=3790 © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Project Parameters121

Parameter Description

Capacity Under the first phase of the project an Electronic hardware manufacturing /assembling /programming/ testing and software development unit will be set up. Other facilities planned in future would include tool room, PCB/Chip Design/Embedded Technology Training Centre, Incubation and R&D center, Electronic Testing & Development Centre with training facility, Standard design factories etc.

Land KSIDC has identified an extent of 100 acres of land in Amballlur, Mulanthuruthy. 30% of the area is allocated for infrastructure, common amenities and utilities like roads, electrification, water supply scheme etc. and for construction of built up space for industries. The balance area of 70 acres can be leased to entrepreneurs and private developers.

Raw Material Power, Boundary, land development, internal roads, storm water drains, street & Utilities lighting, Water and sewage treatment plant, Waste disposal system, Electrification infrastructure, Warehousing, Training Facility, Conference facility, IT & Telecom infrastructure, Tool room, CAD/CAM centre, Plastic molding, Packaging, Testing facilities ,semiconductor and electronic components

Employment Considering Kerala's standard for working density at green and white industry / Potential service sector, estimated employment shall reach around 25-30 K , including indirect employment

Cost of the Expected project outlay for the project is approximately INR 1200 Crores (~USD project (INR) 185 Mn) Broad cost break-up estimation is provided below: • For 100 acre land a cost around INR 500 Cr is estimated for the land acquisition and infrastructure development. • For interior, landscape and building services including HVAC an investment of ~ INR 700 Cr is estimated (which is likely to be borne by tenants/private investors)

Means of The proposed Debt - Equity ratio is 60:40. Promoter’s contribution of INR 480 Cr Finance and Term Loan/Borrowings/Investments in tune of INR 720 Cr. Investors can avail various policy initiatives and support provided by the Government include: • 100 per cent FDI allowed in the electronics hardware manufacturing sector

121 http://www.india-opportunities.es/archivos/publicaciones/Electronics-january-2016.pdf , https://www.ibef.org/download/Electronics-June- 2017.pdf, http://www.thehindu.com/news/cities/Cochin/amballur-electronics-park-to-generate-5000-jobs/article8291519.ece, http://meity.gov.in/writereaddata/files/tender_upload/DPR%20Format%282%29.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Parameter Description

• Modified Special Incentive Package Scheme(M-SIPS) provides capex subsidy of 20-25 per cent for units engaged in electronics manufacturing • As per Make in India Initiative, Electronic Development Fund Policy has been approved which would rationalize an inverted duty structure • Electronic Hardware Technology Park (EHTP) Schemes • Administrative sanction of INR 125 crore granted by the State government

Expected The government hopes to generate business of INR 1,000 crore from the Sales Turnover electronic industries that would come up there. The Indian electronics and hardware industry is expected to reach USD 110-130 billion by 2018. By capturing 0.5% share the proposed park would generate revenue in tune of INR 3000 Cr by 2020.

Competitive Landscape In India, the domestic manufacturing capacity is less than 45 per cent of the consumption, exposing the huge gap in the demand and supply situation. The free trade agreements signed with various countries has made it mandatory to ensure rapid growth of domestic manufacture of these goods, a major chunk of which are imported from China. In March 2017, Xiaomi announced its 2nd manufacturing plant along with Taiwan based company Foxconn, in Andhra Pradesh. This will help create employment in 100 nearby villages for at least 5,000 people. High production is majorly contributed by accelerating demand for advanced TVs, mobile phones, computers & defence related electronic equipment's during FY07 to FY15. The National Manufacturing Policy of GoI and other export promotion policies specializes firms in production activities and- results for global competition. To be competitive at international level large size electronic hardware technology parks with high class infrastructure is a need for the state to flourish. In Kerala Ernakulam, Kannur and Thiruvananthapuram are key districts with electronics manufacturing clusters. Key Players: Few key players in Kerala are KELTRON, OEN India Limited, CII Guardian International, KINFRA Electronic Manufacturing Cluster (EMC), TELK, Maker Village Kochi, CDAC, BPL, SFO Technologies etc.

Conclusion The ambitious electronic park project being planned to be developed at Amballur in Kerala is soon expected to uplift the region into an attractive manufacturing destination. The Amballur initiative focuses on encashing on the booming market in India for electronic products which are being utilized in IT, industrial, manufacturing and infrastructure activities. The project which involves development of the first-of-its-kind facility in the state is being envisaged as an electronic hub to promote manufacturing and assembly of hardware, as well as to support the development of qualitative infrastructure. The electronic hub proposed at Cochin is expected to promote electronic hardware manufacturing and assembling units, R&D centres and supporting infrastructure. The project is fully in line with the National Manufacturing Policy of the Government of India for promoting more manufacturing industries in the country for economic growth and employment generation and hopes to generate business of INR 1,000 crore from the electronic industries that would come up there. The

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Study on Investment Potential in Kerala proposed world class park is expected to draw investments in the basic infrastructure development and through manufacturers and assemblers of electronic equipment, computer to mobile handsets and by attracting companies in the semiconductor and electronic components sector.

Multi-modal Logistics Park

Sector/Industry – Infrastructure Project Type – Mega Estimated Project Cost – INR 1500 Cr Proposed Location – Cochin

Project Description122 • A Multi-modal logistic park (MMLP) including Free trade warehousing zone is proposed to be set up at Cochin in the vicinity of Cochin Port. The Multi-modal logistics park is an enhanced form of a logistics park with various value-added services rendered through rail, road, air and sea modes of transport. Cochin Port Trust intends to establish this project in conjunction with the existing port facilities and services under the Logistics Efficiency Enhancement Programme (LEEP) of the Ministry of Road Transport and Highways (MORTH). Under LEEP, there are also plans to construct Inter-Modal Stations which integrate various transportation modes like rail, road, mass rapid transit system, bus rapid transit (BRT), auto-rickshaw, taxi and private vehicles. Cochin port is the most potential location for multi-modal transportation corridor due to its proximity to National Highway, Rail, International Airport and national/inland waterway connectivity. • The objective of this project is to provide efficient integrated logistics services with dedicated areas in the MMLP which would enable freight aggregation, distribution and multi-modal freight movement by providing services such as Warehouse, Cold Storage, and other value- added services. The MMLP is poised to address the issues of unfavourable modal mix, inefficient fleet mix and under-developed material handing infrastructure. The proposed MMLP is composed of following sub-projects: 1. General Warehouse 2. Cold Storage 3. Container Freight Station (CFS) • In addition to these, a Free Trade Warehousing Zones (FTWZ) is also proposed to be set up in juncture with the MMLP. FTWZ is a special category of Special Economic Zones that are governed by the provisions of SEZ Act and Rules. They are Integrated Zones used as international trading hubs and designated as deemed foreign territory. The FTWZs that form part of the Logistics Parks would improve the logistics infrastructure of the state and facilitate and promote cross-border and international trade. The primary intent of FTWZ is to attract industries catering to Storage, Handling, Transportation, Documentation, Tagging, Packing,

122 http://pib.nic.in/newsite/PrintRelease.aspx?relid=153623, http://pib.nic.in/newsite/PrintRelease.aspx?relid=159271; http://www.thehindu.com/todays-paper/tp-national/tp-kerala/Multimodal-logistics-park-in-Cochin/article14554608.ece © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Labelling, Palletisation, Quality Assurance, Repair & maintenance, Refurbishment, etc., of goods/ cargo will be ideal for locating in the Parks. • Advantages of the proposed Multimodal Logistics Parks & FTWZ include reduction in transport costs by 10 per cent, reduction in CO2 emissions by 12 per cent, and reduction in freight vehicles by 20 per cent.

Market Scenario123

Cochin Port Trust has achieved the highest growth in operating surplus and third highest growth in cargo traffic among the major ports in 2016-17. The Cochin Port Trust has registered an operating profit of ₹127.72 crore during 2016-17 recording a growth of 80 per cent YoY.

FTWZ will have the benefits of a free zone like duty deferment which meant duties on the imported goods stocked there need to be paid only when they are transported out of the zone, after resale. This facility will be of immense advantage for industries based on goods requiring longer storage time. FTWZ can cater to various industries such as seafood, tea and coffee, cashew, spices, electrical and electronics, food and beverages, high value products such as gems and jewellery, ship building and repairs, construction related products as well as furniture

The Cochin Port has been handling around 16 million metric tonnes (MMT) per year of bulk cargo during 2014-2016 period. Again, Cochin Port has been handling approximately 4 lakhs containers every year in TEU terms. Container traffic saw a CAGR of 6 per cent during 2012-16 period. Cochin Port is leveraging its strategic location at the cross roads of trade between East and West to establish the first ICTT of India.

The terminal will meet the demand of a convenient pivotal point for consolidating and distributing regional cargo. ICTT has registered a whopping growth of 17.5 per cent in total traffic handled in 2016, hence the container capacity is slated to increase in a phased manner up to 30 lakhs TEUs/year. Connectivity for all mainline carriers on the East-West shipping routes and regular scheduled train services to Inland Container Depots (ICDs) located in Irugur (Coimbatore) and Whitefield (Bengaluru) are catalysts for the impressive growth.

Cochin Port is also attracting various new businesses through coastal shipping mode with the arrival of the first Ro-Ro car ship in 2016. This ship connects the automobile production hubs in Tamil Nadu (east coast) and Gujarat and Haryana (west coast). Huge car carrier trucks plying on the congested roads dominate the present mode of movement of automobiles for internal consumption in the country. Therefore, the potential coastal transport market segment could be strong; 50 ship calls a year with 1,000 cars per call will be required if 30 per cent of the Kerala market shifts to the coastal transport mode.

The Ministry of Shipping has identified fourteen Coastal Economic Zones (CEZ) along the coastline of the country under National Perspective Plan (NPP) of Sagarmala Programme. The CEZ are spatial

123 http://pib.nic.in/newsite/PrintRelease.aspx?relid=159271, http://www.thehindubusinessline.com/news/awards-for-cochinport/article9709225.ece , http://www.containersindia.in/pdf/INDIAN%20CONTAINER%20MARKET%20REPORT-2016.pdf, http://www.thehindubusinessline.com/economy/logistics/cochin-port-attracts-new-business-through-coastal-shipping/article9154382.ece , http://pib.nic.in/newsite/PrintRelease.aspx?relid=155130 , http://timesofindia.indiatimes.com/city/Cochin/Cochin-Port-invites-expression-of- interest-for-warehousing-zone/articleshow/10429871.cms

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Study on Investment Potential in Kerala economic regions spread over multiple coastal districts with strong port linkage. Within each CEZ, there could be multiple industrial clusters that could contain industrial units with requisite support infrastructure. Sagarmala project aims to invest INR 70,000 crore in facilitating economic growth by enhancing coastal shipping of goods. Project Parameters124

Parameter Description

• Warehouse Capacity: 7,00,000 Cu. Ft (First Phase) Capacity • Cold Storage Capacity: 30000 Sq. Ft with capacity of ~80000 tonnes per annum (First Phase) • CFS Capacity: Installed capacity to handle 100 Containers per day (36000/ year) • FTWZ: 100000 Sq. m The cargo and container handling capacity is based on space availability, capacity of the handling equipment's and projected Container traffic at Cochin Total land Area 100 Acres (available with Cochin Port Trust in vicinity of Land International Container Trans-shipment Terminal, Vallarpadam) • 25 per cent of land area will be utilized for ware housing of general goods • 20 per cent will be utilized for cold storage • 30 per cent will be utilized for CFS • 25 per cent will be utilized for FTWZ The proposed land for the project is in close proximity to railway station, airport, National Highway and city premises.

The main items required for the ware house and cold storage are Fork Lifts etc. Raw Material For the CFS facility, two numbers of Reach Stackers having a capacity to lift 45 & Utilities tons and stack 1+4 Containers are envisage. Using this, laden Containers can be handled easily. Three numbers of forklifts are proposed for handling empty Container. Power requirement is estimated at 1000 KVA

Direct - 60 Employment Loading/Unloading & Security - 125 Potential

The total cost estimated for setting up the Multimodal Logistics Park & FTWZ in Cost of the Cochin will be approximately INR 1500 Crore (~USD 230 Mn). The costs for project (INR) developing the FTWZ in 25 acres land will come to nearly INR 250 Cr. The breakup of costs under major heads are as follows: The estimated cost for first phase of the project ~ INR 80 Cr. • Land 190 • Site Development 75 • Infrastructure 750 • Utilities 35 • Misc. Fixed Assets 130

124 http://www.cochinport.gov.in/index.php?opt=projects&sub=20&id=3&tab=1 © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Parameter Description

• Preliminary & Preoperative Expenses 100 • Others (Expansion, Contingency, Deposits etc.) 180 • Total 1500 Cr

Means of Promoters contribution – INR 600 Cr and Term Loan/Private investment in tune Finance of INR 900 Cr SEZ units (FTWZ) can have external commercial borrowing up to USD 500 million in a year without any maturity restriction through recognized banking channels.

Expected The expected sales turnover (Revenue) for the project is in tune of ~20 Cr after Sales Turnover completion of first phase of the project. Industries catering to Storage, Handling, Transportation, Documentation, Tagging, Packing, Labelling, Palletisation, Quality Assurance, Repair & maintenance, Refurbishment, etc., of goods/ cargo will be ideal for locating in the Park.

Competitive Landscape125 Vizag multi-modal logistics park was inaugurated in February 2017 due to which movement of container cargo and other cargo from the port city will get a tremendous boost with the commencement of commercial operations at the multi-modal logistics park built at Sheelanagar beside the National Highway by the Container Corporation of India (Concor) Government plans to develop 35 Multimodal Logistics Parks (MMLPs) in the country. Cochin is one of the identified locations and with the upcoming MMLP in Cochin, which faces competition from Colombo, Singapore etc. with world-class infrastructure facilities can lead to cost advantages and attract cargo routed to neighbouring ports Key Players: There are several private logistics service providers, cold storage, and warehouse service providers in the vicinity of Cochin port trust. The proposed MMLP shall act as an incentive for all existing players to be part of the larger ecosystem.

Conclusion The project shall be supported by the government for land acquisition. Different operation models like profit sharing, fixed monthly lease rent system etc. with land owners can be worked out. Central Government assistance through the Logistic Efficiency Enhancement Programme (LEEP) of Ministry of Road Transport & Highways (MoRTH), will also be explored. The LEEP aims at enhancing freight transportation across the country through infrastructure, procedural and IT interventions. The government is also working to formulate a uniform policy for the development of MMLPs. 100 per cent FDI is permitted to develop FTWZ. Several countries are expressing their interest in the upcoming FTWZ in order to foster their trade relations with India as they can import goods duty-free and

125 http://www.cochinport.gov.in/index.php?opt=projects&sub=20&id=3&tab=1, http://www.dailypioneer.com/business-and- finance/government-to-construct-35-multimodal-logistics-parks-gadkari.html © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Study on Investment Potential in Kerala warehouse it in the FTWZ, they can re-export these goods without paying duty. Cochin is one of the few ports that surpassed the Shipping Ministry's traffic target by handling 25.01 million tonnes in the just concluded fiscal year and is an ideal location for the MLP and FTWZ.

Free Trade Warehousing Zone (FTWZ)

Sector/Industry – Infrastructure Project Type – Large Estimated Project Cost – INR 250 Cr Proposed Location – Vizhinjam Port

Project Description • The proposed Free Trade Warehousing Zone in Vizhinjam will be developed in lines of a special economic zone, wherein the area under development would be classified as a deemed foreign territory and the unit’s operating within the zone would be given special status and provided various fiscal and non-fiscal benefits. FTWZ will be governed by the SEZ Act 2005 and SEZ Rules. The activities permitted within the zone would be limited to packing, de-stuffing, splitting, and other activities related to storage and logistics. • Proposed FTWZ is a 100000 sq. m facility, which will include customized warehouses for food products, electronics, chemicals, textiles etc. along with cold storage facility, controlled humidity warehouses, enhanced transportation facilities and a well-equipped IT-integrated cargo management system

Market Scenario126 • Cost of importing/exporting from India is relatively higher than in other developed countries, primarily due to inefficiencies in the logistics chain, lack of deep draft port facilities and capacity constrained hinterland cargo evacuation system. Vizhinjam is strategically located along south of the Kerala coast and is only 10 nautical miles away from the East-West world shipping corridor. The port is being developed to provide world class infrastructure for efficient services and to cater for future development potential. • The average growth in import-export traffic in the region has been about 13% per annum in the last 11 years. • Indian exporters need not rely on foreign ports for trans-shipment of cargo as Vizhinjam port offers savings in annual expenditure of at least Rs.1000 Crore due to which huge opportunity exists w.r.t export and import of goods. The port location is ideal to tap the potential of development of a deepwater international container port in India that can handle the largest container vessels serving the East-West shipping route which can use facilities of the proposed FTWZ • In line with the phase-I development of Vizhinjam port, the container terminal capacity for handling the projected traffic is 10,00,000 TEU at 70% berth utilization. However, it is envisaged that the port will have state-of-art equipment to handle the projected container traffic and

126 http://www.vizhinjamport.in/download/Feasibility-Report.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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according to global productivity standards, such ports can achieve a maximum berth utilization rate of up to 80%. Therefore in Phase-1 development of Vizhinjam Port is expected to cater to a maximum container traffic up to 12,50,000 TEU by 2030

Project Parameters127

Parameter Description

100000 sq. m facility with provision for packaging, re-packaging, labelling, re- Capacity labelling, strapping, refurbishment, crating, carbonisation, fumigation, choking, lashing, tagging, shrink / stretch / bubble wrapping, palletisation, bagging, re- bagging, quality assurance, kitting, de-kitting, sorting assorting, making combination pack, consolidation, agglomeration, washing, cleaning, processing, repairs & maintenance, CKD/SKD assembly, bottling, blending, cutting, polishing, painting, coating, filming, re-sizing, splitting, threading etc. 25 acres land is to be earmarked in proximity to Vizhinjam port. Land

Basic Infrastructure, Counterbalance forklifts, Stackers, Cranes & Grabs, Push Raw Material carts, Shelves, storage bins, electronic scales, cold storage freezers and cooler & Utilities facilities, break bulk, containerized and dry cargo storage facility.

The zone is expected to provide 200-300 direct and indirect jobs Employment Potential

The total project cost is estimated at 250 Crores (USD 40 Mn) which will include Cost of the storage facility and value-added services project (INR)

Units in FTWZ SEZ type can explore external commercial borrowing options up Means of to USD 500 million in a year without any maturity restriction through recognized Finance banking channels.

Competitive Landscape • Vizhinjam port’s immediate competition would be with Cochin (Vallarpadam) and VOC (Tuticorin) for its gateway containerized cargo; however, the port would primarily be competing with Colombo in Sri Lanka for container transhipment traffic. Key Players Cochin Vallarpadam ICTT, Tuticorin port, Colombo port

127 http://genexlogistics.in/free-trade-warehousing-zone-genesis-concept-objectives-and-envisaged-benefits/, http://www.epces.in/uploads/files/file/FAQ.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Conclusion128 • Free Trade Warehousing Zones are envisaged to be essential logistics infrastructure to facilitate export-import trade and to root out inefficiencies associated with movement and valued addition of cargo. FTWZ projects are usually developed through a PPP model. Under PPP mode, it can be developed either by ‘Build, Own, Operate and Maintain (BOOM) model or Joint Venture. It is proposed that the government shall support developer for land acquisition and implementation of the project. • FTWZs are entitled to many benefits such as Income tax exemption on all profits generated through re-exports activity through the FTWZ, Hassle-free re-export process by routing cargo through FTWZ integrated with CFS services, 100% deduction of profits derived from such business for 10 consecutive assessment years out of 15 years beginning from the year the SEZ was notified by the central government. The Government of India’s Foreign Trade Policy (2015- 2020) aims to increase the value of trade to USD 900 billion by 2020, by aligning with Government’s various initiatives to promote exports growth. • Due to growth across diversified industries with marked entry of foreign players leading to investment in logistic/warehouse such as pharma, automobile, retail, agriculture, FMCG etc. FTWZ in Vizhinjam would attract many leading players to utilize its facilities

Port based Cruise Tourism Sector/Industry – Tourism Project Type – Large Estimated Project Cost – INR 100 Crores Proposed Location – Vizhinjam Port

Project Description In the existing master plan of upcoming Vizhinjam port developed by Adani Ports and SEZ, there is a provision for a cruise terminal which can drive demand for hospitality services in the area thereby contributing to the overall economic growth of the state by boosting tourism. The proposed new cruise terminal which is planned to be developed in the next phase of development is for cruises with 3000 passenger capacity equipped with facilities for international immigration standard operating procedures. This project puts forth opportunities for offering various cruise operators, cruise and passenger services at Vizhinjam Port, as a Port of Call.

Market Scenario129 • Global cruise market witnessed a CAGR of 7% in growth of passengers during the period 1990- 2015 with more than 22.2 million passengers in 2015.Growth in cruise tourism is expected to continue, reaching more than 25.3 million passengers in 2019.The passenger capacity of the

128 http://www.vizhinjamport.in/download/Feasibility-Report.pdf, Vibrant Gujarat 2017 report on Ports, Port Services and Logistics 129 http://timesofindia.indiatimes.com/city/Cochin/City-to-get-new-cruise-terminal/articleshow/54772099.cms , http://cochinport.gov.in/index.php?opt=cruisedestination, http://www.livemint.com/Politics/gFMW1phDvWa04KMhTdriKI/India-allows-foreign- cruise-ships-to-operate-along-the-coast.html, http://cochinport.gov.in/index.php?opt=cruisedestination , http://www.cruisemapper.com/ports/cochin-port-228 © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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global cruise industry is more than 466,000 beds according to the Cruise Lines International Association • India is ranked as the 9th most popular tourist destinations in the world and is a preferred cruise destination. Kerala’s revenue from tourism (direct & indirect) during 2015 was INR 26,689 Crore which saw increase of 7.25 % over 2014. In Kerala, Cochin port has a dedicated cruise terminal which gets call from major cruise lines like Cunard Lines, Royal Caribbean Lines, Aida Cruises, Costa Cruises etc. every year • Government of India has relaxed cabotage restrictions for cruise vessels so that it is possible to transport Indians from one Indian Port to another on foreign cruise vessels transiting through India. This was in view of boosting cruise tourism in the country. As part of its cruise tourism development initiatives, Government of India has already identified 6 ports to be developed as ‘World class cruise terminals’ and to be promoted as ‘Integrated Indian Cruise Circuit’ – Mumbai, Goa, Mangalore, Cochin, Tuticorin and Chennai • Vizhinjam Port holds great potential to fit into the Indian Cruise Circuit as a Port of Call due to proximity to renowned beaches such as Kovalam Beach (less than 5 Km away) & Varkala Beach (55 Km away) and other popular tourist attractions like Ayurveda rejuvenation therapies, Sea foods, Backwaters, Hill stations (Ponmudi) etc. • An average international cruise passenger roughly spends USD 500 during a ship visit to Cochin. With the onset of cruise terminal infrastructure which is technologically advanced and in line with international standards, will lead into increased tourist inflow to the state.

Project Parameters130

Parameter Description

Capacity Terminal and ancillary facilities to handle 3,000 passenger capacity cruise ships cum multipurpose cargo vessels. Various opportunities in line with the ancillary services required for passengers and cruise are: Tour Operator and Tourist Information center along with a help desk manned round the clock to cater to the passenger needs, inquiries and distribute city maps, brochures on tourist attractions, heritage sites etc. • Shops selling souvenir, gifts, jewellery, ethnic wear etc. • Restaurant • Hotel • Foreign exchange counters • Communication Center • Entry/Exit Clearance counters • Parking facilities

Land Requisite land is already earmarked in the existing master plan for development of Vizhinjam port by Adani ports & SEZ. Land lease possibilities can be explored with Adani Ports & SEZ.

130 https://incredibleindia.org/lang/images/docs/trade-pdf/surveys-and-studies/study-reports/Cruise%20Tourism%20- %20Potential%20&%20Strategy%20Study.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Employment Such a tourism facility can attract nearly 250 direct and indirect jobs. Potential

The total cost for the project is estimated at ~ INR 100 Cr (USD 15 Mn) Cost of the project (INR)

Debt-Equity ratio of 70:30 is proposed for the project. Means of Finance

Competitive Landscape131 • Cochin Port has a dedicated cruise terminal which has a modern world class fully air- conditioned Cruise passenger facilitation centre “SAMUDRIKA”, where all statutory clearances like Customs and Immigration for cruise passengers are given under single roof. • For the first time in India, Indians can look forward to embarking on a home port cruiseliner from Mumbai and going to enchanting destinations within India such as Goa and Kerala enroute to popular foreign destinations like Maldives and Colombo. Key Players Cochin Port, Colombo Port

Conclusion Cruise tourism is as a major business prospect for Vizhinjam. A well-equipped cruise terminal with extensive docking facilities, well-developed transportation network will attract lot of well-equipped in- terminal service providers and support facilities. Vizhinjam Port holds great potential to fit into the Indian Cruise Circuit as a Port of Call, which opens up huge opportunity for cruise & passenger based service providers. Several lease and other operating models can be worked along with Adani Ports & SEZ in the next phase of development of Vizhinjam port which has a provision for cruise terminal. Government of India has launched several cruise tourism development initiatives to boost investor sentiment in the sector.

Light Metro – Thiruvananthapuram Sector/Industry – Urban Infrastructure Project Type – Mega Estimated Project Cost – INR 4219 Crores Proposed Location – Thiruvananthapuram

131 http://timesofindia.indiatimes.com/city/delhi/Costa-Cruises-enters-India-to-begin-homeport-cruises-from Mumbai/articleshow/53280863.cms © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Project Description • Thiruvananthapuram Metro Rail is a proposed light metro rail project in the city of Thiruvananthapuram which spans across 19 stations with a route length of 21.82 km and the estimated completion period is 5 years • The proposed route would cover 19 stations namely Technocity, Pallipuram, Kaniyapuram, Kazhakoottam Jn., Kazhakoottam, Karyavattom, Gurumandiram, Pangappara, Sreekaryam, Pongumoodu, Ulloor, Kesavadasapuram, Pattom, Plamoodu, Palayam, Secretariat, Thampanoor, Killipalam, Karamana • Kerala Rapid Transit Corporation Limited (KRTL) is a Special Purpose Vehicle (SPV) of the Government of Kerala, set up for the implementation and subsequent operation and maintenance of the Metro Rail System in Thiruvananthapuram Market Scenario132 • Thiruvananthapuram is the second largest city in Kerala after Cochin. The city does not have any public transport system other than Bus services. Due to high land cost and extreme reluctance of the public to part with their lands, widening of roads to accommodate Mass Transit System is almost unthinkable. Therefore, an elevated or underground guided public transport system is unavoidable and the only solution to meet the traffic requirements of the city • The roads in the city are narrow with only 15 Km of 4 lane roads and are congested all the time. The average city speed during peak hour is only about 20 Km/hr. All the city buses are also over crowded especially during peak hours. It is estimated that 36,73,50 people would get the benefits of the new transportation system by 2031 • With the projected person per hour per direction (PHPDT) requirement of 11296 in 2021 and about 17000 in the year 2041 for Thiruvananthapuram, it is clear that ordinary bus systems or a Bus Rapid Transit (BRT) system would not be able to meet the traffic demands of the city.

Project Parameters

Parameter Description

Capacity of 3 coach Capacity • 600 passengers with 6 persons/ sq. m • 750 passengers with 8 persons/ sq. m

• Total requirement: 11.96 hectares Land • Government: 8.92 hectares and Private: 3.04 hectares • 19.54 Acres of Government land at Pallippuram, Thiruvananthapuram assigned to KRTL for construction of depot/ yard for the Light Metro Rail project

132 Detailed Project Report for Thiruvananthapuram Light Metro Rail Project, October 2014, DMRC

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Project Inspection and workshop facilities, stabling lines in depot, test track, power Facilities supply, water supply, sewerage and drainage works, ancillary workshops, watch towers, parking facility Total power for the corridor is 23.3 MVA

INR 4219 Crores (USD 650 Mn) over a period of 5 years Cost of the project (INR)

Proposed funding model (Debt-Equity Ratio = 60:40) Means of Equity by GoI = 20% Finance • • Equity by GoK = 20% • Debt = 60% (International agencies, national funds, market borrowings etc.)

• The revenue of Thiruvananthapuram Light Metro Rail mainly consists of Expected fare box collection and other incomes from property development, Sales Turnover advertisement, parking etc. Rental income of 83 crores is estimated for 2020-21 • Other revenues from property development and advertisement have been estimated at 10% of the fare box revenues during operations • Economic rate of return has been estimated as 17.99%.

Competitive Landscape • Travel options within the city are limited to bus transport, and other road transport means limiting public transport option to buses alone as the entire district is extensively covered by the operation of buses • Railways are used for commutation within Kazhakootam, Petta and Trivandrum Central Stations. Also, there are limited trains which have stoppage at all 3 stations. Commuters usually use railway lines for intra district travel and opt for autos, taxis and buses for travel apart from private vehicles

Conclusion133 • The main advantage of the Light Metro System is that it can negotiate very sharp curves and steep gradients. The moving dimensions for the Light Metro Trains will not need extensive widening of the Roads and hence large scale demolitions can be avoided. • The project is the initial stage of development and land acquisition process is ongoing. The state government has taken several steps to expedite the acquisition process in order to complete the project within the projected timelines • The huge prospects of the project to build urban infrastructure in the district can further usher economic development of the state at large and makes it a lucrative investment option

133 http://krtl.in/trivandrum.html, DPR for Phase I Kozhikode Light Metro Rail Project, Government of Kerala, Prepared by DMRC © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• Delhi Metro Rail Corporation for the 1st and 2nd phase of the Delhi Metro was entitled to certain Government of India encouragement through duty and tax concessions for the project. The same is expected for the proposed Light Metro projects, at least in the initial stages • Kerala Rapid Transit Corporation Limited (KRTL) proposes to engage private investors/players for implementation of the project

Light Metro - Kozhikode Sector/Industry – Urban Infrastructure Project Type – Mega Estimated Project Cost – INR 2509 Crores Proposed Location – Kozhikode

Project Description • Kozhikode Metro Rail is a proposed light metro rail project in the city of Kozhikode which spans across 14 stations with a route length of 13.33 km and the estimated completion period is 5 years • The proposed route (phase I) would cover 14 stations namely Medical College, Chevayur, Thondayad, Kottuli, New Bus Stand, KSRTC, Mananchira, Palayam, Railway Station, Pushpa, Kallayi, Panniyankara, Vattakkinar, Meenchanda. • Kerala Rapid Transit Corporation Limited (KRTL) is a Special Purpose Vehicle (SPV) of the Government of Kerala, set up for the implementation and subsequent operation and maintenance of the Metro Rail System in Kozhikode

Market Scenario133 • Kozhikode is the third largest city in Kerala after Cochin and Thiruvananthapuram and is part of the second largest city agglomeration in Kerala with a metro population of 20, 30,519 (as per census 2011). • The city does not have any public transport system other than Bus services. It is seen that a number of important highways pass through the city. All other roads in the city are narrow with only 15 km of 4 lane road and they are congested all the time. The average city speed is only about 25 km/hr. All the city buses are also over crowded especially during peak hours.It is estimated that 23, 97,32 people would get the benefits of the new transportation system by 2031. • With the projected person per hour per direction (PHPDT) requirement of 6079 in 2021 and about 12000 in the year 2041 for Kozhikode, it is clear that ordinary bus systems or a Bus Rapid Transit (BRT) system would not be able to meet the traffic demands of the city.

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Project Parameters134

Parameter Description

Capacity of 2 coach: Capacity • 400 passengers with 6 persons/ sq. m • 500 passengers with 8 persons/ sq. m

• Total land requirement is 10.654 Hectares Land • Government Land: 8.554 Hectares; Railway Land: 0.518 Hectares; Private Land: 1.582 Hectares; • 8.28 Hectares of Government land has been assigned to KRTL for the Light Metro Rail Project

Project • Inspection and workshop facilities, stabling lines in depot, test track, Facilities power supply, water supply, sewerage and drainage works, ancillary workshops, watch towers, parking facility

Cost of the • INR 2509 Crores (USD 387 Mn) project (INR)

Proposed funding model (Debt-Equity Ratio = 60:40) Means of Equity by GoI = 20% Finance • • Equity by GoK = 20% • Debt = 60% (International agencies, national funds, market borrowings etc.)

Expected Sales The revenue of Kozhikode metro mainly constitutes of fare box collection and Turnover other incomes from property development, advertisement, parking etc. Rental income of 49 crores is estimated for 2020-21. Economic rate of return has been estimated as 17.39%.

Competitive Landscape • Travel options within the city are limited to bus transport, and other road transport means limiting public transport option to buses alone • Railways are used largely for commuting from Kozhikode to other districts and has very limited role to play for travel within the city

Conclusion • A reliable and safe public transport system is essential for the very survival of the city itself and also to accelerate its economic growth.

134 http://krtl.in/kozhikode.html, DPR for Phase I Kozhikode Light Metro Rail Project, Government of Kerala, Prepared by DMRC © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• The project is planned to be clubbed with Trivandrum metro under single management and procurement to achieve benefits of economies of scale • The project is the initial stage of implementation. The state government has taken several steps to expedite the land acquisition process in order to complete the project within the projected timelines • Delhi Metro Rail Corporation for the 1st and 2nd phase of the Delhi Metro was entitled to certain Government of India encouragement through duty and tax concessions for the project. The same is expected for the proposed Light Metro projects, at least in the initial stages • Kerala Rapid Transit Corporation Limited (KRTL) proposes to engage private investors/players for implementation of the project

Marina at Alappuzha Sector/Industry – Tourism Project Type – Medium Scale Project Estimated Project Cost – INR 100 Crores Proposed Location – Alappuzha District (3500 sq. m. land identified)

Project Description • ‘Marina’ is a sheltered harbour designed primarily for yachts and other small boats for recreational tourism. The facility is required for safe anchorage and parking of small speed boats, pleasure crafts and yachts. The facility provides safe berths, utility supplies, safety & security, and onshore facilities such as restrooms, F&B, provisioning, repair services etc. It’s an infrastructure project for the beach tourism & watersports industry. • A large no of ‘Marina’ projects make multi-billion dollar business in developed nations and now in India people are at the advent stage of practice in terms of exploring water sports like yacht-owning, jet-skis, dinghy sailing, canoeing, pleasure cruises, but these all need infrastructure, and specifically marinas. The project has been conceived at Alappuzha District in Kerala, and would have approximately 2000 Sq. m. of area with provision for additional inland canal expansion up to 1500 Sq. m to accommodate different sized yachts & boats.

Market Scenario135 • Tourism & Hospitality industry in India is expected to grow from USD 147.7 billion in 2005 to USD 418.9 billion in 2025. Approximately 8 Million foreign tourist have arrived in India in 2015 and the footfall is expected to growth at an average rate of 7% CAGR during 2005 – 2025 period. 1 State tourism forecast in Kerala for next 30 years portrays a steady 12% annual growth rate of foreign tourist footfall and 4% for domestic tourist footfall. As per the project feasibility

135 Tourism & hospitality, IBEF Publication, Jan 2017, Feasibility Report Alappuzha Marina DPR, Directorate of Ports, Govt. Of Kerala, July 2012 (http://keralaports.gov.in/currentproject.htm)

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study done in 2012 more than 10500 foreign tourists has engaged to waterside tourism facility specifically leisure boating in Allepey which is accounted as 30-40% of total footfall2 • The marina project is expected to reinforce infrastructure for canal tourism and water sports activities at Allepey with significance in services such as sightseeing of attractions, backwater tours for families and waterside adventure activities for age group of 15-25. Focusing both on foreign and domestic tourist influx the project has potential for development of additional adjoined amusement facilities such as Theme Park, Dolphin Pool, Health Spa and Food Courts. • Based on the market response the project scale may vary from medium to large but cannot expand as a mega project due to existing built up structure surrounding the identified land. As a general practice the project needs to accommodate tourism services from local tour operators in terms of day tours and water sports.

Project Parameters136

Parameter Description

Capacity Marina facility having Large (20 person per craft) Medium (10 person per craft) and small (4 person per craft) sized yachts as well as 2 seater speed boats and water scooters. Approximately 3, 18,000 annual tourist handling capacity only for Marina by 2025. Inclusive of all other facilities the handling capacity shall be doubled as per estimated optimistic scenario.

Land 3500 Sq. m (2000 Sq. m for development of boat shelter and extendable inland canal having 1500 Sq. m canal area) for Marina. Additional 6500 Sq. m area for water park (excluding of area requirement for dolphin pool and other auxiliary developments)

Raw Material Civil building materials, STP setup materials – pumps , water-treatment & Utilities equipment, structural materials, safety equipment, manpower, power and water supply (Locally available) ; Yachts/ Boats and Water-sport equipment ( to be imported or from regionally available suppliers).

Employment Total direct and indirect employment potential for 300 jobs Potential

The total estimated cost for the project is INR 100 Cr (USD 15 Mn) which includes Cost of the basic marina facility development, other landside projects like Theme Park, project (INR) Health spa & Food Court and future expansion with facilities like Dolphin Pool etc.

136 Profitability Index: PI = PV of future cash flows ÷ Capital Investment. Update of DPR, Directorate of Ports, Govt. Of Kerala, July 2012

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70% Debt and 30% Equity, having assumed debt payment period for 10 Years. Means of Equity share between - Govt. of Kerala & Developer > 24% & 76% respectively. Finance

Expected Estimated Internal Rate of Return (IRR) for Marina facility – 13.8 %, for Health Spa Sales Turnover – 25 -26 % and for Dolphin pool – 15 % approximately, Payback period for Marina – 17 Years. Profitability Index * 1.26 for Marina project and combined 2.67. [ Average DSCR 3.96 ] **

Competitive Landscape At present there is no significant infrastructure available at the subject area although National and local tour operators such as Cox and Kings (India) Pvt. Ltd, Aspinwall & Co. Tours Division, SITA (A division of Kuoni Travel (I) P. Ltd), Cruise Lines India, Creek Cruise Cochin, GAC Shipping (India) Pvt. Ltd, Intersight Tours & Travels (P) Ltd, Marvel Tours, Aqua Holidays and several others are sharing the market opportunities. Since such exclusive marina development is first of its kind in the subject region the project has ample opportunity to pioneer in waterside tourism. Apart from certain predicted competition with houseboat services, amusement facilities and other yacht tour programs ‘Marina’ project has a wider opportunity to collaborate with local tour operators and launch and landmark project regionally. Since Marina project is a unique infrastructure facility and can be positioned as extended recreational components including theme park, dolphin pool, amenities and food court, relatively standalone tour programs and existing operators will likely intend to get a larger functional and financial benefit from such facility. Thus it is predictable that the project will promote an inclusive regional tourism service at Allepey rather than facing local competition. Key Players Ocean Blue Marinas | Kochi International Marinas, Kerala Water sports & Sailing Organization: KWSO, Sailing Club House, Wonderla Holidays Private Limited

Conclusion Being famous for the uniqueness of backwater tourism and current trend of rapidly growth of health and wellness tourism in Kerala the ‘Marina’ project at Alappuzha has a promising market setting to achieve socio-economic success. Although such high end tourism facility might be targeted specifically to foreign tourist but according to domestic tourism trend it also has high potential to attract equally large group of regional and national tourists at all water sport and landside amusement facilities. Since the land is already identified by State Government and feasibility study has been done with updated exercise performed in recent years it indicates supportive intension of the tourism department as well as availability of adequate fund. Based on investment prospect it is recommended to implement the Marina project under long term DBFOT (Design, Built, Finance, Operate and Transfer) mode and the state government is keen on developing the project in PPP mode.

Medium Density Fibreboard (MDF) Plant Sector/Industry – Manufacturing Project Type – Mega © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Estimated Project Cost – INR 200 Crores Proposed Location – Ernakulam - Perumbavoor area

Project Description The proposed project is to set up a Medium Density Fiberboard (MDF) Plant at Ernakulam Perumbavoor area. With a capacity of 800 TPA (Tons per Day). MDF is a wood based composite, an engineered wood product made by breaking down hardwood or softwood residuals into wood fibers, often in a defibrator, combining it with wax and a resin binder, and forming panels by applying high temperature and pressure. MDF is dense, flat, and stiff, has no knots and is easily machined. Market Scenario137 • Market size of Indian MDF segment is INR 15 billion (growth at 25% CAGR over the last five years) of which 70% is dominated by a few organized players like Greenply, Mangalam timber, Action, VIR, Shirdi Industries etc. and 30% is accounted by imports. Globally, MDF constitutes ~65% of total panel products compared to ~4% in India. MDF, the engineered wood panel substrate, has been growing at 15-20% CAGR over the last five years, led by increasing awareness and acceptance. It currently accounts for a mere 7% of the wood panel substrate market, while globally it commands a share of over 80%. Going forward, we see strong growth opportunities, led by MDF gradually being preferred over cheap plywood segment and increasing demand for modular furniture. • MDF markets are now more mature, and price competitive, which has driven producers to improve quality and develop new products and markets. MDF has many benefits as it is available in many sizes, has no natural defects and can be easily machined. • Kerala produces 95% of the total supply of rubber wood in India. Economic growth has dramatically increased wood demand in India, and this trend is expected to continue. The Indian market for particle board and plywood is estimated in value terms, at over INR 37 bn. Of the total market, particle board including medium density fiberboard (MDF board) accounts for nearly a quarter of the market. Demand in this sector is driven by readymade modular furniture, modular kitchen, ready-to-move into offices/retail outlets etc. The B2B market of small and large readymade furniture makers accounts for larger pie of the demand.

Project Parameters

Parameter Description

Capacity Medium Density Fiberboard (MDF) 800 TPD(Tons per Day)

137 Report on Wood and Panel Products Sector, Asian Markets Securities Pvt Ltd., January 20, 2016, Webpage: http://centuryveneers.com/files/download/31a2a803a756c4a, accessed: 19 July 2017; Article on Medium Density Fiberboard (MDF), Entrepreneur India, Website: http://www.entrepreneurindia.co/project-and-profile-details/14213, accessed: 19 July 2019; Report on Wood panel sector , India Research Building Materials,13 October 2015, Website: http://www.centuryply.com/files/download/6a2f07fb62d2830, accessed: 20 July 2017

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Parameter Description

Land 15 acres of Land in Ernakulam Perumbavoor area to be identified. In Perumbavoor, the wood is available at cheaper rate and in good quality. Also Rubber wood and Chipped wood material required for the production of MDF is available in plenty in the proposed locations in Ernakulam Perumbavoor area.

Raw Material Wood residuals (tree trunk, branches, chemicals) & Utilities

Employment Potential to provide nearly 500 direct and indirect jobs Potential

Cost of the Estimated total project cost is in tune of INR 200 Cr (USD 30 Mn) project (INR)

Debt-Equity ratio of 70:30 is proposed for the project with promoter equity of INR Means of 60 Cr and private investments/term loans in tune of INR 120 Cr (USD 18 Mn) Finance

Competitive Landscape • Indian states well known for woodwork include Gujarat, Jammu & Kashmir, Punjab, Uttar Pradesh and Kerala. The MDF plant in Kerala has a lot of potential to grow as the demand for housing has consistently grown and is likely to continue in the future. The plywood is expected to face a stiff competition from MDF board as the MDF’s homogeneous structure and uniform properties ensure equal strength in all directions and its dimensional stability in variable atmospheric conditions. However, plywood alone accounts for 78% of the wood panel market in India, the rest comprising engineered panels like MDF and particleboard. The country has sufficient availability of tropical wood, however, in recent years, growing concerns about the environment and the need for conservation of forests have led to reduction in the supply of wood. However, domestically- produced MDF faces competition from imports. Key Players • Few Indian Major Players: Century Plyboards (India) Ltd, Greenply Industries Ltd, Mangalam Timber Products Ltd, Nuchem Ltd, Shirdi Industries Ltd. • Key MDF Manufacturers in Kerala: K-Board, Action Tesa.

Conclusion There is a growing demand for MDF from the real estate sector with boom in Real estate / Commercial / Hospitality / Health care sectors. One of the biggest advantages of using MDF is that it is far more affordable than plywood and can be carved and molded to one's liking.

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Rubber wood and chipped wood material required for the production of MDF is available in plenty in the proposed locations in Ernakulam - Perumbavoor area. Demand in this sector is driven by readymade modular furniture, modular kitchen, ready-to-move into offices/retail outlets etc.

Abattoir and Modern Meat processing unit Sector/Industry – Food Processing Project Type – Mega Estimated Project Cost – INR 250 Crores Proposed Location – Wayanad, Idukki

Project Description • The proposed project is to set up an Abattoir and Modern Meat Processing Unit and Allied Products at Wayanad or Idukki in 400 Acres of land at any of the aforesaid mentioned location. The project aims to streamline meat production in the state to make it more efficient and hygienic. Wayanad is the second highest in per capita availability of meat. The country has 77 abattoirs and meat processing plants approved by Agricultural and Processed Food Products Export Development Authority. Kerala is one of the leading states in meat consumption with a daily requirement of over 5000 tonnes. Less than 10% of this meat is produced within Kerala and comes from neighbouring states. In addition to this, over 60% of the meat production is in the unorganized sector through illegal slaughterhouses that use unscientific methods of slaughter that result in unhygienic meat, wastage of meat, loss of valuable by-products and creates unsanitary conditions due to improper waste management. Livestock production practise of cattle fattening will be used in order to reduce animal movements thereby fattening cattle herds more quickly and in much more healthier and sanitary conditions in order to obtain better quality meat. Therefore, modern slaughterhouses are an initiative which is to be explored considering the high demand for the product and low domestic supply. Market Scenario138 • Kerala is one of the leading states in meat consumption (2.46 lakh ton in 2015-16) and Kerala has topped the list on cattle slaughter in the year 2015-2016.In addition to this, over 60% of the meat production is in the unorganized sector through illegal slaughterhouses that use unscientific methods of slaughter that result in unhygienic meat, wastage of meat, loss of valuable by-products and creates unsanitary conditions due to improper waste management. • In Kerala at least 80% cattle for meat are procured from livestock markets. In India, total meat production increased to 2.43 million tons between July-October 2016-17, as against 2.24 million tonnes for the same period during 2015-16, registering a growth of 8.74%. India is currently second fastest growing processed meat and poultry market globally with a CAGR of

138 Article on Beefed’ up Kerala hits a record high, New Indian Express, 04th April 2017, Webpage: http://www.newindianexpress.com/states/kerala/2017/apr/04/beefed-up-kerala-hits-a-record-high-1589515.html accessed: 18 July 2017; Article on Meat production registers 9% growth in 2016-2017, Deccan Herald, 17 February 2017, Webpage: http://www.deccanherald.com/content/596787/meat-production-registers-9-growth.html, accessed: 19 July 2017; Article on Indian Food Processing, Indian Brand Equity Foundation(IBEF),June 2017,Webpage: https://www.ibef.org/industry/indian-food-industry.aspx, accessed on 19 July 2017; Annual Report 2016-17, Ministry of Food Processing Industries, Webpage: http://mofpi.nic.in, accessed: 19 July 2017, http://www.worldbank.org/en/news/feature/2016/01/14/malian-livestock-farmers-turn-to-cattle-fattening-to-increase-their-income ,Kerala Animal Husbandry Department say meat consumption in the state stood at 2.46 lakh tonne (1.46 lakh tonne of cow and ox meat and 1.10 lakh tonne of buffalo meat) in 2015-16

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22% as per a new research from global market intelligence agency Mintel. The sector is estimated to grow at CAGR of 7.5% to become a USD 1.3 trillion valued market by 2020. According to Mintel Market Sizes, Indian organized meat retail sector is expected to witness a CAGR of 15.6 per cent during 2016-20. • As per APEDA, the total processing capacity in India is over 1 million tons per annum, of which 40-50 percent is utilized. India exports about 13, 43,607 tons of meat, mostly buffalo meat.

Project Parameters

Parameter Description

Capacity A plant for the processing of cattle meat with a capacity of 10000 tonnes per annum.

Land Land area of ~ 100 acres to be identified for this facility. The proposed districts for this facility is Wayanad and Idukki owing to favorable weather conditions for cattle fattening.

Raw Material Core processes: Infrastructural facilities such as Lairages, Veterinary & Utilities examination and sampling, Isolated areas for diseased animals, Slaughter units, Machinery and processing units, Storage areas Supporting processes: • Water Supply – Expected requirement 10,000 – 20,000 litres per day • Effluent disposal – 12,000 – 22,000 litres per day • Solid waste and blood disposal • Hide and skin processing • Electricity – 100 KVA

Employment Direct employment of approx. ~ 100 people, Indirect employment can be Potential generated through meat distribution, transportation, animal husbandry, leather manufacturing etc.

The total investment cost of the project including working capital is estimated at Cost of the INR 250 Cr (~USD 40 Mn). project (INR)

The Ministry of Food Processing under Setting-up/Modernization of Abattoirs Means of Scheme provides financial assistance (grant-in-aid) for setting up of new Finance abattoirs at 50% of cost of plant & machinery and technical civil work (TCW) in general areas subject to maximum of INR 15 crore. For difficult areas, the ceiling is 75% of cost of plant & machinery and technical civil work subject to maximum of INR 15 crore.

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Competitive Landscape The major consuming states of meat in India are Uttar Pradesh, Andhra Pradesh (erstwhile), Kerala, West Bengal and Maharashtra. The rising slaughter of buffalo in these states is indicative of increasing consumer demand for buffalo meat. India has several integrated mechanized slaughterhouse-cum meat processing plants and has facilities for slaughtering, processing, packing and cold storage of meat. However, there is an increased demand for hygienic processed food (meat). Market for meat based processed RTE food products is rapidly increasing in Kerala. Meat Products of India Limited (MPI), Koothattukulam is selling ~ 5-30 tonnes of meat products per month. There is increased sale of unhygienic meat across the state due to which MPI is set to open a high-tech slaughterhouse and meat processing plant at Koothattukulam which is a '100% pollution free' slaughterhouse set up with the support of both centre and state governments. Key Players Andhra Pradesh, West Bengal, Maharashtra, Delhi, Uttar Pradesh, Rajasthan are the key areas of Processed meat production in India. Meat Products of India Limited, Koothattukulam, Kerala Goa Meat Complex Limited (GMCL) (Govt. of Goa Undertaking)

Conclusion • There is a need of authorized Abattoir / Modern Meat Processing units and allied products to meet local demand of Kerala and such products offer an immense potential in domestic as well as export market. In line with recent concerns regarding cattle slaughter, such facilities with inbuilt cattle fattening techniques or with high standard quality check livestock procurement processes shall eliminate the need for unhygienic cattle trading for slaughter. • In addition to this, the proposed project possesses wide range of economic and social benefits such as increasing the level of investment, tax revenue, employment creation and rural income. • Food processing sector offers huge potential for setting up of modern meat processing units. The potential in areas like Frozen meat, ready to eat products, semi-finished products for retails is to be focused.

Air Taxi Service Sector/Industry – Services/Tourism Project Type – Mega Estimated Project Cost – INR 1100 Crores Proposed Location: • Circuit 1 – Trivandrum, Kollam, Pathanamthitta • Circuit 2 – Alappuzha, Ernakulam, Idukki, Kottayam, Thrissur • Circuit 3 – Malappuram, Kozhikode, Kannur, Wayanad, Palakkad, Kasaragod

Project Description • It is proposed that the Government would step in to develop the basic infrastructural facilities like the heliport and helipad. The operations would be carried out by fleet operators like Pawan © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Hans, Deccan Aviation etc. INKEL Infrastructure Kerala Limited has conducted a feasibility assessment for the project. • Kerala has been divided into 3 circuits and the project intends to link up tourist destinations in these three circuits. Cochin is proposed as the Central Hub (Heliport) to base the operations with 18 helipads all over Kerala in all the districts. • Since the helicopter service network is a new concept in the State, the demand projections have been made in the conservative side and the following destinations are proposed to be linked up through 3 circuits namely • Circuit 1: Trivandrum (Varkala), Kollam, Pathanamthitta • Circuit 2: Alappuzha, Ernakulam, Idukki (Munnar and Thekkady), Kottayam, Thrissur • Circuit 3: Malappuram, Kozhikode, Kannur Wayanad (Kalpetta), Palakkad, Kasaragod (Bekal) • The possibilities of using the helicopter service network for allied usages identified were Disaster Relief, Emergency Medical Services or Air Ambulance Services, Police Services cum Airborne Law Enforcement, Moving VIPs & High-Value Assets, Search and Rescue Operations, Agricultural Operations etc. • The proposed Helicopter Service network should have a central hub wherein all the aspects of operations can be controlled and supported. In the case of the proposed project, the Heliport (hub) is intended to be set inside the Cochin International Airport Ltd. (CIAL) at Nedumbasserry. • Based on the outcome of the traffic demand assessment and site assessment, the tourist destinations in the Trivandrum, Alappuzha, Kottayam, Idukki, Ernakulam, Wayanad and Kasaragod are proposed to be linked up through the helicopter service network in Phase I.

Market Scenario139 • According to New Delhi-based Business Aircraft Operators Association, there are 550 aircraft in the general and business aviation categories which are used for charter flights. An increase in organ transplantation and medical evacuation has also seen helicopters being booked in remote areas. • Seeking to promote helicopter tourism, Indian Railway Catering and Tourism Corporation and Pawan Hans have joined hands under an agreement that would allow flyers to book tickets through IRCTC website. The Memorandum of Understanding has been signed to implement the 'heli project' by making joint use of their capabilities and facilities. • Key features of the National Civil Aviation Policy 2016 are: • Helicopters will be free to fly from point to point without prior ATC clearance in airspace below 5000 feet and areas other than controlled or prohibited or restricted airspace

139 INKEL Feasibility Study, http://timesofindia.indiatimes.com/india/IRCTC-to-sell-tickets-for-Pawan-Hans-helicopter- service/articleshow/51429194.cms, http://pib.nic.in/newsite/PrintRelease.aspx?relid=146238, https://factly.in/government-launches-regional- connectivity-scheme-udan/

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• The existing policy of allowing inclusive tour package charters will be further reviewed to include more categories of passenger charter flights recognised globally • Under the Regional Connectivity Scheme (RCS or UDN Scheme), the selected Airline operators would be extended subsidies from the Central & State governments such as sharing 20% of the Viability Gap Funding (VGF) for RCS routes, No landing or parking charges at RCS airport, levy of excise duty on ATF for a period of 3 years • Hiring helicopters and private planes sees steady rise among commoners. People from smaller towns and villages in Rajasthan, Punjab and Haryana are ready to spend up to INR 2-6 lakh for two-hour trips by helicopter. Also, regular users are increasingly chartering aircraft and not always for work-related reasons. • Kerala is home to the extensive coastline, with large expanse of back waters and amazing greenery in the Western Ghats. Air taxi services can be provided across the State to some of its exotic locations such as the back waters of Allepey, green valleys of Munnar etc.

Project Parameters140

Parameter Description

Capacity Phase-I will include setting up of Helipad facilities at Trivandrum, Alappuzha, Kottayam, Idukki, Ernakulam, Wayanad and Kasaragod

Land Land for the proposed helipads and heliport will be under the ownership of government

Raw Material Lighting facilities, Wind indicators, Fire-fighting facilities, security requirements & Utilities such as perimeter fencing, guard posts etc., administrative requirements such as ticket booths, passenger waiting areas, crew cabins etc.

The total cost for developing the project based on assumptions undertaken in Cost of the the feasibility study* is ~ INR 13 Cr excluding land and helicopter cost. Broad- project (INR) level breakup of costs are as follows: • Helipad Area Development : INR 3.3 Cr • Helipad Physical and Technical Requirements: INR 2 Cr • Administrative Requirements: INR 2.9 Cr • Medical facilities: INR 2.1 Cr • Others (Contingency, Interest requirements, Helipad Lighting, Fire Fighting, Ground to Air Communication, Passenger Access Control, Wind Indicator etc.) : INR 3 Cr

140 * INKEL Feasibility study and assumptions considering inflation in last 5 years © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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It is assumed that the project will have a debt equity ratio of 1.5:1 Means of Finance

Expected Main revenue streams are: Sales Turnover Expected revenue to infrastructure facility in first year of operation ~ INR 3 Cr increasing at an annual growth rate of 10 per cent

Competitive Landscape There are quite a few private helicopter service providers operating in Kerala who provide helicopter chartering services for wedding, film shooting, flower showering, air ambulance, private jet charter for business and leisure etc. However, a dedicated inter-connected network connecting all major tourist destinations in the state is not available. Key Players Chipsan Aviation Helicopter Services, HeliTaxi, Joy Jets, Helitours India, Rajputana Aviation, ACS – Air Charter Service India Pvt.. Ltd., Fly jettech, Air Charters India, Taj Air (Kerala), King Rotors

Conclusion • The helicopter network service is a novel concept and world over it is a practice to setup such networks in a phased manner. While phasing, it also necessary to note that sufficient traffic would be present to justify the trips/ sorties since the operation of such trips are expensive. • The proposed helicopter service network can be developed through the Public Private Partnership {PPP) mode. In this mode, the Government would provide the base Infrastructure facilities like the heliport and the helipads. Most of the existing helipads in the State are under Government ownership and this would make the development of the basic infrastructure easier since no further land acquisition would be involved. • Aircraft and helicopter services are poised to become increasingly popular in Kerala as well as India because of several reasons such as unpredictable rail networks and congested roads, long check-in times at airports, many users will shift to use of helicopters to travel throughout country especially in the tourism sector. • Providing air charter services is considered to be a niche market targeting only a group of users but there is significant scope for exploiting the full potential and for this there is a need for adequate infrastructure facilities to be in place. This would enable better coverage to the tourist destinations in the state and also more usage of the services. More usage of the services would increase the flying hours and thereby reducing the cost of travel through economies of scale.

International Exhibition cum Conference Center Sector/Industry – Infrastructure Project Type – Mega Estimated Project Cost – INR 500 Crores with INR 100 Crores for Phase Proposed Location – Kakkanad, Cochin

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Project Description • IECC Kochi is proposed to be set up at 20 acres of land earmarked by KINFRA at Kakkanad, Kochi close to the Info Park, Smart City and the KINFRA Export Promotion Industrial Park. • The proposed IECC shall be comparable to global exhibition centers with respect to operational efficiency, energy efficiency, architecture, layout, interior design, acoustics, visual effects, and other supporting facilities. Likewise, the convention center is envisaged to be a facility for private events and high - end Government-to-Government, business-to-business and business-to-customer meetings, exhibitions and events. Market Scenario141 • According to Kerala Tourism Trends Trade Survey 2016, Kerala has been pitched as a potential MICE and wedding destination and the tourism industry in Kerala has been offering exclusive packages for MICE and wedding settings. Increasing corporate penetration and role of wedding planners have resulted in rapid growth in the industry and also with the huge numbers that flow in as a part of a single booking promises wider market prospects for the upcoming IECC • According to the trends survey, the biggest factor contributing to the growth of MICE business in Kerala is availability of good MICE infrastructure and facilities followed by Kerala tagged along lines of a tourist destination • For a thriving industrial and business sector to grow, expo’s & exhibitions play a major role by bringing the seller and customer together under a single platform. All major cities have a permanent industrial exhibition or convention centre which would host various domestic events, different business functions year round. Cochin is a forerunner in the area of MICE tourism • Total revenue (including direct & indirect) from Tourism for the state in 2016 was INR 29658.56 Crores, showing an increase of 11.12% over 2015

Project Parameters142

Parameter Description

• Covered exhibition halls (Approx 1, 00,000 Sq. ft) Capacity • Convention center with a seating capacity of 5000 persons • Mini conference hall with a seating capacity of 1500 persons • Open exhibition space (Approx 1,00,000 Sq. ft) • Food court

• Total site area: 6.07 ha Land • Build-up area: 45409 sq. m

141 http://www.manoramaonline.com/content/dam/mm/ml/news/latest-news/pdf/2016/jan/Kerala-Tourism-Trends-Trade-Survey-Report.pdf, http://kinfra.org/wp-content/uploads/2013/04/RFP-IECC-Cochin.pdf, https://www.keralatourism.org/tourismstatistics/tourist_statistics_201620170325143623.pdf

142 http://environmentclearance.nic.in/writereaddata/FormB/EC/FORM_1/25032017CGO3GK0QformIA.pdf , http://kinfra.org/rfp-forinternational-exhibition-cum-convention-centre-iecc-kakkanad-kochi-kerala.html © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• Water Consumption: 170 KLD (Operation phase) Raw Material Power requirement: Supplied from KSEB & Utilities • • Waste Management facility

Cost of the Total estimated project cost – INR 500 Crores (USD 77 Mn) with INR 100 Crores project (INR) (USD 15 Mn) in Phase 1 It is proposed to use around 10 acres for the exhibition activities in the Phase 1 and the balance land will be developed in the ensuing phases commensurate with the utilization and demand and part of it through private participation for setting up hotels, multiplex, restaurants, paid parking etc. The approximate cost of the project in Phase 1 is INR 100 Crores.

The project is proposed be set-up in PPP mode. The built up space shall be made Means of available to investors on lease. Finance

Expected The locational advantage is expected to give a return of more than 20% to the Sales Turnover lessee or to the operators of the project

Competitive Landscape • Due to locational advantage, there a few convention centers functioning in Cochin. However, convention centers with proposed capacity of 5000 persons etc. are limited. • Convention centre facilities are also provided by five-star category hotels in the city Key Players CIAL Convention Center, RECCA Club, Adlux International Convention Centre, Convention Center in Le Meridian, Marriott, Gokulam Park and other hotels in Cochin such as Gokulam Park etc.

Conclusion143 • This IECC project, on completion, to be world class in architecture, layout, interior design, acoustics, visual effects, general ambiance etc. with state of the art facilities, making the IECC an attractive destination for public gatherings/congregations, meetings, incentives, conventions and exhibitions (MICE), Industrial promotions, art and craft, trade fairs, etc. IECC Cochin is visualized to be the best (SMART) in its class with all modern facilities • The investors can explore various options to take space as per their requirement on long lease for developing specific facilities. The lessee may develop the interiors required for operating the specific facilities and will have the right to sub lease the space to other parties or groups having expertise in operating and managing these facilities. The value appreciation of the property, owing to the locational prominence, will enable the lessee/ investor to sublease/ sublet the space easily. • A total area of 6,23,973 sq.ft is being planned for the International Exhibition Centre and 3,76,298 sq. ft is being planned for the Conference Hall (B+G+1) which will have integrated

143 http://kinfra.org/rfp-for-international-exhibition-cum-convention-centre-iecc-kakkanad-Cochin-kerala.html © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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venue for conferencing, convention and exhibition and equipped with state-of-the-art facilities, audio and video equipment and other auxiliary services. • Out of the total around 2 lakh sq. ft is available for commercial activities which is intended to be given to prospective investors on long lease.

Cryogenic Warehouse Sector/Industry – Infrastructure Project Type – Mega Estimated Project Cost – INR 3000 Crores Proposed Location – Puthuvypeen, Cochin Port

Project Description144 • The proposed project is to establish a Cryogenic Warehouse at an area of 10 acres in Puthuvypeen next to the existing LNG terminal. The project has been earmarked using the cold energy available from the regasification process that can be used for creation of a zero CO2 emission cold-chain hub. • The concept, popular in Japan and China, is being experimented within India, where the possibility to set up cold storages near LNG terminals exists. Cochin Port has a 5 MMTPA LNG terminal and Regasification Plant owned by the Petronet LNG Ltd. 10 acres of land adjoining the LNG terminal in Puthuvypeen Port Based SEZ is earmarked for setting up the cold storage on PPP basis. • Cryogenic Warehousing proposed is basically for perishable products like vegetables, meat, and fish and also for pharma products. The terminal area is situated in the Special Economic Zone (SEZ) of Puthuvypeen near the entrance to Cochin Port. Recycling of waste cold from LNG re-gasification to help produce the cryogenic air or nitrogen would serve as an energy vector to displace fossil fuels in cooling would produce value for the LNG terminal operators (value from waste re-cycling), cryogen producers (increased sales), fleet operators (lower costs) and society (reduced CO2, NOx and PM emissions, health/social costs, post-harvest food and associated losses, infrastructure costs). • Each tonne of LNG contains the cold energy equivalent of 240kWh, quite apart from the chemical energy contained in its methane molecules, and typically 80% of this cold energy is thrown away. • The proposed project can utilise this cold energy by recycling it through a co-located air liquefaction plant to help produce liquid air or at around -196C. Once converted into liquid air, LNG waste cold could be used in various applications such as direct heat transfer for over the fence cold port for deep freezing and temperature controlled storage - Cryogenic warehouse.

144 http://www.financialexpress.com/industry/petronet-plans-to-use-cold-energy-to-set-up-power-units/12293/, http://www.wpsdlocal6.com/story/35369725/frozen-food-2017-global-market-expected-to-grow-at-cagr-615-and-forecast-to-2021, https://setis.ec.europa.eu/system/files/bham_input_action6.pdf, http://dearman.co.uk/wp-content/uploads/2016/05/The-prospects-for-liquid- air-cold-chains-in-India.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Market Scenario145 • The cold chain market is expected to grow at a compound annual growth rate (CAGR) of 13.2% worldwide in 2017; and in India a CAGR of more than 25% is projected1. • The shortage of refrigerated vehicles is increasing in India. National Centre for Cold-chain Development (NCCD) estimates that to meet current demand, India requires a further 17,000 refrigerated vehicles. • International Institute of Refrigeration (IIR) estimates that more than 200 million tonnes of perishable foods could be preserved if developing countries had the same level of cold chain as found in the developed world. As per Birmingham Energy Institute study, the cold from projected Indian LNG imports in 2022 could in principle help produce enough liquid air to fuel half a million liquid air refrigeration units (TRUs) • Ministry of Shipping and the Ministry of Agriculture are spearheading a project to set up cold chain hubs at Ports with LNG terminals like such as Cochin Port, so that they could be developed as Perishable Handling Centres and Perishable Port Gateways. • The global frozen food market is forecasted to grow at a CAGR of 6.15% during the period 2017-2021. With the increasing demand for quick meals, the popularity of frozen food products is increasing. Improving living standards, growth of urban settlements, and growing working women population is also adding to this new trend in the global frozen food market. • Development of cold storage industry has an important role to play in reducing the wastages of the perishable commodities and thus providing remunerative prices to the growers. The facility can be used as a port based cold store hub for the entire Kerala region. The facility could also be utilised by small and medium food suppliers/producers, marine processing firms etc. Since operation of the facility is through utilising the wasted energy during regasification process, the operation shall be economical compared to conventional cold storage. • The Cochin LNG terminal is expected to run at 40 per cent capacity by 2019 which shall ensure a continuous generation of waste cold for the proposed warehouse.

Project Parameters146

Parameter Description

Capacity 5 million cubic meters of chilled and frozen buildings

Land An area of 10 acres in Puthuvypeen next to the LNG terminal has been earmarked for setting up cryogenic warehousing

145 http://dearman.co.uk/wp-content/uploads/2016/05/The-prospects-for-liquid-air-cold-chains-in-India.pdf, http://www.financialexpress.com/industry/petronet-plans-to-use-cold-energy-to-set-up-power-units/12293/, http://www.wpsdlocal6.com/story/35369725/frozen-food-2017-global-market-expected-to-grow-at-cagr-615-and-forecast-to-2021, https://setis.ec.europa.eu/system/files/bham_input_action6.pdf , http://profit.ndtv.com/news/budget/article-petronet-lng-to-run-kochi-terminal- at-40-capacity-by-2019-1647630 146 http://www.cochinport.gov.in/index.php?opt=projects&sub=20&id=20&tab=1 , http://nccd.gov.in/PDF/Sea_Port_LNG_Regas.pdf, Cold Chain Technologies Report by Assocham India and Sathguru, May 2017 © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Raw Material A study by E4tech, conducted on behalf of India’s NCCD, shows that a typical & Utilities LNG terminal re-gasifying 7100 tons of LNG/day can produce 2,600 tons of liquid nitrogen, enough to provide the cooling for almost 1,100 chilled and frozen refrigerated trucks operating around the clock and peak time cooling (three hours a day) for 7.5 million cubic meters of chilled and frozen buildings.

The estimated total project is INR 300 Crore (~USD 45 Mn) Cost of the project (INR)

Means of Various means of finance and support is available form Government of India. Finance Few being • Access to low interest fund of Rs.5, 000 crores from WIF from the National Centre for Cold Chain Development under the Ministry of Agriculture. • Access to National Clean Energy Fund • Credit linked subsidy at 35% (up to 50%) for cold chain infrastructure • Investment linked 150% tax deduction • Automatic route clearance for 100% FDI with External Commercial Borrowings route open

Competitive Landscape147 • Petronet LNG recently has invited expressions of interest from players to help it develop an integrated cold store facility at its LNG import terminal at Dahej, Gujarat as well. Since the application of the technology is at a nascent stage and with increased focus on environment this field is poised to gain significant competition from cryogenic technology providers, logistics providers etc. • Sainsbury in the UK has become the first company in the world to introduce a refrigerated delivery truck cooled by a liquid nitrogen powered engine • Unlike other alternative refrigeration technologies, liquid air can cater to full range of cold chain services - from pre-cooling of produce to warehouse cold storage and long distance vehicle refrigeration. It can also supply the cold for blast freezing and other forms of food processing. Liquid air can find applications beyond agriculture like back-up power and air-conditioning in buildings.

Conclusion • There is therefore a huge opportunity to utilize the earmarked area on PPP (DBFOT) basis to build and operate cold chain facilities after tying up with PLL for the cold energy.

147 http://www.sagarmala.gov.in/sites/default/files/2.Final%20Master%20%20Plan_Cochin.pdf, http://www.sciencedirect.com/science/article/pii/S1876610216314485, http://www.maritimegateway.com/interviews/riding-liquid-cargo/). http://www.cochinport.gov.in/index.php?opt=projects&sub=20&id=20&tab=1 © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• The facility could also be utilized by small and medium food suppliers/producers, marine processing firms etc. The operation of the facility is considered to be far more economical compared to conventional cold storage. • Dearman, a UK-based technology company, has developed a family of engines that uses liquid air/liquid nitrogen to deliver zero-emission power and cooling. • National Center for Cold Chain Development is pursuing the potential of clean energy from liquid air based cold chains by recovering stranded cold from LNG re-gasification. The prospect of developing cryogenic warehouse at the Cochin LNG terminal can be developed under this window.

Propylene Oxide/ Polyol Petrochemical Plant Sector/Industry – Manufacturing Project Type – World scale Petrochemical Complex Estimated Project Cost – INR 5000 Crores Proposed Location – Kochi (BPCL-Kochi Refinery)

Project Description • The proposed project is for developing a Propylene Oxide (PO) manufacturing plant of 200000 MPA capacity required to produce Propylene Glycol & Polyether Polyols at Kochi is in the vicinity of existing BPCL Kochi Refinery • PO is a highly reactive versatile compound which has major application for the production of Polyether Polyols (70%) for use in making Flexible, Rigid foams (PU) , Non-foam applications, Glycol Ethers (15%) & Propylene Glycol (15%) • Flexible foams are used in mattresses, cushions etc. Rigid foams are used in automotive applications, Building Insulation. Propylene Glycol (PG) is used in the manufacture of Unsaturated Polyester Resin that finds application in the production of Fibre glass reinforced plastic. Other uses include Pharmaceuticals, Deodorants & Cosmetics. • Endowed with an excellent port infrastructure with ICTT, bulk cargo terminal, oil terminal and airport connectivity, Kochi is an ideal location for the project. This project will help meet the increasing demand for polyols. The proposed location in the vicinity of refinery makes integration of feedstock supply, utilities, off-sites and other general facilities easy. Market Scenario148 • The total installed capacity of Propylene Oxide in India in 2015-16 is nearly 36000 MT with a capacity utilization of ~ 70%. Total consumption of PO in 2015-16 was 51000 MT. India imported nearly 25552 MT of PO worth INR 256 Cr in 2015-16. • PO is a major derivative of Propylene after Polypropylene, The market of PO in India is anticipated to grow at a CAGR of over 8% during 2016 – 2025. • Currently India imports PO from Korea (68%), Singapore (18%) & Saudi Arabia (14%). Freight costs are high for importing PO. Hence the advantage of having domestic production of PO is necessary to support Polyols production.

148 http://www.chemicals.nic.in/sites/default/files/Chemicals%20%26%20Petrochemicals%20Statistics%20At%20A%20Glance%202016_0.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• In India, PO demand will be driven by the growth in industry applications such as bedding, mattresses, automobiles, construction and energy efficient buildings. • Polyol consumption is expected to grow at an annual rate of 11 % CAGR over the next 5 years.

Project Parameters149

Parameter Description

2,00,000 TPA (PO/Polyol/PG & Utilities) Capacity • Feed material pre-treatment section • Direct oxidation reaction section • Initial separation section/Solvent recovery/recycle/Catalyst removal • Final distillation section

Land 180 acres

Raw Material • Raw Materials: The main raw materials for manufacture of Polyol are & Utilities Propylene Oxide and Ethylene Oxide. Other raw materials required are glycerin, sorbitol, glycols, and pyrophosphate. • Recirculating Cooling Water: 40,000 m^3/ hr • Pumps, Heat Exchangers, Reactors, Adsorber, Distillation column components, storage tank, flash

Employment > 3000 Potential

Licensors for • M/s Evonik PO plant* • M/s Sumitomo Chemical • M/s Himtech Engineering

Cost of the INR 5000 Crore (USD 770 Mn) Project Estimated cost of equipment – INR 2500 Cr • Process Machinery – INR 1500 Cr • Fabricated Equipment – INR 500 Cr • Catalysts – INR 10 Cr • Storage – INR 40 Cr

149 Raw Materials: The main raw materials for manufacture of Polyol are Propylene Oxide and Ethylene Oxide. Other raw materials required are glycerin, sorbitol, glycols, and pyrophosphate. Recirculating Cooling Water: 40,000 m^3/ hr Pumps, Heat Exchangers, Reactors, Adsorber, Distillation column components, storage tank, flash © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Competitive Landscape150 • PO capacity addition in Middle East, Korea & Singapore will result in increase of imports to India. • Furthermore, PO is projected to dominate global Propylene market, on account of increasing government regulations for reducing greenhouse gas emissions in environment supported by tremendous growth in the production of light commercial vehicles and packaging industries. 5 • BASF SE, China National Petroleum Corp. (CNPC), Enterprise Products Partners L.P., Exxon Mobil Corp., Formosa Plastics Group (FPG), Lyondell Basell Industries AF S.C.A., Reliance Industries Ltd., Royal Dutch Shell PLC, Saudi Basic Industries Corp. (SABIC), The Dow Chemical Company, Total S.A., Valero Energy Corp. are some of the leading producers of Propylene. Key Players • Manali Petrochemicals Limited, Chennai (Polyol- 75,000 TPA , Propylene Oxide - 36,000 TPA) (Plans to invest INR 100 Cr to increase Polyol capacity by 50,000 TPA) • India Glycols (Methylene glycols - 175,000MTPA, glycol ethers and acetates - 70,000MTPA ) • Huntsman India (Araldite® resins and Aradur® hardeners - 30,000 MTA) • Expanded Polymer Systems (polyether polyol - 16,250 MT/Annum, aliphatic polyester polyols - 300 MT/Annum, aromatic polyester polyols - 3,000 MT/Annum) Conclusion151 • In India, strong demand for Propylene Oxide by various end user industries, increasing discretionary income and rapid industrialization are expected to drive India Propylene market during 2016-2025. Moreover, booming automotive, FMCG and furniture sectors is anticipated to aid the country's Propylene industry. • There is considerable opportunity for the setting up of such downstream and ancillary industries taking into account the nature of products and widespread utilisation in common applications • The Government of India launched the Automotive Mission Plan 2016-2026 in 2016 with an aim to increase the contribution of automotive sector in the country's GDP to 12% by the end of 2026. Hence, growing automotive sector is expected to positively influence the market of Propylene Oxide in India during forecast period. • Various technology partnership opportunities can be worked out to develop this plant in Kerala as Propylene Oxide market will grow swiftly owing to enhanced demand from packaging, automotive, footwear Industries which see a widespread potential in Kerala

150 http://www.prnewswire.com/news-releases/india-propylene-polypropylene-propylene-oxide-acrylonitrile--cumene-market-report-2011-2025-- -research-and-markets-300441116.html 151 Global Propylene Market By Application, By Region, Competition Forecast and Opportunities, 2011 – 2025, http://www.business- standard.com/content/b2b-chemicals/manali-petrochemicals-to-invest-rs-100-cr-for-polyols-capacity-expansion-115052100770_1.html, http://www.indiaglycols.com/divisions/chemicals_division.htm ,http://www.huntsman.com/corporate/a/Careers/Global%20Careers/India , http://www.expanded.co.in/present-day-operations , http://www.deccanchronicle.com/150904/nation-current-affairs/article/petrochemical- project-takes , http://cpmaindia.com/propylene_about.php , http://www.business-standard.com/content/b2b-chemicals/manali-petrochemicals- to-invest-rs-100-cr-for-polyols-capacity-expansion-115052100770_1.html © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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PVC Manufacturing Sector/Industry – Manufacturing Project Type – Mega Estimated Project Cost – INR 3000 Crores Proposed Location – Kochi (BPCL-Kochi Refinery)

Project Description The proposed project is to set up a PVC manufacturing facility of capacity 150,000 TPA. Polyvinyl chloride, commonly abbreviated PVC, is the world's third largest plastic in production and consumption. A key feature of PVC is that it can be combined with additives and fabricated into a wide variety of forms. These include pipes and fittings, profiles and tubes, windows and doors, sidings, wires and cables, film and sheets, toys and other moulded products and floorings. This quality, together with features such as durability, self-extinguishing property, resistance to most chemicals and oil, mechanical strength and ease of processing, means that PVC is a competitive and attractive option for many end uses in construction and infrastructure, agriculture, electrical products and healthcare. Endowed with an excellent port infrastructure with ICTT, bulk cargo terminal, oil terminal and airport connectivity, Kochi is an ideal location for the project.

Market Scenario152 • The total installed capacity of PVC in India in 2015-16 is nearly 1,423,000 MT with a capacity utilization of ~ 101%. Total consumption of PVC in 2015-16 was 2,936,000 MT. India imported nearly 1501311 MT of PO worth INR 8788 Cr in 2015-16 and exported nearly 3000 MT of PVC worth INR 33 Cr. • Imports of PVC in India are now at almost 50 percent and growing rapidly every year and are expected to reach to USD 3 billion in few years • Taking into account the demand drivers and CAGR of around 9% from 2002-2015, it is estimated that annual demand growth for PVC will be at least 13% in the next 5 years and is expected to cross 5 million tons in 2020. • PVC demand in India shall be driven by sectors such as Agriculture, Infrastructure (rural water and sanitation infrastructure, smart cities will boost to PVC consumption), Housing (pipes, doors & windows, conduits, wires & cables) - Potential for PVC in the building and construction sector alone is over 700 KTPA (without taking smart city development into account), green building etc. • PVC, being recyclable, less energy intensive and having longer life will be in demand in these segments. PVC has packaging as well as other applications in the FMCG, pharmaceutical & retail segments. These sectors are expected to grow in the coming years as the customer base comprising India's young population increases. • Further, there are a number of applications in India, which are still nascent or currently unexploited like, wall cladding, technologically-advanced pipes for sewerage application, and

152 : http://ficci.in/spdocument/20684/PVC-Report-new.pdf , http://www.chemicals.nic.in/sites/default/files/Chemicals%20%26%20Petrochemicals%20Statistics%20At%20A%20Glance%202016_0.pdf , http://www.business-standard.com/content/b2b-plastics-polymers/imports-hurting-domestic-pvc-manufacturing-industry-a-report- 116012000615_1.html © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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liners for landfill applications, decking, furniture applications, waterproofing membranes and food grain storage. • These products are well established abroad and with ever-increasing urbanization, changing lifestyles, new technologies in construction and other factors, investments in these sectors are expected in the future. This bodes well for the PVC industry.

Project Parameters153

Parameter Description

Capacity 150000 MTPA

Land 80 acres

Raw Material • Raw material: PVC Resin, Stabilizer, Lubricants, Fillers & Utilities • Water: 1000 KL/ year • Ethylene: 75000 TPA Ethylene can be made available from BPCL- Kochi Refinery, which is the raw material for production for VCM and VCM is the raw material for PVC • Chlorine: Chlorine which is a by-product of Travancore Cochin Chemicals Ltd., Cochin and can be procured from them

Licensors for • M/s Ineos PVC Plant • M/s Arkema • M/s JNC • M/s Kemone Total cost ~ 3000 Cr (~USD 460 Mn) Cost of the project (INR)

Competitive Landscape154 • Export of plastic products from India stood at USD 7.64 billion in FY 2015-16. Domestic consumption of plastic is expected to touch 20 million Metric Tonnes by 2020. • Per capita PVC consumption in India is only 2 kg as compared to China’s 10 kg. PVC industries are essential to the growth of the economy with the product finding applications in variety of sectors as well as being a source of employment. Today, close to 50% of the demand for PVC in the country is met by imports. Though level of imports have been increasing over the years and meeting the

153 Suspension polymerisation, emulsion polymerisation and bulk polymerisation are the three types of PVC manufacturing process. PVC made from suspension is by far the most common. The licensors is poised to offer advanced technologies. 154 http://ficci.in/spdocument/20684/PVC-Report-new.pdf, https://www.ibef.org/exports/plastic-industry-india.aspx , https://www.icis.com/resources/news/2015/03/20/9869814/india-s-reliance-operating-all-pvc-units-at-near-full-capacity/ , http://sanmargroup.com/pvc-manufacturing.php , http://www.dcwltd.com/ , http://www.finolexwater.com/about-finolex-industries/ , http://www.chemicals-technology.com/projects/dahej/, ttp://sanmargroup.com/Compliance/EC%20for%20PVC%20Plant%20capacity%20of%20170000%20TPA%20dated%2028-11-2005.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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supply-demand deficit for PVC in the country, it remains to be seen whether this can be sustained over medium to long term when domestic demand grows. • Very little capacity expansion is seen in countries which are currently exporting to India, meaning that there is an upper threshold beyond which these countries cannot supply. There could be a case in the future where demand for PVC in India could possibly outstrip supply. This would lead to processed PVC products not being available for use as well as a lot of downstream processing facilities having poor capacity utilization levels. Other PVC manufacturing players in India are targeting to fulfil these opportunities and capture market share in this space.

Key Players • Reliance Industries Limited (Dahej155 - 3,15,000 tonnes/year, Hazira – 360,000 tonnes/year, Vadodara – 80,000 tonnes/year) • Chemplast Sanmar (2,92,000 TPA)156 • DCW group (90,000 TPA) • Finolex (PVC-U Pipes - 2,50,000 MTPA, PVC Resin - 2,72,000 MTPA

Conclusion This project is poised to be showcases as a key industry representing Kerala in the “Make in India” initiative. The existing refinery facility along with the proposed PVC manufacturing plant can showcase itself as an upcoming industrial sector offering varied opportunities for the downstream PVC product market.

Super Absorbent Polymer Sector/Industry – Manufacturing Project Type – Mega Estimated Project Cost – INR 900 Crores Proposed Location – Kochi (BPCL-Kochi Refinery)

Project Description • Superabsorbent Polymers (SAP) are hydrogels which can absorb water many times higher than its own weight. Compared to common absorbents like tissue paper, wood pulp fluff etc. SAP can absorb moisture up to 5 to 100 times of their own weights. Glacial Acrylic acid and Caustic soda is used to produce recipe grade SAP, which is further subjected to cross-linking using chemicals/initiators to produce quality SAP. • The project plans to set-up a manufacturing unit of Superabsorbent Polymer of 60,000 TPA capacity. • Endowed with an excellent port infrastructure with ICTT, bulk cargo terminal, oil terminal and airport connectivity, Kochi is an ideal location for the project. This project will be the very first endeavour to supply local demand of SAP as most of the products are being imported now.

155 The Dahej complex VCM, PVC and chlor-alkali plant expansion project was implemented in two phases. The total estimated cost of the project was INR 3505 Cr 156 The total estimated cost of Chemplast Sanmar Cuddolore PVC plant (140000 TPA capacity) was INR 500 Cr (2005-06) © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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The proposed location in the vicinity of refinery makes integration of feedstock supply, utilities, off-sites and other general facilities with the refinery easy

Market Scenario157 • According to “Global Superabsorbent Polymer Market 2016-2020”, Superabsorbent polymers market was valued at US$ 39,548.1 Mn in 2015 and is expected to reach US$ 64,761.9 Mn by 2022, growing at a CAGR of 7.3% during the forecast period 2016-2022. • India imported 151,223 tonnes of other acrylic polymers in primary forms which include Super Absorbent Polymers worth USD 328 Mn in 2016-17 which saw a 25% growth from 2015-16. • The market for diaper is the largest application for superabsorbent polymers and have been growing with a CAGR of 22.23% over past five years. This is driving the demand for SAP. • The medical industry has contributed and is expected to fuel more demand for superabsorbent polymers in the market through its wound care segment. Due to its water retention property and advancement in technology, superabsorbent polymers are used in manufacturing medical products which include traditional and advanced wound care products such as bandages and surgical pads among others. These polymers help absorbing exudates and liquids leaving the wound dry. This prevents itching and quick recovery of wound. • SAP is used in agriculture for drip irrigation techniques which reduces water loss leading to irrigation frequency reduction by 50%. Agriculture sector is poised to fuel demand for superabsorbent polymers in the near future. • SAP is also used in Sanitary napkins & Adult diapers. The demand is increasing, with focus on rural markets with regard to female hygiene products.

Project Parameters158

Parameter Description

Capacity 60,000 TPA

Land 20 acres

Raw Material Glacial Acrylic Acid:- Being produced from the petrochemical complex of BPCL – & Utilities Kochi Refinery

Employment 500 to 1000 direct jobs and up to 2,000 indirect jobs Potential

Cost of the ~ INR 900 Crore (~USD 140 mn) project (INR) The estimated breakup of costs are as follows: • Land - ~ 13 Cr

157 Source: http://www.credenceresearch.com/report/superabsorbent-polymers-market , http://commerce.nic.in/eidb/Icomq.asp 158 https://dir.indiamart.com/impcat/super-absorbent-polymer.html, http://www.starchemical.in/super-absorbent-polymer.html#superabsorbent-polymer, * Suggested licensors for technology outsourcing , http://www.prnewswire.com/news-releases/global-sap-superabsorbent- polymers-market-driven-by-top-6-companies-at-80-sap-manufacturing-capacity-520573382.html © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• Building comprising of plant area, office, store, packaging space, processing space, yard, open space - ~ 51 Cr • Machinery, working capital and other expenses - ~ 836 Cr Licensors for • M/s Evonik the SAP plant* • M/s Yixing Danson Technology • M/s SANYO Chemical Means of Project is expected to come up in JV mode, the JV partner providing the License/ Finance Equity and ensuring marketing of SAP to end-users

Expected • SAP cost per kilogram varies based on absorbency and retention Sales Turnover capacities required by application • Assuming plant production capacity of 30% in year 1, the estimated revenue per year will be in tune of INR 290 Cr

Competitive Landscape • Dominated by major players world–wide such as Dow, BASF, Nippon Shokubai, San Dia polymers, Evonik, & LG Chem. There are minor Chinese players • These large players have inbuilt research and development centre. Companies focusing on manufacturing baby diapers focus on product thinness to ensure optimal comfort and minimizing environmental impact. To achieve this, companies are procuring SAP with highly absorbent cores and also reducing the weight of bulkier materials such as fluff pulp. This is one key application which will strive need for innovation in SAP manufacturing and processing.

Key Players • No domestic player in India. SAP demand is met entirely through imports. • The major end-users are P&G, Unicharm & Johnson & Johnson.

Conclusion159 • Super-absorbent polymers have immense potential to cater to key environmental issues and the same is being researched extensively worldwide. Plant growth and different physiological activities are restricted by drought stress and the application of superabsorbent polymer could conserve soil water, making same available to plants for increased growth and biomass accumulation especially under severe water stress. Thus, application of SAP is a suitable soil management practice for the locations characterized by severe water stress. • SAP has been already indispensable for diapers and sanitary products. In many countries, due to falling birth rate and aging population the increase rate of diapers for elderly adults tends to exceed that of diaper for babies, which increases the total demands of SAP. SAP

159 https://www.gminsights.com/industry-analysis/synthetic-and-bio-super-absorbent-polymer-sap-market , http://www.socochem.com/aboutus.html , https://www.thesuperabsorbentsource.com/aboutus.cfm © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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opportunities in this space can become a huge opportunity for the proposed plant at Cochin to capture. • The synthesis of superabsorbent polymers is done through various techniques such as gel polymerization, copolymer synthesis, suspension polymerization and solution polymerization. Opportunities lie in import of such technologies for synthetization of SAP. . • Make in India sector policy offers various incentives for research and development, green technology and practices

Elevated Highway Sector/Industry – Urban Infrastructure Project Type – Mega Estimated Project Cost – INR 15000 Crores Proposed Location – Multiple location between Trivandrum to Kannur

Project Description • An elevated highway is a controlled-access highway that is raised above grade for its entire length. Elevation is usually constructed as viaducts, typically a long pier bridge. Technically, the entire highway is a single bridge. Adopting the same model, Kerala focuses to decongest the roads in the State, which can be further expanded providing connectivity throughout the State. • An elevated expressway across the State from Kannur to Trivandrum along the western side of National Waterway III that can link major district capitals, airports, major ports, and transhipment terminals has been suggested by the State Government in 2016-17. An amount of INR 50 lakh has been earmarked for carrying out the feasibility study for the proposed elevated highway that is to transform the face of Kerala. The vision is to develop a multimodal and integrated transport system for the State. • The Elevated Highways are costlier than ordinary highways. However, the advantages of Elevated Highways are manifold such as the pedestals of elevated highways will occupy only two to three meters on the ground and since minimal land acquisition is involved, the work can be commenced immediately. • New highway, road widening projects in Kerala has faced many restrictions and oppositions with regards to land acquisition and displacement. Also, buses plying through the new highways stopping at regular intervals, operation of the signal systems etc. further reduces vehicular speed and time of travel between districts. Due to aforesaid reasons, elevated highways is a promising option to consider.

Market Scenario • Value of total roads & bridges infrastructure in India is expected to expand at a CAGR of 13.6 per cent over FY 09–17 to USD 19.2 billion. In FY 16, road projects worth USD 2.21 billion has been awarded under Public Private Partnership (PPP) mode. Investment of USD 31 billion is expected in PPP during the next 5 years (by 2020) for national highways. Government is planning to offer a bonus of 10 per cent of the total project cost to firms that construct & deliver highway projects before deadline.

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• Since people can travel below the elevated highway without paying toll, there is no resistance on collection of toll from the public for the elevated highways and hence, this becomes a viable proposition. Also, the possibility of substantial reduction in road accidents and less fuel consumption will substantiate the initial costs of the project.

Project Parameters160

Parameter Description

Capacity The proposed routes are from Thiruvananthapuram to Kannur in phases of 25- 50 km lengths bypassing high traffic routes.

The proposed routes are of 25 km stretches between the following districts: Proposed • Trivandrum to Kottayam Routes • Kottayam to Ernakulam • Trivandrum to Kozhikode (bypassing Thrissur/ Ernakulam) • Kozhikode to Kannur • Kannur to Kasaragod The highways shall be access-controlled with toll only at the beginning of each stretch of 25 km

Raw Material Water, Construction Equipment, Cement bound Material, Concrete & Utilities

Employment It has been estimated that a total number of 4,076 man-days are required for Potential construction of one kilometre of highway

Cost of the INR 15000 Crores (~USD 2300 Mn) project (INR) For elevated highways, the cost of construction estimated is approximately INR 100 Crores per Kilometre for roads with 24 metres width

Means of The project is planned to set-up the project in PPP mode in phases Finance Road projects financing is typically debt intensive with debt equity ratio of 70:30 or even higher. Promoter's contribution ~ INR 4500, Term Loans/Borrowings from External Agencies etc. ~ INR 10500 Cr

Expected Revenue would be generated from toll charges. For a typical Indian highway road Sales Turnover project on annuity basis, where government takes the revenue risk, the project IRR is expected to be 12-14% and equity IRR would be 14 -16%. For toll projects, where the concessionaire assumes the traffic risk, the project IRR is expected to be around 14-16% and equity IRR around 18-20%

160 http://pib.nic.in/newsite/PrintRelease.aspx?relid=164460, http://jms.nonolympictimes.org/Articles/June-2014-Article-3.pdf , Guidelines for Investment in Road Sector, www.nhai.org © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Competitive Landscape161 • Kerala government is pushing fast infrastructure development in the state to augment its connectivity to major tourism destinations and to ease travel within the state. Road projects are largely undertaken by the Public Works Departments and City development authorities. Under these, different PPP models are executed with national and local players. • Road infrastructure has been key government priority; sector has received strong budgetary support over the years. Financial institutions received government approval to raise money through tax-free bonds. 100 per cent FDI is allowed under automatic route subject to applicable laws and regulations • Rising vehicular traffic is a key factor for expansion of roadways: • Sales of passenger vehicles increased at a CAGR of 10.1 per cent during FY 06 – 16 and reached 3.4 million in FY 16 • Sales of commercial vehicles in the country increased at a CAGR of 5.5 per cent in FY 10 – 16, with the number reaching 782,814 during FY 16

Key Players L&T, AFCONS, IL&FS, Road Infrastructure Company Kerala Limited, Roads & Bridges Development Corporation of Kerala Ltd., Shilpa Projects & Infrastructure Pvt. Ltd., Rajdeep Group etc.

Conclusion • Implementing elevated highway a promising option in Kerala as the land acquisition issues affect the local people and less land is required for the Project. Since rehabilitation is note required and with restrictions on public transport fleet, no cross roads etc. this will facilitate non-stop travel for long stretches • It may not be feasible to have long stretches of elevated highway in one go. A shorter stretches of less than 10-50 km shall be taken up initially with provision for expansion. • Detailed traffic study and feasibility study shall be undertaken by consultants in prior to implementation. • The project is suggested to be implemented in PPP mode (BOT type is suitable for toll road projects) and can qualify for Viability Gap Funding of government. The project can also explore the Hybrid Annuity Model in which a private player is required only to partly bear financing risk.

Inland Waterways and Cruise Development Sector/Industry – Transport/Tourism Project Type – Mega Estimated Project Cost – INR 10000 Crores

161 https://www.ibef.org/download/Roads-February-2017.pdf, https://www.pppinindia.gov.in/faqs , http://www.keralapwd.gov.in/getPage.php?page=NHDP%20Home&pageId=289 , http://www.projectsmonitor.com/guest-articles/we-see-bright- opportunities-in-the-road-construction-sector/ , http://pib.nic.in/newsite/PrintRelease.aspx?relid=135821 © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Proposed Location – Multiple (Rivers and backwaters of Kannur and Kasaragod district)

Project Description • The project plans to develop the inland navigation waterways to reduce congestion on roads and also to promote backwater tourism. This project envisages water connectivity, linking all the lagoons and river estuaries. • The River Cruises industry comprises the following stakeholders: Department of Inland Water Transport, Department of Tourism, River Cruise Operators/ Cruise Liners, Ship Agents, Tour Operators, Provision suppliers • The major benefits of Inland Water Transport are cheaper mode of transport, safe and energy efficient, more environmentally friendly and cause least CO2 emission. Diversion of a part of the cargo from road to Inland Water Transport will decongest the roads, reduce accidents and substantially reduce the transportation and fuel cost.

Market Scenario • Foreign and Domestic Tourist arrival to Kerala during the year 2016 is 10,38,419 and 1,31,72,535 respectively. Total Revenue (including direct & indirect) from Tourism during 2016 is INR 29658.56 Crores. With regards to inland waterways & cruise development, Kerala has a coastline of around 590 Km and backwater tourism I a key attraction for tourists • Government support for investments based on integrated water use for irrigation, drinking and industry and for controlled flow, strategic important alternate route for bulk movements, tourism related, new canal systems, river linking projects can be worked out • Inland waterways in the State offer a unique opportunity for the development of tourism and cargo traffic apart from its navigational importance and potential for fisheries. However, a coordinated development of inland waterway system with focus on tourist infrastructure and cargo movement may be stresses upon for exploiting the potential in these sectors. With a number of lagoons and interconnecting canals and rivers provide an ideal mode for transport. Kerala has four National Waterways which covers a length of more than 450 kms, provides ample scope for Inland waterways and Cruise Development in the State. Further, the State Government has been supporting investment in major infrastructure development projects for promoting backwater tourism in Kerala.

Project Parameters162

Parameter Description

Land • Rivers and backwaters of Kannur and Kasaragod district. For cruise, around Chandragiri, Tejaswani, Perumba, Kuppam, Valapattnam and the backwaters, among others

162Economic Review 2016, GoK, http://content.icicidirect.com/mailimages/IDirect_DredgingCorp_IC.pdf, http://www.karnatakatourism.org/policy/river_cruise_karnataka.pdf , https://www.thequint.com/news/business/will-indias-navigable- waterways-turn-into-highways-for-transportation © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Parameter Description

• Cruise Liner, On Board facilities (Cabins, play area, indoor games, Project restaurant etc.), Off-Board Infrastructure (jetty facilities, lounge area, facilities connectivity to base stations etc.). In order to establish robust waterways systems bypassing problems like low height bridges obstructing traffic and diverting river navigation, reconstruction of bridges and connecting roads is essential alongside with dredging along coastlines, and ongoing maintenance of these is an important aspect of successful implementation of waterway projects

Employment • The total contribution of travel and tourism to employment was Potential 37,315,000 jobs in 2015 (8.7 per cent of total employment). Moreover, as per “Regional Tourism satellite Account for Kerala”, the total number of jobs created directly and indirectly by the sector between 2009 and 2012 turned out to be 23.52 per cent of the total employment in Kerala. • Tourism sector created 14 lakhs jobs as per the report. Therefore, it can be concluded that a project of this scale would create > 2000 direct and indirect jobs.

Cost of the INR 10000 Crores (~USD 1550 Mn). project (INR) Estimated break-up for road, bridge development works and dredging are given below. • Road development ~ INR 1500 Cr • Bridges reconstruction, dredging and maintenance ~ INR 2000 Cr

Means of • The project could be set-up in PPP mode. Finance • Estimated industry average for debt/equity ratio for river cruise projects is 0.6x

Competitive Landscape163 • River cruises have been predominantly present in rivers that have excellent navigation systems. Cities like Venice and villages in the backwaters of countries like China and India (western coastline and the north-eastern States) thrive on river and canal cruises for livelihood. Some of the best examples of river cruises come from river Amazon, river Nile and river Thames. • As the wildlife sanctuary at Thekkady, the Periyar River has been dammed to provide an extensive fresh water lake to enable tourists to have boat cruises. In Vembanad Lake and other backwaters, there are areas suitable for aquatic sports and other activities. Houseboats in the waterways help attract a large number of foreign as well as domestic tourists to the State. Thus, development of inland waterways can act as an important tool for promotion of tourism. Also, main tourist centres such as Kochi, Alappuzha, Kodungallur, Ponnani, Thriprayar, Cheruthuruthy etc. along the West Coast Canal route also offers good potential for pilgrim tourism.

163 http://tourism.gov.in/sites/default/files/Guideline_5.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Key Players KSINC, KSWTC, KTDC, IWAI

Conclusion • The project offers varied opportunities to capture potential of integrating Inland Waterways with coastal shipping for the movement of cargo to ports. With waterways connecting the ports, it would be economical to distribute the cargo through waterways. It is also possible to integrate inland waterways with coastal ports to accommodate coastal and international traffic. • According to Government of India scheme for assistance to agencies for tourism infrastructure development, development of cruise terminals can be taken up under the scheme. The Ministry of Tourism would bear 100% of the project cost (not more than 25 Crore) based on the project plan and estimates submitted excluding the items which are the exclusive responsibility of the Central Agencies.

Aerotropolis Sector/Industry – Infrastructure Project Type – Mega Estimated Project Cost – INR 850 - 1000 Crore Proposed Location – Kannur

Project Description164 • The Aerotropolis consists of an airport city core and outlying corridors and clusters of aviation- linked businesses. The proposed project is in juncture with the upcoming Kannur International airport, first phase of which is ready to be commissioned this year. The three major components of Kannur aerotropolis includes: • Traditional Industries - Marine Product Processing, Cashew Processing, Coir Processing, Plywood, Spices, Silk production, Handloom & Textile, Coffee Processing, Handicrafts, Floriculture • Induced Industries considering airport as catalyst –Aviation MRO, Aerospace Manufacturing, Aviation Institute, Gems & Jewellery, Logistics • Real Estate – As a support facility such as Tourism & Hospitality, Medical facilities, Commercial (IT & Non-IT) • With the onset of Kannur airport which was envisioned taking into account the future demand of the passenger traffic of the emigration population from North Kerala and the huge tourist volume in the hinterland, the district has a huge opportunity to be developed as an industrial hub in the state. Thus, with vision to have a holistic project catering to the airborne passengers, logistic, industrial and social requirement of the entire hinterland, an Aerotropolis is advised in the subject site at Mattannur in Kannur

164 Feasibility study for landside development of Kannur Aerotropolis by INKEL and Jones Lang © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Market Scenario • Although Kannur has a diverse agricultural and marine base, it is still untapped. The proposed Aerotropolis ought to have a vision of leveraging on the existing untapped potential of Kannur and adjoining Kasaragod district in different spectrums like agro processing, marine processing and tourism. • Kannur has historically been bestowed with the status of the `Town of Export Excellence' by the Central Ministry of Commerce and Trade and the Kannur airport is likely to facilitate export trade for the export focused industrial clusters • Major Urban nodes is Kannur and sea port at Azhikkal. The economic drivers are primarily agricultural and fishing zone, hence untapped potential exists in agro processing & tourism sector. Calicut is also a key urban node which is a key target market • Major products in the region are – cashew, coffee, floriculture, spices, coir products, plywood, handloom, silk and marine products

Project Parameters165

Parameter Description

Land • Industrial park – 612 acres (Proposed • Airport based SEZ – 300 acres landside breakup) • Real Estate – 55 acres

Raw Materials Site access road, power (110 KV substation at Kannur airport), water supply and Utilities (proposed to be sourced from Pazhassi dam)

Cost of the The project cost is estimated taking into account various expenditures on project (INR) account of the following components. The total cost is estimated at INR 900 Cr* (~USD 140 Mn) • Cost of Land: INR 700 CR • Land Development Cost: INR 80 Cr • Utilities Cost: INR 70 Cr • Administrative Block: INR 5 Cr • Contingency: INR 8 Cr • Preliminary and Preoperative Expenses: INR 6 Cr • Margin money for Working Capital: INR 1 Cr • Interest during Construction: INR 30 Cr

Means of • Debt-equity ratio of 1.5:1 is assumed. Finance • Considering this as regional/industrial development project government support may be availed in terms of Grants/VGF etc.

165Feasibility study for landside development of Kannur Aerotropolis by INKEL and Jones Lang, * Assumptions considering inflation in last 5 years © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Parameter Description

Expected • The pre-tax project IRR is estimated at 16.67% Sales Turnover

Competitive Landscape166 • Kannur region is home to many industrial sectors such as textile, food & agro, wood and paper related etc. An industrial park that shall subsume the combined potential of these sectors will be first of its kind in the district and north Malabar region itself. • Due to dearth of a comprehensive industrial setup in the district, major development is poised to come in with the proposed Aerotropolis.

Conclusion The proposed Greenfield Aerotropolis in Kannur, Kerala is thus envisaged to be unique development with capability to change the socio-economic scenario of its primary hinterland. With a vision to capitalize the untapped industrial and tourism potential of North Malabar region, the subject project can emerge as a definite winner in creating a large number employment opportunity and making Kannur a 'Destination' of its own. The feasibility study conducted by INKEL proposed 2 development options for the project namely: 1. Integrated with development plan of Kannur International airport and bid out on BOT mode 2. Treated as separated entities, wherein Aerotropolis will be bid out on BOT mode However, various models can be worked out with the government

Aquaculture and Seafood Exports Sector/Industry – Infrastructure Project Type – Mega Estimated Project Cost – INR 10 Crore (excluding land lease cost) Proposed Location – Vizhinjam Port

166 Feasibility study for landside development of Kannur Aerotropolis by INKEL and Jones Lang © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Project Description167 • The proposed project is to build an Aquaculture and Seafood export facility at an area of 20 acres of government land earmarked for fishing harbor and seafood park (with processing and cold storage) at Vizhinjam Port. The aim of this project is to boost the aquaculture industry and seafood export in Kerala to enhance the food security, creation of employment opportunities, generation of income and surplus for trade in fish and fishery products. • The Aquaculture scenario in Kerala is mostly dominated by shrimp culture especially in coastal area, and recorded rapid progression in production and makes a significant contribution to the foreign exchange earnings through exports. The diversification of production by introducing new commercial species, adoption of new technologies and introduction of seafood export units for value added products shall help open a new set of opportunities in the fisheries sector. • Vizhinjam is a major fishing village in Thiruvananthapuram and proximity of Vizhinjam Port to major international sea route and East West shipping region puts forth tremendous potential towards development of ornamental fish trade and aquaculture of Vannamei, Tiger Shrimps and Bamboo Shrimps. • Kerala is yet to tap the burgeoning prospects of aquaculture. Empowerment of fish farmers in the state can make them aware of the potential of diversification of aquaculture practices such as integrated farming and cage culture.

Market Scenario168 • The coast of Kerala constitutes approximately 10 percent of India’s total coastline. Among maritime states in India, Kerala ranks second in marine fish production. In 2015-16, total fish production in the state stood at 0.68 million tonnes. Kochi Port exported 1,55,989 tons of marine cargo worth INR 4,447 crore. • Trivandrum port saw 3665 tons of marine exports worth 186 Cr. Efforts are underway to culture fish other than shrimps that have huge potential for export and local consumption like cobia, pompano, groupers and sea bass. • Kerala registered an 8% increase in its total marine fish catch over the previous year producing 5.23 lakh tonnes in 2016. Kerala has the highest share (49%) of marine fish landings in South- west region • Seafood exports from the country is expected to exceed USD 6 billion in the FY17 driven largely by demand for Indian shrimps in the global market. In 2016-17, India exported USD 5.78 billion (~INR 37,871 crore) worth of marine products which saw a 23% increase from 2015-16 during which India has seafood worth USD 4.7 billion (~INR 30,420 crore). Cultured shrimps account

167 Vizhinjam Seaport Project: Land Acquisition Hurdle Solved,21 April 2016, http://entecity.com/news/vizhinjam-seaport-project-land-acquisition- hurdle-solved,accessed 24.07.2017; Report of India Brand Equity Foundation, April 2017, https://www.ibef.org/states/kerala.aspx, accessed 24.07.2017; http://shodhganga.inflibnet.ac.in/bitstream/10603/111440/4/13_chapter3.pdf; Seafood exports at all-time high, The Hindu,11 June 2017, http://www.thehindu.com/todays-paper/tp-national/tp-kerala/seafood-exports-at-all-time-high/article18958985.ece; India’s Seafood Export at all-time High in 2016-17:MPEDA, Press Information Bureau Government of India Ministry of Commerce & Industry, 07.06.2017, http://pib.nic.in/newsite/PrintRelease.aspx?relid=164454, accessed: 25.07.2017; Seafood exports could grow 20% in FY17, Business Standard, 06 Aug 2016, http://www.business-standard.com/article/markets/seafood-exports-could-grow-20-in-fy17-116081000007_1.html, accessed on 25.07.2017 168http://economictimes.indiatimes.com/articleshow/59787946.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst, http://economictimes.indiatimes.com/markets/expert-view/india-has-increased-seafood-exports-and-there-is-no-shortfall-in-shrimp-exports-a- indra-kumar-cmd-avanti-feeds/articleshow/59646611.cms, http://www.icar.org.in/en/node/12770, http://pib.nic.in/newsite/PrintRelease.aspx?relid=164454, http://economictimes.indiatimes.com/markets/commodities/kerala-widens-fish- export-platter/articleshow/50800302.cms © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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for about 70% of the value of the exports and there has been increased interest in the farming of the shrimps, particularly the Vannamei variety, which has most demand in the market now. • India being one of the top producers of the seafood, huge market opportunities are there in US, EU, UAE, China and South East Asian countries. Export markets have seen a growth of 20% in shrimp demand • USA continued to be the largest market in value terms whereas South East Asia stands first in quantity. South East Asia, with a share of 30% in dollar terms, remained the second largest destination for India’s seafood products. It was followed by the EU (17.98%), Japan (6.83%), West Asia (4.78%), China (3.50%), and other countries (7.03%). Overall, exports to South East Asia increased by 47.41% in quantity, 52.84% in rupee value, and 49.90% in dollar earnings. Besides frozen shrimp and frozen fish, India’s other major seafood product was frozen squid, which recorded a growth of 21.50 %, 59.44 % and 57 % in terms of quantity, rupee value and dollar earnings, respectively.

Project Parameters

Parameter Description

Capacity • Aquaculture capacity, a minimum of 1000 MT fish/annum • Approx. cold storage (freezer) facility of 5 MT per day

Land • An area of 20 acres of at Vizhinjam Port is available for lease with Vizhinjam International Seaport Ltd

Raw Materials • Aquaculture cages and Utilities • Aquaculture blower • Set-up for hatcheries • Storing area for seafood • Pre-processing plant / Peeling shed • Cold storage - Freezer, containers • Packaging facility Employment • Estimated employment opportunity of ~500 direct and indirect jobs Potential

Cost of the • Cost of the project excluding land cost ~ INR 7-10 Cr (~USD 2 Mn) project (INR) • Estimated cost for plant and machinery for an aquaculture capacity of 1000 MT is estimated at INR 2 Cr • Estimated cost for cold storage and processing facility is INR 5 Cr • Misc. cost – 1-3 Cr Means of The proposed debt-equity ratio for the project is 70:30 Finance Many government schemes can be availed under: • Export promotion council / commodity boards • Apex trade bodies recognized under the EXIM policy of Government of India and other apex bodies recognized for this purpose • MPEDA/Rajiv Gandhi Centre for Aquaculture funding provisions

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Competitive Landscape • Vizag, Kochi, Kolkata, Pipavav and Jawaharlal Nehru Port (JNP) were major ports that handled the marine cargo during 2016-17. • Seafood exports from the country had declined in 2015-16 with the slowdown in global economies and better supply from competing countries such as Thailand and Vietnam. • States such as Andhra Pradesh and Odisha have opened up opportunities for aquaculture farmers to bring more areas under shrimp production. Gujarat has added aquaculture ponds in a big way. • According to the available estimates of potential fishery resources of the West Coast, particularly in the south-west coasts, Kerala possesses the richest fishing grounds in the region. Seafood export from Kerala is mainly channeled through the Kochi port.

Key Players Kochi Port, Vizag, Kolkata, Pipavav, JNP, Krishnapatnam, Tuticorin and Chennai ports, KINFRA Seafood Park, Aroor, Many small-medium scale seafood exporters exists in Vizhinjam and Kochi regions

Conclusion • The vast fishery resources existing in Kerala need to be exploited properly and carefully adopting scientific fish farming to enhance productivity. • Development of an aquaculture and a seafood Park at Vizhinjam would significantly value add the seafood produce of the local fishermen fraternity and economically back boost them. Implementation of scientific method in aquaculture confers many economic benefit on the society in the form of employment and income generation, production of food, trade surplus and foreign exchange earnings etc. • Aquaculture has emerged one of the fastest growing food production activities in the world. This facility can help disseminate the vast potential of the fisheries and aquaculture sector and offer numerous investment opportunities in this industry.

Integrated Manufacturing Cluster (IMC) Sector/Industry – Infrastructure Project Type – Mega Estimated Project Cost – > INR 10000 Crore Proposed Location – Cochin to Palakkad

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Project Description169 • It is proposed to establish an Integrated Manufacturing Cluster (IMC) in the proposed Kochi- Bengaluru Industrial Corridor from Kochi to Palakkad. The project aims to facilitate investment, foster innovation, enhance skill development, and build best-in-class manufacturing infrastructure. The proposed industrial corridor passes through Palakkad and Coimbatore to link with the Chennai-Bengaluru industrial corridor • The length of the corridor in Kerala would be nearly 160 Km. the Integrated Manufacturing Cluster that will come along the Corridor will boost the manufacturing activities including Electronics, IT, Biotechnology, Life Sciences, etc. in the districts of Ernakulam, Thrissur, Malappuram and Palakkad. • The clusters shall be equipped with world-class infrastructure, road and rail connectivity for freight movement to and from ports and logistics hubs, served by reliable power and quality social infrastructure. They will provide a globally competitive environment conducive for businesses. • The Kochi Bengaluru Industrial Corridor proposes to address the infrastructure bottlenecks through a holistic approach while benefiting from the inherent strengths and competitiveness of each of the KBIC states. Accordingly high impact/ market driven integrated manufacturing clusters are proposed to be developed, at strategic locations, within the corridor to provide transparent and investment friendly facility regimes. • Such a cluster concept will enable the R&D resources already existing at Trivandrum to be optimally used, to generate more project and business ideas, setting off more virtuous circles. Industry-specific clusters will be set up under central schemes like the Electronic Manufacturing Cluster Scheme of the Department of Electronics & IT and the Modified Industrial Infrastructure Upgradation Scheme of Ministry of Commerce & Industry. The Central Government is preparing a National Plan for Manufacturing Clusters. The Plan aims to bring about convergence in development of industrial areas by the central and state governments so as to bring about optimal utilization of resources

Market Scenario170 • The India Brand Equity Foundation (IBEF) states that as of July 2016, Kerala had 29 SEZs with formal approval and 25 notified SEZs. A cyber-park, spread over a 68-acre campus, is being developed in Kozhikode. • Kerala has been promoting knowledge-based industries such as IT/ITeS, computer hardware and biotechnology. It is the first state having a technology park with CMMI level 4 quality certification and a world-class IT campus in Thiruvananthapuram. • The Industrial Development & Economic Growth in Kerala's gross state domestic product (GSDP) was at USD 68.5 billion over 2014-15 and net state domestic product (NSDP) was at USD 59.70 billion over 2014-15.

169 1. Article on Manufacturing Sector in India,India Brand Equity Foundation(IBEF),July 2017 Webpage:https://www.ibef.org/industry/manufacturing-sector-india.aspx, accessed : 20 July 2017, 2. Article "Government preparing national plan for manufacturing clusters",The Economics Times, 17 July 2017, webpage: http://economictimes.indiatimes.com/news/economy/policy/government-preparing-national-plan-for-manufacturing- clusters/articleshow/59633730.cms; accessed: 19 July 2017 , 3.Report on Kerala Industrial & Commercial Policy Amended - 2015, Website: http://www.ksidc.org/userfiles/industrial___commercial_policy_2015___approved___may_6__2015-old16-9-2015.pdf, accessed:20 July 2017 170http://www.ksidc.org/userfiles/selection_of_consultant_fo_implementation_of_common_application_form_and_online_clearance_mechanism _in_the_state.pdf, IBEF © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• Manufacturing has emerged as one of the high growth sectors in India. India’s manufacturing sector has the potential to touch USD 1 trillion by 2025. There is potential for the sector to account for 25-30 per cent of the country’s GDP and create up to 90 million domestic jobs by 2025. • Business conditions in the Indian manufacturing sector continue to remain positive. India has become one of the most attractive destinations for investments in the manufacturing sector. • Cumulative FDI inflows into the electronics sector, including computer hardware and software, increased at a CAGR of 13.56 per cent, with the value increasing from USD 9.8 billion in FY10 to USD 21.02 billion in FY16. • Demand growth, supply advantages, and policy support have been instrumental in attracting FDI. India has grown as a global manufacturing hub due to its cost competitiveness, trained labor and due to the positive government plans. • Setting up of Industrial projects in Kerala has become a hassle free operation since Government of Kerala has introduced the Single Window Clearance System in the State. Currently KSIDC is in the process of implementing a Common Application Form in the state

Project Parameters

Parameter Description

Land Around 1000 acres of land in the possession of central and state PSUs in the region remains unutilized. A 50 kms band with NH 544 as the spine and a length of 160 kms has been proposed within the State for establishing the Industrial Corridor. Another 2000 acres of land can be acquired along the corridor region, and this was announced in the State Budget 2016-17. This will be in different nodes of 50 to 500 acres, situated on either side of NH-66.

Raw Materials • Infrastructure augmentation and Utilities • Power Supply • Industrial Grade Water Supply • Solid Waste Management services by ULBs • Connecting roads Employment Targets to create gainful employment opportunities with more than 0.1 million Potential direct employment and at least 0.3 million indirect employment.

Cost of the The total cost estimated for the Integrated Manufacturing Cluster is INR 10,000 project (INR) Cr (~USD 1550 Mn). For infrastructure activity under PPP, viability gap funding would be available. It is proposed to develop the project on Design, Build, Finance, Operate and Transfer (DBFOT) basis.

Means of The project is proposed to be implemented in PPP mode. Government of Kerala Finance will provide the land required for establishing the Cluster. An SPV will be formed

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Parameter Description

involving Government agencies like KSIDC, KINFRA, DIC, etc. to this extent. Land will be the equity of Government of Kerala in the project. All necessary clearances will also be facilitated by the Government. Suggested particulars under means of finance are as follows: • Government Grant – 30% • Equity from Government Agencies and from constituent units – 40% • Term Loan – 30%

Competitive Landscape171 • KBIC seeks to optimise the present economic and employment potential of the region, stimulate investments particularly in the manufacturing, agro-processing, services and export oriented units and promote overall economic development of the area through creation of high standard infrastructure and an enabling pro-business environment • Central government has proposed various initiatives to give a push to the Make in India campaign and the National Investment and Manufacturing Zone (NIMZ) in Prakasam district in Andhra Pradesh is one such example. Once the NIMZ becomes a reality, it is estimated to attract investments to the tune of INR 437000 crore, generate jobs to 3 lakh people and earn foreign exchange to the tune of INR 24,000 crore • With the onset of Sagarmala Programme, many ports including ports in Kerala have been identified across port modernization & new port development, port connectivity enhancement, port-linked industrialization and coastal community development for phase wise implementation over the period 2015 to 2035. This increases the potential for a manufacturing cluster in the state. Key Players Manufacturing cluster Chennai, Hyderabad; Integrated MSME clusters, Tamil Nadu; VCIC Corridor

Conclusion • By introducing a cluster-based approach in the state, it can further strengthen the competitiveness of the sectors through leveraging the economies of scale. Support of the state government of Kerala for land acquisition required for establishing the cluster shall be provided. An SPV will be formed involving Government agencies like KSIDC, KINFRA, DIC, etc. to this extent. All necessary clearances will also be facilitated by the Government. An integrated approach involving industrialists, Government and the society is crucial for achieving faster industrial development of Kerala and the same will be demonstrated through this manufacturing cluster.

171 http://pib.nic.in/newsite/PrintRelease.aspx?relid=159037, http://www.thehindu.com/news/national/andhra-pradesh/nimz-works-gain-pace-in- prakasam-district/article8030363.ece © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Petrochemical Park Sector/Industry – Petrochemical Project Type – Mega Project Estimated Project Cost – INR 1864 Crore Proposed Location – Ambalamugal, Kochi

Project Description172 • KINFRA proposes to develop a Petrochemical Park of international standards at Ambalamugal, in Ernakulam district of Kerala. The project is intended to create an Industrial Park with all modern facilities exclusive for the Petrochemical Industry. • The Petrochemical and Pharma Park is proposed in 600 acres of FACT land in Ambalamugal, to be transferred to KINFRA. This land already has a large refinery, fertiliser and chemical factories, LNG Terminal & Gas Pipeline Network being established, a Bulk Terminal and International Container Transhipment Terminal (ICTT). The proposal assumes significance in view of the expansion proposal of BPCL, nearness to the Port and Natural Gas infrastructure at the location. • Petrochemicals play a vital role in economic development and growth of a country. The growth of this industry is closely linked to economic growth of a country. Petrochemicals are considered as enablers for growth of other sectors of the society. They are derived from various chemical compounds, mainly hydrocarbons. These hydrocarbons are derived from crude oil and natural gas. • The basic petrochemicals are synthetic fibres, polymers, elastomers, synthetic detergent intermediates, performance plastics, fibre intermediates, olefins and aromatics. Market Scenario173 • The capacity of the Kochi refinery of Bharat Petroleum Corporation is being expanded from 9.5 million tonnes a year to 15.5 million tonnes. The expanded refinery will produce 5 lakh tonnes of propylene annually, the basic raw material for the petrochemicals units3. • India’s production in 2014-15 has been 11,594 thousand MT for major petrochemicals production with polymer constituting around 57%. Indian export of chemicals and petrochemicals stood at US$ 27.43 billion in 2014-15 and constituted 9.4% towards total export.4 Petrochemicals account for 30 per cent of the country’s US dollars 120-billion chemical industry in 2016, which is likely to grow about 11 per cent in the coming years to hit US$250 billion by 20205. • The Indian Government allows 100% FDI in chemicals sector and the domestic petrochemical industry is in the process of investing over USD 25 billion.

172 http://www.thehindu.com/todays-paper/tp-national/tp-kerala/petrochemical-majors-plan-units-in-kochi/article4958950.ece; http://www.makeinindia.com/article/-/v/make-in-india-sector-survey-chemicals; 173 http://www.newindianexpress.com/cities/kochi/2016/oct/23/kochi-to-turn-petrochemical-hub-1531065.htm, http://www.thehindu.com/todays-paper/tp-national/tp-kerala/petrochemical-majors-plan-units-in-kochi/article4958950.ece; http://www.makeinindia.com/article/-/v/make-in-india-sector-survey-chemicals; http://www.newindianexpress.com/cities/kochi/2016/oct/23/kochi-to-turn-petrochemical-hub-1531065.htm; file:///D:/D/2017/KSIDC/Chemical- and-Petrochemical-Industry-in-India.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Project Parameters

Parameter Description

Capacity Common Infrastructure Facilities • Internal Roads, culverts & drainage • Water Treatment Plant • Water supply and distribution, recycling system for irrigation & flushing • Dedicated Sub-station & Power distribution System • Street lighting • Telecom & communication systems • Sewerage network • Common Effluent Treatment Plant (CETP) for Industrial Wastewater treatment; also • Industrial Wastewater conveyance & recycling • Rainwater harvesting • Greenery • Social Amenities • Canteen • Clinic • Bank / ATM • Gymnasium • Sports Courts • Logistics movement support Land • The proposed Petrochemical is to be established in an area of 600 acres at Ambalamugal, Kochi. Out of the total area of 600 acres, it is planned to earmark 450 acres for Petrochemical Industries and balance land of 150 acres for Pharmaceutical sector. The land is currently in possession of FACT Ltd which will be transferred to KINFRA. • Land site survey is in progress. Raw Materials Kerala Industrial Infrastructure Development Corporation KINFRA will develop and Utilities all basic Infrastructure facilities for the park

Employment The proposed part is poised to offer employment opportunities in tune of 300 Potential plus direct jobs and more than 1000 indirect jobs

Cost of the • Land cost - INR 1,264 crore project (INR) • Project cost - INR 600 crore • Total cost of the project is INR 1864 crore (~USD 300 Mn) Means of Kerala Infrastructure Investment Fund Board (KIIFB) will be funding the entire Finance INR 1,864 crore

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Competitive Landscape174 • Deepak Petrochemicals, Kothari Petrochemicals, Hindustan Organic Chemicals, Mareena Chemicals and SK Global Chemicals are few of the players operating in this space. • With the emphasis on ‘Make in India’ and the many investor summits organized by different states, the interest in this sector is brimming. Key Players • Indian Petrochemicals Corporation Limited (IPCL), Reliance Industries Limited (RIL) and Oil and Natural Gas Corporation (ONGC) in Gujarat. • Petroleum, Chemical & Petrochemical Investment Region (PCPIR) - a specifically delineated Investment Region being developed in n Andhra Pradesh, Gujarat, Odisha and Tamil Nadu Conclusion • The proposed Petrochemicals Park offers facilities like Single Window Clearance facility, complete Eco friendly infrastructure, shared common infrastructure facilities and land in parcels and built up spaces available for establishment of units on lease basis. The Department of Chemicals and Petrochemicals, GoI, has also launched some schemes to promote this sector like ‘Setting up of centres for Excellence in Petrochemicals Sector’. This Petrochemicals Park will create more employment in the state and would accommodate about 20 small and medium scale companies¹. This state of the art facility welcomes all investment opportunities to develop their industries here and reap the benefits of it.

Kerala Maritime Cluster

Sector/Industry – Infrastructure Project Type – Mega Estimated Project Cost – INR 3500 Crore Proposed Location – Cochin Port (Wellington Island)

Project Description • The maritime gateway to peninsular India, Cochin is the fastest growing logistic centre emerging in to a major International trans-shipment terminal. An all-weather natural Port, and located strategically close to the busiest international sea routes Cochin is promoting a major liquid terminal, bulk terminal and maritime industries in its port based SEZs. Additionally due to its proximity to the maritime highway, it is proposed to set up a Maritime Cluster in Cochin adjoining to the port area. • The proposed cluster is poised to enhance the strength and development of maritime sector and in effect make the port more accessible and competent. Maritime Cluster can be broadly defined as a group of organisations, institutions, business and other industry players in the maritime sector that are geographically located close to each other and enjoy positive synergy between their activities. In India, most of the existing maritime clusters have been developed in an un-planned manner which has led to highly fragment maritime industry and sub-optimal growth over the years.

174 http://www.thehindu.com/news/cities/Kochi/petrochemical-park-for-kochi/article6992929.ece © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• Kerala, especially Kochi, has already had an important presence in the maritime field. However, the different stake holders are scattered and there is no common link connecting the stakeholders. Because of this reason, the potential of the maritime activity in the state is not fully explored. The cluster is to be government by a well-tailored maritime policy to create a common platform for all the stake holders functioning in and around Kochi port ranging from manufacturers, logistics, ancillary service providers, universities etc. Such a proposition shall foster the maritime manufacturing potential of the state and transform the maritime dreams of the state. • The major stakeholders comprises of Governments of Central & State, Shipyards, State and Central institutions, boat builders, ancillary equipment manufacturers, fishermen, logistics, maritime lawyers, insurance, tourism, financiers, Government, tax laws, and many more. At present all the stakeholders are scattered and are disconnected. All these elements need to be consolidated and streamlined into a well-oiled machinery to reap the maximum reward for the State in the maritime sector. • In cochin, existing cluster consists of cochin shipyard - ship repair and ship building facility, container cargo, commodities trading center, LNG Terminal Jetty, cruise terminal, International container transhipment terminal, Bolghatty Resort, Government bodies like, Kerala State Maritime Development Corporation, Kerala State shipping & Inland Navigation Corporation, private shipyards, institutes like Kerala Maritime University. The scope of this project is to develop and enhance the existing maritime cluster at par with leading international maritime centers and develop a policy guideline for functioning of the maritime cluster • The proposed project of development of a maritime cluster is Kochi consists of development/enhancement of following components of the existing cluster: • Core Services (Shipping and Port related) - International Ship Repair Terminal, Boat Manufacturing & Repair facility, Port Modernization, Ship Management Services • Finance and Regulatory Services - Maritime finance & insurance services • Others – Port led Industrial park, Cruise Tourism, Water sport activities at Marina and Maritime Museum

Market Scenario175 • India port infrastructure market is projected to grow at a CAGR of over 9% during 2016-2025, on account of heavy funding pertaining to development of ports and related infrastructure such as connecting roads, railways and Coastal Economic Zones. Government’s focus on ease of doing business such as allowing 100% FDI under automatic route for projects related to construction and maintenance of ports and harbors provides a promising outlook for future development and growth of port infrastructure market in India. • Cochin port currently handles ~25 MTPA of cargo out of which liquid cargo- POL, LNG and LPG forms the major chunk while other commodities including containers, fertilizers, coking coal, etc. form a small share of the total traffic. The total traffic at Cochin port is expected to increase to 41-43 MTPA by 2025 and 52-60 MTPA by 2035 driven primarily by the expansion of the BPCL refinery, LNG and LPG imports and growth in container volumes. • The Kerala Coastal Economic Zone (CEZ) under the National Perspective plan of the Sagarmala Programme is envisaged to provide a thrust to the traditional stronghold industries in the state

175 Cochin Port Trust, http://sagarmala.gov.in/sites/default/files/1058476289DraftPerspectivePlans%20ofCEZones.pdf, http://pib.nic.in/newsite/PrintRelease.aspx?relid=154922 , http://www.oceanblue.in/kochi-international-marinas.html © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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which have a significant EXIM orientation and linkages with the port. It aims to provide an impetus to the economy of the state, taking into account the favourable conditions it enjoys both as a location for light manufacturing and as a tourist destination. • Kerala has a coastline of around 580 km. The CEZ in the state of Kerala comprises nine coastal districts of the state Kasaragod, Kannur, Kozhikode, Malappuram, Thrissur, Ernakulam, Alappuzha, Kollam, Thiruvanthapuram. • The potential for developing a maritime cluster with export oriented industrial clusters can be utilized by providing greater export incentives to the industry, improvement of logistics infrastructure, and simplification of export processes including faster documentation and custom clearance • According to Ministry of Shipping, India accounts for only 0.45 per cent of the global shipbuilding market in 2016 and could target 3–4 mn DWT of the global shipbuilding capacity by 2025. With the recent policies & initiatives by the Government the unfavorable cost differential faced by the Indian shipyards is expected to reduce. Subsequently, opportunity in defence sector, growth in coastal shipping and replacement of existing vessel fleet is expected to drive growth of the shipbuilding industry in India. • For port led industrialization, huge potential has been identified for Kerala CEZ in two potential industries namely furniture manufacturing/processing and passenger cruise tourism. • Demand for furniture in India surged at 12 per cent annual rate between 2007 and 2014 creating a USD 25 billion market • Kerala currently has major furniture clusters in Taliparamba, Malapuram and Ernakulam and minor furniture clusters in Kollam and Thrissur. • Kerala, due to its location and already established ecosystem, is best suited for a port- based or port-proximate furniture manufacturing cluster. • Kochi is a popular tourist destination for foreigners and domestic tourists alike. It is already a port of call for cruises connecting South Asia and Middle East and North Africa (MENA). Kochi has the highest relative share approx. 31 per cent as ‘port of call’ among Indian ports. This reinforces Kochi’s popularity as a tourist destination amongst cruise liners. • Kochi port saw a CAGR of 37% increase in average cruise passengers visiting the port in 2014-16 period with ~82000 average number of cruise passengers in 2016-17. The number of cruise ships that visited increased from 39 in 2014-15 to 46 in 2016-17 with a CAGR of 9%. • Kochi port being located on the south-western coast, is an ideal location to be linked to domestic cruise circuits that connect Kochi, Mangalore, Goa and Mumbai offering cultural and heritage, religious as well as leisure destinations • The existing "Kochi International Marina" located on the eastern coast of Bolgatty Island adjoining the Bolgatty Palace is a full-fledged marina of international standards in India. The marina is close to the international maritime route at the south west coast of the Indian Peninsula, with favorable conditions and minimum tidal variations throughout the year. By providing adequate facilities for the yacht owners and their crews, with various water sports activities in place, this marina has huge potential to augment the tourist flow to Kerala • To boost the maritime operations in the state, Cochin Shipyard Limited has chalked up huge expansion plans with a new 310 meter dry which will help them handle ships with much larger capacities and will invest INR 1800 Cr for the project

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Project Parameters176

Parameter Description

Capacity Port Modernization • Setting up of fertiliser bagging facility at Kochi port • Setting up of food grain import terminal at Kochi port • Setting up of edible oil terminal at Kochi port International Ship Repair Facility • Facility for repair of ships of capacity up to 25000 DWT, with Ship Lift System. Port-led Industrial Cluster • Ernakulam could be developed as a furniture manufacturing hub and linked to Kochi port for evacuation. • Modernization of existing boat manufacturing facilities Cruise Tourism and Marina water sports • Upgrading infrastructures at Ernakulam Wharf for cruise berthing facilities: • Construction of Cruise Terminal building • Development of berth and backup area • Upgradation of existing International Marina with water sports facilities such as Jet Ski, Towables, Bumper boats and Parasail Boats Maritime Museum • Enhancement of existing maritime museum to create a Maritime Experiential Museum

Land • International Ship Repair Facility - Around 42 acres of land area and 37 acres of water area is given for lease to Cochin Shipyard Limited • Port-led Industrial Cluster - Approx. ~ 180 acres of land is available in proximity of Cochin Port Trust Wellington Island

Employment The industrial cluster could also generate around 1 lakh jobs in the next 10 Potential years

Cost of the The total project cost is estimated at: ~ INR 3500 Cr (~ USD 540 Mn) project (INR) • Port Modernization: ~INR 200 Cr • International Ship Repair Facility: ~ INR 970 Cr • Port-led Industrial Cluster: ~ INR 2000 Cr • Cruise Tourism: ~ INR 20 Cr • Maritime Museum: ~ INR 10 Cr • Marina Watersports activities: ~ INR 20 Cr • Others – Ship Management Services, Finance and Insurance Services, Seafood export facility, Policy Guidelines Consultancy: ~ INR 250-300 Cr Means of The cost of the project is approx. INR 3500 Cr and is proposed to be financed as Finance Promoter’s contribution as equity 1500 Crore and Term Loan from Financial Institutions 2000 Cr. The project may be implemented by relevant Central

176 http://sagarmala.gov.in/sites/default/files/1058476289DraftPerspectivePlans%20ofCEZones.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Parameter Description

Ministries, State Governments, Ports and other agencies primarily through the private or PPP mode.

Competitive Landscape177 • Proposed Maritime cluster in Kochi will be first of its kind in Kerala. • Other developing regions such as Vizhinjam, Poovar and Azhikkal will see development of similar facilities in Ship Building, Cruise tourism, Ship Management and ancillary services. • Ministry of Shipping under the Sagarmala Programme plans to develop 14 Coastal Economic Zones in India targeting major industrial clusters in each zone Key Players • Mumbai and Chennai have established themselves as centers of maritime trade in India • Other prominent proposed future maritime clusters include Ennore (Tamil Nadu) and Saurashtra (Gujarat)

Conclusion • Maritime clusters are to be one of focal points for economic development along India’s coastline and the Sagarmala Programme of the Ministry of Shipping is constantly striving to develop such clusters across major ports in India • The opportunities in the maritime sector with the onset of the proposed maritime cluster is huge. Kochi has an important presence in the maritime field. With the onset of a common link connecting all the stakeholders under the cluster, immense potential of maritime activity in the State is yet to unfold. • In the ports sector, PPP has been primarily observed in segments, such as operation and management of ports, construction of deep water ports, container terminals, shipping yards and bulk ports. India’s “Maritime Agenda 2010-2020,” which replaced the National Maritime Development Programme (NMDP), targets to grow India’s port handling capacity to 3.1 billion ton by 2020. The private sector is expected to play a key role in achieving this ambitious target. • This project aims to attract investments in light of modernizing port infrastructure facilities, ship building and repair facilities, ancillary services, development of industrial clusters etc. leading to robust development of the maritime ecosystem in the state

Small Hydro Power

Sector/Industry – Power Project Type – Mega

177 http://pib.nic.in/newsite/PrintRelease.aspx?relid=149411 © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Estimated Project Cost – INR 850 Cr (Multiple projects) Proposed Location – Multiple Locations

Project Description178 • The proposed project comprises construction and operation of 12 Small Hydro Projects (SHP) across different locations in Kerala under Kerala State Electricity Board (KSEB). These projects are planned to be developed in IPP mode. The combined capacity of 59 MW plants will generate 133.5 GWh annually. SHP projects normally do not encounter the problems associated with large hydel projects of deforestation and resettlement. The projects have potential to meet power requirements of remote and isolated areas. These factors make small hydel as one of the most attractive renewable source of grid quality power generation. Hydropower is a proven, mature, predictable, highest conversion efficiency and cost competitive RE source as it requires relatively high initial investment, but has the advantage of very low operational costs and a long life span, quick start and stop. Hydropower plays a key role in power systems due to its flexibility and reliability (peaking, ancillary services) and in the present scenario, its importance has further increased because of the large scale addition of variable renewable energy power in the form of solar and wind energy in the power system. The proposed hydropower projects are Greenfield projects and its lifetime is 30 years. The projects are expected to operate at a PLF of 25 to 50 per cent. • The details of individual plants, their location, installed capacity and head are given below. # Name of scheme River/River basin Location (District) Installed Capacity (in MW) 1 Nakkayam Muvattupuzha/ Kiriplavuthodu Idukki 12 2 Kallar Kallar River/ Vamanpuram Trivandrum 4 3 Thommankuthu Muvattupuzha/ Kannadiar Idukki 3 4 Wanchiyam Wanchiam/ Valapatianam Kannur 3 5 Kanjirakolly Udumpanpuzha/ Valapatianam Kannur 2.7 6 Bhavalipuzha II Bhavalipuzha/ Valapattanam Kannur 7.5 7 Bhavalipuzha IV Bhavalipuzha/ Valapattanam Kannur 3.5 8 Pappanoor Kallada/ Kallada Kollam 1.5

9 Ambankadavu Ambankadavethode/ Palakkad 2.4 Bharathapuzha

10 Karlmpuzha Karlmpuzha/ Bharathapuzha Palakkad 4.5

11 Palagappandi Palagapandi/ Bharathapuzha Palakkad 4 SHES

12 Chinnaparambhuth Chinnaparambhuthodu and Palakkad 11 odu Mandapotty River

178 Project Design Document Form For CDM Project Activities, Gujarat, KSEB © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Market Scenario179 • In 2016 of the total power generation installed capacity of 3 lakh MW in India, hydropower contributes about 15.37 per cent which includes large hydro and small hydro power projects. • The estimated potential of a SHP project (up to 25 MW station capacity) in India is of about 20,000 MW, of which about 4341 MW has been exploited. A target of adding about 5000 MW by 2022 is kept by the Ministry of New & Renewable Energy (MNRE) by installing SHPs. • Small Hydropower projects can provide a solution for the energy problem in rural, remote and hilly areas where extension of grid system is comparatively uneconomical. • Kerala depends on drawing power from Central pool to meet its peak demand that some time leads to grid failures in peak demand seasons. SHP can be a potential option to build in-house capacity in the state • The estimated potential for power generation from small hydro power projects in the country is about 20,000 MW of which about 4341 MW has been exploited. • Keeping in line with Government of India policy, 24 states have announced policies for inviting private sector investment. About 416 Small Hydro Projects of about 2389 MW capacity have been setup till January 2017. • Government of Kerala (GoK) has been supporting development of small hydro power projects in the state since 1992. It also has a ‘Kerala Small Hydro Policy 2012’ to support investments in this sector. • Kerala has 13th largest potential for small hydro projects in the country compared to the other states. In February 2016, GoK issued a joint statement with GoI to ensure a 24 x 7 supply of power to all. Hydro power is slated to add about 2000 MW to the required capacity in the coming years. • As per a survey carried out by ANERT (Agency for Non-Conventional Energy and Rural Technology) in 13 districts of Kerala to determine the estimated SHP power potential in the state, Idukki has the highest number of sites with an estimated power potential of 279.95 MW. Based on this survey, ANERT initiated cluster mode development of 14 SHP sites in Peravoor block of Kannur district with the support of NABARD. • MNRE has launched many initiatives to promote development of SHP in a planned manner and improve reliability and quality of the project by giving various physical and financial incentives, investments have been attracted in commercial SHP projects apart from subsidizing state governments to set up SHPs.

179Small Hydro Power Program, MNRE, http://mnre.gov.in/schemes/grid-connected/small-hydro/ ; Energy Next, Contributory Artticles, March 20, 2017 - http://www.energynext.in/small-hydro-power-in-india/ ; ANERT Survey , http://anert.gov.in/index.php?option=com_content&view=article&id=159&Itemid=16 ; Joint statement - http://powermin.nic.in/sites/default/files/uploads/joint_initiative_of_govt_of_india_and_Kerala.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Project Parameters180

Parameter Description

Facilities • Gates • Trench weir • Main inlet valves • Penstocks • Power house facilities – Turbine, Generator, Transformer, Generator (for backup), Electronic metering panels • Switchyard Cost of the Estimated per MW cost*: INR 12.5 Cr – 16 Cr project (INR) % share of total project cost • Civil Works: 60%-65% • Electro-Mechanical Equipment: 17%-20% • Indirect costs: 17%-20% • Financing charges: 0.5%-1.2% Means of Standard Debt Equity Ratio for hydro projects is 70:30 Finance MNRE has been providing financial support for the following activities to develop the SHP sector : • Research & Development, Capacity building • Resource Assessment, Detailed Survey & Investigation, DPR • preparation and perspective plan for States • Capital Subsidy to State Sector Projects • Subsidy for Commercial Projects MNRE provides financial support of INR 1 crore per MW limited to INR 5 crore per project for projects in Kerala being set up by private sector

# Name of River/River Location Installed Net Land details scheme basin (District) Capacity Head (in Ha) (in MW) (in m) 1. Nakkayam Muvattupuzha/ Idukki 12 229 Forest - 9.8 Kiriplavuthodu Private - 4.0 Govt. - 0.6 Total - 14.4 2. Kallar Kallar River/ Thiruvananth 4 96.6 Forest : 4.98 Vamanpuram apuram

3. Thommankut Muvattupuzha/ Idukki 3 36 Forest : 4.00 hu Kannadiar Private: 1.30 Total : 5.30

180 http://powermin.nic.in/en/content/faqs-hydropower , *Cost estimation as per Small Hydro Power in India, Energy Next, March 2017 and KSEB, http://mnre.gov.in/file-manager/UserFiles/faq_SHP.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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# Name of River/River Location Installed Net Land details scheme basin (District) Capacity Head (in Ha) (in MW) (in m) 4. Wanchiyam Wanchiam/ Kannur 3 197 Private: 5.00 Valapatianam

5. Kanjirakolly Udumpanpuzha/ Kannur 2.7 47 Private: 13.00 Valapatianam Govt. :0.72 Total : 13.72 6. Bhavalipuzha Bhavalipuzha/ Kannur 7.5 45 Forest : 7.5 II Valapattanam Private: 0.50 Total :8.00

7. Bhavalipuzha Bhavalipuzha/ Kannur 3.5 10.5 Private: 6.00 IV Valapattanam

8. Pappanoor Kallada/ Kallada Kollam 1.5 8 Forest Land Required

9. Ambankadav Ambankadaveth Palakkad 2.4 184 Private: 6.75 u ode/ Bharathapuzha

10. Karlmpuzha Karlmpuzha/ Palakkad 4.5 95 Forest : 4.20 Bharathapuzha

11. Palagappandi Palagapandi/ Palakkad 4 820 Reserve SHES Bharathapuzha Forest

12. Chinnaparam Chinnaparambh Palakkad 11 375 NA bhuthodu uthodu & Mandapotty River/ Bharathapuzha

Competitive Landscape181 • The small hydroelectric projects that are currently present in Kerala under KSEB are: Kallada (15MW), Peppara (3 MW), Lower Meenmutti (3.5 MW), Peechi (1.25 MW), Poozhithode (4.8 MW), Vilangad (7.5 MW), Malampuzha (2.5 MW), Urumi I (3.75 MW) & II (2.4 MW), Chembukadavu I (2.7 MW) & II (3.75 MW), Chimmony (2.5 MW) and Adyanpara (3.5 MW).

181http://www.kseb.in/index.php?option=com_content&view=article&id=74&Itemid=729&lang=en , Private players - http://www.kseboa.org/downloads/Study%20reports/private%20sector%20participation%20in%20power%20generation.pdf , http://kredlinfo.in/projdet_pdf_files/SH_Allotted%20Capaicty%20to%20be%20commissioned.pdf , http://corporateethos.com/corporate- domain/cumi-to-set-up-21-mw-hydro-power-unit-in-kerala/ © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• As per MNRE, Karnataka has the highest potential of over 4000 MW for small hydro power projects. The state has allotted about 273 projects since 1995 with total capacity of 1524 MW with only 9 MW being allotted in FY16-18 period. • Minar Renewable Energy Projects Private Limited (8MW capacity in Pathankayam in Kodenchery), M/s Tecil Chemicals and Electro power Ltd. and Kottayam, M/s Silcal Mettullurgic Limited, Coimbatore are few of the private players in Kerala in this sector.

Conclusion • SHPs have increasingly become an attractive investment destination since large power generating units face major challenges with respect to neighbouring flora and fauna • The proposed projects of KSEB shall have grid connectivity from KSEB to evacuate power from the hydro-electric power station for which private investors can embark upon a Power Purchase Agreement (PPA) with respect to each project • The proposed SHP projects in Kannur, Trivandrum, Idukki and Kollam are planned to be developed in PPP mode. Select projects have pre-feasibility, detailed engineering and detailed project feasibility reports prepared by KSEB which can provide deeper insights to prospective investors.

Holistic Medical Village

Sector/Industry - Services/Healthcare Project Classification - Mega Estimated Project Cost - ~ INR 1500 Crore Project Description

• The tourism sector is the largest service industry in the country, its importance lies in being an instrument for economic development and employment generation, particularly in the remote parts of the country. Tourism is one of the largest industry. It contributes 5 – 6 percent of GSDP. • India is considered as the top medical tourism destination in Asia after Thailand. But only 4% of foreign tourists come to Kerala of total arrival. • Kerala lags behind health infrastructure for medical tourism. Project objective is to tap the opportunity by creating good health infrastructure Project Scenario – Key Analysis

• The project aims to provide an enabling infrastructure, which will address to the current gaps in the growth of total medical system and enhance the opportunities with value added service, which will boost the medical tourism in the state • The project will have two main components 1. Centre for Clinical excellence • Treatment facility with modern amenities • NABL accredited diagnostic centre

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2. Knowledge Centre • Human Resource Development Facility with Finishing School, • It is proposed to be developed with the participation of private partners as a PPP model. The project will be developed and operated by a Special Purpose Vehicle (SPV) in coordination with KSIDC/KINFRA Project Parameters

Parameter Description

Existing Market Kerala hosts 5-7% of the total foreign medical tourist arrivals who avail modern Size complicated medical Treatments. It accounts to USD 200 Mn

Growth (5 Yrs.) 18.5 %

Market Potential The global medical tourism market was estimated to be USD 17 Bn in FY15, India’s share is 17%. Which is ~ USD 3 Bn. It is expected to reach USD 7 Bn by 2020

Competitive Tamil Nadu leads the tally followed by Maharashtra and Andhra Pradesh. Landscape Kerala has advantage of Infrastructure – Three international airports which connects all GCC countries and most Asian countries Qualified Manpower – Kerala is considered to be nursing hub. Kerala’s doctor population ratio is 1:792. Well established wellness system – Kerala is considered to be house of Ayurveda, it has 1531 AYUSH hospitals

Employment There is an opportunity for Direct employment for 1500 people and indirect potential employment of 2000 persons

Investment ~1500 Cr

Source KPMG report on Medical Value Travel in India FICCI report on Transformative Evolution: From ‘wellness’ to ‘medical wellness’ tourism in Kerala, All data related to investments and project costs are basis assumptions from industry and other sources

Project Elements

• Project Objective - To develop a world class medical village with integrated Centre of excellence in health care. • Target Location - Well connected place having land with availability of water • Land requirement - 20 Acres • Power Requirement - A transformer has to be set up with back up facilities • Water requirement - Huge quantity of water is required

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• Project Cost - ~ INR 1500 Cr • 1000 Bedded well equipped treatment centre • Facility for availing service of • Modern medicine • Indian System of medicines • Homoeopathy • Poly clinic - NABH accredited diagnostic centre • Telemedicine facility • Innovation centre – for conducting research & development182 • Service apartments – equipped to provide accommodation for 300 families • Knowledge Convention centre – for conducting health care events, accommodating 1500 persons • Food Court • Fitness centre – Yoga, Gym • Waste Management unit Challenges

• Availability of land • The facility is being built aiming at medical tourists – seasonal variations will be there • Providing quality service at minimum cost

Case Study – Medanta, Medicity183

Overview Medanta is one of India’s largest specialty institutes located in the National Capital Region184.

Year of establishment 2009

Initial Investment (INR) 1000 Crores

Facilities 1,250 beds 350 critical care beds 45 operation theatres catering to over 20 specialties 13 departments of medicines

Patient flow 4000 per day

183 http://www.medanta.org/ 184 http://www.forbesindia.com/article/hidden-gems/medantathe-medicity-world-class-health-care-with-a-soul/38218/1?utm=slidebox

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Employment ~ 5000

Campus area 43 Acres

Revenue (INR) 1,100 Crores (2014)

Challenge185 • Patients with chronic conditions require frequent check-ups, which is costly for people staying abroad - cross-country trips. Also scheduling of visits was also difficult. • Mendata wanted to provide quality healthcare to patients without added costs associated with travel. Solution

Medanta created a self-service portal to offer patients a one-stop shop to access medical tests and records, speak with a doctor or specialist via an integrated video conference, and view recommendations and diagnosis. Additionally, by offering video conferencing within the ICU, patients and families are able to see each other, face-to-face, without potential health risks

Large projects

S Project Name Estimated Project Proposed Location No. Cost

1 Cultural Zone and Theme Park INR 50 Cr Thiruvananthapuram 2 Domestic LED lights INR 12 Cr Kakkanad, Ernakulam manufacturing

185 Mendata customer case study , All data related to investments and project costs are basis assumptions from industry and other sources © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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S Project Name Estimated Project Proposed Location No. Cost

3 Medicinal Plant Preservation & INR 35 Cr Punalur, Kollam Processing Unit

4 Natural Colours, Herbal Extracts INR 14.6 Cr Palakkad and Oleoresins 5 Sports Complex INR 30 Cr Kozhikode 6 Experience Sharing Theme Parks INR 95 Cr Kozhikode, Malappuram, Kasaragod

Cultural Zone and Theme Park Sector/Industry – Tourism Project Type – Large Estimated Project Cost – INR 50 Crores Proposed Location – Thiruvananthapuram

Project Description The proposed Urban Entertainment Centre (UEC) at Veli, which will have cultural zone and theme park in its vicinity, shall provide premium urban public space & urban entertainment components, catering to the people of all walks of life. Proposed near the Veli tourist village, the location is in close proximity of the Veli railway station, the International Airport and the Techno Park. The proposed UEC once build shall attract tourists and high net worth individuals. Culture & Heritage Centre (CHC) is proposed as part of the UEC, to tap business tourism including the fast-growing Meetings, Incentives, Conventions and Exhibitions (MICE) tourism segment in a traditional setting. The project is structured as an institutional-cum-tourism infrastructure project and would have substantial leisure facilities to provide fillip to tourism growth in the region. The cultural and traditional zone would be used for showcasing, preservation and promotion of Kerala’s traditional art, crafts, vocational, cultural and habitat forms.

Market Scenario186 One key market, linked to the community’s attractive setting, is for small (20-100) executive retreats, executive training sessions, board visioning sessions, and incentive travel and similar events. For this type of event, participants/corporates are willing to spend a bit more time and money to have a good conference facility, a more sequestered setting, and a chance for enjoyable extra-conference activities. This niche includes both government and private organizations. Attracting these groups is easier during the summer and non-monsoon seasons, when prospects for recreation are better. A second important market is for larger events, particularly linked to institutions both national and international. Kerala convention center industry is estimated to be capped at INR 650 Crore. The sudden growth in sectors like IT, Tourism, Education has increased the demand for hospitality and MICE facilities. The Kovalam, Varkala, beach sector has seen the largest number of hospitality growth in the recent history.

186http://www.emergingkerala2012.org/beta/pdf/inkel/45-Exhibition-Centre-cum-Conference-Hall-at-IETC-Kakkanad.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Even though the numbers have increased, still the hospitality sector in Trivandrum is under supplied. The following factors is also expected to impact the hospitality sector in Trivandrum: • Rise in the international as well as domestic tourists • Growth in IT/ITES sector • Establishment of Vizhinjam Container Terminal • Boom in education sector • Increase in moving population over the years

Project Parameters

Parameter Description

Capacity Conferencing with onsite accommodation facilities to accommodate 100 rooms with facilities such as modern health club, spa and Ayurvedic spa, seminar facilities, traditional restaurants and theme restaurants, swimming pool and water front areas. The proposed theme park has three district theme zones that would showcase the uniqueness of the three cultural regions of Kerala, Travancore, Kochi and Malabar. The basis of designing and detailing for the components in each theme would be to show the unique features of the cultural centers of that particular region.

Land Land proposed is the 18 acre lying contiguous to the Veli Tourist village on both sides of the Shanghumugham – Veli Road within Trivandrum City limits. The site is just 3 km from Thiruvananthapuram International Airport, and is 8km from Thiruvananthapuram city Centre. The Cultural and Heritage Center is proposed to be developed in a 4.5 Acre land parcel with 200,000 sq. ft. of Built up space. Theme Park is proposed a one of the major component in the CHC complementing convention facilities.

Employment There is an opportunity of providing direct employment to more than 200 Potential persons and indirect employment to 1000 persons.

Cost of the The Cultural & Heritage Centre would consist of 200,000 sq. ft. of built up project (INR) commercial space spread over ground plus 4 floors. The cost of providing the infrastructure for the aforementioned facilities is estimated to around INR 50 Crore. Theme Park area is proposed to be constructed as temporary structures and would be leased out to investors for a tentative cost of INR 5 -10 Crore.

Means of • Grant: INR 12.5 Crore Finance • Equity: INR 18.75 Crore • Term Loan: INR 18.75 Crore Expected Sales Turnover • Net Profit > INR 5 Crore • Internal Rate of Return (IRR) > 20%

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Competitive Landscape187 • There are dozens of theme and amusement parks in India. However, only a few of them are outstanding. • Adlabs Imagica, Near Mumbai • Wonderla, Bangalore • Wonderla, Kochi • Wonderla, Hyderabad • Kingdom of dreams, Gurgaon • Ramoji Film City, Hyderabad • There are 4-5 large water theme parks in Kerala and 2-3 other small theme parks (traffic and magic theme parks). There are no integrated experience sharing parks in Kerala. Since the business is capital intensive and requires tacit knowledge in technical aspects and experts. The market is relatively open to competition and promises great returns.

Conclusion The Indian amusement and theme park segment is valued at USD 400 mn, compared to the USD 25 bn global amusement and theme park segment, offering immense growth opportunities. With rising income levels, increased domestic tourism and rise in discretionary spending, it is expected that the amusement park culture would pick up significantly as an alternative source of entertainment. The project is bundled in a manner that it is commercial viable in totality with an expected return of over 20% for the potential investor. The Theme Park is ring fenced in such a manner that the independent viability with a return of over 20% can be expected by the potential investor.

Domestic LED lights manufacturing Sector/Industry – Manufacture Project Type – Large Estimated Project Cost – INR 12 Crores Proposed Location – Kakkanad, Ernakulum

Project Description The proposed project is to establish a state of the art manufacturing facility in Ernakulam district spread across an area of 10 acres which specializes in the design and manufacture of domestic lighting products with highest standards of quality at an initial cost of investment of INR 12 Crs. LED lighting is a key proposition towards reduced power consumption. LED’s are available with at the most Lumen efficiency of 110 Lum/Watt compared to 65-80 Lum/Watt of CFL and FTL, 45 Lum/Watt of Mercury vapor and 75 Lum/Watt of metal halide or 94 Lum/Watt of Sodium Vapor with operational life

187 https://www.majorgainz.com/ResearchReport_PDF/Rathi/2015/December/11_EQSEC_190811.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Study on Investment Potential in Kerala of ~ 50,000-80,000 burning hours as compared to 5000-10000 hrs of CFL and FLT. Notable benefits of LED’s include • No cost of replacement of LED’s as compared to other lamps which require frequent replacement • No maintenance required as compared to other lamps which have starter igniters and capacitors which are repair bound. • LED’s are available in wide range of colors from 2700K to 6500K which are dark, yellow, mild yellow and ultra-white. LED’s are dimmable. Hence any reasonable fluctuation in input voltage will not affect life of LED as it happens with all other lamps. • LED’s produce no UV radiation. LED’s being no-filament lamp, shock and vibration does not affect its life as it happens with all other lamps.

Market Scenario188 • Global LED lighting market is forecasted to reach USD42.7 billion by 2020 at a CAGR of 13.5% from 2014-2020. • Indian LED Lighting market is projected to grow at a CAGR of 26.6% during 2017-2023. • Government of India launched an initiative in 2016 to replace conventional lights by LED lights by deploying 770 million bulbs and 35 million street lights by 2019. • India has immense potential in the LED industry which is evident from the fact that the market has displayed a CAGR of 56.1% in the last 5 years. The market is expected to grow to INR 30 million in terms of revenue by FY’2019, largely backed by huge consumption volumes on part of the government sector • In Kerala, Keltron presents a series of LED lighting systems to match various applications manufactured by Keltron Lighting Division at Mudadi, Kozhikode in Kerala State • In Kerala LED par lights are widely used for commercial lighting and the domestic market. However, largely Chinese-made LED par lights are being used which do not carry any guarantee and most of which are thrown away in case of any malfunction which provides a huge opportunity for a home brand

Project Parameters189

Parameter Description

Capacity Capacity of Production: 2.4 Lakhs units of LED lights per annum

Land The project is proposed to be established in two phases. Initial phase to be established in 10 acres of land at Kakkanad, Ernakulum, with the prospects of expanding its LED manufacturing facility to double its production capacity to

188Make in India Report, Research and Markets, March 2017 189 KPMG in India analysis 2017- The total annual units production has been calculated considering the total annual revenue of lighting segment, average cost of LED bulb, size of facility, KPMG in India analysis 2017 . © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Parameter Description

cater the ever growing market in near future. Location for primarily chosen due to its easy access by Road to Airport as well as Seaport.

Raw Material Compound semiconductor materials (Indium gallium nitride, Aluminum gallium & Utilities indium phosphide and Aluminum gallium arsenide), electrical chipsets (capacitor, diode, resistor and IC chip, etc.) and optical glass are the key raw materials used in the production of LED bulbs/lights. Other utilities include water, power, natural gas etc.

Employment The project is expected to create employment opportunity (direct and indirect) Potential for around 150 - 200 people.

Cost of the The total project cost of setting up a LED manufacturing unit is INR 12 Crore. The project (INR) facility will manufacture LED lighting solutions for indoor, outdoor and industrial segments.

Means of • Debt-Equity is estimated at 70:30 Finance

Expected The estimated payback period is 13-14 years considering a total production of Sales Turnover 2.4 lakhs units at an average selling price of INR 300/unit. The EBITDA margin used for the calculation of payback period stands has been calculated by averaging the top LED manufacturer’s figures.

Competitive Landscape • A number of facilities for manufacturing and assembling LED lights have sprung up in India over the past few years. A number of LED exhibitions have also been held in the country ever since the advent of LED lights. The government is also playing an important role in increasing LED penetration in the country with new initiatives such as Domestic Efficient Lighting Programme (DELP). • Few key competitors in the market: KELTRON, Philips, Osram, Havells, Wipro, Bajaj, Eveready, SYSKA, Oreva, Moser Baer, Surya etc. • Other emerging LED lighting companies in India: GE Lighting, Charlston, NTL Lemnis, Reiz Electro controls Pvt Ltd, MIC Electronics Ltd, Innovlite India Private Limited, Sanarti Group, Goldwyn Limited.

Conclusion The project, to be executed with private participation, aims at providing LED lighting solution to a large section of people at competitive rates. With so many advantages and potential applications, LED is sure to succeed in large markets such as India. Thus, LED light manufacturing is a profitable investment opportunity for the new entrepreneurs.

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Medicinal Plant Preservation & Processing Unit Sector/Industry – Pharma/Healthcare Project Type – Large Estimated Project Cost – INR 35 Crore Proposed Location – Punalur

Project Description190 • The proposed project is to set up a Medicinal Plant Preservation & Processing Unit along with a Plantation & Knowledge Centre in 15 acres of land at Punalur in Kollam district. The project envisages farming of medicinal plants and will have facilities for processing of the raw materials, research and development, documentation and manufacturing of medicines. • The facility proposed at Punalur, shall produce a wide range of classical and proprietary Ayurvedic medicines, including therapeutic formulations and Food supplements. It shall offer a full range of Ayurvedic lifestyle products, including health supplements, skin and beauty care products • The Medicinal Plantation & Knowledge Centre would not only attract tourists to visit the garden, it would make them aware about usage of medicinal plant species. Farmers could also get first-hand information about medicinal plantation from the Centre. • Dravya guna is a branch of Ayurveda, which deals with all drugs used in the treatment of diseases, their source, collection, preservation, preparation dosages and uses. Collection preservation and protection of specific drugs plays utmost role in Ayurveda. Drugs need preservation for future use in treatment. The main aim of collection and preservation of the drug is to maintain its potency by conserving its properties and action. Even the best selected and protected medicine loses its effectiveness after a certain period. Generally they are potent for one year. Strategic location of processing facilities facilitates the easy procurement and timely utilization of fresh herbs. • GMP (Good Manufacturing Practices) certified with all modern manufacturing facilities to manufacture all types of ayurvedic formulations, most hygienically and in strict adherence to the prescribed norms coupled with the meticulous selection of raw materials provides genuineness and efficacy to all products. The products proposed to be manufactured include Classical medicines, Proprietary medicines and Food supplements. The prime objectives behind setting up of a Medicinal Plant Preservation & Processing unit along with a knowledge centre is with the intent of to provide its customers the most comprehensive Ayurveda and healthcare solutions at affordable prices and to promote, develop and sustainable technologies, through a seamless blend of traditional wisdom and modern scientific knowledge.

Market Scenario191 • Increasing interest by multinational pharmaceutical companies and domestic manufacturers of herbal-based medicines is contributing significant economic growth of the global medicinal

190 Collection And Preservation Of Ayurvedic Herbs, April, 2016

191Make in India Report, Research and Markets, March 2017 © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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plants sector. The global market potential of Aloe Vera used to treat burns and added to skin creams and cosmetics was estimated in the billions of dollars. Export opportunities of natural products are tremendous, as the world market is looking towards natural sources for the purposes of therapeutic use as well as nutritional dietary supplements. • The principal herbal drugs that are finding a good market in foreign countries are Aconite, Aloe, Ammimajus, Belladona, Bach, Cinchona, Cassia tora, Dioscorea, Digitalis, Ephedra, Ergot, Hyoscymus, Ipecac, Isabgol, Liquorice, Opim, Papain, Podophyllum, Pyrethrum, Rauwolfia, Rhubarb, Senna, Stramonium, Valerian, Sennaleaves, Isabgolseeds/husk and cassia toraseeds are in maximum demand. • The total worth of exports of AYUSH products, including extracts of medicinal herbs, has gone up from $352.93 in 2014-15 to $ 403.59 already in 2016-17. The Indian Medicinal Plant Extract market is expected to grow at a CAGR of around 22% during 2017-2022. As a result, of increased investments as well as significant demand of medicinal extract in internationals markets, there lies immense opportunity for new and existing players to tap the fast growing market which would garner huge revenue. • India has large biodiversity and is endowed with 45,000 plant species out of which about 15,000-20,000 plants are known to have medicinal properties. With a share of 46.4%, the US is the largest importer of medicinal herbs value added products from India in 2013. Other top importer countries include Pakistan and Germany. • Government of Kerala offers subsidy and tax holidays to promote Ayurveda as a tourist crowd puller. As per World Health Organization (WHO) estimates, almost 80% of the population of developing countries relies on traditional medicines, mostly plant drugs, for their primary health care needs. • Modern pharmacopoeia still contains at least 25% drugs derived from plants and many others which are synthetic analogues built on prototype compounds isolated from plants. Medicinal plants have been identified as one of the thrust areas by the Ministry and different programmes have been initiated for conservation of medicinal plants found in the forests and protected areas as well as cultivation of these plants in the degraded forest areas.

Project Parameters192

Parameter Description

Capacity A processing plant capacity of 1000 TPA is proposed. The various sections would include the following. A. Ayurvedic Medicinal Plant Preservation & Processing • Medicine Processing Plant • Post-Harvest Preservation • Farmer Training Centre • Collection & Distribution Centre • Market Development Centre

192 Project Profile INKEL, KPMG in India analysis 2017 © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Parameter Description

B. Medicinal Plantation & Knowledge Centre • Medicinal Plantation & Nursery • Green House Farming of Medicines • R&D in Tissue Culture & Medicine Formulation • Data Centre & Pharmacopeia • Technology & Business Incubation Centre (Product Launch) Two types of processing units are envisaged. The first level of processing will be carried out at Collection Centres/Pack Houses. Once the produce is collected at the farms or from wild sources, the same must be properly handled prior to being taken to well-equipped processing centres, or for direct exports. Such centres will be equipped with facilities for cleaning, drying under controlled conditions, sizing, grading and sorting, packaging (including consumer packs) and storage. These units will also be suitably linked with adequate storage and arrangements for transport to move the packaged produce for further processing or export. These units will have facilities for multi-purpose facilities for grinding, crushing, solvent extraction, distillation, and antimicrobial treatment etc. It is also important that the processing units (dry as well as value added products), to be set up adopt and implement the quality systems as per international standards like Codex, PFA etc., so as to compete with other developed countries. Medicine Manufacture of Herbal oils, Ayurveda medicines and patented products in GMP (Good Manufacturing Practices) certified units to cater to various market segments.

Land Medicinal Plant Preservation & Processing Unit is proposed in 15 Acres of land at Punalur, Kollam district, is predominantly an agricultural area. Punalur is a hilly town and a municipality in Kollam district in the southern state of Kerala, India. It is the second largest town in Kollam and is one of the industrial towns in Kerala. It is situated 45 km north-east of Kollam and 75 km north of Thiruvananthapuram. Punalur is the headquarters of Pathanapuram Taluk. This place is the gateway to Western Ghats and it is connected to the towns of Tamil Nadu like Tenkasi. The Project location is at the eastern side of Kollam district which is mostly agriculture dominated. This will help the agricultural production in that area. Raw Material Seeds and propagation material, water, power, internal roads, parking area, & Utilities security, Sewage Treatment Plant (STP), landscaping, pedestrian streets and other services required for the complex.

Employment Estimated employment opportunity direct 100 and indirect 200. Potential Cost of the The estimated project cost for the development of proposed Medicinal Plant project (INR) Preservation & Processing Unit along with a Plantation & Knowledge Centre in

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Parameter Description

15 acres of land at Punalur in Kollam district is INR 35 Cr. (Including Land cost, construction cost, plant & machinery, other facilities)

Means of Various government support initiatives from Central and State Government such Finance as grants/subsidies from Ministry of Agriculture, AYUSH etc. can be leveraged. Expected Average revenues per annum is expected to be around INR 4 – 5 Crore. The Sales Turnover Project is expected to be completed in 2 years, from the date of obtaining all the clearances and approvals, in a phased manner. Demand for medicinal plants is increasing in both developing and developed countries due to growing recognition of natural products being non-narcotic, having no side-effects, easily available at affordable prices and sometime the only source of health care available to the poor. Medicinal Plant Preservation & Processing in the Hub at Punalur ensures synergy and enhances the marketability of the project. All these factors related to the project may fetch a return of more than 25% to investor or to the operators of the project.

Competitive Landscape • The growing demand for herbal products has led to a quantum jump in volume of plant materials traded within and across the countries. Interest and support for the conservation and development of medicinal plants is increasing in all parts of the world. In India, Medicinal plants sector has traditionally occupied an important position in the socio cultural, spiritual and medicinal arena of rural and tribal lives. • USA and Europe are the largest markets for herbal products, accounting for nearly two-thirds of the total demand. The varied agro-climate conditions in Punalur make it suitable for growing a wide range and variety of valuable medicinal plants. Medicinal Plants are highly esteemed all over the world as a rich source of therapeutic agents for the prevention of diseases and ailments. Kerala is host to one of the largest number of quality treatment centers and the largest number of treatment methodologies. There are 18 Medicinal Plants Nurseries in Kerala. • Major players in the Ayurveda sector are Kottakkal Arya Vaidya Sala, Kerala Ayurveda Pharmacy, Aluva and Nagarjuna. Conclusion The project, to be executed with private participation, aims at providing services in Ayurveda to a large section of people at competitive rates, to promote, develop and sustainable technologies, through a seamless blend of traditional wisdom and modern scientific knowledge and to promote opportunities for employment generation for skilled and unskilled persons, especially unemployed youth.

Natural Colours, Herbal Extracts and Oleoresins Sector/Industry – Manufacturing Project Type – Large Estimated Project Cost – INR 14.6 Crore

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Proposed Location – Palakkad

Project Description • The project proposes production of herbal extracts - 150 MT/annum, natural colors/flavors: 100T/annum and oleoresins: 50 T/annum in Ernakulam or Palakkad districts. • Kerala is known for its lush green cover and abundance of natural resources. There is increase in awareness of naturally available produce and products. • Oleoresins are a combination of oil and resin extracted from plants in a liquid form. The extraction process begins with raw spices that are cleaned and ground, then the spices' oils are distilled using an organic solvent. • Oleoresins find application in Beverages, Confectionery, Meat Canning, Sauces, Pharmaceuticals, seasonings etc. • Natural food colours are dyes or pigments extracted from natural sources such as fruits, vegetables and plants. They are largely used for flavouring and as additives of food particularly by large scale food processing and flavouring units engaged in meat canning, manufacture of sauces, soft drinks, confectionery etc. • A liquid herbal extract is a concentrated solution made by extracting (pulling or "washing") the herb's chemical constituents out of the inert herb fiber (cellulose) with a solution of alcohol and water or glycerin and water. A good liquid herbal extract should optimally preserve the aroma, taste and biological activity of the herb from which it is made. • Vanilla extract is a commonly known liquid herbal extract. Herbal extracts find application in Ayurvedic drugs and pharmaceutical preparations. Herbal colours and aroma are useful for cosmetics and food additives. • Flavors accounted for over 35% of the overall market and emerged as the leading segment followed by food & beverages

Market Scenario193 • The global requirement of various oleoresins such as paprika, chilly, turmeric, pepper, ginger, and cardamom is about 15000 tonnes and the global spice oleoresin market is values at US$ 1 Mn. • Kerala is home to a variety of spices and is well-known for producing some of the best quality spices when it comes to cardamom and pepper. Synthite Industries limited, a Kerala based company alone commands for nearly 30% share in the global Oleoresin market. • The country exported 11,475 tonnes of oils and oleoresins valued at INR 1,911 crore during 2014-15. On the quantity front the increase was 1% compared to the previous financial year. India is a leading exporter of spice oils to West Europe, USA and Far East. Kerala grows cardamom (small), cinnamon and cassia, clove, ginger, nutmeg &mace, pepper, turmeric, vanilla and cambodge.

193KSIDC Kerala IP Final Report 2017, http://www.business-standard.com/article/markets/oleoresin-companies-move-out-of-india-shift-focus-to- south-east-asia-china-115091600538_1.html , http://www.indianspices.com/spice-products/spice-oils-and-oleoresins-0 , http://www.isca.in/rjcs/Archives/v4/i2/15.ISCA-RJCS-2014-007.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• As of now, the sector focus in on export markets and the industrial segment like hotels, bakeries etc. Huge scope exists for expanding the market to include home users, caterers and industrial canteens. The usage of spice oleoresins is largely used for Italian, Mexican and other continental dishes and not much in Indian and especially Kerala cuisine. • The market for natural colors will probably become strong as manufacturers start using natural colors in more number of products and start to see extremely steady natural colors and venture into new natural and herbal extracts. The investment in natural food color market across the globe has touched to US $ 1 billion in 2014. The natural food coloring industry market is increasing at 10% -15% yearly. • The Indian herbal supplements and remedies market is forecast to reach $50 million by the year 2020, spurred by growing aging population and increasing consumer awareness about general health and wellbeing, according to a new report from Global Industry Analysts. Herbal extract market products promise a good and vast market for dyes. Additionally, the fact that herbal supplements and remedies cause little or no side effects and provide greater efficacy is also proving to be a major factor aiding market growth.

Project Parameters194

Parameter Description

Capacity • Herbal extracts: 150 MT/annum • Natural Colors/flavors: 100T/annum • Oleoresins: 50 T/annum Land Land Requirement – 200 cents or 2 acres. Land can be sought from KINFRA Mega Food Park, Kanjikode, Palakkad and KINFRA Integrated Industrial Park, Ottapalam, Palakkad.

Raw Material The proposed unit would require approx. 140 KVA power, with steam & Utilities requirement of 0.3 MT per hour. Apart from these utilities, the unit would require facilities for storing 10 KLPD liquid carbon dioxide at high pressure and handling of the same. Standby power generation of 100 KVA will also be required to run critical continuous process plant and & machinery.

Employment The unit would require direct employment of approx. 50 persons that will Potential include technical, managerial and blue collar man power.

Cost of the • project (INR) Land 2 acres: INR 5 Cr • Land development: INR 0.5 Cr • Building: INR 0.75 Cr • Plant & Machinery: INR 7 Cr • Miscellaneous Fixed Assets: INR 0.30 Cr

194 Emerging Kerala Project Profile, District Industries Centre, Kozhikode © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Parameter Description

• Preliminary & Pre-operative exp.: INR 0.45 Cr • Provision for contingencies: INR 0.45 Cr • Margin Money for working capital: INR 0.60 Cr

Means of Promoters contribution: INR 5.84 Cr Finance Term Loan: INR 8.76 Cr

Expected Expected payback period is 3 to 4 years. On an expected RoI of 25%, a profit of Sales Turnover around INR 8 crore may be earned.

Competitive Landscape • The market is upcoming and relatively new in Kerala. • Synthite Industries Ltd. Kochi commands 30% of the global market. • Some of the other national key competitors include Arjuna natural extracts Ltd., Bio-gen extracts Pvt. Ltd., Vidya Herbs Pvt Ltd., Venkatesh Natural Extract Pvt Ltd., Akay Flavours & Aromatics Ltd., Global Green Co. Ltd., Kancor Ingredients Ltd., Novo Agritech Ltd., Sijmak Oils Ltd. and South East Agro Inds. Ltd. • Skilled job requirement is essential requirement to provide competitive capabilities to players. • Other players include Kancor, AVT Natural etc. Conclusion The global essential oils and oleoresins market is poised to surge exponentially in the forthcoming years. People are becoming more and more conscious about using natural products as the risk of using synthetic flavours, colours and extracts are being highlighted. As of now, the sector focus in on export markets and the industrial segment like hotels, bakeries etc. Huge scope exists for expanding the market to include home users, caterers and industrial canteens. As the food industry grows continuously, the demand for flavouring agents, natural colours, and spice oils will increase. Rising interest in ayurvedic and herbal medicines, will increase demand of herbal extracts as a raw material to the burgeoning industry. These agro-allied services will revive agriculture related small and medium industries helping farmers and related people to be employed sustainably. Being an agro food processing industry, Govt. of India subsidy/grant is available for the project. This sector has a huge potential that can be explored.

Sports Complex Sector/Industry – Infrastructure Project Type – Large Estimated Project Cost – INR 30 Cr Proposed Location – Kozhikode

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Project Description • Kerala is well known beyond the nation’s boundaries for its great sporting culture and has produced many great athletes and sportsmen over the years. It’s a mixture of nature, nurture and sporting culture that has made Kerala successful. Kerala hosted national games twice in 1987 and 2012. This state has always stood for an active lifestyle and a competitive spirit that has given rise to many sporting icons at National, Olympic and Commonwealth events. Most of these athletes struggle to find adequate sports facility to practice • Recently Sports such as hockey, kabaddi, badminton, tennis, football and cricket leagues have become popular in the last few years, and this requires professional and specialized sports facilities for practice and competitions. The availability and quality of Sports Infrastructure is essential for a country to achieve success in the global sports arena. As a result, the concept of sports complexes has emerged. Sport complexes provide sports facilities with residential spaces available. The idea is to develop a fully integrated sports complex that includes stadiums, multiple recreational and leisure zones, gyms, parks and other facilities. • The proposed sports complex will be developed as an integrated facility that will encourage different sports and promote healthy lifestyle to the citizens. • The facility shall act as a venue for national and international sport events, and attract sportspersons across the country • The local population would benefit as the proposed complex would encourage them to enroll in sports via membership schemes • Youngsters who wish to take up sports as a profession would have adequate opportunities to get trained by experienced and reputed coaches • The proposed Complex will house a Sports Academy that will focus on R&D of sports medicine and also develop skills of existing trainers (train-the-trainer Program). This will help develop professional qualified trainers who can move to the next level as coaches • The proposed sports complex is to be established in 10 acres of land at Kozhikode district at an estimated cost of INR 30 crores with fully air conditioned modern indoor sports complex spread over an area of 1,50,000 Sq. ft. with a gallery seating capacity of 6000 spectators having facilities for Basketball, Volleyball, Shuttle Badminton, Table Tennis, Kabaddi, Squash, Swimming, Health club, Gymnasium, cafeteria etc. A convention hall is also proposed for hosting sports events and other functions for bagging additional revenue.

Market Scenario195 Sports sector in India comprises of a range of associated businesses such as sports manufacturing, retail, tourism, sports medicine, venues & infrastructure, media & hospitality and merchandising. Indian sports infrastructure market is estimated INR 80,000 Cr. (USD 11.9 Billion). Additionally the sports sponsorship market has grew 12.5 % year on year in 2015 to reach INR 5190 Cr. The sector has seen steady growth in the past few years due to new sporting leagues such as The Indian Super League (ISL), the Pro Kabaddi League, Indian Premier League (IPL), Hockey India League (HIL) and Indian

195Sports City report, Ibrant, Gujarat 2017, Government Releases 20-Point Plan To Win 50 Olympic Medals By 2024, Report 2016, Business of Sports: Shaping a Successful Innings for the Indian Sports Industry, Article, Indian sports needs to institutionalize private investments, Business Economics, 2016. © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Badminton League (IBL). Global sports industries growth rate is projected to reach at 6.1% by end of 2017 amounting additional 90.9 billion USD growth on current market value of nearly 700 billion USD. India comprises of approximately 1% of the total market with high potential for rapid growth in coming years. International sports events are also on a rise and this indicates an increase in demand for sports infrastructure. Such events include Olympics, Commonwealth games, Asian games, Paralympic games etc.

Major growth drivers: • Aim to match global standards across various sports: National Institution for Transforming India (NITI Aayog) has come-up with a new plan called Let's Play - Action Plan for enhancing sports performance in India. The initiative is aimed at targeting 50 Olympic medals in the 2024 Summer Olympic Games. This requires international standard sports infrastructure facility in the country, driving need for sport cities in India. • Consumer emphasis on healthy living: Rising middle class with increased health awareness, health maintenance trend and focus on leading active and healthy lifestyle. • Rising popularity of National and International Sporting Events • Favorable government policies to promote sports sector. • Increase in demand for sports infrastructure: According to FICCI study, about 1.3 m young people in India are likely to consider sports as a profession by 2017, therefore demand for sports infrastructure is likely to increase in the coming years. Also, domestic events such as IPL, Hockey India League, etc. would induce demand for appropriate infrastructure in the country.

Project Parameters196

Parameter Description

Capacity Based on the preliminary assessment it is envisaged that the sporting complex facility would include arenas to host International sporting events, National sporting events, Professional sports leagues, Student/University activities, Sports Academies, Training institutions and Camps, Concerts & Shows, Corporate events, Commercial establishments, Food and Beverage Facilities, Entertainment and Leisure activities. The sporting facilities in the complex shall encompass the following: • Indoor arena with facilities for Basketball, Volleyball, Shuttle Badminton, Table Tennis, Kabaddi, Squash, Swimming with a gallery seating capacity of 6000 spectators. • 200 m indoor jogging track • Parking space for 300 cars • Health club and Spa facility

196 Emerging Kerala Project Profile, District Industries Centre, Kozhikode © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Parameter Description

• Accommodation facility for 200 people, convention hall and administrative block • Optional facilities like club house or gymnasium for commercial purpose • First aid treatment area and recovery rooms. • Toilets meeting international standards in terms of facilities and with a ratio of 40% toilets for women • Minimum area of emergency services like police and fire brigade • Cafeteria of best standards. Land The integrated sports complex is proposed to be established in 10 acres of land in Kozhikode district. The dream project of Kozhikode Sports Complex would create infra structure facilities for the benefit of the sports persons, the sports organizations, youngsters of Kozhikode. Complex include fully air conditioned modern indoor stadium having an area of around 1.5 lakh Sq. ft. with seating capacity of 6000 spectators.

Raw Material Raw materials account for majority of cost in addition to land and labor. Major & Utilities raw materials used for constructing sports city include – steel, concrete, electricals and sanitary fittings, aluminum, flooring and glass. Steel and concrete are the main raw materials required for infrastructure projects like sports complexes and will account for nearly half of the total raw material cost. Flooring for sports complexes like cricket stadium, football stadium, athletics stadium etc. is primarily done using granite. Internal flooring of rooms is done with vitrified tiles. Stadium and court turfs, sports equipment’s. Utilities include power, water, drainage system, waste management systems. Employment Manpower require estimated to be 60-70 Nos. Instructors, Managers, Potential Executives, Administrative staffs, Supervisors, Technicians, Assistants, Security, and helpers are the working force envisaged for the implementation of sports complex.

Cost of the A considerable sum of money is required to setup up required to develop such project (INR) high quality facilities in sports complex, and in order to make the project financially viable it is decided to initially focus on facilities which have a high revenue potential in the first phase. The Capital expenditure for the proposed facilities along with supporting infrastructure (internal road network, landscaping, water drainage system, waste system management) is estimated to be around INR 30 crores. In addition to initial Capital expenditure the bidder is expected to incur yearly O&M expenses, and any other planned/unplanned investments for up gradation of facilities as and when required.

Means of The major expense area would be the construction and civil works. Funds are Finance required for Site development (internal roads, sewage line, water supply, street lighting, landscaping), Construction (indoor stadium, convention hall, residential

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Parameter Description

space and other amenities) and miscellaneous fixed assets (Furniture and fixtures, office equipment - laptops, projectors). Means of finance include equity, FDI, Term loan, Central and State Government grants/subsidies, International Event organization’s fund, Financial Institutes. Expected An income of INR 1.5 crores can be expected in a year on an investment of INR Sales Turnover 30 crores from indoor stadium rent, convention hall, health club, gymnasium, cafeteria/food court, sports complex membership schemes, parking fees etc. and the entire investment can be realized during the period of 20 years. The lease period would be 30 years which is negotiable with the Government and thus one can conclude that this project is economically and financially viable.

Competitive Landscape197 Most of the large stadiums in India are developed, owned & maintained by the respective sports association for single sport stadiums like football & cricket. Sports complexes capable of hosting multiple sports are mainly developed and owned by the respective government or the Indian Olympic association & its member associations. In addition there are a number of privately developed sports complexes coming up in the country • Excellence academies set-up by ex-sports professionals to focus on the development of young talent in the country (Pullela Gopi Chand sports academy, Tata football academy) • Private developers like Jaypee group, educational institution & others have developed sports infrastructure that is used for internal purposes and also to host major events. They adopt a membership model for revenue generation and has the ability to host national events. In addition to the facilities the venue also provides professional coaching to the members. The Sports Authority of India has setup 9 academic regional centres which offer training and coaching facilities to sports persons across the country namelylIndira Gandhi Sports Complex, Major Dhyan Chand National Stadium, Dr. Syama Prasad Mookerjee Swimming Pool Complex, SAI Udhav Das Mehta Central Centre - Bhopal, SAI Netaji Subhas Southern Centre, Bengaluru. Key private players include Japyee, Supertech, Ajnara, Savvy Infrastructures Pvt. Ltd., Lotus Greens etc. Conclusion The primary objective of the model report is to facilitate the entrepreneurs in understanding the concept of sports complex and serve as a guidance for setting up such a facilities in the state. The Project objective is to develop under PPP (Public Private Partnership) mode and the partnership would adopt DBFOT (design, build, finance, operate and transfer) model. The new venue will also be used to market and attract world class events improving the tourism and associated revenues for the state.

197 Sports Authority of India, Jaypeesportscity.co, Supertech Limited. Meerut Sports city, T K Devasia (2015), Sachin Tendulkar plans sports city in Kochi, Khaleej Times © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Experience Sharing Theme Parks

Sector/Industry - Tourism/ Entertainment Project Classification – Large Estimated Project Cost - ~ INR 95 Cr

Proposed Location - Kozhikode, Malappuram, Kasaragod – Highest proportion of urban population and child population Project purpose and objective

• The experience sharing theme park constitutes a group of entertainment attractions and other events based on certain fantasy themes which are largely children and family-oriented. An integrated experience sharing theme park shall showcase theme-based fun-factory tours, recreational activities, restaurants, shopping, gaming etc. • The park shall be an addition to boost up the tourism industry in Kerala and increase livelihood opportunities for local population especially in the Malabar region. The development of adequate infrastructure facilities for promoting tourism would be key to developing the state’s economy. • Kerala, which is home to 250 Lakhs domestic and foreign tourists in the last three with an average growth rate of 7.53% is an ideal location for such a theme park to come up. Market Scenario • A large youth population (who are the main visitors to amusement parks) and increasing spend on leisure and entertainment supported by rising income levels, prospects of the domestic amusement park industry are bright. Amusement parks are a nascent industry in India, poised to showcase huge potential for growth. • India’s per capita income has grown at a five-year CAGR of 16%. It is also interesting to note that the share of discretionary spending in overall expenses has increased rapidly from 19% in 1981 to 45% in 2012. With a sizeable population in the 15-35 age group, interest in amusement parks is also expected to rise. • According to CRISIL Research, given the large youth population and rising income levels leading to increasing affordability) the amusement park industry in India is underpenetrated and new parks with new and innovative offerings are likely to get a good response. • The proposed fun factory theme based integrated park will be one of its kind in India and can not only attract local tourists but also domestic tourists across the country. Project Parameters

Parameter Description

Existing Market Size INR 6,000 crore by 20201, poised to register a 20% CAGR

Growth Footfalls have grown at 10.4% CAGR during FY09-13 Revenues have grown at 22% CAGR (Wonderla)

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Parameter Description

Market Potential Due to the rising middle class and increased affordability, increase in tourist footfalls is expected through developing this project. State endowed largely with water-based theme parks. Innovation can attract large number of footfalls.

Competitive Landscape There are 4-5 large water theme parks in Kerala and 2-3 other small theme parks (traffic and magic theme parks). There are no integrated experience sharing parks in Kerala. Since the business is capital intensive and requires tacit knowledge in technical aspects and experts, it is a risky proposition.

Employment potential The combination of retail and entertainment facilities helps to draw people in and support the overall operations of the theme park. There is an opportunity of providing direct employment to more than 200 persons and indirect employment to 1000 persons

Expected revenues With an average ticket price of INR 1350 and annual footfalls of 7 lakhs in the first year , expected revenues amount to ~ INR 95 Cr

Potential districts Kozhikode, Malappuram, Kasaragod – Highest proportion of urban population and child population

Source: Economic Times – Wonderla, Census 2011 Kerala State Profile, www.capitalmarket.com, CRISIL Research, All data related to investments and project costs are basis assumptions from industry and other sources

Project Elements • Theme definition - Factory based experience sharing for kids constituting of 6 factory pavilions with dry rides covering each pavilion, animation characters, virtual reality ride in 2 pavilions, customized activities in each of the pavilion, theme based-retail outlets to own merchandise. • Target Location – Area in close proximity to Kozhikode, Malappuram and Kannur. (Districts with highest share of urban population in the state) • Target Market – Urban Households, Non-resident Keralites • (Total urban households in the 3 districts amount to ~12, 86000) • Target footfalls to the park – 50% of urban households in select market • Land availability – Availability of suitable land which is easily accessible by transport networks as these are an important factor in determining the number of visitors the park is likely to attract • Access - Important to look into both medium and long distance access networks and the need for a transport system in keeping with the needs of the demand • Appropriate size (land requirement) – 20-30 acres

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• Integrated development strategy – Theme-based rides, activities, retail outlet, food court, star attractions, Theme-based shows, maintenance and quality of service • Project Cost elements • Average project cost - INR 150-200 Cr • 6 Pavilions with minimum built-up area of 10,000 sq ft. comprising of rides through factory layout, adventure rides, special effects, activity space and queuing space • Food courts with sufficient capacity to cater to 1000 visitors a time. • Infrastructure – Adequate parking facility, washrooms, prayer rooms, seating area • Live program zone – Indoor theater with seating capacity for 300 quests Key challenges • Land risks • Maintaining high quality of safety and hygiene standards • Seasonal patterns of visitors Case Study – Wonderla, Kochi

Key parameters Wonderla Kochi Year of Commissioning 2000

Area (acres) 93.17

Distance from center of city (kms) 15

Capex incurred (INR Cr) 65

Land-based rides 33

Water-based rides 22

No. of employees 274

No. of restaurants 7

Yearly footfalls in lakhs (2013) 12.1

Ticket pricing INR (2016) 600-750 (regular) 760-950 (peak) 1200-1900 (fast track) Yearly revenues (2013) 58.4

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International Case Study – Hersheys Chocolate World (Pennsylvania)198

Theme – Explore the many wonders of chocolate

Footfalls - Through its first year of operations, Chocolate World had over 1.4 million visitors

Attractions

• Chocolate Tour • Create your own candy bar • 4D Chocolate Mystery • Chocolate tasting experience • Trolley works • The jungle • Candy store • Photo studio • Icecream and Milkshare shop

International Case Study – Crayola Experience (Minneapolis)199

Theme - Crayola Experience to let one’s creativity run free, to color outside the lines, and to play, explore, and learn

198 http://www.hersheys.com/chocolateworld/; 199 http://www.crayolaexperience.com/Minneapolis © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Total Area – 60000 sq.ft

Total employees – 250

Estimated investment – USD 30-50 Mn (INR 200-350 Crs)200

Attractions - 25 one-of-a-kind attractions includes: Crayon Factory, Activity Studio, Art Alive, Be a Star, Birthday Rooms, Café Crayola, Café Stage, Color Magic, Color Playground, Colossal Candy, Crayola Store, Doodle in the dark, Drip Art, Puzzle it, Rainbow rain, Scribble Square, Toddler Town, You design etc.

Micro, Small and Medium projects

S Project Name Estimated Project Proposed Location No. Cost

1 Fruit Processing & Canning INR 5-6 Cr Kannur, Palakkad

2 Inflight Catering Unit INR 5 Cr Thiruvananthapuram, Ernakulam, Kozhikode, Palakkad

3 Integrated Coir Processing Unit INR 8 Cr Thrissur, Kozhikode, Alappuzha

4 Home Based Bakery Brand INR 5 Cr All districts

5 Hospital Medical Furniture INR 2 Cr Ernakulam, Palakkad

6 All-Service Portal and Training INR 10-15 Lakhs Central portal catering to all Center districts

7 Home-based Solar Micro Solar PV Panel All districts. Primary those with generation Costs INR 30-50 highest share of urban per watt of power households – generated Thiruvananthapuram, Kozhikode, Thrissur, Ernakulum, Kannur etc. 8 A-Z Online Delivery Portal INR 5-7 Cr Tier-I and Tier-II cities in Kerala

9 Contact Centres INR 7-10 lakhs All districts

Fruit Processing & Canning

Sector/Industry - Manufacturing /Food Processing

Project Type - Large

Estimated Project Cost - INR 5-6 Crores

200 http://finance-commerce.com/2015/12/crayola-to-make-mark-at-moa © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Proposed Location - Kannur, Palakkad

Project Description

• Fruit Pulp is the concentrated fruit juice on processing of fruits. The pulp can be easily extracted from Mango, Guava, custard apple, gooseberry etc. and are plenty in availability. • The fruit pulp can further be used to produce downstream products like fruit jellies. The canned mango pulp has about two years of shelf life without using a cold storage. Canned fruit pulp is consumed as a fruit juice and in the processing of fruit jelly.

Fruit processing- canning Manufacturing process201

Market Scenario

The fruit pulpy juices have good market. The processed fruit pulp has enhanced shelf life and has significant export potential. Presently, a mere 2.2 per cent of fruits and vegetables are processed. Mango, Guava, custard apple, gooseberry are available in Kerala.

Few of the fast growing segments of food processing are:

• Mango and other fruit pulp • Pickles & Sauces • Fruit jam, marmalade, crush, squashes, juices etc. • Canned fruits • Ready to Eat (RTE) and Ready to Serve (RTS) products • Wet salads, purees, coulis, sauces, smoothies, chunks, slices

Project Parameters

Parameter Description

Existing Market Size 2015 – 16 India exported Mango Pulp worth INR 7963 Cr and Other Processed Fruit and Vegetable worth INR 29003 Cr

Growth (5 Yrs.) 11% (India Market)

Market Potential There is a tremendous potential for processing units, considering the still the sector is in budding stage.

Competitive Landscape There are lot many private players in fruit processing industry in India. A large number of units are in MSME sector having

201 http://www.dcmsme.gov.in/reports/mechanical/AdjustableHospitalBeds.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Parameter Description

installed capacity of 250 Tonnes per annum and large companies have capacity of 30 Tonnes/Hour

Employment potential The fruit collection units can be set up in every districts and processing units can be set up in Palakkad or Kannur. There is an opportunity of providing direct employment to more than 200 persons and indirect employment to 1000 persons

Govt. Support 100% FDI is allowed. Five-year tax holiday for new food processing units in fruits and vegetables processing

Potential Districts Palakkad, Kannur

Project Cost (INR) 5 to 6 Crores

• Capital Expenditure – • Land for setting up factory • Building Infrastructure • Pulping and canning • Pre operating cost • Raw material • Utilities – power, water

Source: NABARD Project report on vegetable & Fruit Processing, KSIDC Project Profile on Mango Processing unit, http://apeda.gov.in/apedawebsite/six_head_product/PFV_OPF.htm, http://foodprocessingindia.co.in/sector- profile/fruits-andvegetables.html, all data related to investments and project costs are basis assumptions from industry and other sources

Project Elements

• Target Market – Domestic and international market

• Products - Fruit pulp and related products

• Location – Kannur, Palakkad are rich in Mango, Guava and Sapota, Gooseberry

• Capacity - 1000 MT

• Water requirement – 1000 L per day

• Manufacturing process - Skilled process

• Skill building – Employees will be trained for operating the machines

• Quality Assurance - Industry standards needs to be followed and as per the guidelines of Food Safety and Standard Authority of India (FSSAI)

• Marketing Strategy – Brand building activities has to be initiated.

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Inflight Catering Unit

Sector/ Industry - Transport / Services Project Classification - MSME Estimated Project Cost - INR 5 Crores

Proposed Location - Thiruvananthapuram, Ernakulam, Kozhikode, Palakkad

Project Description

• The flight catering industry is a very large, More than 340 crores people are served in a year globally. India is among the fastest growing aviation markets. • During FY 16 increased at a rate of 21.3 per cent compared to FY15. • Airlines use food as a marketing tool. A number of airlines advertise their product by making food the focal point.

Market Scenario

Total passengers travelled in India during FY16 is more than 10 Crore passengers. The Kerala’s share is • Cochin airport - ~78 Lakhs • Trivandrum Airport - ~35 Lakhs • Calicut Airport - ~ 23 Lakhs The airline requires its catering supplier to deliver on certain key variables, such as: • Consistency of food product • Accuracy of uplift • On time delivery • Value for money • Service relationships • Health, hygiene and safety • Innovation • Overall operational performance

Project Parameters

Parameter Description

Existing Market Size The revenue earned by Trivandrum, Cochin, and Calicut airports 2014 -14 was INR 7,600202 Crores

Growth (5 Yrs.) (Kerala Market) 16.21% (Revenue Growth rate)

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Parameter Description

Market Potential India’s In-flight catering market was 10003 Crores in 2010

Competitive Landscape There are about 35 in-flight catering services in India,

Employment potential The employment multiplier is 6.10

Govt. Support The national civil aviation policy 2016 aims in harmonized growth of all aviation sub sectors.

Potential districts Thiruvananthapuram, Ernakulam, Kozhikode, Palakkad

Investment (INR) 5 Crore

Source: http://epubs.surrey.ac.uk/2200/2/E66589A3.pdf, http://dir.indiamart.com/impcat/in-flight-catering- services.html, http://timesofindia.indiatimes.com/business/india-business/Flight-caterers-eye-retail- business/articleshow/6482451.cms, Director General of Civil Aviation, National Civil Aviation Policy 2016, All data related to investments and project costs are basis assumptions from industry and other sources

Case Study – TajSats203

The TajSats started in-flight catering services in the year 1976. With clientele of 9 domestic and 23 International air carriers, leads the Indian in-flight catering market. They have got branches in seven cities across India. TajSats follows a market niche strategy204– Special meals for Jains, diabetics, infants and children. They have prepared more than One Crore205 hot food till 2011.

203 http://www.muthootskychef.com/ 204 https://www.ukessays.com/essays/marketing/business-strategies-of-the-taj-sats-air-catering-marketing-essay.php 205 https://www.scoopwhoop.com/inothernews/indian-mega-kitchens/#.oo3kxfr68 © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Case Study – Muthoot Skychef Trivandrum

The Muthoot skychef started their operation in 2003. The kitchen is situated near to Trivandrum International airport. The catering unit has the capacity of serving 3600 passengers per day. The unit has modern kitchen equipment and good transport system which enables them to meet the order requirement on time. Their customers include Air India, Indian, Qatar Airways, and VIP flights transiting

Integrated Coir Processing Unit

Sector/Industry - Manufacturing/ Processing Project Classification - MSME Estimated Project Cost - INR 8 Crore

Proposed Location - Thrissur, Kozhikode, Alappuzha

Project Description

• Kerala is in third position in coconut production in India. • Coir composite boards consist of properties such as lightweight, corrosion resistance and other advantages, the proposed Coir composite boards (CCB) of integrated Coir processing plant will be an important composite material in building and civil engineering fields. Market Scenario

• As India is moving towards environment friendly nation, the requirement of non-plastic products will be high in demand. Also it can be exported to foreign countries, as the coir products are in demand everywhere, it has got good export value. • Coconut consists of water and copra contained in a hard shell covered with fibrous husk. • Fibre is extracted from coconut husk mechanically and is used in making several products with wide applications such as Coir Fibre, Coir Yarn, Floor Mats, Curled Coir, Mattresses, Coir Ropes, Anti-weed blankets, Erosion Control Blankets, Fishing Nets, Coir Pith – A by-product

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Project Parameters

Parameter Description

Existing Market Size In year 2013-14 the coir products export was INR 1476 Crores. Kerala contributes 85%3 of total coir products and accounts for 50% in terms of value (INR 780 Cr).

Growth (5 Yrs.) (Kerala Market) 25.74%

Market Potential There is high demand in global market for value added products from coir yarn. Currently Sri Lanka and China leads the table.

Competitive Landscape There are about 8814 Coir Units in Kerala. And 450 coir products exporters in India.

Employment potential Coir Industry Provides employment to about 3, 75,000 people. Direct employment to 100 persons

Potential Districts Thrissur, Kozhikode, Alappuzha

Investment (INR) 8 Crore

Source : KSIDC Project Profile on Coir Processing, Coir Board, Report on Kerala Coir products, Economic Times 27-Mar-16, Lok Sabha Unstarred Question No. 2167, dated on 03.08.2015, All data related to investments and project costs are basis assumptions from industry and other sources

Case Study – Coimbatore Coir Cluster206

Product Range • Coir Fibre • Coir Yarn • Coir Pith Block • Curled Coir Rope • Rubberized Coir Size of cluster & Type of units The total number of coir units available in the cluster area is around 264 units of which 145 Nos. are engaged in Fibre Extraction, 13 Nos. engaged in Yarn Spinning, 40 Nos. engaged in Curled Coir Rope Making, 1 No. engaged in Rubberized Coir and 65 Nos. engaged in manufacturing of Pith Blocks.

Turn over (INR) 230 Cr

206 http://coirboard.gov.in/wp-content/uploads/2016/03/FINAL-ECO-Coir-Pollachi-Writeup1.pdf, All data related to investments and project costs are basis assumptions from industry and other sources © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Employment (Direct) 3353

Employment (Indirect) 1500

Income for workers INR 500/day

Cluster map

Home Based Bakery Brand

Sector/Industry - Manufacturing/ Food Processing Project Classification - Nano MSME Estimated Project Cost - INR 5 Crore

Proposed Location - All districts Project purpose and objective • Bakery business in Kerala is the largest segment in food processing sector. Bakery products have become very popular throughout the state. Bakery can be one of the most profitable food processing business opportunity if the market is targeted with right product mix. Bakery products are an item of mass consumption. • The objective is to build a Kerala bakery brand – to integrate the unorganized sector. The food products will be made in households level and with a proper supply chain management will meet the demand of local and away markets. • An online platform will be set up where the entrepreneurs can register with for the food items they would like to manufacture. After due quality assurance process the entrepreneurs will

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become authorized vendors. The platform can also be used by general public/ retailers for ordering their choice Market Scenario • Bakery industry has become India’s third largest of the food industries with an annual turnover of about Rs.3000 crores. India is one of the largest producer of biscuits. • Bread and Biscuits form the major baked food accounting for over 80% of total bakery products produced in the country. With Bakery products’ low price and with rapid growth and changing eating habits of people, they have gained popularity among people. • In India the unorganized sector contributes 55% of total production which comprises an estimated 75,000 bread bakers, mostly located in the residential areas of cities and towns.

Project Parameters

Parameter Description

Existing Market Size The revenue generated during 2013 – 14 was INR 810 Crores Kerala

Growth Bakery industry is growing @ 13 – 15%

Market Potential There is a rapid growth in demand for ready to serve and ready to eat food items in the state.

Competitive Landscape • As per the report published on Hotels and Restaurants in Kerala, 2015 by Department of Economics and statistics, there are about 36,000 Restaurants and 16000 Tea & Snack stalls in the state. • There are 50 to 60 small local Bakery chains in the State

Employment potential • The industrial segment provides direct employment to about 27,000 persons. • The proposed project has the potential to provide job opportunity to 1000 persons

Expected revenues 5 Crores

Potential districts All districts

Source: MSME – PM’s Employment generation programme, Muvsi business idea, Department of Economics & Statistics, All data related to investments and project costs are basis assumptions from industry and other sources

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Project Elements • Target Market - All households in the state and Middle east • Target Items - Ready to Eat and Ready to Serve food items • Location - Manufacturing units in all districts and three logistics centres at Northern, Central and Southern regions • Manufacturing process - The food items will be produced in home based kitchens, which will be packaged at logistics centres and distributed to retailers and to end consumers • Quality Assurance - The product quality will be ensured through a sample checking process • Marketing Strategy – Brand building activities to be initiated • Media marketing – Visual, FM, Print • Digital marketing • Word of mouth • Project Cost • Capital Expenditure – • Kitchen - Kitchen, Equipment's, • logistics centres – Land, Work shed, packing equipment's • Vehicles • Raw materials • Working capital • Salaries • Challenges • Getting entrepreneurs to invest • Maintaining consistent quality

Case Study – Anns House207

207 http://www.annsindia.com/cakes.html © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• Anns Ind Flavours is a new venture of Anns Group, setup to manufacture spices, spice blends and breakfast cereals. • The manufacturing facility is a state of the art one in terms of infrastructure as well as machinery and is certified for ISO 22000:200 which covers an area of 50000 sq ft the facility in 'Pala' • 'Anns' brand is synonymous for quality bakery products208

Year of Establishment 1984

Products • Cookies & Biscuits, • Bread, • Cakes and Pastries, • Snacks, • Local sweets and Namkeens

Revenue (INR) 12 – 14 Crores

Employment 500 persons

Location Central part of Kerala Kottayam, Pathanamthitta

Other Initiative Anns Spices

Household Farming Cold Storage

Sector/Industry - Agriculture/ Storage

208 http://www.indiamart.com/anns-bakery-confectionery/ © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Project Classification – Medium Proposed Location - All districts

Project purpose and objective • As per latest Kerala organic farming policy a model to be developed for sustainable organic farming and will be made part of responsible tourism programme. Also it thrusts on setting up decentralized cold storage facilities for preserving farming products. • The Urban Housing Mission aims to build houses for al in the state. • These two policies can be inferred and a policy to be made for making house hold farming as integral part of housing projects. • The project aims to build small capacity cold storage facilities in vegetable markets of every panchayats. • This will help in storing the surplus amount of vegetables in daily market for selling the products later Market Scenario • Kerala has become consuming state, and has negative growth rate in agriculture production in last four years. To improve upon the present scenario, Government is encouraging all type of farming and providing subsidies. • As the availability of farming land is in diminishing trend, the house hold farming will be a suitable solution for Kerala. • As the production increases the non-availability of proper storage facility will become a bottle- neck in tapping the potential. • The high end cold storage will require huge space and for daily storage, it is not required. • The cold storage/cold chain facilities in the State will become an unavoidable support. Project Parameters

Parameter Description

Existing Market Size 95% of cold storage available in the state are for marine products India

Growth • The vegetables or fruits cultivated in Kerala are not stored in cold storage facilities • The traders/consumers are not aware about the benefit of cold storages in preserving perishables

Market Potential Even though there is not much production of fruits and vegetables in the state, for the huge quantities of vegetables arriving from neighbouring states there is a need of cold storage chains. Also house-hold farming units will require these facilities in future

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Competitive Landscape Though cold storages are available, but there are less players in the vegetable storage segment

Employment potential 1500 The cold storage facility will require one person. If the cold storages are set up in all the panchayats and every ward of municipal corporations and municipalities

Expected revenues INR 15,00,000 per cold storage (the capacity will be 10MT and the rent will be INR 0.5/Kg, the facility will be available for 300 Days)

Potential districts All districts

Source: MSME Report on Cold storage unit, http://agmarknet.nic.in/klcsmp.pdf, All data related to investments and project costs are basis assumptions from industry and other sources

Project Elements • Target Market – All panchayats • Location – Near to vegetable markets • Storage process - The ideal environmental condition for storage of fresh fruits and vegetables is the lowest temperature which does not cause chilling injury to the product. The capacity of utilization of cold storage is about 70%. 300 days in a year. • Training – One time training will be required for maintaining the cold storage • Quality Assurance - this will be done after each process completion • Requirements – • High Tension power supply with backup generator • 1000L per day • 10MT cold storage • Challenges • For setting up cold storage License is required from Local government • There is no subsidy provided by government for setting up cold storage

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Case Study - Economical Cold-Storage, Lettuce Farm, Maharashtra

Problem Statement A medium sized farm produces 800 Kg lettuce per day. As there is time gap of one day to reach the destination market, 40% of the total production is spoiled as a result of exposure to heat and transportation. Though the leafs are stored in cold atmosphere, the rate of spoilage are not reduced. This is because the vegetables are damaged before keeping them in cold storage Solution A small capacity of cold storage facility was established near to the farm. As the leafs are chilled immediately after harvest, spoilage has reduced considerably Conclusion Chilling the fresh vegetable/fruit immediately at the source will increase shelf life and the profits of the farm

Hospital Medical Furniture

Sector/Industry - Manufacturing/Light Manufacturing Project Classification - MSME Estimated Project Cost - ~ INR 2 Crore Proposed Location - Ernakulam, Palakkad

Project purpose and objective • Kerala’s health sector is expanding rapidly. More and more health care facilities are being set up. • Hospital furniture have important role to play in health care. Makes patients feel comfortable during their stay in hospital or the surgery/post-surgery as well.

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• The project aims in setting up a light engineering unit for manufacturing hospital medical furniture to cater to the rise in demand. • Initially the unit will manufacture as per the local market demand, later will tap the international market • The product range includes such as: Different type of hospital beds – ICU, Fowlers, Orthopaedic, Baby crib, Hospital mattress, Hospital cabinet, Doctor chair, Examination table, Bed side screen, Tables, Foot stools, Stretchers Market Scenario • Kerala health care system provides quality service with international standard. • The growth in medical tourism also drives state-of-the art heath infrastructure in the state • There are about 15,000 medical institutions in Kerala. • The total bed strength is about 1,00,000 • The health care is expected to grow with more private players entering into market • There are about 10 manufacturing units in the state. • Project Parameters

Parameter Description

Existing Market Size The Indian healthcare sector is valued at USD100 Bn

Growth 17%

Market Potential High potential. With the rapid growth in the number of Public and Private Hospitals, and emphasis being laid to provide more and better Medical facilities in the village & small towns, the demand is likely to increased further

Competitive Landscape Well established manufacturing entities are there in the market. Good marketing strategy will be required to establish the brand.

Employment potential The hospital medical furniture segment has high potential in generating employment. There will be requirement for High skilled workers of 100

Expected Revenue (INR) 3 Crore ( Sale of 2000 hospital furniture units worth of average price INR 15,000)

Potential districts Ernakulam, Palakkad

Investment (INR) ~ 2 Crore

Source: FICCI report on Kerala Healthcare system, IBEF report on Healthcare, http://www.dcmsme.gov.in/reports/ADJUSTABLE%20%20HOSPITAL%20%20BEDS.htm, All data related to investments and project costs are basis assumptions from industry and other sources

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Hospital Bed - Bed manufacturing process209

Project Elements • Target Market – Public and Private medical institutions in the state • Products - Hospital furniture • Location – Ernakulam precision engineering park • Manufacturing process - Highly skilled process • Skill building – Employees will be trained for operating advanced machines • Quality Assurance - Industry standards needs to be followed • Marketing Strategy – A good marketing plan should be made for promoting the brand • Media Publicity • ICT programmes • Project Cost • Capital Expenditure • Land for setting up factory • Building Infrastructure • Machinery and other equipment • Pre operating cost • Raw material • Utilities – power, water • Challenges • Availability of skilled labour • Land availability

Case Study – Godrej Hospital Bed210

209 http://www.dcmsme.gov.in/reports/mechanical/AdjustableHospitalBeds.pdf, All data related to investments and project costs are basis assumptions from industry and other sources 210 Case study DESIGNING ‘MADE FOR INDIA’ HOSPITAL FURNITURE © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• Godrej interio is the leading brand in home and office furnishing. They wanted to foray into the Hospital Furniture domain. • Onio worked on the design right from user research, concepting, prototyping to manufacturability and created a range of patient room furniture. • Full-scale working prototypes were built & tested for performance before it was delivered to the client. Challenges • Patients of all age should be able to use • All stakeholders – doctor, other staff, patient Solution • Onio’s complete ‘design & features’ strategy to meet user needs, based on research, provided a breakthrough • The design won many awards

Case Study – Narang211, Medical Limited • Year of establishment – 1989 • Location – Delhi • Export – 40% of total production, medical equipment are exported to 80 countries • Quality Standard - conform to ISO 9001:2008, EN ISO 13485:2012 and CE standards

211 http://www.narang.com/products.php © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• Product Range –The various range of products includes : Hospital Medical Furniture, Orthopedic Implants & Instruments, Medical Disposables, Diagnostic Equipment & Products, Anesthesia Equipment & Products, Autoclave & Sterilizers, Laboratory Products, OT equipment, Medical Imaging, Rehabilitation products

All-Service Portal and Training Center

Sector/Industry - Other Services/Skill Development Project Classification – MSME Proposed Location - Central portal catering to all districts

Project purpose and objective • Holistic solution to provide enhancement of requisite skill sets and create a platform to self- employ certified repair and maintenance professionals – Electricians, plumbers, carpenters etc.. • The ultimate objective is to build a whole ecosystem in collaboration with Department of Industrial Training, Kerala through a PPP Model to provide world-class training facilities for skill enhancement, monitor and verify service professionals and build a platform to connect customers to certified service providers providing employment as well. • Main purpose for the project is to address major concerns of lack of transparency, lack of quality and lack of on-time performance in this sector which aggravates the need for training the workforce • The project is key to build an organized profile for this industry which is largely unorganized and with wide gaps in meeting demand for quick and efficient repair and maintenance services. Market Scenario • Professional repair and maintenance and other service market aim to fix the one perennial problem at most homes today which is the need for a well-trained, professional service provider who provides quality service and time-bound service. • In the recent past the focus is also on improving the lifestyle of the average domestic help and their families through better pay and perks like insurance benefits, flexible work hours and paid weekly-offs. • Increasing customer bookings in metro Tier-I cities indicate how quickly some of these services have become popular. • Other service related apps operating in tuer-1 cities have been growing at 30-40%

Process Description

Project Parameters

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Parameter Description

Existing Market Home services market in India, pegged at approximately $100 billion. 5,000 Size urban homes translates into a market size of INR 25 lakh per day per city

Growth 300% yoy annual growth (Easy Fix)

Market Potential A service provider aggregation model is asset-light and highly scalable. Large scope to develop an organised network of service providers. With increasing sale of white goods and housing sector, demand for repair services is showing an increasing trend.

Competitive Very few online portals available in Kerala– Fixall, Metro360 etc. Many Landscape players nationally - UrbanClap, LocalOye, and Taskbob.Handy Home etc. These players are generic marketplaces providing all sorts of services – from guitar tutors, electricians, beauticians, and event managers. EasyFix specializes in the home repairs and maintenance category, which requires technical expertise. An integrated model of training and service portal will be first of its kind in Kerala

Employment Under the Department of Training, over 20,000 skilled technicians are potential passing out from various Government and Private ITIs from across state. Service platform can provide opportunities in scale of at least 10,000 skilled professionals

Expected revenues INR 1-2 Cr

Potential districts Central portal catering to all districts

Source: http://www.skilljobs.kerala.gov.in/jobportal.html; Yourstory, http://www.hindustantimes.com/more- lifestyle/bai-on-call-how-home-service-apps-changing-the-maids-market/story-s6zz6kmWw1aEamZ1yLxjaL.html, All data related to investments and project costs are basis assumptions from industry and other sources

Project Elements • Skill enhancement – Skill enhancement to cater to demand driven market relevant courses to address the skill development and training. Skill up gradation to strengthen mathematics and communication skills

• Target Market – Urban households in all districts primarily Thiruvananthapuram, Ernakulam, Trichur, Kozhikode and Kannur ~ 25 lakh households

• Target Services – Electrician, Plumber, Carpenter in initial phase

• Target Bookings – 30% of urban households in select market

• Quality of Service – Process to ensure minimum process time from online booking to completion of work by technician

• Marketing strategy – Servicemen providing service under one brand, marketing channel - Primarily digital and word of mouth

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• Project Cost elements212

• Average project cost - INR 10-15 Lakhs

• Website development cost – INR 1.5-3 lakhs to get an initial version of the product to market. A more robust app could cost between INR 3.5 – 5 lakhs for an initial version • Hosting • Design • Custom Development • Setup and Configuration • Training • Website maintenance cost • Verification team costs – In-house grooming experts, Skill verification by Department of Industrial Training, Certification costs • Logistics and Branding – Services for transportation of servicemen. Tools and uniforms for service professionals • Key challenges

• Aggregating service men other than those registered from Department of Industrial Training as it is largely an unorganized sector • Pricing model as there is no standard pricing of home services • Need-based industry poses challenges in streamlining both pricing and mainstream adoption Case Study – FixAll.in (Kochi)213 Services

Location

• Kochi • Thrissur • Kottayam • Expansion to Thiruvananthapuram and Kozhikode

Process

212 JIS Institute of Skill Development, https://atlanticbt.com/blog/how-much-does-ecommerce-wesbite-cost/ , All data related to investments and project costs are basic assumptions from industry and other sources 213 Fixall.in, Housejoy

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Offering – Self-employment platform that connect customers to service providers using latest innovative technologies. Customers who have maintenance issues at home can log on to the Fixall website and select the service they require, along with a description of the issue, following which the team responds with a phone call to get address details and further clarifications if required. For work of a larger scale, a work coordinator visits the site to conduct an evaluation. Materials are procured locally and billed to the customer while labour charges are extra

National Case Study – Easyfix Offering - To provide customers with home repair service experience that delights them and become their best-handy-friend

Employment – 2,500 servicemen across top 5 cities

Turnover – 2.5 Cr

Service - 5, 50,000 houses in 5 years

Estimated investment – INR 10 lakh per city

Services – The wide range of services includes: Plumber, Electrician, Carpenter and A/C & Refrigerator

Process

Rates

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Home-based Solar Micro generation

Sector/Industry - Electricity Project Classification - Large Proposed Location - All districts. Primary those with highest share of urban households – Thiruvananthapuram, Kozhikode, Thrissur, Ernakulum, Kannur etc. Project purpose and objective • The project is proposed to be implemented in collaboration with ANERT on a PPP model basis structured to improve the quality of the grid in general with specific focus on evolving nano/ community grids. The project will function primarily on smart grid principles. • The company will be set-up with an objective to provide comprehensive assistance in installing grid-connected solar PV setups in households and equipping households with Feed-in-tariff principles and net-metering installations. ANERT will act as the nodal body to get all clearances in enabling grid connectivity to the participating households. • This project will be a solution to the power shortage problem in the state. As about 65% of the annual power requirement of the state is sourced from outside the state and with Government of India recent mandate that 85% of the power generated in a state has to be utilized in the state creates challenges for Kerala. In order to fulfil the state’s power demand, the best solution is to build a home-based solar micro-generation ecosystem Market Scenario • Solar electricity is green renewable energy and doesn't release any harmful carbon dioxide or other pollutants. A typical home solar PV system could save nearly two tonnes of carbon per year. • In the recent past, households have introduced solar water heating and solar lighting systems. • ANERT is working on 25000 rooftop grid-connected programme for government buildings. The regulations and system to operate this programme is being developed by ANERT. Association with ANERT on such a project would help leverage expertise in this regard. • Kerala had a demand of more than 4172 MW of electricity as on March 2016, but the generation was only 2545 MW2. About 1626 MW were purchased from central pool and the remaining gap was managed through load shedding and power cuts.

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Process Description • Registration/Empanelment of Installer /Manufacturer through an enrolment process • Payment of registration fees • Single window process in assisting consumer to obtain guidance and permissions for successful installation • The installer shall • Install the system: • Show you how to operate the system and how to spot faults • Provide information on maintenance requirements • Share pack of all documents, manuals and warranties • Undertaking by consumer on completion of installation and provide portal access to receive details on net-metering bills and payments Key Parameters Parameter Description

Existing Market Solar energy harvesting is achieving new prospects in Kerala. Kerala has a Size solar rooftop potential of 10,000 MW Growth Growth will be driven by successful implementation of Feed-in-Tariff scheme in the state Market Potential About 80 % of the electricity demand is from the 90 lakh domestic consumers. Most consumers are affluent and would not mind putting up solar plants on their roofs for energy security, Kerala was one of the very first states to put together a very comprehensive renewable energy policy. The commitment is reiterated and fleshed out in further detail in the Kerala Solar Energy Policy 2013. Competitive There are no business model operating in such a fashion. Largely solar- Landscape driven initiatives are subsidized by government. Employment This system is poised to provide employment opportunities in the scale of potential 50-100 employees to maintain the portal and empanel suppliers in the portal Expected revenues Revenue collection basis registration fees of households ~ 2% of total costs incurred by households Potential districts All districts. Primary those with highest share of urban households – Thiruvananthapuram, Kozhikode, Thrissur, Ernakulam, Kannur etc. Source: http://www.pv-magazine.com/archive/articles/beitrag/600-mw-of-solar-to-be-added-to-indian-state-of- kerala-in-next-three-years_100026510/#ixzz4ROwQ5GQp, http://www.thehindubusinessline.com/economy/kerala- plans-25000rooftop-solar-units-programme/article4385219.ece , ww.cea.nic.in/reports/monthly/installedcapacity/2016/installed_capacity-03.pdf, http://blog.ksidc.org/solar- energy-harvestation-reaching-new-heights-in-kerala/

Project Elements • Target Location – Area in close proximity to Kozhikode, Malappuram and Kannur. (Districts with highest share of urban population in the state)

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• Target Market – Urban Households

• Target no. of households – 10% of urban households in select districts in initial phase of operation

• Solar PV- Basic building block of a PV system. A basic PV cell produces a very small amount of electricity and multiple of them connected together to form a Solar PV module that can generate 10W to 300W output. Arrays can help generate more output.

• System sizing– Sizing will depend on the load requirements in your setup. It is important to note that a Solar system is good for operating low wattage appliances like lights, fans, TV, etc.

• Roof capacity - Solar Panel structure typically weight 15kg per sq meter and the roof should be able to handle the load.

• Output– Typically a 1kW capacity solar system will generate 1600-1700 kWH of electricity per year

• Net-Metering - Compliance to be followed with respect to Kerala State Electricity Regulatory Commission (Grid Interactive Distributed Solar Energy Systems) Regulations, 2014

• Accounting and Settlement - Accounting and settlement of electricity drawn and injected by an eligible consumer monitored by ANERT)

• Project Cost elements214

• Average project cost for household

• The cost of setting up a rooftop solar power generation facility varies between INR 1.75-2 Lakh

• A good 5 kW system for a home would cost around Rs 3-4 lakhs to setup, which can provide electricity for 25 years. The additional operating cost will include the cost of replacing the batteries.

• In case of net-metering for grid-connected systems batteries can be avoided hence reducing maintenance costs

• Solar PV Panel – Costs INR 30-50 per watt of power generated

• Solar Inverter - Grid-tied inverters, convert the direct current (DC) electricity produced by your solar PV panels to alternating current (AC) electricity that can be used in your home and exported back to the grid.

• Solar batteries/Net Meter

• Average project cost for company

• Development cost for building a portal that will register households and integrate net-metering collection with distribution company

214 ANERT, https://www.bijlibachao.com/solar/roof-top-solar-pv-system-project-for-home-and-office.html , All data related to investments and project costs are basis assumptions from industry and other sources © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• Marketing programs to attract households

Key challenges • Other subsidy driven programs of ANERT and Government of Kerala may pose risks

• Lack of awareness of consumer households about net-metering guidelines and regulations

Case Study – 10,000 Rooftop Solar Power Plants Programme of ANERT (Off-grid)215 Process

• Programme for decentralised standalone rooftop solar power generation. Target to 1kW solar power plants on 10,000 rooftops totalling a capacity of 10MW. • Registration process for selection of beneficiary • Installation of the solar power plants will be through a panel of agencies, selected from channel partners of MNRE whose financial and technical credibility is already confirmed by MNRE. • The beneficiaries can select any agency of their choice for installation of the system. The list of empanelled agencies along with the rates offered will be available to beneficiaries. • Total Subsidy available is limited to INR 92,262 • System configuration to include: Solar Panel, Battery, Power conditioning unit, Cables, Switches/Circuit breakers, Junction Boxes etc. • Beneficiary share of the cost of the system (over and above the subsidy) will be directly paid by the beneficiary to the selected Agency • International Case Study – Microgeneration Certification Scheme (EU)

215 ANERT, http://www.microgenerationcertification.org/ © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• The Microgeneration Certification Scheme (MCS) is an industry-led and nationally recognised quality assurance scheme, supported by the Department of Energy and Climate Change (DECC). • MCS certifies microgeneration products used to produce electricity and heat from renewable sources. MCS also certifies installation companies to ensure the microgeneration products have been installed and commissioned to the highest standard for the consumer. The certification is based on a set of installer standards and product scheme requirements Key Features • The Key features of this scheme includes: Consumers, Installer Search, Product Search, Important Consumer Information, Microgeneration Technologies, Installation Process, Finance & Incentives, Complaints, Amend Certificate

A-Z Online Delivery Portal

Sector/Industry - Transport/Services Project Classification - Nano Large Project cost - INR 5-7 Cr Proposed Location - Tier-I and Tier-II cities in Kerala

Project purpose and objective • Project aims to provide a full-fledged delivery platform for Hypermarkets, supermarkets, pharmacies and other vendors/retailers who intend to provide home delivery services to their customers. The proposition is to help deliver anything from these stores during pre-selected time slot of delivery by customers. • Kerala is the first digital state of India. However, the use of digital services are in the nascent stage with a huge surge in online delivery options in Kochi and Trivandrum where online delivery options are in demand now. Primarily this area functions in the food delivery segment and not spread across other segments. • The project aims to build an online delivery brand which will function in all districts through a delivery logistics system which will sign up runners and partners to get anything delivered at the customer’s doorstep. Market Scenario

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• Selling groceries and other daily-use products online can open up a sales avenue for retailers at little extra cost. In the recent past, with a large customer base and increasing penetration of Internet connectivity and growing popularity of online shopping many entrepreneurs have seen the potential in creating e-stores for groceries. • In Kerala, spending on grocery and daily essentials is the largest and most consistent share of spending for any household. However, it has still not got into the ambit of online shopping and hence provides a huge opportunity. • Kerala government’s present rules for ecommerce transactions from players outside the state gives immense opportunities for in-house players to operate in this space and develop a strong market in Kerala. • With a strong retail market in the state with hypermarkets and supermarkets functioning actively in Kochi, Trivandrum, Kozhikode, Trichur etc., opportunities to tie-up with their home delivery wing increases prospects of such a proposition Project Parameters

Parameter Description

Existing Market Size Food and grocery industry in India is now worth USD 383 billion and is expected to touch USD 1 trillion by 2020

Growth In the last 3 years, the sector saw 200% growth in the number of new ventures in the online delivery space.

Market Potential Online delivery is primarily in the grocery segment. Other areas are less explored especially that of medicines and delivery from hypermarkets, supermarkets and other retailers. The online grocery sector is in its growing stage with more business models evolving, there is enough space for multiple players and scope for their rise.

Competitive Landscape In Kerala, quite a few online delivery stores for grocery, food delivery are in operation. Few players being Kada.in, onedaycart, emarginfree, luluwebstore, keralashop.in, ekada etc. Competition is increasing primarily in the grocery segment.

Employment potential In the partnership model, as many as 50 runners will be employed to cater to delivery per city. Apart from this the team members will constitute of 50 members

Expected revenues Revenue will be gained through commission from registered partners and delivery charges based on availability of partners in a particular city. Average revenues of 5% per order. With a target of 500 orders per day of average amount of INR 150, revenues will amount to INR 1 lakh per month per city in the initial phase

Potential districts Tier-I and Tier-II cities in Kerala

Source: https://yourstory.com/2015/11/kada-groceries/, http://www.financialexpress.com/industry/shopping- online-in-kerala-expect-no-delivery-messages/162777/ All data related to investments and project costs are basis assumptions from industry and other sources

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Project Elements • Platform – When a consumer shops on the app, they get to choose a retailer (signed-up partner) in their neighbourhood or city limits where the customer wants to order from. Other than retailers, white-good manufacturers can use the app to facilitate deliveries of their orders. Separate segments of delivery will be available – Food, Grocery and essentials, White goods, etc. Through the app, the order goes to the partner and the assigned runner picks up the order and delivers the order. Partners and runners can sign upon the mobile app platform of A-Z and join the on-demand logistics network of A-Z portal.

• Target Market – The portal will caters to buyers in Tier 2 cities of Kerala. The aim is to exhaust the potential of one location before targeting new ones

• Partners – Hypermarkets, super markets, small grocery, pharmacies, clinics and other stores

• Runners- Drivers who have a bike and intend to do part-time job, auto-rickshaw drivers, and small logistics firms etc. For large orders tie-ups with small pickupvans.trucks.

• Order Fulfilment – Customer can place order from their desired store signed up as partners and the mobile app will assign suitable runner and provide tracking details, payment details to the customer.

• Logistics network – Build a robust offline local network that can fulfill the orders. Also an in- house network in large cities as well

• Project Cost elements

• Average project cost - INR 5-7 Cr • High end mobile app with multiple features to integrate partners and runners for order fulfilment which will be outsourced to a third-party technology platform – INR 25-30 Lakhs • Branding – Extensive co-branding with partners. Every partner and runner will be allocated branding merchandise

• Logistics – In-house logistics network in main cities with minimum 2 bikes and 3 delivery personnel

Key challenges • Standardizing commission and delivery fees

• Assuring on-time delivery of products

Case Study – Kada.in (Trivandrum)216 Year started 2012

Business Model Combination of its own inventory for fast-moving products, as well as partnerships with retailers in the city

216 http://www.businesstoday.in/moneytoday/smart-spending/online-grocery-shopping-vegetables-new-trend-in-india/story/197141.html, All data related to investments and project costs are basis assumptions from industry and other sources © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Investments (INR Cr) 1.25

Revenues (INR) 15lakh per month

Revenue from mobile app (%) 15-20%

Anticipated Growth (%) 300% (expansion to other cities)

No. of orders 2200-2500 per month

Categories Gramam/Village, Helping Hands , Grocery, Vegetables & Fruits, Fish, Chicken & Meat , Organic Products , Bakery & Beverages, Household, Health and Beauty, Mumz and Baby, Pet Zone, Stationery

Employees 50 and other part-time employees

Kada.in special ‘Kada.in Specials’ is an effort to encourage women entrepreneurship. A campaign to encourage housewives to become entrepreneurs by having them create products (such as pickles and snacks), Kada sells those items through their platform.

International Case Study – Postmates217

• Transforming the way goods move around cities by enabling anyone to have anything delivered on-demand. Our revolutionary Urban Logistics platform connects customers with local couriers who can deliver anything from any store or restaurant in minutes. Key proposition • Postmates embrace food delivery by delivering not just takeaways, but other local goods too

• Postmates help city users get any kind of product, including hot food, delivered to them in under one hour.

Business model • Connects customers with local couriers, who go out and buy the takeaway food and bring it to them

217 https://postmates.com/partner, Business Insider, http://www.businessofapps.com/six-app-startups-revolutionising-food-delivery/ © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• Also opened up its API to small businesses so that any developer can integrate delivery into their own restaurants and apps and access the firm’s fleet of drivers

Technology • Purely a mobile app, without an accompanying online option, that allows users to search for available food deliveries and other products.

• Allows real-time tracking of delivery in much the same way

• No.of orders processed - Surpassed 2.5 million deliveries in 28 markets in 2015 • No.of delivery personnel - 13,000 • Key partners - Apple, Starbucks and Chipotle

Contact Centres

Sector/Industry - Communication/IT

Project Classification - Nano MSME

Project cost - INR 7-10 lakhs

Proposed Location - All districts

Project purpose and objective • A women-focussed entrepreneurship model of operating a virtual contact center whose services can be availed by any organization (white good manufacturers, online portals, airlines, bus operators etc.) for their customer care operations. This model will be a platform for women to work from anywhere provided they have an internet connection, smart phone and laptop of their own. This model of operation can reduce in-house costs of the companies that deploy an

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additional customer care call-center unit in terms of infrastructure, equipment and other associated costs. • The flexibility of working from home and flexibility of timings will provide employability to the large home maker segment of Kerala. • Outsourcing virtual contact center services can help organizations benefit in quick call closures and increase output. • The project can be rolled-out in collaboration with Kudumbasree mission as well. Market Scenario • Kerala is poised to be the state with highest literacy. The state although claims to possess this achievement, large number of women are unemployed especially post their marriage. Kerala is ranked 25 with regards to female work participation rate in 2011 census. Women in Kerala log an unemployment rate of 47.4 %, as compared to 9.7 % of men. • The patterns in educational and occupational trends for women in the state are dramatically contradictory when compared to many other Indian states. Hence attracting more women to the main stream of employment would accelerate the pace of economic development in Kerala. • Leveraging potential of this section of workforce especially empowering the unemployed housewives can help provide customers with high-quality customer support services while cutting down costs. Project Parameters Parameter Description Existing Market Size BPO sector in India is estimated to have reached 54% growth revenue. 70% of India's BPO industry's revenue is from contact centers. The domestic Indian IT-BPM market is rapidly approaching the USD 50 billion mark. Kerala’s potential to capture at least 0.1 % of this market can fetch INR 335 Crs

Growth The demand for Indian BPO services has been growing at an annual growth rate of 50%

Market Potential Business Process Outsourcing (BPO) is the fastest growing segment of the ITES (Information Technology Enabled Services) industry in India. Kerala, poised to have a strong IT base in the state can attract educated professionals to this contact center.

Competitive Landscape National companies operating in Bangalore, Delhi etc. provide their service in Kerala. There is no known presence of Kerala based large players operating in this model. However, there are lot of home-based jobs available in the market.

Employment potential IT-BPO/BPM sectors contributes to one of the largest employers. Such a call-centre can provide employment to ~1000 women professionals

Expected revenues Revenues are basis number of calls/chats/mails/sms closed per day. Assuming INR 10 for successful closure, 500 calls per day, revenues amount to ~INR 15 lakhs per year

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Potential districts All districts

Source: : http://labourbureau.nic.in/Statistical_Profile_2012_13.pdf, http://www.thehindu.com/news/national/kerala/kerala-tops-in-unemployment-rates/article8226139.ece, https://www.outsource2india.com/callcenter/articles/virtual-call-centers.asp, http://shodhganga.inflibnet.ac.in/bitstream/10603/21340/15/15_chapter%203.pdf , https://www.outsource2india.com/india/bpo-industry-india.asp , All data related to investments and project costs are basis assumptions from industry and other sources.

Project Elements • Home agents - A home agent will require to have a smartphone mobile connection, internet connection and a personal laptop. The agents can login to the central portal and choose their work plan at the beginning of every week. At month end, basis successful call closures and number of calls attended salaries would be transferred. Incentives for best performing agents will be announced every quarter

• Pricing - Pricing will be based on scale of contract, call volumes, duration of project, skill level requirements and technical complexity of requirement. On an average basic successful call closure rates are INR 10 per call.

• Portal - An IT platform where agents can register and route calls/mails/chat/sms according to their work plan calls assigned. The technology should be able to cater to large traffic and ensure good voice quality.

• Support Infrastructure – In case agents do not possess requisite internet data connection, they will be provided with allowances.

• Benefits

• More number of inquiries converted into orders • Less number of calls being escalated • Solution for seasonal business • Hire only the required number of virtual call center agents • Project cost elements

• Average cost – INR 7-10 lakhs

• Contact center infrastructure – INR 3-4 Lakhs. Cost may increase subject to increase in number of orders received as call traffic will increase • Agent verification, screening, skills set listing and training team

Case Study – Flatworld Solutions (Outsource to India) Bangalore218

Provides hassle free and seamless outsourcing solutions. Several global customers have benefitted by outsourcing their call center services to O2I.

218 OutsourcetoIndia, https://www.outsource2india.com/Clients/success_stories.asp © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Their multi-channel call center services have helped many small, midsized and large companies meet their organizational needs. They follow a 5 stage outsourcing process to ensure that their services are delivered on time at cost-effective rates.

1. Establish Contact 2. Requirement Analysis 3. Pricing and Contracting 4. Project Initiation 5. Project steady state 6. Successful project implementation

Problem

• Assist with challenges that had affected customer support operations because of the explosive growth of the company. • E-mail is an important medium of communication for this company as some of its customers are based outside the US. • Average speed of response to emails was slow, resulting in order cancellations and missed sales opportunities. Solution

• Within 4 days, a team set-up that could handle the e-mails in offshore center. • The costs fell by 65% and the response time has gone from days to under 10 hours. • This time of response is maintained through holidays and weekends, as they recognize that different countries do not have the same work schedules or holidays. • In order to cut costs in the voice portion of the business we launched a trial program. This trial program has grown to handling over 5,000 calls per month by Outsource2india. Result

• Outsource2india has been able to handle call volume, accurately, with minuscule abandonment rates resulting in client's cost savings in tune of 40%

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Study on Investment Potential of Kerala- Annexures

Kerala State Industrial Development Corporation Ltd

30 October, 2017

KPMG.com/in

Page 1 of 134

Contents

Annexure I - Demographic and Infrastructure Assessment ...... 3 Annexure II - Detailed Industry Infrastructure Assessment ...... 9 Annexure III - Central Government Support Schems/Policies ...... 28 Annexure IV – District Profiling ...... 30 Thiruvananthapuram ...... 30 Kollam ...... 37 Pathanamthitta ...... 44 Alappuzha ...... 50 Kottayam ...... 57 Idukki ...... 64 Ernakulam ...... 71 Thrissur ...... 79 Palakkad ...... 86 Malappuram ...... 93 Kozhikode ...... 100 Wayanad ...... 107 Kannur ...... 114 Kasaragod ...... 120 Annexure V – Brand Listing ...... 127

Page 2 of 134

Annexure I - Demographic and Infrastructure Assessment

Demographic Profile

Characteristic/Parameter Select Facts

Location Southern tip of India encompassing 1.18% of the total country area

Area 38863 sq. km

Climate Humid Tropical

• Coastal belt of 585 KM • Western Ghats edging the eastern boundary of Kerala Topography Features1 • Hills and Deep Valleys surround the eastern border • Central region endowed with Midland plains • 44 rivers and 35 small rivers with canals linking the lakes and backwaters facilitate a well-built inland navigation system

Total Population (census 2011) 3,34,06,061

Total Population (2015)2 ~34,000,000 State with highest Literacy Rate effective literacy rate of Population 94%3 Amongst top 10 Urbanization urbanized states in India with an urban population share of 47 7% Working age population ~ 65%

Mineral Resource Profile

Characteristic/Parameter Select Facts

• Large scale mining activities confined to few minerals - Heavy Mineral Sands, China Clay, Limestone, Silica Sand and Granite Major Minerals4 • Heavy mineral sand and China Clay contribute more than 90% of the total value of mineral production in the State.

Amongst leading states in Country’s production of certain minerals Mineral Production • Kaolin – 14.99% • Minor Minerals5 – 5.9%

Infrastructure Connectivity

1 Maps of India, State Profile of Kerala – MSME, Government of Kerala web portal 2 Assuming 0.5% growth rate every year from 2011 to 2015, India Guide 3 Census 2011 4 Department of Mining & Geology, Government of Kerala 5 Include building stones, gravel, ordinary clay, ordinary sand, limestone, bounder, kankar, murum, brick earth etc. – Definition Source: Directorate of Geology and Mining © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Gap Assessment in Characteristic/Parameter Select Facts comparison to Power bl / i hb i

2835.77 • Availability of power

4097.88 is the major concern

in starting up of Thermal 718.49 industrial units Installed Capacity (MW)) Hydro (Renewables) 2081.31 • Hydel and thermal power generations RES (MNRE) 34.88 account for the bulk whereas wind and Nuclear 228.6 solar power • Kerala has higher energy availability - Actual energy shortage in Kerala was 0.5% against anticipated shortage of 14.2% • Minimal energy shortages compared to Tamil Nadu, Andhra Pradesh and Power requirement and Karnataka availability (MW)9 • Shortages in Kerala - 0.3- 0.5% ; Tamil Nadu and Andhra Pradesh - 0.1-0.7%; Karnataka - 5.2% (Maximum in Southern Region)

• Minimal private sector participation as compared to Private Player 7.2% share of private sector in overall installed average share of Participation in Power capacity. Gas-based and Renewable power 50% in Andhra generation attracts private participation Pradesh and

Telangana, Karnataka and Tamil Nadu. Power Consumption Domestic 51% • Maximum revenue

6 Southern region States; Karnataka (KN), Tamil Nadu (TN) and Andhra Pradesh (AP) are selected for comparison 7 Economic Review 2015 8 CEA, Capacity Including Allocated Shares in Joint & Central Sector Utilities (As on 31.08.2016) 9 CEA – LGBR 2016-17 (Including allocated shares in joint and central utilities) © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Industrial and 27% collected from Commercial Industrial segments Other segments Public Lighting, followed by agriculture, railway domestic and tractions and others - commercial segment 22%

Water supply

Rainfall Average Rainfall 1290.8 32% deficient (mm)10

Ground Water • Quality of shallow Availability and groundwater in Requirement11 Kerala is good • Utilization of available ground water resource in Kerala is 43.24 %

Others sources of • Surface water sources such as rivers, wells • Highest Open well supply12 sources like tanks, ponds, provide and density in the drinking and water for irrigation country with 200

• Annual yield of all rivers in Kerala – 70303 wells per sq.km

mcm

• Utilizable yield of approx. 60%

Road

Infrastructure Spread Total length of State 4310 km State government • Highways priority to develop

Total length of 1600 km national highways to

National Highways 45 m width

Surface Road 57.5% Coverage13 (%)

10 Meteorological Centre Thiruvananthapuram – Season’s Rainfall (June – Sep 2016) 11 Central Ground Water Board 12 ENVIS Centre – Kerala, Economic Review 2015 13 MOSPI Infrastructure Statistics – 2014-15 © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Road density14 • Density per 1000 sq.km - 5543 • Comparatively better • National Average – 1206.29 placed than most • Density per 1000 population – 6.19 other States, as regards road length, • National Average – 3.28 the condition of many of these roads are not satisfactory • Roads not able to t t tffi Road Traffic13 • Registered Motor Vehicles per 1000 • Scattered pattern of

population – 198.07 urbanization a

challenge for Kerala • National Average - 132

Railways Infrastructure Spread • Total railway route - 1257 km • Thiruvananthapuram Division - Largest coaching division of Southern Railway with holding capacity of 1572 Rail Density16 • Density per 1000 sq. km – 27 • In terms of rail • National average - 20 density, Kerala has • Density per 1000 population – 0.03 performed better that national • National average – 0.05 average.

New Projects • Suburban train services in • Government’s Thiruvananthapuram – Chengannur increased efforts in /Harippad sector establishing railway • Kochi metro project sector – High- speed • Light metro rail project - Planned to be rail corridor project implemented in the cities of under Thiruvananthapuram and Kozhikode conceptualization Gas pipelines

Infrastructure Spread • 1 Operational Gas Pipeline - Kochi- • Well-connected gas Koottanad- Bangalore-Mangalore (Part of pipeline network – the 1104 km with 16 MMSCMD capacity is KG D6 Basin still under construction) Network and • 1 City Gas Distribution (CGD) Network EWPL17 to cater to authorized in Ernakulam district requirements of AP (Geographical Area). Expected to start & Telangana operations in 2016 • CGD networks across 3 geographical areas in Andhra Pradesh and Telangana

14 Economic Review 2015 –State Planning Board © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Air transport Infrastructure Spread • Operational airports – Kochi, • Kochi airport setup Thiruvananthapuram and Kozhikode in PPP mode • 1 planned airport at Kannur • Key mode of transport catering to the Tourism sector • Cochin Airport – First airport to be powered completely Ports

Infrastructure Spread • Major port is Cochin amongst 12 major • Among the major ports of the country ports, Cochin port • 17 minor ports handled a mere 3.71% of all-India major ports cargo traffic. • Minor ports are underdeveloped Solarization of Ports • Project underway in 7 ports • Currently no project conceptualized for Cochin port • Andhra Pradesh - Vishakhapatnam (Project commissioning stage) Tuticorin (RFP Port Traffic • AP • 5.38% increase in port traffic during Apr- (Vishakhapatnam) Aug16 period over last year. – 10.82% increase • TN (Chennai) – 0.6% increase • TN (V.O. Chidambaranar) – 0.19% increase • KN (New Mangalore) - 1.58% decrease

Digital and Telecommunication

Subscriber Base • 1.94%15 growth in (Wireless+ Wireline ) • Kerala has the Subscriber base highest tele- density, also the highest penetration of optic fibre cable in the country

Urban Infrastructure • Wireless Urban Tele-density 211 • Wireline Urban Tele-density 9.33

15 http://www.trai.gov.in/WriteReadData/PIRReport/Documents/Indicator_Report_05_August_2016.pdf © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• Internet/Broadband Subscribers per 100 99.6 population

Rural Infrastructure • Wireless Rural Tele-density 56.8 • Wireline Rural Tele-density 5.44 • Internet/Broadband subscribers per 100 20.84 population

Source: Economic Review, Infrastructure Statistics 2014, KPMG in India Analysis based on market research

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Annexure II - Detailed Industry Infrastructure Assessment

1. Kerala Industrial Infrastructure Development Corporation (KINFRA)16

Development of infrastructure reflects the strength of industrial development of a nation. In order to create such an atmosphere, the State Government established Kerala Industrial Infrastructure Development Corporation (KINFRA) in 1993. The corporation focuses on industrial infrastructure development by setting up industrial parks, townships, zones etc. KINFRA offers various facilities like developed land or built up space, dedicated power, continuous water supply, communication facilities etc., in addition to supporting social infrastructure facilities like bank, post office etc. KINFRA has also implemented a Single Window Clearance system in all the Parks. As per economic review 2015, on September 2015, there were 637 industrial units started in the various Industrial Parks with total investment of₹1486.50 crore. The direct employment generated were close to 25,754.

Apparel and Textile Parks

1. KINFRA Textile Centre, Thaliparamba District: Kannur Year of Commencement: 2009 Investment (Rs. in Lakhs) - 1282.2 Number of people employed: 1145 Thrust Total Total Land Nearest Nearest Nearest Nearest Seaport Area Area Number Availability Airport Railway Highway of Units Station

Apparel 124.85 15 82 acres of Kozhikode Kannur NH-47, 2.5 Kochi Seaport acres Land International Railway km (ICTT) -200 km, available airport Station, Mangalore Port- for 180km 14km 70km allotment

Facilities offered: Standard Design Factory, Hazardous waste disposal facility, Common dye house, Health center, and Nursery, Effluent Treatment Plant, Power and water distribution, Single window Clearance facility

Location Advantage: Kannur is the land of handloom that conquered global markets, especially in the home furnishing segment. Due to quality of raw material, and entrepreneurial spirit, northern district of Kerala assert its supremacy in handloom exports.

Description: It will boost the textile industry in the district which has a target of valuating exports worth Rs 1000 crore. KINFRA would provide a “walk in and manufacture” environment to entrepreneurs in the textile and textile-related industries sector. The Textile Centre will have a bonded warehouse which will facilitate exports and avoid delays.

With the Supreme Court tightening the norms on environmental pollution, many units in the districts were finding it difficult to survive as the cost of setting up and running a full-fledged effluent treatment plant for a single unit would ruin them. Some of them were even facing closure. Several such units are relocating to the Centre.

Funding: The Textile Centre is set up at a cost of Rs 45 crore, of which the State government’s contribution was Rs 20 crore.

16 http://kinfra.org/parks © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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Infrastructure offered: The Centre has laid a 9 km pipeline to ensure availability of water. The Centre has also set up a nursery, dispensary and an ambulance unit for the employees of the units in the centre. The park is set up on 124 acres, of which 94 acres are allocable land for industrial purpose and 30 acres of land has been reserved for setting up weaving units.

2. KINFRA International Apparel Park, Thumba District: Thiruvananthapuram Year of Commencement: 2000 Investment (Rs. in Lakhs): 3982.15 Number of people employed: 1549

Land Nearest Nearest Total Nearest Railway Availabilit Nearest Airport Highwa Seapor Thrust Area Area Station y y t Apparel 90 6 acres for Thiruvananthapura Thiruvananthapura NH47 Kochi Manufacturin acres Garment/ m International m Central Railway 2.5 KM Seaport g Apparel Airport, 19km Station, 14km (ICTT) : Sector 200km

Facilities offered: Common bonded warehouse, Health centres, Banking, Effluent Treatment Plant, Power and water distribution, Single window Clearance facility

Location Advantage: Potentials for exporting textile as Vizhinjam International Seaport is under construction

Description: It hosts garment manufacturing units that employs women and operation of high technology companies that make products ranging from heart valves to solar lamps. It also trains top fashion designers and technologists. The park today hosts garments manufacturing units by the Bombay Rayons Fashion Limited, which employs more than 2500 people at its facility. The company provides subsidised transportation to the women employees. Apart from full-time students, the centre also trains candidates sent in by local self-governments and self-help groups. Inside the park, entrepreneurs can avail developed land. The land is developed in all respects with easy Nearest Highway accessibility, LT/HT supply, water connection, and communication facilities. The eco-friendly park has an effluent treatment plant and facilities for hazardous waste disposal.

Funding: Government provided capital subsidy up to 25% of the Fixed Capital Investment (FCI) (with a ceiling of Rs.2.5 million) and subsidy up to 15% of the cost of the installation (with a ceiling of Rs.0.5 million) for captive consumption.

Infrastructure offered: It is established in 90 acres of land with allocable area of 36 acres and is specifically developed for garment industry.

Export Promotion Parks

3. KINFRA Export Promotion Industrial Park, Kakkanad District: Kochi Year of Commencement: 1996 Investment (Rs. in Lakhs): 12156.85 Number of people employed: 763

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Nearest Land Nearest Thrust Area Total Nearest Railway Nearest Seaport Availability Highway Area Airport Station Manufacturing 281 Land Kochi Ernakulam NH-47 2.5 Kochi Seaport, Engineering acres available not International Central km (ICTT), 30 km allotment for Airport, 23 Railway km Station, 14 km

Facilities offered: Common bonded warehouse, Health center, Power and water distribution, Single window Clearance facility

Location Advantage: Many large and medium scale industries and organization are being established here at a faster pace, giving city a versatile commercial mapping. International Container Transshipment terminal and Cochin Shipyard Limited, Kochi Refineries Ltd, Info park are other landmarks that makes Kochi’s advantageous.

Description: Bash-P International, a unit in the KINFRA Park, Kakkanad, is the first Indian company to produce container handling equipment, which have an increased potential as the Vallarpadam International Container Transshipment terminal becoming operational. Bash-P International manufactures and distributors marine safety equipment for the burgeoning Indian market. It is the hub for international marketing. International Container Transshipment Container Terminal at Vallarpadam taking off and the Cochin Shipyard Limited has started manufacturing steel chains for cranes, the Indian company to do so. Kera fibretex has grown to become one of the largest manufacturers of coir-based product.

Funding: The total investment in the park is estimated to be Rs 2000 crore.

Infrastructure offered: The Park has a 45 mVA power station. The Brahmapuram diesel power plant on the vicinity proves power protection to the park. The park has its own power distribution system which ensures that the units are provided with uninterrupted and quality power all the time. The overhead water tank of 6.5 MLD capacity takes care of the water needs of the park.

Film and Video Parks

4. KINFRA Film & Video Park, Kazhakkuttom District: Thiruvananthapuram Year of Commencement: 2007

Land Thrust Nearest Railway Total Availabilit Nearest Nearest Area Nearest Airport Station Area y Highway Seaport Film, 75 acres 5 acres Thiruvananthapuram Thiruvananthapuram NH47 2.5 km Kochi Animation, International Airport, Central Railway Station, Seaport IT, ITES 11km 16km (ICTT) : 200km

Facilities offered: Incubation Center for Animation and Gaming Units in SEZ, Motion Capture Studio, Power and water distribution, Single window Clearance facility

Description: A world-class animation school will be established inside the park. The idea is to set up the animation school as a three-way joint venture that involves KINFRA, an international animation

Page 11 of 134 school and a player from the animation industry.

Funding: With Rs 20-crore investment by KSIDC, KINFRA Film and Video Park is seeking investors for the other facilities.

Infrastructure offered: Setting up of Special animation zone in animation studio will be located in a separate building and will offer its occupants all basic infrastructure such as power, water air- conditioning and so on.

Food Processing Zone

1. KINFRA Techno Industrial Park, Malappuram District: Malappuram Year of Commencement: 2000 Investment (Rs. in Lakhs): 11648.50 Number of people employed: 4386

Thrust Area Total Total Land Nearest Nearest Nearest Nearest Area Number Availability Airport Railway Highway Seaport of Units Station Food 72 acres 19 Land available Kozhikode Kozhikode NH-47 Kochi Seaport Processing, for allotment inInternational Railway (ICTT) : 200km Garment SEZ for Food Airport,19 km Station, 46km Manufacturing Processing IT

Facilities offered: Special Economic Zone for Food Processing, Food Incubation facility, Quality Control Laboratory, Common bonded warehouse, Banking, Effluent Treatment Plant, Power and water distribution, Single window Clearance facility.

Location advantage: A clean environment, availability of quality raw material in the local market and large pool of human resource.

Description: It is an initiative that aims at creating massive employment, encouraging entrepreneurship and promoting local agriculture and economy. In this process, they create large number of jobs and support the local economy. It caters to fruits and vegetables processing industries, milk products, poultry and meat products, and the grain-processing industry. The Park hosts several food processing units including Parison Foods, which is the largest edible oil refining unit in Kerala, Foster Foods, Midwest Foods Limited, M57erry Times Foods and Falcon. Some other units produce ready-to-cook and ready-to-eat food products which are either distributed in the home market or are exported. It has made the most of the advantages Kerala has in food processing industry: a clean environment, availability of quality raw material in the local market and large pool of human resource. The Central Warehousing Corporation is setting up a cold storage facility in the park and a quality assurance lab.

Funding: The Park, developed at a cost of Rs. 19.50 crore with an assistance of Rs 4 crore from the Union Ministry of Food Processing.

Infrastructure offered: Midwest Foods is one such unit at the Park, sourced technology from Defence Foods Research Laboratory and the Central Food Technological Research Institute for making products such as chapatti with long shelf life.

2. KINFRA Food Processing Park, Kakkanchery District: Malappuram Year of Commencement: 2003

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Investment (Rs. in Lakhs): 1164.08 Number of people employed: 809

The Neo Space at the KINFRA Park, Kakkancherry is unique in that it is the first major IT infrastructure in the Malabar region, providing facilities which include Software Development, Business Process Outsourcing, Web Development, IT enabled services, KPO and Animation. Cybrosis Techno Solutions Pvt Limited are into software products and R&D, a rare feat for a start-up company. They have filed six patents in the last six months.

3. KINFRA Industrial Park, Nellad District: Ernakulam

Thrust Area Total Land Nearest Nearest Nearest Nearest Area Availability Airport Railway Highway Seaport Station Food processing, 64.89 No allocable Kochi Ernakulam NH-49 2.5 Kochi Seaport manufacturing acres land available International Junction RailwayKM (ICTT) : 39km Airport, 29km Station, 34km

Facilities offered: Cold storage, Standard Design Facility, Effluent Treatment Plant, Power and water distribution, Single window Clearance facility

Description: Units at the KINFRA food processing and small scale industrial park at Nellad serve a range of customers, varying from the local population to the premium US customers of value added products. It meets every global standards in food processing, be it the production plant, quality control, raw material, or even the campus. In the process, they have changed the economy of the region. Dhatri brand has set up its R&D centre at the park. The company has till now launched close to a dozen products from the work that has been happening at the centre.

Infrastructure offered: The park, set up in an area of 65 acres of land under the Integrated Infrastructure Development Scheme of the Centre, has promoted small industrial as well as food processing units. The companies are mostly in the sectors as diverse as manufacturing, polymers, ayurveda, herbal extracts and agro-based units. Around 30 acre of the park has been earmarked for projects in the food processing sector alone. The village which did not have a single bank has now branches of five nationalized banks. The park has an effluent treatment plant which uses a common drainage system to collect effluents with a full capacity of 400 cubic metres per day. It also offers infrastructure facilities such as water, power and developed land. It has a cold storage which has a capacity of 50 tonnes, and can be expanded to 250 tonnes.

4. Mega Food Park, Palakkad Location: Palakkad Key Focus Area: Agriculture

KINFRA has identified 73 acres of land in Palakkad District for developing infrastructure facilities for Food Processing as well as Agro- based industries. The proposed project will be implemented under the Mega Food Park Scheme of Ministry of Food Processing Industries (MFPI). It cater to marine food processing sector with common infrastructure facilities such as cold storage, standard design factory, ice plant, and reefer vehicles etc. The park will also cater to units engaged in production of value-added products from coconuts, spices, fruits and vegetables, paddy, cashews etc.

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Location advantage: Palakkad is a land where agriculture and industry are equally good.The project has the locational and economical advantages being located in the state with proximity to sea port, rail connectivity and airport.

Hi-Tech Parks

1. KINFRA Hi Tech Park, Kalamassery District: Kochi Year of Commencement: 2009 Investment (Rs. in Lakhs): 1903.25 Number of people employed: 335

Thrust Area Total Land Nearest Nearest Nearest Nearest Area Availability Airport Railway Highway Seaport Station

Hi-Tech non- 243 Acres of land Kochi Ernakulam NH47 1km Kochi Seaport polluting acres available for Hi- International Town Railway (ICTT): 21km Industry Tech Industries Airport, 20km Station, 18km

Facilities offered: Biotechnology Incubation Centre, SEZ for IT & ITES, SEZ for Electronics, Gem and Jewelry Park, Power and water distribution, Single window Clearance facility

Description: The Park will house common equipment and facilities like greenhouse and hardening facilities, tissue culture, analytical and QC laboratories and a patent facilitation centre. They focus on Biotechnology, electronics hardware, gem and jewelry, education and on the special economic zones. Ubio Biotechnology Systems Pvt Ltd, a start-up company which is into various animal health products, has already commenced operations at the Centre. The Nest group plans to make it a world-class hardware manufacturing park utilizing Nest’s global experience in this sector. The central public sector unit Bharat Electronics Limited is setting up a unit at the Park.

Infrastructure offered: The centre, spread over 50,000 sq. ft, can house 12 units. The park would also have fully furnished R&D wet lab modules with provision for water, power and drainage. The IT and ITES park is coming up on 25 acres and will be developed by Sutherland Global Services, a Nest group company, is developing the special economic zone for electronics hardware. It will have an eco-friendly, solar powered infrastructure. Construction of common facility building as well as design work in respect of water supply and power supply facility have also been completed.

2. KINFRA Defence Park Location: Palakkad Key Focus Area: Defence

Defence has been identified as one of the sectors under “Make in India” initiative of Government of India to provide a major thrust to in-house manufacturing of equipment’s and meet most of the varied requirements of defence. In India, there is a 15% gap between demand and supply. The defence park can bridge the gap apart from providing the country an opportunity in defence- related export of products from small- and medium-sized enterprises. KINFRA has earmarked 40 acres of land for setting up Defence Park at Ottappalam. The project is intended to create © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

Page 14 of 134 a Defence Park with all modern common infrastructure facilities exclusive for the component manufacturers of Defence Industry with Central Assistance from, Government of India.

Location Advantage: Ottappalam, in Palakkad, was selected for the defence park keeping in view its strategic location as far as connectivity was concerned. Apart from common facilities such as dedicated power and water supply, the park will have a research and development centre.

3. KINFRA Industrial Park Location: Kannur Key Focus Area: Industrial growth The project ensures parallel development of industries in areas closer to the proposed airport which could attract investors and entrepreneurs.

Location Advantage: Kannur has natural beaches, hill stations, rivers, backwaters, historical monuments and religious centres. It is also well known for its handlooms cloths and Dinesh Beedi, Rubco (rubber) are established there. The Western India Plywood’s, one of the biggest wood based industrial complexes in South East Asia is located in Kannur.

Integrated Industrial and Textile Parks

1. KINFRA Integrated Industrial & Textile Parks, Palakkad District: Palakkad Year of Commencement: 2003 Investment (Rs. in Lakhs): 52749.44 Number of people employed: 4130

Thrust Area Total Total Land Nearest Nearest Nearest Nearest Area Number Availability Airport Railway Highway Seaport of Units Station

Manufacturing, 163.58 72 NA Kochi Palakkad NH47 2.5 Kochi Seaport Textiles, acres International Railway km (ICTT) :160 km Garment Airport, 140 Station, 27 General km, km, Industries Coimbatore: Coimbatore: 40km 40km

Facilities offered: Power and water distribution, Single window Clearance facility

Location Advantage: Palakkad, a land where agriculture and industry thrive together, and is located in the state with proximity to sea port, rail connectivity and airport, giving locational advantage. The project site also has economical advantages being of Defence equipments, as BEML (Bharat Earth Movers Ltd) has setup their plant in that area. The new complex of BEML at Palakkad will be a dedicated Centre for the manufacture

Description: The KINFRA Park at Palakkad hosts the first major defence production unit in Kerala. Rail coach assemblies such as bogie frames, side walls, end walls, rail coach bogie frames, HPB (High Performance Bedding) aggregates, other rail parts and spares will also be manufactured there. The State government has agreed to provide corridor land for rail connectivity to BEML

Page 15 of 134 for its rail manufacturing facility for underpass across national high way upon which complete products such as LHB coaches, Mil-Wagons and aluminium and stainless steel goods-wagons. It will also be a dedicated centre for the manufacture of defence equipment

Funding: The Central public sector unit plans a total investment of Rs 1,200 crore spread over three years. KINFRA Integrated Industrial Area in Palakkad, Kerala, as part of its expansion and diversification plan, with investment of around Rs. 260 crores.

Joint Venture Parks

1. WISE KINFRA Park, Palakkad District: Palakkad

Thrust Total Total Nearest Airport Nearest Nearest Seaport Area Area Number Highway of Units

General 200 acres 24 Thiruvananthapuram NH47 2.5 km Kochi Seaport (ICTT): 200 Industries International Airport km

Facilities offered: Power, Water

Location Advantage: The Palakkad District has attracted industrial investments from MNC's, Public Sector and Private and small scale and tiny industrial units engaged in metallurgical, milling, hand looms etc. Pepsi-Cola, Tread and Tyres, Malabar Cements Ltd. etc. are a few major companies. Also abundant availability of man power.

Description: Self-contained with Industrial and Social Infrastructure and has all the facilities that a business needs. It is a Public- Private enterprise with Government support and private initiative and efficiency.

Infrastructure offered: Good quality ground water, Bonded warehousing facility, Banks, Post Office, Business Centres, good Drainage system etc.

2. KINFRA Seafood Park, Aroor District: Alappuzha

Thrust Area Total Land Nearest Airport Nearest Nearest Nearest Area Availability Railway Highway Seaport Station A Joint Venture4 acres NA Thiruvananthapuram NA NH47 2.5 km Kochi of KINFRA, International Airport Seaport MPEDA and Sea (ICTT) : 200 Food Exporters km Association

Facilities offered: Quality Control Labs, Pre Processing Centres, and Effluent Treatment Plant

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3. KINFRA Rubber Park, Irapuram District: Ernakulam

Thrust Area Total Total Land Nearest Nearest Nearest Nearest Area Number Availability Airport Railway Highway Seaport of Units Station Rubber 105 6 NA Kochi Ernakulam 5 km Kochi Processing, acres International railway station : Seapor Manufacturing Airport : 25 15 KM , (ICTT) : 15km KM

Facilities offered: Research and certification center, Power distribution license, Convention Center, Effluent Treatment Park and Total waste management

Description: It is a Joint Venture Company of Govt. of India and Govt. of Kerala, set up with the objective of powering the progress of Rubber based industries in India.

Infrastructure offered: Power is given on a prepaid automatic metering system using power line communication. Effluent treatment and waste management is available. Park is equipped with good rain water harvesting system.

4. KINFRA Park, Seethangoli District: Kasaragod Year of Commencement: 2002 Investment (Rs. in Lakhs): 7971.27 Number of people employed: 1443

Thrust Area Total Total Land Nearest Nearest Nearest Nearest Area Number Availability Airport Railway Highway Seaport of Units Station Manufacturing 270 acres30 NA Calicut Kasaragod NH-47 7.5Kochi International Railway km Seaport Airport- 30km,Station - 14km (ICTT): Mangalore 300 km, Airport-70km Mangalore Port: 70 km

Facilities offered: Power and water distribution, Single window Clearance facility

Location Advantage: Availability of land, water and power

Description: The strategic electronics manufacturing unit is the second defence establishment to be established in Kerala. BrahMos Aerospace, under the Defence Ministry, had taken over Kerala Hitech Ltd, a State public sector enterprise, giving a boost to Central investment in the State. The facility would be expanded to include new projects under the aircraft programs and converted into a full-fledged division manufacturing systems and sub-systems for various aircraft. Kamat Industrial Oil, another unit in the KINFRA park, converts and industrial byproduct into a useful

Page 17 of 134 product. It makes uses of the cashew shells and producing double refined oil which can be a raw material for industrial paints. Eco Asia, another unit, produces quality products for the industry out of the raw material. Srinivasa Majakar, who has set up the Eco Asia unit which makes palm leafs into various industrial products. The unit helps society in two ways: it pays the farmers for a products that seldom fetch them an income, and makes products that are so needed by society. It also provides an effective way of replacing plastics.

Funding: The initial investment for the project would be Rs.66.31 crore.

5. KINFRA Industrial Park, Kalpetta District Name: Wayanad Year of Commencement: 2005 Investment (Rs. in Lakhs): 5842.37 Number of people employed: 597

Thrust Area Total Area Land Nearest Nearest Nearest Nearest Seaport Availability Airport Railway Highway Station Food Processing,50 acres 3 acres of Land Kozhikode Kozhikode NH-212, Kochi Seaport Manufacturing, available for International Railway Station2.5 km (ICTT) : 300km Furniture allotment Airport, 120km100km

Facilities offered: Exceptional Climate, Cold Storage, Power and water distribution, Single window Clearance facility

Location Advantage: Agrarian richness, Pleasant climate, large production of Bananas.

Description: PD Joseph’s Safety Foods, one of the units in the park, uses raw bananas, as being main agricultural products of the district, for the business which involves peeling the dry banana and supplying in the market. Thus adding value addition. S M Mihraj, another unit, who has put up a most modern soap and soap noodle factory, has a huge demand for the product as this is the only industry which produces the product other than Unilever. The park also includes food processing units and other furniture units.

6. KINFRA Industrial Park, Thalassery District : Kannur Year of Commencement: 2002 Investment (Rs. in Lakhs): 4194.14 Number of people employed: 1079

Thrust Area Total Land Nearest Nearest Nearest Nearest Area Availability Airport Railway Highway Seaport Station

Page 18 of 134

Manufacturing/ 50 acres 4 acres of LanKozhikode Thalassery NH-17 2KMKochi Seapor Furniture available for International Railway (ICTT) : 300km allotment Airport, 90km Station, 14km

Facilities offered: Power and water distribution

Location Advantage: Availability of rubber and other raw materials like fire glass, wood etc. and proposed airport shall act as an advantage for Industrial parks in that location.

Description: The Thalassery park has units which has made raw materials such as rubber wood a viable proposition. The dyeing and weaving unit is another major unit at the park. Parco, a unit in the park, is the only company in south India capable of making an entire suit of kitchen and bakery equipment. The Rubco factory at the Park has given a new lease of life to rubber wood, which was till found use only as firewood. Today, treated rubber wood is being made into furniture.

7. KINFRA Industrial Park, Kunnamthanam District Name: Pathanamthitta Year of Commencement: 2009 Investment (Rs. in Lakhs): 3010.03 Number of people employed: 458

Thrust Total Total Land Availability Nearest Nearest Nearest Nearest Area Area Number Airport Railway Highway Seaport of Units Station

General Non39 acres21 16.42 acres of land Thiruvanan- ThiruvallaNH -47 7.5 Kochi polluting available for General thapuram Railway km Seaport Industries Sector International Station- (ICTT) : Airport – 100 4km 100km km

Facilities offered: Power, water, single window clearance facility

8. KINFRA Industrial Park, Koratty District Name: Thrissur Year of Commencement: 2011 Investment (Rs. in Lakhs): 225.5 Number of people employed: 65

Thrust Area Total Land Nearest Nearest Railway Nearest Nearest Area Availabilit Airport Station Highway Seaport General Non- 33 acresLand not Kochi Angamaly RailwayNH -49 Kochi Seaport polluting available forInternational Station, 9km International Industries. allotment Airport, 18km Container Transhipment Terminal : 39km

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Facilities offered: Standard Design Facility, Ayurveda Facility, Post office, Power and water distribution, Single window Clearance facility

9. KINFRA Food Industrial Park, Adoor District Name: Pathanamthitta Year of Commencement: 2009 Investment (Rs. in Lakhs): 5961.96 Number of people employed: 670

Thrust Area Total Total Nearest Airport Nearest Nearest Nearest Seaport Area Numbe Railway Highway r of Station Units Food 85 acres 16 Thiruvananthapuram Thiruvalla MC Road- Kochi Seaport Processing/ International Airport, Railway 47 International General Non 100km Station, 25km Container polluting Transhipment Industries. Terminal : 100 km

Facilities offered: Power, water, Single window clearance facility.

2. Small Industries Development Corporation

The main objective of SIDCO is for the development and promotion for Small Scale Industries. Key facilities offered by SIDCO are; • Consultancy for identification of Industrial Site • Commissioning or authorizing of project • Providing infrastructure facilities • Distributing essential raw materials • Undertaking civil and electrical works

Apart from providing assistance to SSI units, SIDCO also offers various other services which includes • Factory Sheds & Developed land in all districts of Kerala • Industrial Raw Materials through District Depots. • Marketing assistance through District level Sales Emporia (i.e. a large retail store selling a wide variety of goods) • Non-Ferrous die cast component, precision machine parts and various types of furniture through production units.

SIDCO is now a very profitable business and the business is augmenting in a faster pace. The following shows the turnover of SIDCO of past years.

In the year 2014-15, Kerala SIDCO achieved the highest turnover among state Indian SIDCO’s with a turnover of 37600 lakhs and it’s ever increasing. They did not experience any downfall in turnover since 2007. SIDCO looks into various divisions for SSI units to invest in. The divisions are mentioned as follows;

Marketing Division

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Marketing division deals in segments of steel/wooden furniture, office interior furnishing/modular seating arrangements etc. They geared up to serve on a statewide basis with 17 sub offices in almost all districts.

Raw material

They counsel, finance, protect and promote the interest of the MSME units in the state which they do by providing steady uninterrupted supply of scarce, indigenous and imported raw materials and also providing marketing assistance for their products. They are running 14 outlets for the time bound supply of raw materials at nominal rate by ensuring quality. The major items handled by the Raw Material division are paraffin wax, wire rode, Iron and steel, cement etc. Industrial Estate Division

The concept of setting up of Industrial Park is to enable to concentrate dedicated infrastructure in a delimited area and to enable new business. SIDCO has 17 major Industrial Estates and 36 Mini Industrial Estates 923 industrial sheds. SIDCO has carried out many developmental works like street lighting, internal road and providing water supply to the units in the Industrial Estates and Mini Industrial Estates. Production Division

SIDCO has 9 production units spread all over Kerala and are direct manufactures of some items through these Production Units. The main customers are Government Departments, Public Sector undertakings and other Government agencies and general public.

Construction Division

The construction Division has been undertaking civil or electrical works of PSU and other Departments. It offers a package of integrated services for Structural Design, Preparing Detailed Estimate, Soil Investigation etc. Some projects which this division includes Coir Corporation, Pollution Control Board, Interior Furnishing Works at Rajiv Gandhi Centre for Bio Technology.

IT and TC

This Division is provides software and hardware solutions to Government Departments, Public Sector Undertakings, Local Self Government Bodies, Autonomous Institutions and SSI Units. The major activities of the department identified for business are, Computer Hardware & Service, Document Management Services, Consultancy, Training etc.

Industrial Park Division

This division is presently managing 7 Industrial Parks developed on its own, lying in various districts of the state. They are;

1. Moodadi Industrial Park, Kozhikode 2. Thiruvarppu Industial Park, Kottayam 3. Angamally Industrial Park, Ernakulam 4. Shornur Industrial Park, Palakkad 5. Chelakkara Industrial Park, Thrissur 6. Athani Industrial Park, Thrissur 7. Kunnamthanam Industrial Park, Pathanamthitta

Consultancy Division

They primarily focused on meeting the prevalent need of the state to involve realistic and implementable projects for various developmental sectors. They have right to accept or reject any proposal after evaluating the eligibility criteria involving financial soundness, technical

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capability.

Export, Import and Project Division

This division is created to undertake special projects like supply / installation of LED Street Lights, High Security Number Plates etc. It is proposed to start IOC/ONGC Petro/Diesel Pumps at Cherthala, Ollur, Kanichukulangara, Olavakkode, Pachalam and Ernakulam.

Trading Division

Trading division is one of the major divisions in Kerala SIDCO. It deals with promoting manufactures by helping them in marketing their products. It offers its valuable brand name to quality products produced by good manufacturers throughout the Country and help them to enter into the markets of Kerala.

Training Division

KERALA SIDCO proposes to strengthen its training division in extending need based training programmes. They are expected to handle active teaching strategies, learner-cantered instruction etc. Kerala Small Industries Development Corporation (SIDCO) provides infrastructure facilities such as land, work shed, water, distribution of scarce raw materials to the units in the small scale sector. There are 17 major industrial estates, which include 830 working units, under the administrative control of SIDCO. These working units provided employment to nearly 7376 people as on 31.03.2015. Besides, there are 36 mini industrial estates under SIDCO in which about 1303 employees are working in 289 units all over the State. Details of Industrial Estates are;

3. Kerala State Industrial Development Corporation KSIDC is the industrial and investment promotion agency for the promotion and development of

Page 22 of 134 medium and large scale units. KSIDC provides support for investors, introduces various incentive schemes for the industries and facilitates interaction with the government. The key areas of they focus on are: 1. Identification of Investment Ideas 2. Translating ideas into concrete proposals 3. Feasibility Study and Project Evaluation 4. Financial Structuring and Loan Syndication 5. Assisting in Central and State Govt. Clearances 6. Development and Administration of Growth Centers 7. Industrial and Infrastructure development

For the industrial growth centers, KSIDC has acquired land at four industrially backward locations in the following districts; 1. Kannur 2. Kozhikode 3. Alappuzha

KSIDC also make sure basic infrastructural facilities such as road, water, power, telecommunication etc. are available to these districts. The details of various growth centres have been discussed below;

Industrial Growth Centre - Kannur Location Advantage: With the Western Ghats in the east and Arabian sea in the west, Kannur district is bounded by a wealth of natural beauty. Kannur is well known for its handlooms cloths. Industries such as Dinesh Beedi, Rubco and Western India Plywood are successfully operating. The Industrial Growth Centre is well connected to the State highway which is 6 km away, and has got close proximity to Mysore, Mangalore and Bangalore. Also, the proposed Kannur Airport is only within a distance of 20 kms which gives an additional advantage. The proposed Gas pipeline from the LNG terminal at Kochi connecting Mangalore will open up tremendous opportunities for Gas based power and other projects. A new gas based thermal power plant with 1200 MW capacity at Cheemeni, in Kasaragod district will ensure adequate power availability. The Azhikkal Port at Kannur and Ezhimala Naval Academy are projects that put Kannur in the global marine map.

Infrastructures Availability: Infrastructure which shall be available to the Growth centre includes;

• Sources of Water shall include Intake well, Pipelines, Overhead tank, Water Treatment Plant, DG set and pumping station. • Roads will be having an internal road of length of around 2 kms within the Growth Centre. • Building with supporting facilities like canteen, nursery, security cabin & first aid room. • Power • Communication which shall include both telephone & Internet connectivity. • Effluent treatment Plant which is been commissioned exclusively for the apparel units

New Initiatives:

1 KSIDC is also looking into other initiatives to make growth centres better. These includes; 2 Setting up of a Working women's hostel with all supporting facilities.

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3 Rain water harvesting inside the Park is under consideration for alternative water source.

Industrial Growth Centre – Kozhikode Location Advantage: Kozhikode offers tremendous opportunity for the entire Malabar region to prosper. Some mega projects which are triggered to make the region advantageous include, Beypore Port development, Revival of Malabar Spinning Mill, SAIL-Steel complex Joint Venture, Knowledge Park of KINFRA, Expansion of Kozhikode International Airport, Cyber Park at Nellikode, Cochin Industrial Rail Corridor to Mangalore, Coconut Park at Kuttiady, The Techno Industrial Park (NEO Space) of KINFRA at Kakkancherry, NIRDESH (National Institute for Research & Development in Defence Shipbuilding) by the Ministry of Defence,

Infrastructures Available: Infrastructure which shall be available to the Growth centre includes; • Sources of Water shall include Natural Pond, Pipelines, Overhead Water tank, 1.5 MLD (million liters per day) capacity Water Treatment Plant, Motors and pumping station. • Power supply by KSEB. • Roads having internal length of 1.1 kms • Communication facilities shall include both Telephone & Internet connectivity. • 630 KVA transformer installed at SDF.

New Initiatives: Few initiatives from KSIDC includes; 1. Food Processing Park - to tap the very active local market with vibrant retail chain. 2. Hi-Tech Park - to promote industries in segments such as Consumer Electronics, Industrial Electronics, Computers, Communication & Broadcasting equipments, strategic electronics and electronic components IT, ITES etc.. 3. Defence Park - to tap the opportunities that come out of NIRDESH (National Institute for Research and Development in Shipbuilding) and set up to design and develop technologies for shipbuilding. 4. General Purpose industrial park - to promote the local industry such as furniture, carton adhesive, tiles etc.

Industrial Growth Centre – Alappuzha Location Advantage: Alappuzha excels in the export of marine foods products and coir products. It has got all the basic infrastructure facilities and good water and rail connectivity. The growth centre is only about 32 kms away from Kochi which offers tremendous opportunities for the investors.

The expansion of IT park by Kerala State IT Infrastructure Ltd (KSITIL) inside the growth centre, new tourism venture at KCCL , expansion of CSEZ (Cochin Special Economic Zone) / ordnance factory at Pallipuram, are some of the proposed major projects in the district.

Infrastructures Available: 1. Water connectivity provided by KWA 2. Power supply by KSEB. 3. Internal Roads with a length of 15 Mts within the Growth Centre 4. Communication shall include both Telephone & Internet connectivity. 5. Single Window Clearance Support for obtaining various licences. 6. New Initiatives • IT park in 66.20 acres of land by Kerala State IT Infrastructure Ltd (KSITIL)., Trivandrum

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• Expansion CSEZ / Ordinance factory

Electronic Hub – Ernakulam Project objective Aim to promote manufacturing and assembly of electronic hardware and would also include a research and development unit. Facilities World-class facilities for manufacturing, contract manufacturing, R&D and fabrication units in the electronics sector. Project Status The project development is in progress and hope to finish the land acquisition within two years after which infrastructure development work would be started. In the first phase, 50 incubation units are planned to be set up.

Mega Food Park – Cherthala17 Project objective Aim to exclusively cater to marine food processing sector with common infrastructure facilities Facilities Common infrastructure facilities include cold storage, standard design factory, ice plant, reefer vehicles etc. Project Status The project is expected to bring in an investment of INR 500 crore in three years and is likely to employ 3,000 persons and provide indirect jobs to 12,000. The project is awaiting final clearance from MOFPI post submission of Detailed Project Report18.

4. Directorate of Industries and Commerce (DIC)

Directorate of Industries and Commerce (DIC) acts as a facilitator for industrial promotion and sustainability of MSME sector and traditional industrial sector in the State with the help of other directorates like Directorates of Handloom & Textiles, Directorate of Coir and Khadi & Village Industries Board.

The major functions performed are: • Facilitating sustained industrial development. • Creating and extending infrastructural requirement for the development of industries. • Promoting Entrepreneurship.

A total amount of INR 2374 Crore have been provided for the development of Industry and Minerals, during the first four years of 12th plan (2012-17).

Vision

To make Kerala a highly sustainable economic growth, which could be achieved from industrialization and profusion of commercial activities. They also plan to create large-scale employment opportunities and converting Kerala into an investment friendly destination.

Objectives

Some of the objectives of DIC Kerala are;

17 http://www.projectstoday.com/News/Kerala-plans-mega-food-parks 18 http://www.thehindu.com/news/national/kerala/central-approval-awaited-for-mega-food-park-at-cherthala/article7472578.ece © 2017 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

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• Strengthen the State Level Public Enterprises • Promote and support MSMEs • Make Traditional Industries competitive by modernization, value addition and skill development. • Attract huge capital investment on mutually beneficial terms. • Accelerate growth in Service Sector. • Develop Kerala as a global centre of excellence.

Industrial Development Plot / Areas

At present there are 37 Development Area / Development Plots under DIC having a total acquired area of 9.19 square kms. DIC experienced a fall of approx. 17.4% in total number of units in DA/DPs form 2176 in the year 2013-14 to 1797 units in 2014-15.

Sl.N Name of Industrial Area Total Allocable Area Total Allotted Total Total o (Sq.KM) Area (Sq.km) registered Operating units Units 1 Thiruvananthapuram DA Veli 0.36 0.36 169 126 DP Manvila 0.09 0.09 74 66 2 Kollam DP Mundakkal 0.07 0.07 53 50 DP Chathanoor 0.07 0.06 1 0 3 Pathanamthitta DP Kunnamthanam 0.06 0.06 79 64 4 Alappuzha DA Kollakadavu 0.06 0.06 44 38 DP Chegannur 0.02 0.02 17 17 DP Punnapra 0.13 0.09 72 58 Coir Park 1 Cherthala 0.09 0.09 10 8 Coir Park 2 Cherthala 0.07 0.07 4 3 DA Aroor 0.22 0.22 99 98 5 Kottayam DP Poovanthuruthu 0.15 0.15 219 216 DP Athirampuzha 0.00 0.00 10 10 DP Vaikom 0.01 0.01 13 12 6 Idukki DP Muttom 0.02 0.02 13 10 7 Ernakulam DA Aluva 0.22 0.22 88 86 DA Edayar 1.52 1.52 356 340 DA Angamaly 0.87 0.87 48 47 DA Vazhakulam 0.05 0.05 42 40 DP Angamaly 0.11 0.11 65 60 DP Kalamassery 0.26 0.26 186 178 8 Thrissur DP Athani 0.18 0.18 86 78 DP Kunnamkulam 0.01 0.01 26 23 DP Ayyankunnu 0.10 0.10 88 68 DP Velakkode 0.09 0.09 37 28 9 Palakkad DP Puthussery 0.53 0.53 64 61

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NIDA Kanjikode 2.08 2.08 262 235 D.P. Kappur 0.07 0.06 29 13 D.P.Shornur 0.07 0.03 2 2 10 Malappuram Functional Industrial 0.03 0.02 26 25 Estate Manjeri 11 Kozhikode DP Westhill 0.04 0.04 37 34 12 Kannur DP Andoor 0.19 0.19 166 150 13 Kasaragod DP Ananthapuram 0.30 0.22 57 12 DA Ananthapuram 0.35 0.27 24 nil DP Chattanchel 0.09 0.08 23 13 Total 8.21 8.29 2104 1797

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Annexure III - Central Government Support Schems/Policies

List of major schemes/grants/aids of central government available for various sectors.

Schemes Sector/Subsector Description Pradhan Mantri Krishi Improving farm productivity Sinchai Yojana (PMKSY) and ensure better utilisation of resources. An area of 0.285 Lakhs Sq.KM cultivable land are planned to be brought under this scheme Soil Health Card (SHC) for The soil health card scheme India Farmers studies and reviews the health of soil or rather we can say a complete evaluation of the quality of soil right from its functional characteristics, to water and nutrients content and other biological properties. The farmers will get a report on the soil which is chosen for cultivation. Experts will guide the farmers to improve the quality of the soil. Till August 2016, 267 Lakhs SHC has been issued. Rashtriya Gokul Mission RGK is a focused project (RGK) under National Programme for Bovine Breeding and Dairy Development, with an outlay of Rs 500 crore during the 12th Five Year Plan. Funding Pattern:- Scheme is implemented on 100% grant-in- aid basis Beneficiaries: Rural cattle and buffalo keepers National Mission for Primary objective is to Sustainable Agriculture ensure food security and (NMSA) protect various resources such as land, water, biodiversity and genetic resources along with facing challenges and threats such as climate change Pradhan Manthri Fasal Motto of the scheme is to Bhima Yojana (PMFBY) provide overall support

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agriculture sector. It facilitates Financial support to farmers for crop loss due to natural calamity, stabilizing the income of farmers, encouraging farmers in using modern agricultural practices and ensuring flow of credit to the agriculture sector; which will contribute to food security

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Annexure IV – District Profiling

Thiruvananthapuram

District at a glance

Total Geographical 2,192 Km2 area Population 33,07,284 Nearest Railway Trivandrum Central ( 2 Km), Trivandrum Pettah (5 Km) Station Nearest airport Thiruvananthapuram International Airport (7 Km) Major Exports Handloom Products, Handicrafts, Software products Key Institutions Techno park, Indian Space Research Organization, Rajiv Gandhi Centre for Biotechnology, Indian Institute of Science Education & Research, National Institute for Interdisciplinary Science & Technology, HLL Lifecare Limited, BrahMos Aerospace Limited, Central Tuber Crops Research Institute, Tropical Botanic Garden & Research Institute, Sri Chitra Tirunal Institute for Medical Sciences & Technology, Regional Cancer Centre, Trivandrum Medical College, College of Engineering Trivandrum, Centre for Development Studies. Major Crops Rice, Coconut, Sesamum, Arecanut, Tapioca Industrial parks Special Economic Zones - Technopark (IT/ITES) KINFRA International Apparel Park at Thumba Film and Video Park at Kazhakoottam Industrial Cluster Handloom, Coir & Handicrafts. Other Key factors IT hub of Kerala, contributing more than 80% of the State's software exports

Administrative Set up

Particulars Numbers

Revenue Divisions 1 Taluks 6 Corporations 1 Municipalities 4 Gram Panchayat 73 Source: Department of Economics and Statistics

Gross District Domestic Product

Gross District Domestic Product (GDDP ) (2013 – 14)

Base year: 2004-05

Particulars INR in Lakhs % Contribution 1 Agriculture & Allied 378320 1.1 Agriculture 298119 6.80%

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1.2 Forestry & Logging 41762 0.95% 1.3 Fishing 38440 0.88% 2 Mining and Quarrying 18917 0.43% A TOTAL OF PRIMARY SECTOR 397237 9.06% 3 Manufacturing 327179 7.46% 3.1 Registered 146124 3.2 Un-registered 181055 4 Construction 500532 11.41% 5 Electricity, Gas and Water supply 98295 2.24% 5.1 Electricity 68606 5.2 Gas 632 5.3 Water supply 29056 B TOTAL OF SECONDARY SECTOR 926006 21.11% 6 Industry 944923 7 Transport, Storage & Comm. 557064 12.70% 7.1 Railways 8779 7.2 Transport by other means 442701 7.3 Storage 2083 7.4 Communication 103501 8 Trade, Hotel & Restaurants 667040 15.21% 9 Banking & Insurance 218369 4.98% 10 Real estate ownership, business ,legal 632262 14.41% 11 Public Administration 577630 13.17% 12 Other Services 410975 9.37% C TOTAL OF TERTIARY SECTOR 3063340 69.83% DDP 4386584 Mid-year Population 3319064 Per capita Income(in Rupees) 132163

GDDP - Thiruvananthapuram

Primary Sector, 9%

Secondary Sector, 21%

Tertiary Sector, 70%

Source: Department of Economics and Statistics, GSDP of Kerala & India (2004-05 to 2013-14)

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Agriculture and Allied Activities

Land Utilization Pattern

Others, 176, 0%

Forest, 49861, 23%

Net area sown, Land put to non 129750, 59% agricultural use, 30396, 14%

Fallow other than current fallow, 660, 0% Current fallow, 2986, 2% Barren & Still Water, uncultivable 4342, 2% land, 236, 0% Cultivable waste, 374, 0% Land Utilization Pattern (Area in Hectare) - Thiruvananthapuram

Source: Agriculture Statistics 2013-14, Department of Economics & Statistics Kerala

“Others” include Permanent pastures & other grazing land, Land under misc. tree crops, marshy land, water logged area and Social Forestry

Net Sown Area = Total Cropped Area – Area sown more than once

Water Resource

Number of Rivers in the District 4 Number of Reservoirs 3

Reservoirs Water Spread Area (in Sq. Km) 23.40 Source: Report on Panchayat Level Statistics - 2011

Production of Mineral (2015-16)

Type Name of mineral Production (in tonnes) Major mineral Granite Building Stone 2,804,768 Minor mineral China Clay 525,935 Sand 139,383

Laterite 23,533 Brick clay 15,000 Granite Dimension Stone 1,283 Source: Dept. Of Mining and Geology, District Profile of Kerala 2014 – 15 Report, Development commissioner MSME, Govt. of India

Animal Husbandry

Details of Farms, Slaughter Houses, Veterinary Institutions (2010-11)

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Type Numbers Cattle farms 549 Poultry farms for meat 323 Poultry farms for egg 111 Slaughter houses 246 Veterinary Institutions 431 Source: Department of Economics and Statistics, Report on Panchayat Level Statistics - 2011

Agriculture worker population (2010-11)

Other Workers, 44% Main Workers Population, 50%

House hold Industry Workers, 1%

Agricultural Cultivators, 2% Labourers, 3%

Source: Department of Economics and Statistics, Report on Panchayat Level Statistics - 2011 Industries

Overview of Industrial Sector (as on 31.03.2016)

Total number of Industrial units 31,277 Number of registered industrial unit 12,322 Number of registered medium and large units 13 Estimated avg. no. of daily worker employed in small scale industries (Per unit) 6 Employment generated in large and medium industries 973 No. of industrial area 2 Turnover of medium & large scale industries (in lakhs) 10,272 Source: District Industries Centre, Thiruvananthapuram,

Trend of Investment, Employment and Units registered (as on 31.03.2016)

60000

50000

40000

30000

20000

10000

NUMBER OF REGISTERED UNITS EMPLOYMENT INVESTMENT (lakh Rs.)

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Investment and Employment Scenario – Industrial sector of Thiruvananthapuram

Number of registered No. of people Investment units employed (In lakhs) Since 2006 12,524 86,450 150,287 For 2015 1,187 7,377 16,704 Table 1: Industrial sector – Trend of Employment and Investment - Thiruvananthapuram

Source: District Industries Centre, Thiruvananthapuram,

Existing Enterprises (as on 31.03.2016)

Details of Existing Micro and Small Enterprises Number of Investment No. of people Type of industry units (lakhs.) employed Agro based 4753 28798 22883 Soda water 43 843 228 Cotton textile 1976 16441 15354 Woolen, silk & artificial Thread based 1095 16441 7673 clothes. Wood/wooden based furniture 514 3927 2508 Paper & Paper products 321 3489 2394 Leather based 1263 4116 8246 Chemical/Chemical based 913 4532 4948 Rubber, Plastic & petro based 596 9377 3362 Mineral based 144 2865 1410 Metal based (Steel Fab.) 2444 8121 9794 Engineering units 822 10350 9428 Electrical machinery and transport 1855 12917 11943 equipment Repairing & servicing 1718 10471 7695 Others 12820 87988 66180 Total 31277 220676 174046 Source: Development commissioner MSME, Govt. of India

Details of Existing Medium Scale Enterprises

Number of No. of people Type of Sector Investment (in Lakhs) Enterprises employed Private 2 1,833 451 Partnership 3 80,700 420 Proprietary 8 3,281 102 Total 13 85,814 973 Source: District Industries Centre, Thiruvananthapuram

Large Scale Industries/ Public Sector Undertaking

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List of the units in Thiruvananthapuram District19

1 Handicrafts Development Corporation of Kerala Ltd. 2 Kerala Artisan Development Corporation Ltd. 3 Travancore Titanium Products Ltd. 4 Kerala Industrial Infrastructure Development Corporation 5 Kerala Small Industries Development Corporation Ltd. Connectivity Road Connectivity Roads Connectivity Length in Kms National Highway 80 State Highway 180 Main District Highway 2420 Other district & Rural 13525 Source: Economic Review 2015-16 Communication (as on 2014-15) Type Number Telephone connection 9,90,103 Post offices 414 Density of telephone (Nos/1000) 299 Source: Economic Review 2015 Social Infrastructure Health Institutions as of 2014-15 Institutions Numbers Allopathic Hospital 10 Ayurvedic Hospital 15 Community health centers 23 Primary health centers 24 Dispensaries 8 Total 80 Source: Compiled from Economic Review 2015 Banking as of 2014-15 Type Numbers Commercial Banks 675

Education Institutions as of 2014-15 Type of schools Number Primary school 505 Secondary & senior secondary schools 482 Source: Economic Review 2015,

19 http://dcmsme.gov.in/dips/2016-17/Thiruvananthapuram.pdf

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Colleges Number Arts and Science 30 Engineering 23 Homeopathy 2 Medical 4 Dental 4 Ayurveda 2 Hotel Management 2 Nursing 2 Management 9 Pharmacy 7 Polytechnic 5 Siddha 1 TTI 34 Total 125 Source: Keralacolleges.com Investment Opportunities 1. IT & IT Enabled Services a) Software Development b) Business Process Outsourcing c) Knowledge Process Outsourcing d) Software Training Centres

2. Tourism a) Medical Tourism/ Ayurveda b) Hotels & Hospitality c) Tours & Travels

3. Biotechnology a) R & D centres, Drug discovery, Tissue Culture b) Life Sciences, Medical devices, Pharmaceuticals c) Education & Training centres

4. Textile a) Handlooms, Power looms, Weaving b) Apparels & Garment manufacturing

5. Infotainment a) Film & Video editing, outdoor facilities b) Shooting locales c) Animation software, Digital cinema

6. Building Construction

Key Projects

1 Vizhinjam International Deepwater Multipurpose Seaport 2 Technocity 3 Life Science Park

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4 Mono Rail

Kollam

District at a glance Total Geographical area 2,491 Km2 Population 26,29,703 Nearest Railway Station Kollam Junction (2 Km from DHQ) Nearest airport Thiruvananthapuram International Airport (66 Km from DHQ) Major Exports Cashew, Sea food, Coir, Handloom Key Institutions Indian Rare Earths Limited (Mineral Division), Kerala Minerals and Metals Ltd, Kerala State Cashew Development Corporation, TKM College of Engineering, Amrita Institutions, Cashew Export promotion council laboratory. Major Crops Paddy, Tapioca, Coconut, Rubber, Pepper, Banana, Mango, Cashew Industrial parks Industrial Park (Promoted by KINFRA) Industrial Estates at Umainellur and Karunagapally (Promoted by SIDCO); Industrial Estates at Chadayamangalam, Sasthamkotta, Mukundapuram, Umainellur (Promoted by DIC). Industrial Cluster Wood Industry, Food Processing Industry, Garment Industries Other Major Industries Cashew processing industry, Handloom industry, Spinning mills, Paper mills, Aluminum industry, Mineral Industry, Fisheries, Rubber plantations etc. Leading industrial houses include United Electrical Industries, Kerala Electrical and Allied Engineering Company, Thomas Stephen and Company, Kerala Ceramics Limited, Kerala Minerals and Metals Limited, Travancore Plywood Industries, Parvathi Mills Limited, Kerala Agro-Fruit Products Aluminum Industries Limited etc. Other Key Factors Neendakara - one of the most important Fishing Ports in the State; Ranks first in Livestock wealth in State.

Administrative setup Particulars Number Revenue Divisions 1 Taluks 6 Corporations 1 Municipalities 4 Gram Panchayat 68 Source: Revenue Dept.,LSGD Elections 2015

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Gross District Domestic Product

Gross District Domestic Product (GDDP ) (2013 – 14)

Base year: 2004-05 Particulars INR in Lakhs % Contribution 1 Agriculture and Allied 546940 1.1 Agriculture & Allied Activities 397838 12.96% 1.2 Forestry & Logging 41448 1.35% 1.3 Fishing 107654 3.51% 2 Mining and Quarrying 20348 0.66% A TOTAL OF PRIMARY SECTOR 567287 18.49% 3 Manufacturing 119375 3.89% 3.1 Registered 53316 3.2 Un-registered 66060 4 Construction 298083 9.71% 5 Electricity, Gas and Water supply 47402 1.54% 5.1 Electricity 43898 5.2 Gas 530 5.3 Water supply 2973 B TOTAL OF SECONDARY SECTOR 464860 15.15% 6 Industry 485207 7 Transport, Storage& Comm. 343405 11.19% 7.1 Railways 10159 7.2 Transport by other means 270395 7.3 Storage 2314 7.4 Communication 60536 8 Trade, Hotel & Restaurants 520703 16.97% 9 Banking & Insurance 132422 4.32% 10 Real estate ownership, business ,legal 501291 16.34% 11 Public Administration 205915 6.71% 12 Other Services 332854 10.85% C TOTAL OF TERTIARY SECTOR 2036591 66.37% DDP 3068738 Mid-year Population 2648672 Per capita Income(in Rupees) 115859 Table 2: GDDP - Kollam

Source: Department of Economics and Statistics, GSDP of Kerala & India (2004-05 to 2013-14)

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Primary 19% Secondary 15% Tertiary 66%

GDDP - Kollam

Source: Department of Economics and Statistics, GSDP of Kerala & India (2004-05 to 2013-14)

Agriculture and Allied Activities

Land Utilization Pattern Others, 1631, 0%

Forest, 81438, 33% Net area sown, 124066, 50% Land put to non agricultural use, 27247, 11% Barren & uncultivable land, 189, 0% Fallow other Current than current Cultivable Still Water, fallow, fallow, 1708, waste, 1913, 6924, 3% 3672, 1% 1% 1% Figure 1 -Land Utilization Pattern (Area in Hectare) - Kollam

Source: Agriculture Statistics 2013-14, Department of Economics & Statistics Kerala

“Others” include Permanent pastures & other grazing land, Land under misc. tree crops, marshy land, water logged area and Social Forestry

Net Sown Area = Total Cropped Area – Area sown more than once

Water resources Length of Coastal Line (in Kms) 37 Number of Rivers in the District 4

Number of Reservoirs 1 Reservoirs Water Spread Area (in Sq. Km) 1.16

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Source: Department of Economics and Statistics

Production of Mineral Deposits (2015-16) Type Name of mineral Production (in tonnes) Major mineral Granite building stone 24,07,583 Minor mineral Laterite 197,128 Ilmenite 53,550 Brick clay 9,709 Sillimanite 9,267 Sand 7,000 Zincon 6,432 Rutile 2,350 Source: Dept. Of Mining and Geology

Animal Husbandry

Details of Farms, Slaughter Houses, Veterinary Institutions (2010-11) Type Numbers Cattle farms 74 Poultry farms for meat 105 Poultry farms for egg - Slaughter houses 118 Veterinary Institutions 241 Source: Department of Economics and Statistics Agriculture Workers Population (2010-11)

Other Workers 42% Workers 50%

House hold Industry Workers 1% Agricultural Cultivators Labourers 3% 4%

Agriculture Workers Population - Kollam

Source: Department of Economics and Statistics, Report on Panchayat Level Statistics 2011

Industries

Overview of Industrial Sector (as on 31.03.2016) Particulars Numbers Total Industrial Unit 8065 Registered Medium and large Scale Unit 5 Estimated Average No of Daily Worker employed in Small Scale 8 Industries (per Unit)

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No of Industrial Area 2 Turnover of Small Scale Industries (in Lakhs) 30,700 Industrial Sector – Kollam , Source: District Industries Centre, Kollam Trend of Investment, Employment and Units registered (as on 31.03.2016)

25000

20000

15000

10000

5000

0 2005 -06 2006 -2007 2007 -08 2008 -09 2009 -10 2010 -11 2011 -12 2012 -13 2013 -14 2014 -15 2015 -16

NUMBER OF REGISTERED UNITS EMPLOYMENT INVESTMENT (lakh Rs.)

Figure 2: Industrial Sector Investment and Employment Scenario - Kollam

Source: District Industries Centre, Kollam

Number of registered No. of people Year Investment (in lakhs) units employed Since 2006 7686 43308 86899

2015-16 1143 4526 11030

Existing Enterprises (as on 31.03.2016)

Details of Existing Micro and Small Enterprises

Type of industry Number of Investment(lakhs) No. of people units employed Agro based 1204 20975 26019 Soda water 23 119 68 Ready-made garments & 670 4649 4030 embroidery Wood / wooden based 643 8584 3508 furniture Paper & Paper products 129 2058 649 Leather based 8 18 36 Chemical/ Chemical based 146 1254 814 Rubber, Plastic & petro 221 4194 1433 based Metal based (Steel Fab.) 15 245 97 Engineering units 1227 12242 6238 Electrical machinery and 110 1792 977 transport equipment

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Repairing & servicing 1245 14362 7008 Others 2424 45227 14264 Total 8065 115719 65141 Source: District Industries Centre, Kollam

Details of existing Medium Scale Enterprises

Not Available

Large Scale Industries/ Public Sector Undertaking

1. Kerala Minerals and Metals Limited 2. Indian Rare Earth Limited

Connectivity Road Connectivity Roads Connectivity Length in Kms National Highway 57 State Highway 267 Main District highway 1202 Other district & Rural roads 196 Rural road/Agriculture roads 196 Source: Economic Review 2015-16

Communication (2014-15) Type Number Telephone connection 6,35,804 Post offices 364 Density of telephone (Nos/1000) 241 Source: Economic Review 2015

Health Institutions as of 2014-15 Institutions Number Allopathic Hospital 9 Ayurvedic Hospital 9 Community health centers 17 Primary health centers 58 Sub Centers 60 Total 153 Source: Compiled from Economic Review 2015, Panchayat Level Statistics 2011 and DHS

Banking as of 2014-15 Type Number Commercial Bank 374 Source: Economic Review 2015

Education Institutions as of 2014-15 Type of School Number Primary school 484

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Upper Primary 211 Secondary & senior secondary schools 417 Source: Economic Review 2015

Colleges Number Arts and Science 14 Engineering 14 Dental 1 Ayurveda 2 Medical 1 Nursing 4 Management 5 Pharmacy 2 Polytechnic 2 TTI 25 Total 70 Source: Keralacolleges.com

Investment Opportunities

1. Manufacturing a. Mineral Processing units, Cashew Processing, Marine Products, Agro based Industries b. Pos20 Building materials (Paving Tiles, Hollow Bricks), Clay based Industries c. Meat processing units, Dairy units 2. IT/ ITES a. BPO, Software Development 3. MSME a. Printing b. Food processing c. Readymade garments d. Building Materials e. Paper product f. Soft Drinks g. Wood h. Light Engineering 4. Service Industry

a. Beauty Parlor b. Ayurveda c. Construction d. IT based service e. Catering service f. Automobile service station g. Fashion designing

20 Polyhedral Oligomeric Silsesquioxanes

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h. Logistic service

Key Projects

a. Titanium Sponge Project b. SEZ - Techno park c. Kallada Irrigation Project d. Kulathupuzha Hi-Tech Dairy Farm

Pathanamthitta

District at a Glance Particulars Total Geographical area 2,637 Km2 Population 11,95,537 Nearest railway station Chengannur railway station (24 km from DHQ) Thiruvananthapuram International Airport (109 Km from Nearest airport DHQ) Major Exports Oleoresin, Spice Oil, Food Products, etc. Pushpagiri Medical College, Muthoot Hospitals, NSS Key Institutions College, Pandalam Plantation Corporation, Soil Conservation Research Centre, Konni Major Crops Paddy, Tapioca, Pulses, Coconut, Banana, Pepper, Ginger. KINFRA Industrial Park at Adoor Industrial parks KINFRA Food processing Park at Adoor Industrial Cluster General Engineering, Food Processing About 75% people are dependent agriculture sector. Rubber Other Key factors is the most important crop, with plantations covering over 478 sq. Km Source: District Profile of Kerala 2015 – 16 Report

Administrative Set up Particulars Number Revenue Divisions 2 Taluks 6 Corporations - Municipalities 4 Gram Panchayat 53 Source: Source: Revenue Dept., LSGD Elections 2015

Gross District Domestic Product Gross District Domestic Product (GDDP ) (2013 – 14) Base year: 2004-05 Particulars INR in Lakhs % Contribution 1 Agriculture and Allied 274787 1.1 Agriculture & Allied Activities 251227 15.69% 1.2 Forestry & Logging 21658 1.35%

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1.3 Fishing 1902 0.12% 2 Mining and Quarrying 9493 0.59% A TOTAL OF PRIMARY SECTOR 284280 17.75% 3 Manufacturing 30951 1.93% 3.1 Registered 13823 3.2 Un-registered 17128 4 Construction 142276 8.88% 5 Electricity, Gas and Water supply 24830 1.55% 5.1 Electricity 22149 5.2 Gas 268 5.3 Water supply 2412 B TOTAL OF SECONDARY SECTOR 198057 12.37% 6 Industry 207550 7 Transport, Storage& Comm. 203258 12.69% 7.1 Railways 1094 7.2 Transport by other means 154304 7.3 Storage 232 7.4 Communication 47629 8 Trade, Hotel & Restaurants 208849 13.04% 9 Banking & Insurance 121387 7.58% 10 Real estate ownership, Business, lega 264758 16.53% 11 Public Administration 107696 6.72% 12 Other Services 213189 13.31% C TOTAL OF TERTIARY SECTOR 1119138 69.88% DDP 1601475 Mid year Population 1188190 Per capita Income(in Rupees) 134783 GDDP – Pathanamthitta. Source: Department of Economics and Statistics, GSDP of Kerala & India (2004-05 to 2013- 14)

Primary Sector 18%

Secondary Tertiary Sector Sector 12% 70%

Figure 3: GDDP – Pathanamthitta

Source: Department of Economics and Statistics, GSDP of Kerala & India (2004-05 to 2013-14)

Agriculture and Allied Activities

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Land Utilization Pattern

Others, 376, 0%

Still Water, Net area sown, 2698, 1% 81364, 31%

Current fallow, Forest, 155214, 4128, 2% 58%

Fallow other than current fallow, 2974, 1% Land put to non Cultivable agricultur waste, Barren & al use, 1873, 1% uncultivable 16488, 6% Figure 5 – Land Utilization (Arealand in, 162Hectare), 0% - Pathanamthitta Figure 4: Land Utilization Pattern - Pathanamthitta Land Utilization (Area in Hectare) - Pathanamthitta Source: Agriculture Statistics 2013-14, Department of Economics & Statistics Kerala

“Others” include Permanent pastures & other grazing land, Land under misc. tree crops, marshy land, water logged area and Social Forestry

Net Sown Area = Total Cropped Area – Area sown more than once

Water Resources Length of Coastal Line (in Kms) -

Number of Rivers in the District 3 Number of Reservoirs - Reservoirs Water Spread Area (in Sq. Km) -

Source: Department of Economics and Statistics, Report on Panchayat Level Statistic, 2011

Production of Mineral Deposits (2015-16) Type Name of mineral Production (in tonnes) Major mineral Granite Building Stone 2,80,084 Ordinary Earth 6,37,682

Minor mineral Laterite 34,525

Brick Clay 2,550 Source: Dept. Of Mining and Geology

Animal Husbandry

Details of Farms, Slaughter Houses, Veterinary Institutions (2010-11)

Type Number Cattle farms 75 Poultry farms for meat 19 Poultry farms for egg 15 Slaughter houses 37 Veterinary Institutions 169

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Source: Department of Economics and Statistics

Agriculture Workers Population (2011-12)

Other workers 37% Workers 50%

Househol d Industry Agricultural Cultivator Worker Labourers s 1% 6% 6% Agriculture Workers Population - Pathanamthitta

Source: Report on Panchayat Level Statistics 2011

Industries Overview of Industrial Sector (as on 31.03.2016)

Particulars Numbers Total Industrial Unit 15,423 Registered Industrial Unit 14,021 Registered Medium and large Scale Unit 1 Estimated Average No of Daily Worker employed in Small Scale 4 Industries (per unit) Employment in Medium and Large Industries 68 No of Industrial Area 3 Turnover of Small Scale Industries (in Lakhs) 500 Turnover of Medium and Large Scale Industries (in Lakhs) 35 Source: District Industries Centre, Pathanamthitta

Trend of Investment, Employment and Units registered (as on 31.03.2016)

70000 60000 50000 40000 30000 20000 10000 0 2006 - 2007 - 2008 - 2009 - 2010 - 2011 - 2012 - 2013 - 2014 - 2015 - 2007 08 09 10 11 12 13 14 15 16

NUMBER OF REGISTERED UNITS EMPLOYMENT INVESTMENT (lakh Rs.)

Figure 6: Industrial Sector Investment and Employment Scenario - Pathanamthitta

Page 47 of 134

Source: District Industries Centre, Pathanamthitta

Year Number of registered No. of people Investment (in lakh) units employed Since 2006 14,021 59,544 99,990

2015-16 426 2,057 19,668

Existing Enterprises (as on 31.03.2016) Details of Existing Micro and Small Enterprises

Number of Investment No. of people Type of industry units (lakh) employed Agro based 1883 12560 7137 Soda water 427 2848 1618 Ready-made garments & 1797 11986 6811 embroidery Paper & Paper products 156 1040 591 Chemical/ Chemical based 760 5069 2880 Rubber, Plastic & petro based 293 1954 1110 Mineral based 247 1647 936 Engineering units 2176 14513 8247 Repairing & servicing 3661 24419 13875 Others 4023 26833 15247 Total 15423 102869 58452 Source: District Industries Centre, Pathanamthitta

Existing Medium Scale Enterprises:

Akay flavors & Aromatics Ltd Tierra Foods Ltd

Existing Large Scale Industries/ Public Sector Undertaking

Traco Cables Connectivity Road Connectivity Roads Connectivity Length in Kms National Highway - State Highway 218 Main District highway 574 Other district & Rural 621 Rural road/Agriculture roads 43 Source: Economic Review 2015-16,

Communication (2014-15) Type Number Telephone connection 4,61,486

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Post offices 315 Density of telephone (Nos/1000) 386 Source: Economic Review 2015,

Social Infrastructure Health Institutions (2014-15) Type Number Allopathic Hospital 9 Ayurvedic Hospital 5 Community health centers 12 Primary health centers 43 Sub Centers 49 Total 118 Source: Compiled from Economic Review 2015,

Banking (2014-15) Type Number Commercial Bank 373 Source: Economic Review 2015

Education Institutions (2014-15) Type of School Number Primary school 425 Upper Primary 143 Secondary & senior secondary schools 286 Source: Economic Review 2015

Colleges Number Arts and Science 10 Engineering 6 Nursing 4 Polytechnic 4 TTI 11 Ayurveda 1 Medical 1 Management 4 Total 41 Source: Keralacolleges.com

Investment Opportunities 1. Tourism a. Pilgrim Tourism, Farm Tourism, Medical Tourism, Eco Tourism b. Hotels & Hospitality (Especially on Sabarimala route) 2. Agro based and Food Processing Industries a. Dairy products, Packed foods, RTE snacks 3. Wood based industries a. Timber, Plywood and Rubber based industries 4. Educational Institutions

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a. Banking & Finance, Nursing & Paramedical 5. Infrastructure Development a. Roads, Transportation facilities, Rest houses/ boarding & lodging 6. MSME a. Food Processing b. Construction Field c. Rubber Based 7. Service Industry a. Construction Field b. Food Processing, c. Light Engineering Field, d. Bakery Products, e. IT Enabled Services

Key Projects — SIDCO – Mini industrial estate — KINFRA Industrial Park Kunnamthanam

Alappuzha

District at a Glance Total Geographical area 1,414 Km2 Population 21,21,943 Nearest railway station Alappuzha railway station (2 km from DHQ) Nearest airport Cochin International Airport (84 km from DHQ) Major Exports Shrimps, Coir Products Key Institutions Central Coir Research Institute Major Crops Rice, Spices, Coconut, Coir products Industrial parks Seafood Park at Aroor, Industrial Growth Centre of KSIDC Pallippram, Mega food park at Pallippram (mainly for marine food processing industry). Industrial Clusters Garments Industry, Coir Industry and Food processing. Industries Eight public sector undertakings are present. Others Key factors Centre of Coir and Prawn farming

Administrative Set up Particulars Numbers Revenue Divisions 2 Taluks 6 Corporations - Municipalities 6 Gram Panchayat 72 Source: Revenue Dept.,LSGD Elections 2015

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Gross District Domestic Product Gross District Domestic Product (GDDP ) (2013 – 14) Base year: 2004-05 Particulars INR in Lakhs % Contribution 1 Agriculture and Allied 1.2 Agriculture & Allied Activities 132433 5.07% 1.2 Forestry & Logging 27709 1.06% 1.3 Fishing 104835 4.01% 2 Mining and Quarrying 5801 0.22% A TOTAL OF PRIMARY SECTOR 270778 10.37% 3 Manufacturing 154748 5.93% 3.1 Registered 69115 3.2 Un-registered 85633 4 Construction 279888 10.72% 5 Electricity, Gas and Water supply 43598 1.67% 5.1 Electricity 37414 5.2 Gas 450 5.3 Water supply 5733 B TOTAL OF SECONDARY SECTOR 478234 18.31% 6 Industry 484035 7 Transport, Storage& Comm. 345960 13.25% 7.1 Railways 12043 7.2 Transport by other means 278249 7.3 Storage 2544 7.4 Communication 53125 8 Trade, Hotel & Restaurants 499391 19.12% 9 Banking & Insurance 147064 5.63% 10 Real estate ownership, Business ,legal 414920 15.89% 11 Public Administration 165070 6.32% 12 Other Services 289849 11.10% C TOTAL OF TERTIARY SECTOR 1862254 71.32% DDP 2611265 Mid year Population 2132661 Per capita Income(in Rupees) 122442 Source: Directorate of Economics & Statistics

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Primary Sector, 10%

Secondar Tertiary y Sector, Sector, 18% 71%

GDDP – Alappuzha

Source: Department of Economics and Statistics, GSDP of Kerala & India (2004-05 to 2013-14) Agriculture and Allied Activities Land Utilization Pattern

Others, 470, 0% Forest, 0, 0%

Land put to non Barren & agricultural use, uncultivable 22567, 16% land, 29, 0%

Cultivable waste, 15064, 11%

Fallow other Net area sown, than current 84705, 60% fallow, 2670, 2% Current fallow, 3363, 2% Still Water, 12143, 9%

Land Utilization Pattern (Area in Hectare) - Alappuzha

Source: Agriculture Statistics 2013-14, Department of Economics & Statistics Kerala

“Others” include Permanent pastures & other grazing land, Land under misc. tree crops, marshy land, water logged area and Social Forestry

Net Sown Area = Total Cropped Area – Area sown more than once

Water Resources

Length of Coastal Line (in Kms) 82 Number of Rivers in the District 3

Number of Reservoirs - Reservoirs Water Spread Area (in Sq Km) -

Source: Department of Economics and Statistics

Production of Mineral Deposits (2015-16) Type Name of Mineral Production(in tonnes) Major Mineral Granite Building Stone 2,378

© 201 7 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

Page 52 of 134

Minor Mineral Laterite 10,991 Sand 2,65,956 Silica Sand 66,402

Source: Dept. Of Mining and Geology

Animal Husbandry • Animal husbandry plays an important role in generating employment and income to the weaker sections of the population. • District contributes 4.42 % of the total livestock population in the State.

Details of Farms, Slaughter Houses, Veterinary Institutions (2010-11)

Type Total Number

Cattle farms 287 Poultry farms for meat 98

Poultry farms for egg 124

Slaughter houses 79 Veterinary Institutions 159 Source: Department of Economics and Statistic,

Agriculture Worker Population (2011-12)

Other Workers, 43% Workers, 50%

House hold Industry Workers, 2% Agricultural Cultivators Labourers, 3% , 1%

Agriculture Worker Population - Alappuzha

Industries Overview of Industrial Sector (as on 31.03.2016)

Type Number Total industrial unit 11,442 Number of registered industrial unit 8,830 Number of registered medium & large unit 36

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Estimated avg. no. of daily worker employed in small scale industries 30 (per Unit) Employment in large and medium industries 2,275 No. of industrial area 9 Turnover of small scale industries.(in Lakhs) 31,397 Turnover of medium & large scale industries (in lacs) 243,396 Source: DIC Alappuzha, District Profile of Kerala 2014 – 15 Report, Development commissioner MSME, Govt. of India

Trend of Investment, Employment and Units registered (as on 31.03.2016)

Trend of units Registered

30000

20000

10000

Investment (In lakhs) Employment Number of Units registered

Industrial Sector –Investment and Employment Scenario - Alappuzha

Source: DIC Alappuzha, District Profile of Kerala 2014 – 15 Report, Development commissioner MSME, Govt. of India Number of Units No. of people Investment (In lakhs) registered employed Since 2006 8830 62655 119417 2016 234 1555 14732

Existing Enterprises (as on 31.03.2016) Details of Existing Micro and Small Enterprises

Number of Units Investment (In No. of people Type of Industries Registered lakhs) employed Agro based 1949 38990 19236 Ready-made garments & 1272 15215 7060 embroidery Repairing & servicing 821 18889 7607 Others 772 8388 1544 Engineering units 668 8012 4200 Chemical/Chemical based 623 5969 3984 Jute & jute based 451 1824 4176 Electrical machinery and 436 2544 908 transport equipment Rubber, Plastic & petro based 402 6700 3868 Woolen, silk & artificial Thread 370 791 2284 based clothes. Wood/wooden based furniture 305 8255 3950 Paper & Paper products 241 1950 1723

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Metal based (Steel Fab.) 199 577 1039 Soda water 119 443 421 Cotton textile 112 560 336 Mineral based 76 246 256 Leather based 14 68 63 Total 8830 119421 62655 Source: DIC Alappuzha, 2014-15

Existing Medium Scale Enterprises

Total Units Investment (in Lakhs) No. of people employed 36 35,498 4,066 Source: DIC, Alappuzha, 2014-15

Existing Large scale Enterprises

No. of people Sector Numbers Investment (in Lakhs) employed Private 3 18911 2467 Public 5 8308 1211 Total 8 27219 3678 Source: DIC, Alappuzha, 2014-15

Connectivity Road Connectivity Road Connectivity Length in Kms

National Highway 24

State Highway 171

Main District Highway 1303

Other district Roads 34

Rural/Agriculture Roads 2573

Source: Economic Review 2015-16, Panchayat level statistics, 2011

Communication (2014-15) Type Number Telephone connection 530500 Post offices 251 Density of telephone (Nos/1000) 250 Source: Economic Review 2015

Social Infrastructure Health Institutions as of 2014-15 Type Number

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Allopathic Hospital 13

Ayurvedic Hospital 11

Unani hospitals 16

Community health centers 42

Primary health centers 55

Dispensaries 18

Sub Health Centers 48

Source: Compiled from Economic Review 2015, Panchayat Level Statistics 2011 and DHS

Banking as of 2014-15 Type of Bank Number Commercial Bank 363 Source: Economic Review 2015

Education Institution as of 2014-15 Type of School Number Primary school 407 Upper schools 155 Secondary & senior secondary schools 321 Source: Economic Review 2015

Colleges Number Arts and Science 15 Hotel Management 1 Engineering 9 Polytechnic 3 Management 1 Medical 1 TTI 10 Pharmacy 2 Total 42 Source: Keralacolleges.com

Investment Opportunities

1. Manufacturing a. Medium & Small scale units in Coir, Coconut, China clay, etc b. Food processing (Marine based), Modern Rice Mills c. Construction materials 2. Tourism a. Backwater Tourism b. Heritage Tourism 3. IT & IT Enabled Services

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a. Software Development b. Software Training Centres 4. MSME a. Fruit processing, Computer Stationery b. PVC products c. Paper products, d. Automobile workshop e. Steel Furniture, Decorative door & Windows, f. Electronic Equipment g. Handicraft items

5. Service Industry

a. Repair & Services (workshops) b. Marketing c. Consultancy d. Computerized design & drafting e. Advertising Agency

Key Projects

1. Industrial Growth Centre, Cherthala (developed by KSIDC) 2. Infoparks at Cherthala & Ambalappuzha 3. Sea Food Park, Aroor (developed by KINFRA)

Kottayam

District at Glance Total Geographical area 2,208 Km2 Population 19,79,384 Nearest Railway station Kottayam railway station (1 Km from DHQ) Nearest airport Cochin International Airport (87.5 Km from DHQ) Major Exports Rubber Products, Ethnic food, Engineering tools, Spice extracts. Key Institution Rubber Research Institute of India, Tropical Institute of Ecological Sciences (TIES), Government Medical College, Kottayam, Centre for Rural Management, Rajiv Gandhi Institute of Technology, Institute for Intensive Research in Basic Sciences, Regional Agricultural Research Station, Kumarakom. Major Crops Rubber, Paddy, Pepper, Cocoa, Coconut, Fruits, Tea And Coffee Industrial clusters Rubber Industry, Food Industry, Soft toys Industry, Engineering Industry Industries Printing & Publishing Others key factors Kumarakom is one of the major tourist attractions of state

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Administrative Set up Particulars Numbers Revenue Divisions 2 Taluks 5 Corporations - Municipalities 6 Gram Panchayat 71 Source: Revenue Dept.,LSGD Elections 2015

Gross District Domestic Product Gross District Domestic Product (GDDP ) (2013 – 14) Base year: 2004-05 Particulars INR in Lakhs % Contribution 1 Agriculture & Allied Activities 436000 16.11% 2 Forestry & Logging 30625 1.13% 3 Fishing 7459 0.28% Agriculture and Allied 474083 4 Mining and Quarrying 12201 0.45% A TOTAL OF PRIMARY SECTOR 486284 17.97% 5 Manufacturing 114953 4.25% 5.1 Registered 51340 5.2 Un-registered 63613 6 Construction 265424 9.81% 7 Electricity, Gas and Water supply 46443 1.72% 7.1 Electricity 40502 7.2 Gas 411 7.3 Water supply 5530 B TOTAL OF SECONDARY SECTOR 426820 15.77% Industry 439021 8 Transport, Storage& Comm. 304690 11.26% 8.1 Railways 5570 8.2 Transport by other means 223281 8.3 Storage 4397 8.4 Communication 71442 9 Trade, Hotel & Restaurants 481632 17.80% 10 Banking & Insurance 167649 6.20% 11 Real estate ownership, Business ,legal 370889 13.71% 12 Public Administration 179171 6.62% 13 Other Services 289009 10.68% C TOTAL OF TERTIARY SECTOR 1793039 66.26% DDP 2706144 Mid-year Population 1980004 Per capita Income(in Rupees) 136674 GDDP - Kottayam

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Primary Sector, 22%

Tertiary Sector, 62% Secondar y Sector, 16%

GDDP - Kottayam

Source: Department of Economics and Statistics, GSDP of Kerala & India (2004-05 to 2013-14) Agriculture and Allied Activities

Land Utilization pattern

Barren & uncultivable Forest, 8141, 4% Land put to non Others, 403, 0% land, 1231, 1% agricultural use, 27611, 12%

Cultivable waste, 6245, 3% Fallow other than current fallow, 3108, 1% Current fallow, Net area sown, 6126, 3% 161217, 73% Still Water, 6360, 3%

Land Utilization Pattern (Area in Hectares) – Kottayam Source: Agriculture Statistics 2013-14, Department of Economics & Statistics Kerala

“Others” include Permanent pastures & other grazing land, Land under misc. tree crops, marshy land, water logged area and Social Forestry

Net Sown Area = Total Cropped Area – Area sown more than once

Water Resources

Length of Coastal Line (in Kms) Nil

Number of Rivers in the District 3 Number of Reservoirs -

Reservoirs Water Spread Area (in Sq. Km) -

© 201 7 KPMG Advisory Services Private Limited , an Indian Private Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), A Swiss entity. All rights reserved

Page 59 of 134

Source: Department of Economics and Statistics

Production of Mineral Deposits (2015-16)

• Kottayam district has rich Production of Mineral of lime shell and graphite. • Lime shell deposits are exploited by units like Travancore Cements limited, Travancore Electro Chemicals available Ltd, etc. for industrial purpose. • Granite is also available which can be utilized by industries engaged in the stone crushing, granite polishing etc. Type Name of Mineral Production (In Tonnes) Major Mineral Lime Shell 27745 Minor Minerals Granite Building Stone 1821254 Sand 4577 Ordinary Earth 1347363 Laterite 19298 Brick Clay 59831 Source: Dept. Of Mining and Geology

Animal Husbandry Details of Farms, Slaughter Houses, Veterinary Institutions (2010-11) Type Total Number Cattle farms 225 Poultry farms for meat 73 Poultry farms for egg 11 Slaughter houses 87 Veterinary Institutions 172 Source: Department of Economics and Statistics

Agriculture Workers Population (2011-12)

Agriculture Workers Population

Other Workers 42% Workers 50% House hold Industry Workers Agricultur 1% al Labourers Cultivators 4% 3% Agriculture Worker Population - Kottayam

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Industries

Overview of Industrial Sector (as on 31.03.2016) Type Numbers Registered Industrial Unit 7413 Registered Medium & Large Unit 1 Estimated Avg. No of Daily worker (per unit) 22 Employment in Medium and Large Industries 2905 No. of Industrial Area 19 Source: District Industries Centre, Kottayam

Trend of Investment, Employment and Units registered (as on 31.03.2016) 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 2006-072007-082008-092009-102010-112011-122012-132013-142014-152015-16

NUMBER OF REGISTERED UNITS EMPLOYMENT INVESTMENT (lakh Rs.)

Industrial sector – Investment and Employment Scenario - Kottayam

Source: District Industries Centre, Kottayam

Number of No. of people Investment (lakhs) registered units employed Since 2006 8254 54538 127968 2016 1245 6265 15645

Existing Enterprises (as on 31.03.2016)

Details of Existing Micro and Small Enterprises Type of industry Number of Investment (lakh No. of people units Rs.) employed Agro based 972 14814 5527 Soda water 56 725 194 Cotton textile 19 843 198 Woolen, silk & artificial Thread 6 44 23 based clothes.

Ready-made garments & 513 3085 3200 embroidery Wood/wooden based furniture 678 9306 4319 Paper & Paper products 103 2038 962

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Leather based 47 838 575 Chemical/Chemical based 45 334 278 Rubber, Plastic & petro based 843 27558 8600 Mineral based 7 73 49 Metal based (Steel Fab.) 763 6515 3598 Electrical machine 9 103 58 Repairing & servicing 125 1111 683 Total 4186 67387 28264 Source: District Industries Centre, Kottayam

Details of Existing Medium Scale Enterprises:

Name of the Unit Sector Investment (in No. of people Lakhs) employed Rubber Industry Private 717 54 Source: District Industries Centre, Kottayam

Details of Existing Large Scale Industries/ Public Sector Undertaking

Type of Industry Value of Plant and No. of people employed Machinery (in Lakhs) Newsprint 20000 1,200 White Cement 75 390 Gray Cement 2000 82 Tread Rubber, Automobile 22741 1,804 tubes & Rubber products Kraft Paper 1200 150 Maida Sooji, Wheat Flour 2800 70 Rubber Gloves 1600 95 Processed Rice 292 11 News Print 96500 485 Procured tread rubber, Tread 2500 19 rubber Total 149,708 4,306 Source: District Industries Centre, Kottayam

Connectivity Road Connectivity Roads Connectivity Length in Kms National Highway - State Highway 406 Main District Highway 3043 Other district & Rural 756 Rural road/Agriculture roads 7700

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Source: Economic Review 2015-16, Panchayat level statistics, 2011

Communication (as on 2014-15) Type Number Telephone connection 746134 Post offices 408 Density of telephone (Nos/1000) 376 Source: Economic Review 2015

Social Infrastructure

Health Institutions as of 2014-15 Type Number Allopathic Hospital 21 Ayurvedic Hospital 11 Community health centers 18 Primary health centers 43 Total 93 Source: Compiled from Economic Review 2015

Banking as of 2014-15 Type Number

Commercial Branches 475

Rural Banks 11

Co-Operative Banks 58

Source: Economic Review 2015

Education Institutions as of 2014-15 Type of School Number Primary school 451 Upper Primary 201 Secondary & senior secondary schools 387 Source: Economic Review 2015

Colleges Number Arts and Science 29 Engineering 9 Dental 1 Homeopathy 1 Medical 1 Nursing 4 Management 5 Pharmacy 2 Polytechnic 3 Physiotherapy 1 TTI 18

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Colleges Number Total 74 Source: Keralacolleges.com

Investment Opportunities

1. Manufacturing a. Rubber and latex based industrial units b. Printing & Publishing, Pre-press/ post-press, Media c. Wood and Agro based Small & Medium units 2. Tourism a. Backwater Tourism, Medical Tourism (Ayurveda), Eco Tourism b. Hotels & Hospitality, Tours & Travels 3. MSME a. Availability of raw mater like Rubber, Spices, Fruits and Vegetables. b. Availability of Minerals like lime shell, graphite c. Good transportation facilities d. Good health Care and education facility e. Presence of Financial Institutions f. Availability of good communication system

Key Projects

1 Kottayam-Kumarakom Ecocity Project 2 Proposed Indian Institute of Information Technology at Pala

Idukki

District at a Glance Particulars Total Geographical area 4,363 Sq. Km Population 11,07,453 Nearest Railway Station Kottayam Railway Station (114 Km from DHQ) Nearest airport Cochin International Airport (97.5 Km from DHQ) Major Exports Spices Key Institutions University College of Engineering, Thodupuzha DC School of Management and Technology, Pullikkanam, Spice Park, Kumily Industrial cluster Rubber Industry, Wood Industry, Engineering Industry, Agriculture Industry Major Crops Cardamom, Tea, Pepper, Rubber, Coffee, Ginger, lemon grass and vegetables Industrial parks Standard Design Factories at Rajakumari Other key factors The district is also the ‘powerhouse’ of Kerala catering to around 66% of the State's Power needs. Floriculture, mushroom cultivation, medicinal plants, vanilla cultivation etc., are being taken up by some farming communities in the district. Animal husbandry activities are a major subsidiary occupation of the farming community.

Administrative set up

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Particulars Number Revenue Divisions 2 Taluks 5 Corporations - Municipalities 2 Gram Panchayat 52 Source: Revenue Dept.,LSGD Elections 2015

Gross District Domestic Product Gross District Domestic Product (GDDP ) (2013 – 14) Base year: 2004-05 Particulars INR in Lakhs % Contribution 1 Agriculture & Allied Activities 493419 32.39% 2 Forestry & Logging 22660 1.49% 3 Fishing 2574 0.17% Agriculture and Allied 518653 4 Mining and Quarrying 4924 0.32% A TOTAL OF PRIMARY SECTOR 523576 34.37% 5 Manufacturing 61900 4.06% 5.1 Registered 27645 5.2 Un-registered 34255 6 Construction 88163 5.79% 7 Electricity, Gas and Water supply 39238 2.58% 7.1 Electricity 38648 7.2 Gas 235 7.3 Water supply 355 B TOTAL OF SECONDARY SECTOR 189301 12.43% Industry 194225 8 Transport, Storage& Comm. 94335 6.19% 8.1 Railways 0 8.2 Transport by other means 73473 8.3 Storage 461 8.4 Communication 20401 9 Trade, Hotel & Restaurants 166937 10.96% 10 Banking & Insurance 70667 4.64% 11 Real estate ownership, Business ,legal 238791 15.68% 12 Public Administration 40358 2.65% 13 Other Services 199410 13.09% C TOTAL OF TERTIARY SECTOR 810498 53.20% DDP 1523375 Mid-year Population 1103811 Per capita Income(in Rupees) 138010

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Primary Sector, Tertiary 34% Sector, Secondary 53% Sector, 12%

GDDP - Idukki

Source: Department of Economics and Statistics, GSDP of Kerala & India (2004-05 to 2013-14)

Agriculture and Allied Activities

Land Utilization Pattern Others, 1604, 0%

Net area sown, Forest, 198413, 206110, 47% 46%

Barren & uncultivable Still land, 1833, 1% Water, Fallow other Cultivable waste, Land put to non Current fallow, 10480, than current 2321, 1% agricultural use, 1647, 0% 2% fallow, 1220, 0% 12700, 3% Land Utilization Pattern (Area in Hectares) – Idukki

Source: Agriculture Statistics 2013-14, Department of Economics & Statistics Kerala

“Others” include Permanent pastures & other grazing land, Land under misc. tree crops, marshy land, water logged area and Social Forestry

Net Sown Area = Total Cropped Area – Area sown more than once

Water Resources Length of Coastal Line (in Kms) Nil Number of Rivers in the District 7 Number of Reservoirs 4 Reservoirs Water Spread Area (in Sq. Km) 187

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Production of Mineral Deposits (2015-16) Type Name of Mineral Production(in tonnes) Major Mineral Granite Building Stone 1,158,289 Minor Mineral Ordinary Earth 93,820 Source: Dept. Of Mining and Geology

Animal Husbandry Details of Farms, Slaughter Houses, Veterinary Institutions (2010-11) Type Number Cattle farms 185 Poultry farms for meat 136 Poultry farms for egg 15 Slaughter houses 194 Veterinary Institutions 142 Source: Department of Economics and Statistics

Agriculture Workers’ Population

House hold Industry Cultivators, Workers, 10% 1%

Agricultural Labourers, 14%

Workers, 50% Other Workers, 26%

Agriculture Worker Population - Idukki

Industries Overview of Industrial Scenario (as on 31.03.2016) Type Number Number of Registered Industrial Unit 2,592 Number of Registered medium & large unit 6 Employment generated in large and medium industries 1,156 Number of industrial area Nil Turnover of small scale industry (in Lakhs) 48,300 Turnover Of Medium & Large Scale Industries (In Lakhs) 22,200 Source: District Industries Centre, Idukki

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Trend of Investment, Employment and Units registered (as on 31.03.2016)

Trend of Units Registered

10000

8000

6000

4000

2000

0 2006-072007-082008-092009-102010-112011-122012-132013-142014-152015-16

NUMBER OF REGISTERED EMPLOYMENT INVESTMENT UNITS (lakh Rs.)

Industrial Sector – Investment and Employment Profile - Idukki

Source: District Industries Centre, Idukki

Number of No. of people Investment registered employed (lakhs) units Since 2006 2726 17928 40020 2016 187 876 2228

Existing Enterprises (as on 31.03.2016)

Details of Existing Micro and Small Enterprises

Type of industry Number of Investment No. of people units (lakh rs.) employed Agro based 657 9667 4778 Soda water 22 258 102 Ready-made garments & embroidery 241 731 1511 Wood/wooden based furniture 168 2123 980 Paper & Paper products 37 142 224 Chemical/Chemical based 88 1793 772 Rubber, Plastic & petro based 160 2214 1113 Engineering units 235 1256 960 Electrical machinery and transport 43 241 242 equipment Repairing & servicing 129 572 650 Others 940 2350 1880 Total 2720 21348 13212 Source: District Industries Centre, Idukki

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Existing Medium Scale Enterprises:

No. of people Type of Sector Numbers Investment (in Lakhs) employed Private 2 2950 541 Public 2 1759 575 Total 4 4709 1116 Source: District Industries Centre, Idukki

Existing large Enterprises

No large Scale Industries

Connectivity Road Connectivity Roads Connectivity Length in Kms National Highway 157 State Highway 998 Main District Highway 1403 Other district & Rural 284 Source: Economic Review 2015-16, Panchayat level statistics, 2011

Communication (2014-15) Type Number Telephone connection 123675 Post offices 296 Density of telephone (Nos/1000) 312 Source: Economic Review 2015

Social Infrastructure Health Institutions as of 2014-15 Type Number Allopathic Hospital 5 Ayurvedic Hospital 3 Community health centers 14 Primary health centers 42 Sub Health Centers 231 Dispensaries 83 Private hospitals 90 Total 468 Source: Compiled from Economic Review 2015, Panchayat Level Statistics 2011 and DHS

Banking as of 2014-15 Type Number Commercial Bank 122 Co-Operative bank 83 Rural Bank 3 Total 208 Source: Economic Review 2015

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Education Institutions as of 2014-15 Type of School Number Primary school 227 Secondary & senior secondary schools 244 Source: Economic Review 2015

Colleges Number Arts and Science 12 Engineering 4 Nursing 2 Management 4 TTI 8 Polytechnic 4 Dental 1 Total 35 Source: Keralacolleges.com

Investment Opportunities

1. Tourism a. Hill tourism, Medical Tourism (Ayurveda), Farm Tourism b. Hotels & Hospitality c. Tours & Travels 2. Manufacturing a. Processing of Spices & Oleoresins Spices, Forest based industries b. Modern Tea Factories, Organic Tea cultivation & processing c. Dairy & Meat Processing units d. Rubber and latex based products 3. Textile a. Handlooms, Power looms, Weaving b. Apparels & Garment manufacturing 4. Power a. Ideal for small hydroelectric power stations b. Wind Farms 5. Infrastructure Development a. Roads and terrain development/ improvement b. Modernization of Rest houses 6. MSME

a. Spices based industries

7. Service Industry a. General Engineering Services, b. Printing Press, c. Plastic Recycling Units, d. Paper and Paper Products

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Key Projects

a. Idukki Hydro Electric project b. Indo-Swiss Livestock project c. Tata Tea Plantations d. Infrastructure development works in Main Eastern Highway (Punalur-Thodupuzha)

Ernakulam

District at a Glance Total Geographical 3068 Sq. Km area Population 32,79,860 Nearest Railway Ernakulam Junction, South (10 KMs from DHQ at Kakkanad) station Nearest airport Cochin International Airport (28 Km from DHQ) Major Exports Tea, Cashew, Coir Products, Coffee, Sea food Products, Spices, Vanilla, Agro& Food Industrial Cluster IT, Offset printers, General engineering, Furniture, Rubber, Garments, Plastic, Plywood Other Major Industries Major business sectors include construction, manufacturing, shipbuilding, transportation/shipping, seafood and spices exports, chemical industries, Information technology, tourism, health services, and banking. Key Institutions Cochin University of Science and Technology (CUSAT), National Institute of Oceanography (Regional Centre), Central Marine Fisheries Research Institute, National Institute of Fisheries Post Harvest Technology & Training, Infopark, Cochin Special Economic Zone, Spices Board, Marine Products Export Development Authority (MPEDA), Coconut Development Board, Coir Board Major Crops Rubber, Tapioca, Black Pepper, Arecanut, Coconut, Turmeric, Banana and Plantain Industrial parks Infopark, Cochin Special Economic Zone, KINFRA Export Promotion Industrial Park, KINFRA Food Park, KINFRA Small Industries Park, Rubber Park, Irapuram, Industrial Parks promoted by District Industries Centre etc. Women Entrepreneur mission (WE Space) of KSIDC at INKEL Business Towers, Angamaly Other Key Factors Industrial Development Area at Eloor is the largest industrial belt in Kerala, with more than 250 industries manufacturing a range of products including chemical and petrochemical products, pesticides, rare earth elements, rubber processing chemicals, fertilisers, and chromium compounds, and leather products. Tourism is one of the strongest drivers of the local economy, ranks first in the total number of domestic tourists visiting Kerala The Kochi Port is one of the leading ports.

Administrative Set up Particular Number Revenue Divisions 2

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Taluks 7 Corporations 1 Municipalities 13 Gram Panchayat 82 Source: Revenue Dept.,LSGD Elections 2015

Gross District Domestic Product (2011-12) Gross District Domestic Product (GDDP ) (2013 – 14) Base year: 2004-05 Particulars INR in Lakhs % Contribution 1 Agriculture & Allied Activities 360817 6.67% 2 Forestry & Logging 32960 0.61% 3 Fishing 113118 2.09% Agriculture and Allied 506894 4 Mining and Quarrying 32095 0.59% A TOTAL OF PRIMARY SECTOR 538990 9.96% 5 Manufacturing 840056 15.53% 5.1 Registered 375183 5.2 Un-registered 464873 6 Construction 877447 16.22% 7 Electricity, Gas and Water supply 63764 1.18% 7.1 Electricity 51575 7.2 Gas 614 7.3 Water supply 11576 B TOTAL OF SECONDARY SECTOR 1781267 32.93% Industry 1813363 8 Transport, Storage& Comm. 606659 11.21% 8.1 Railways 8965 8.2 Transport by other means 453981 8.3 Storage 3241 8.4 Communication 140472 9 Trade, Hotel & Restaurants 902884 16.69% 10 Banking & Insurance 307497 5.68% 11 Real estate ownership, Business ,legal 569601 10.53% 12 Public Administration 262316 4.85% 13 Other Services 440502 8.14% C TOTAL OF TERTIARY SECTOR 3089459 57.11% DDP 5409716 Mid-year Population 3329625 Per capita Income(in Rupees) 162472

Source: Directorate of Economics & Statistics

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Primary Sector, 10% Secondary Tertiary Sector, Sector, 33% 57%

GDDP - Ernakulam

Source: Department of Economics and Statistics, GSDP of Kerala & India (2004-05 to 2013-14) Agriculture and Allied Activities

Land Utilization Pattern

Others, 554, 0%

Forest, 70617, 23%

Net area sown, 151786, 50% Land put to non agricultural use, 40875, 13% Barren & Still Water, uncultivable 10410, 4% land, 578, 0% Cultivable waste, Fallow other 11071, 4% than current Current fallow, fallow, 10350, 9585, 3% 3% Land Utilization Pattern (Area in Hectares) –Ernakulam

Source: Agriculture Statistics 2013-14, Department of Economics & Statistics Kerala

“Others” include Permanent pastures & other grazing land, Land under misc. tree crops, marshy land, water logged area and Social Forestry

Net Sown Area = Total Cropped Area – Area sown more than once

Water Resources

Length of Coastal Line (in Kms) 46 Number of Rivers in the District 2

Number of Reservoirs 1 Reservoirs Water Spread Area (in Sq Km) 6.08 Source: Department of Economics and Statistics

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Production of Mineral Deposits (2015-16)

1 The district is not endowed with rich mineral resources. 2 The graphite, lime shell and brick clay are few important minerals found in this district. 3 Rich lime shell deposits are found in the Vembanad lake and in the portion of Periyar River 4 Likewise Graphite deposits are spread in Peringala, Nirampuzha, Aroli, Vadakode and Nagapuzha.

Type Name of Mineral Production(in tonnes) Major Mineral Granite Building Stone 66,58,934

Minor Mineral Laterite 3,92,875 Ordinary Sand 57,143 River Sand 5,044 Ordinary Earth Brick Clay 920 Source: Dept. Of Mining and Geology

Animal Husbandry Details of Farms, Slaughter Houses, Veterinary Institutions (2010-11) Type Number

Cattle farms 52 Poultry farms for meat 75

Poultry farms for egg 14

Slaughter houses 170 Veterinary Institutions 274 Source: Department of Economics and Statistics

Agriculture workers population (2011-12)

Other Workers, 45% Workers, 50%

House hold Industry Workers, 1% Agricultur al Cultivator Labourers, s, 2% 2% Agriculture Worker Population - Ernakulam

Source: Department of Economics and Statistics

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Industries Overview of Industrial Sector (as on 31.03.2016)

Particulars Total industrial unit 34863 Number of registered industrial unit 21004 Number of registered medium and large unit 89 Estimated avg. no. of daily worker employed in small scale 246 industries (per unit) Employment in large and medium industries 4355 No. of industrial area 6 Source: District Industries Centre, Ernakulum

Trend of Investment, Employment and Units registered (as on 31.03.2016) 140000

120000

100000

80000

60000

40000

20000

0 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

NUMBER OF REGISTERED UNITS EMPLOYMEN T INVESTMENT…

Industrial Sector – Investment and Employment Scenario Ernakulam

Source: District Industries Centre, Ernakulum

Existing Enterprises (as on 31.03.2016)

Details of Existing Micro and Small Enterprises

No. of people Investment Type of industry Number of units employed (lakh Rs.) generated Agro based 2,332 56,300 13,988 Soda water 1,045 1,438 9,518 Cotton textile 1,375 29,375 12,375 Woolen, silk & artificial 163 35,964 8,551 Thread based clothes. Jute & jute based 461 2,357 8,417 Ready-made garments & 1,608 10,008 22,553 embroidery

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No. of people Investment Type of industry Number of units employed (lakh Rs.) generated Wood/wooden based furniture 1,008 24,250 16,894 Paper & Paper products 131 3,275 1,179 Leather based 96 3,400 1,864 Chemical/Chemical based 357 14,475 5,241 Rubber, Plastic & petro based 513 16,550 5,832 Mineral based 44 1,177 396 Metal based (Steel Fab.) 228 7,650 2,430 Engineering units 2,097 52,625 8,873 Electrical machinery and 331 10,275 5,979 transport equipment Repairing & servicing 7,363 140,675 26,267 Others 1,852 98,583 42,318 Total 21,004 508,377 192,675 Source: District Industries Centre, Ernakulum

Existing Medium Scale Enterprises:

Value of Plant and Machinery Numbers No. of people employed (in Lakhs) Total Industries 89 50,800 6,094 Source: District Industries Centre, Ernakulum

Existing Large Scale Industries Large Scale Industries Under Public Sector Total Industries 47 31 Source: District Industries Centre, Ernakulum

Existing Major Service enterprises

1. Ship chandelling 2. Security 3. Condition assessments/certification 4. Minor repairs to ships/pipeline

Connectivity

Road Connectivity Road Connectivity Length in Kms National Highway 97

State Highway 325

Major District Roads 2,815

Other district Roads 147

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Road Connectivity Length in Kms Rural/ Agriculture (village roads) 10,003 Source: Economic Review 2015-16, Panchayat level statistics, 2011

Communication (as on 2014-15) Type Number Telephone connection 2,73,917 Density of telephone (Nos/1000) 312 Source: Economic Review 2015

Social Infrastructure

Health Institutions as of 2014-15 Institutions Number

Allopathic Hospital 7

Ayurvedic Hospital 13

Community health centers 23

Primary health centers 42

Private Hospitals 60

Source: Compiled from Economic Review 2015, Panchayat Level Statistics 2011 and DHS

Banking as of 2014-15 Type of Bank Number Commercial Bank 932 Source: Economic Review 2015

Education Institution as of 2014-15 Type of School Number Primary school 675 Upper schools 320 Secondary & senior secondary schools 209 Source: Economic Review 2015

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Colleges Number Arts and Science 32 Engineering 15 Homeopathy 1 Medical 3 Ayurveda 2 Dental 5 Nursing 7 Management 19 Pharmacy 2 Polytechnic 4 TTI 24 Total 114 Source: Keralacolleges.com

Investment Opportunities

1. IT & IT Enabled Services a. Software Development b. Business Process Outsourcing c. Knowledge Process Outsourcing d. Software Training Centres 2. Tourism a. Medical Tourism/ Ayurveda b. Hotels & Hospitality c. Tours & Travels d. Way side amenities e. Cruise Tourism 3. Biotechnology a. R & D centres, Drug discovery, Tissue Culture b. Life Sciences, Medical devices, Pharmaceuticals c. Education & Training centers 4. Manufacturing a. Food Processing Units b. Electronics Hardware Units c. Gem & Jewellery d. Engineering Industries 5. Other Sectors a. Natural Gas based projects b. Logistics & Warehousing

6. MSME

a. Food processing sector b. Garment Manufacturing c. Metal based

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d. Rubber base e. Chemical based f. Electronic Goods g. Plastic based h. Bio Technology i. Tourism & Healthcare

Key Projects

1. International Container Transshipment Terminal (ICTT),Vallarpadam 2. Smart City, Kakkanad 3. LNG Terminal 4. Electronics Hardware Park 5. Port-based Special Economic Zone 6. Metro Rail Project 7. Oceanarium Project 8. City Gas Distribution

Thrissur

District at a Glance Total Geographical 3,032 Km2 area Population 31,10,327 Nearest railway Thrissur Railway Station (3 KM from DHQ) Station Nearest airport Cochin International Airport (50 km from DHQ) Major Exports Ayurvedic Products, Handicraft items, Textiles, Food Products, Dry Fish, Rubber Products, Coconut Oil, Soap, Spice Oil, Food Processing Machineries, Concrete Product machineries etc. Key Institutions Kerala University of Health and Allied Sciences, Kerala Agricultural University, Kerala Forest Research Institute, Amala Cancer Research Centre, Amala Ayurvedic Hospital and Research Centre, Kerala Sahitya Akademi, Kerala Kalamandalam Deemed University for Art and Culture, Rashtriya Sanskrit Sansthan Deemed University,Oushadhi, Vaidyaratnam Oushadhasala Major Crops Paddy, Tapioca, Coconut, Areca Nut. Industrial parks KINFRA Small Industries Park at Koratty, KINFRA industrial park in Puzhakkal. Industrial Cluster Terra tiles industries, Canning industries, Handlooms industries, Power looms industries

Other Major The economy is largely dependent on industries like textile, timber, Industries coir, fishery, agriculture-based industries, tiles industries and cattle feed industry. The bell metal industry is another significant part of the economy. The other industries are diamond polishing and tyre moulding.

Other key factors It manufactures 70% of plain gold Jewellery in Kerala.

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Largest hubs for Ayurvedic drug manufacturing in the country prominent banking hub of South India Numerous NBFCs like Chit units etc

Administrative Set up Particular Number Revenue Divisions 1 Taluks 6 Corporations 1 Municipalities 7 Gram Panchayat 86 Source: Revenue Dept.,LSGD Elections 2015

Gross District Domestic Product Gross District Domestic Product (GDDP ) (2013 – 14) Base year: 2004-05 Particulars INR in Lakhs % Contribution 1 Agriculture & Allied Activities 218489 5.82% 2 Forestry & Logging 45084 1.20% 3 Fishing 85814 2.29% Agriculture and Allied 349388 4 Mining and Quarrying 16166 0.43% A TOTAL OF PRIMARY SECTOR 365553 9.73% 5 Manufacturing 247596 6.59% 5.1 Registered 110580 5.2 Un-registered 137016 6 Construction 495402 13.19% 7 Electricity, Gas and Water supply 46755 1.25% 7.1 Electricity 40898 7.2 Gas 591 7.3 Water supply 5266 B TOTAL OF SECONDARY SECTOR 789752 21.03% Industry 805918 8 Transport, Storage& Comm. 420845 11.21% 8.1 Railways 8826 8.2 Transport by other means 316390 8.3 Storage 953 8.4 Communication 94675 9 Trade, Hotel & Restaurants 789941 21.04% 10 Banking & Insurance 227271 6.05% 11 Real estate ownership, Business ,legal 534604 14.24% 12 Public Administration 188657 5.02% 13 Other Services 438675 11.68%

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C TOTAL OF TERTIARY SECTOR 2599993 69.24% DDP 3755299 Mid-year Population 3160361 Per capita Income(in Rupees) 118825

Source: Directorate of Economics & Statistics

Primary Sector 10%

Tertiary Seconda Sector ry 69% Sector 21%

GDDP – Thrissur

Source: Department of Economics and Statistics, GSDP of Kerala & India (2004-05 to 2013-14) Agriculture and Allied Activities

Land Utilization Pattern

Others, 665, 0%

Forest, 103619, Net area sown, 34% 128385, 42%

Land put to non agricultural use, 37613, 13% Barren & Still Water, 6328, uncultivable 2% land, 259, 0% Fallow other Cultivable Current fallow, than current waste, 8279, 9515, 3% fallow, 8256, 3% 3% Land Utilization Pattern (Area in Hectares) –Thrissur

Source: Agriculture Statistics 2013-14, Department of Economics & Statistics Kerala

“Others” include Permanent pastures & other grazing land, Land under misc. tree crops, marshy land, water logged area and Social Forestry

Net Sown Area = Total Cropped Area – Area sown more than once

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Water Resources

Length of Coastal Line (in Kms) 54

Number of Rivers in the District 4

Number of Reservoirs 8 Reservoirs Water Spread Area (in Sq Km) 25.06

Source: Department of Economics and Statistics

Production of Mineral Deposits (2015-16) 1 The District is not rich in Mineral resources except for clay and sand. 2 Deposits of river sands are seen at the important rivers in the District. 3 Ordinary sand deposits are found under the paddy fields of Mukundapuram Taluks.

Type Name of Mineral Production(in tonnes) Major Mineral Granite Building Stone 32,46,657

Minor Mineral Laterite 2,10,082 Ordinary Sand 25,774 River Sand 8,181 Ordinary Earth Brick Clay 1,81,183 Ordinary Earth 5,03,817 Source: Dept. Of Mining and Geology

Animal Husbandry Details of Farms, Slaughter Houses, Veterinary Institutions (2010-11) Type Number Cattle farms 42 Poultry farms for meat 80 Poultry farms for egg 65 Slaughter houses 364 Veterinary Institutions 230 Source: Department of Economics and Statistics

Agriculture workers’ population

Agriculture Workers' Population

Main Workers Population Cultivators 44% 50% Agricultural Labourers House hold Industry Workers Other Workers 1% 3% 2%

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Industries Overview of Industrial Sectors (as on 31.03.2016)

Particulars Total industrial unit 32,654 Number of registered medium unit 11 Estimated avg. no. of daily worker employed in small scale 3 industries (per unit) No. of industrial area 6 Source: District Industries Centre, Thrissur

Trend of Investment, Employment and Units registered (as on 31.03.2016)

Trend of Units Registered 16000 14000 12000 10000 8000 6000 4000 2000 0 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Number of units registered Employment Investment (in lakhs)

Source: District Industries Centre, Thrissur

Number of units No. of people employed Investment (in registered lakhs) Since 2006 13746 78386 1931 2016 774 4249 145.52

Existing Enterprises (as on 31.03.2016) Details of Existing Micro and Small Enterprises

No. of people Type of Industry No of Units Investment (Lakhs Rs.) employed Agro Based 2,026 7,987 8,633 Repairing & Servicing 1,085 5,341 5,720 Mineral Based 830 7,030 1,125 Ready-made garments & 823 2,128 4,723 embroidery Rubber, Plastic & petro based 683 22,842 4,968 Engineering units 623 1,577 2,425 Metal based (Steel Fab.) 584 5,981 2,619 Wood/wooden based 457 4,503 2,473 furniture Paper & Paper products 215 2,526 1,458

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No. of people Type of Industry No of Units Investment (Lakhs Rs.) employed Electrical machinery and 214 2,665 1,504 transport equipment Chemical/Chemical based 210 2,228 1,172 Soda Water 114 495 407 Cotton Textile 104 641 1,066 Leather based 37 143 433 Woolen, Silk & artificial 6 5 20 thread based clothes. Others 3,178 30,759 11,643 Total 11,189 96,851 50,389 Source: District Industries Centre, Thrissur

Existing Medium Scale Enterprises:

No. of people Sector Numbers Investment (in Lakhs) employed Private 2 610 78 Public 1 780 29 Total 3 1390 107 Source: District Industries Centre, Thrissur

Existing Large and Medium Scale Industries Type of Sectors Large Scale Industries Medium Scale Industries Public Sector 7 1 Private Sector 6 2 Co-operative 1 0 Total 14 3 Source: District Industries Centre, Thrissur

Existing Service enterprises

1 The major Service enterprises are mainly Automobile Repairing & Service, IT Enabled Services, Tyre retreading, 2 Gold chain cutting, Health services, Hotels & restaurants, meat processing, food grain milling / processing, 3 Tourism and Ayurvedic health care package etc.

Connectivity

Road Connectivity Road Connectivity Length in Kms National Highway 41 State Highway 374 Major District Roads 1,682 Other district Roads 24 Rural/ Agriculture (village roads) 5,646 Source: Economic Review 2015-16

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Communication (as on 2014-15) Type Number Telephone connection 522033 Post offices 486 Density of telephone (Nos/1000) 253

Social Infrastructure Health Institutions as of 2014-15 Institution Numbers Allopathic Hospital 11 Ayurvedic Hospital 17 Beds in Ayurvedic hospitals 303 Community health centers 24 Primary health centers 68

Source: Compiled from Economic Review 2015

Banking as of 2014-15 Type of Bank Number Commercial Bank 695 Source: Economic Review 2015

Education Institutions as of 2014-15 Type of School Number Primary school 514 Upper schools 228 Secondary & senior secondary schools 502 Source: Economic Review 2015

Colleges Number Arts and Science 30 Engineering 12 Nursing 4 Management 4 Medical 3 Ayurveda 1 Dental 1 Pharmacy 2 Polytechnic 7 TTI 24 Total 88 Source: Keralacolleges.com

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Investment Opportunities Tourism

• Medical Tourism/Ayurveda • Coastal belt-beach based resorts • Health & Wellness centres, Super Specialty Hospital Gem & Jewellery

• Gold and Fashion Jewellery manufacturing • Gem & Jewellery Design centres, Training institutions Biotechnology & Food Processing

• R & D Centres, Drug development, Tissue Culture • Meat processing units, Cattle feed manufacturing Small Scale Manufacturing

• Decorative Pottery units, Terracotta tiles MSMEs • Household Industries, Handloom Industries, Clay based Industries, Diamond and Gold based industries, agro based industries and Book making industries etc are having more potential in the District. Service Industry

• Areas like Computer, Transport, Studio, Beauty Parlours, Tailoring, Flour Mills, Sales

Key Projects • Medical University • Shobha City • Training Centre under Kerala Forest Research Institute

Palakkad

District at a Glance Total Geographical 4,480 Km2 area Population 28,10,892 Nearest Railway Palakkad Station Nearest airport Coimbatore Airport ( 73 Km from DHQ) Major Exports Coconut oil, sortex rice, avil, processed tamarind, dry ginger, coffee powder, kondattom, curry masala, pickles, soaps, readymade garments, ayurvedic products, palada & palada mix, and agricultural implements. Key Institutions Fluid Control Research Institute (FCRI), Malabar Cements Ltd, BEML Ltd, IIT

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Major Crops Timber, Paddy, Coconut, Rubber, Palm trees, Pulses, Areca nut, Tapioca, Ginger, Groundnut, Sugarcane, Cotton etc. Industrial parks Western India KINFRA Ltd at Kanjikode Light Engineering Industrial Park (LEIP) of KSIDC at Kanalpirivu, Walayar Mega Food Park of KINFRA Industrial Cluster Agricultural implements, Sericulture Other Major Industries The units in these estates produce agricultural implements, ferrous castings, rubber products, cutleries, chemical, electronic and electrical products / goods. Many major firms have their plants here like UB Group, BPL Group, Coca Cola and Pepsi. Other prominent units include Paragon Steels Ltd, Malabar Cements Limited, Marico Industries, Empee Distilleries, Kerala Agro Machinery Corporation Ltd, Tatafone, etc. The Small Industries Development Corporation (SIDCO) provides infrastructure facilities for the small scale sector. Other key factors Timber is the most important produce.

Administrative Set up Particulars Numbers Revenue Divisions 2 Taluks 6 Corporations - Municipalities 7 Gram Panchayat 88 Source: Revenue Dept.,LSGD Elections 2015

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B TOTAL OF SECONDARY SECTOR 620830 20.46% Industry 641807 8 Transport, Storage& Comm. 251839 8.30% 8.1 Railways 23005 8.2 Transport by other means 184183 8.3 Storage 1853 8.4 Communication 42797 9 Trade, Hotel & Restaurants 544855 17.96% 10 Banking & Insurance 164677 5.43% 11 Real estate ownership, Business ,legal 455569 15.02% 12 Public Administration 160210 5.28% 13 Other Services 340786 11.23% C TOTAL OF TERTIARY SECTOR 1917936 63.22% DDP 3033803 Mid-year Population 2861910 Per capita Income(in Rupees) 106006

Source: Directorate of Economics & Statistics

Primary , 16.32%

Secondary, Tertiary , 20.46% 63.22%

GDDP - Palakkad

Source: Department of Economics and Statistics, GSDP of Kerala & India (2004-05 to 2013-14) Agriculture and Allied Activities

Land Utilization Pattern (Area in heactares)

Others, 1077, 0%

Net area Forest, Land put to non sown, 136257, 31% agricultural use, 197192, 45231, 10% 44%

Barren & uncultivable land, 1795, 0% Cultivable Still Water, Fallow other waste, 15340, 4% Current fallow, than current 23794, 5% 12746, 3% fallow, 14152, 3%

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Source: Agriculture Statistics 2013-14, Department of Economics & Statistics Kerala

“Others” include Permanent pastures & other grazing land, Land under misc. tree crops, marshy land, water logged area and Social Forestry

Net Sown Area = Total Cropped Area – Area sown more than once

Water Resources

Length of Coastal Line (in Kms) Nil

Number of Rivers in the District 6

Reservoirs Water Spread Area (in Sq. Km) 48.65

Source: Department of Economics and Statistics

Production of Mineral Deposits (2015-16) Type Name of Mineral Production (in Tonnes)

Major Mineral Granite Building Stone 3,537,246

Minor Mineral Lime Stone 616,120

Ordinary Earth 202,332 Laterite 165,635 Ordinary Sand 24,331 Brick Clay 1,610 Source: Dept. Of Mining and Geology

Animal Husbandry Details of Farms, Slaughter Houses, Veterinary Institutions (2010-11) Type Total Number Cattle farms 549 Poultry farms for meat 323 Poultry farms for egg 111 Slaughter houses 246 Veterinary Institutions 431 Source: Department of Economics and Statistics

Agriculture Workers’ Population

Main Workers Population Cultivators 34% Agricultural 50% Labourers House hold 11% 1% Industry Workers Other Workers 3%

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Industries

Overview of Industrial Sector as on 31.03.2016 Type Number Total Industrial Unit 21,156 Registered Industrial Unit 7,842 Registered Medium Unit 31 Estimated Average No of Daily Worker employed in Small Scale 5 Industries (per unit) No of Industrial Area 5 Source: District Industries Centre, Palakkad

Trend of Investment, Employment and Units registered (as on 31.03.2016) Trend of Unit Registered 400,000

300,000

200,000

100,000

Number of Registered Units Employment Investment (in Lakhs)

Source: District Industries Centre, Palakkad

Number of No. of people Investment (in Lakhs) Registered Units employed From 2006 7,842 49,242 484,465 2016 830 3,778 359,901

Existing Industries (as on 31.03.2016) Details of Existing Micro and Small Enterprises

Type of Industry No of Units Investment (Lakhs No. of people Rs.) employed Agro based 1,558 33,870 10,527 Soda water 92 1,324 473 Cotton textile 11 38 59 Woolen, silk & artificial Thread based 489 2,595 3,594 clothes Jute & jute based 71 1,306 567 Ready-made garments 502 2,539 3,619 & embroidery Wood/wooden based furniture 236 4,055 1,208 Paper & Paper products 60 269 209

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Type of Industry No of Units Investment (Lakhs No. of people Rs.) employed Leather based 50 189 249 Chemical/Chemical based 44 16,187 430 Rubber, Plastic & petro based 285 12,702 1,825 Mineral based 36 1,380 561 Metal based (Steel Fab.) 222 1,446 1,159 Engineering units 732 7,258 207 Electrical machinery and transport 110 1,879 1,020 equipment Repairing & servicing 320 2,013 990 Others 3,024 395,417 16,992 Total 7,842 484,465 43,689 Source: District Industries Centre, Palakkad

Existing Medium Scale Enterprises:

Sector Numbers No. of people employed Private 10 868 Partnership 1 12 Proprietary 2 4 Public Limited 3 498 Others 1 66 Total 17 1448 Source: District Industries Centre, Palakkad

Existing Large Scale Industries/ Public Sector Undertaking There are 55 large scale industries in the district

Connectivity

Road Connectivity Roads Connectivity Length in Kms National Highway 128 State Highway 245 Main District Highway 1927 Other district & Rural 81.08 Rural road/Agriculture roads 10503 Source: Economic Review 2015-16, Panchayat level statistics, 2011

Communication (as on 2014-15) Type Number Telephone connection 5,22,033 Post offices 432 Density of telephone (Nos/1000) 185

Source: Economic Review 2015

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Social Infrastructure

Health Institutions as of 2014-15 Type Number Allopathic Hospital 9 Ayurvedic Hospital 7 Community health centers 19 Primary health centers 65 Total 100 Source: Compiled from Economic Review 2015

Banking as of 2014-15 Type Number Commercial Bank 390 Source: Economic Review 2015

Education Institutes as of 2014-15 Type of School Number Primary school 558 Upper Primary 217 Secondary & senior secondary schools 380 Source: Economic Review 2015

Colleges Number Arts and Science 25 Engineering 9 Dental 1 Ayurveda 2 Hotel Management 1 Medical 1 Management 1 Pharmacy 1 Polytechnic 2 TTI 15 Total 58 Source: Keralacolleges.com

Investment Opportunities

1. Manufacturing a. Iron & Steel units (Mild Steel, MS Ingots, TMT bars, etc) b. Distilleries (Indian made Foreign Liquor, Beer, Alcohol) c. Agro Products (Rubber products, Surgical Gloves, Heat Resistant Latex, Crumb Rubber) d. Plastic Products (Plastic Components, Precision Parts, Latex Collection Cups, PET Bottles) e. Packaging material (Tapes, Cartons) 2. Engineering a. Control Valves, Telecom Products, Powerline, Electronics and Home Automation products, Communication Equipments, Fuse, Panel Board,

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HT< Cables, Auto Injection Moulding, Patient Monitoring System, Electro Cardiogram 3. Cotton / Textiles a. Knitted Hosiery, Fabrication, Garments, Cotton Yarn, Printing Yarn, Bleaching, Dyeing Clothes, Blended Yarn. 4. Information Technology a. Application software, web based solutions, ERPs 5. Chemicals a. Potassium, Refractories, Cements, Aluminium Oxide, Silico Manganese, Pharmaceutical items. 6. Medical Products a. Medical implants, disposables b. Service Industry c. Textile & Tailoring d. General Engineering e. Flour Milling f. Beauty Parlor 7. MSME a. Textile Industry b. Light Engineering c. Food and Beverages d. Wood base industry e. Plastic based f. Paper based

Key Projects 1. Kanjikode Railway Coach Factory 2. Integrated Textile Park 3. Defense Park

Malappuram

District at a Glance Total Geographical area 3,550 Km2 Population 41,10,956 Nearest Railway Station Calicut Railway Station (43 Km from DHQ) Nearest airport Karipur International Airport (22 Km from DHQ) Major Exports Food products and treated rubber wood furniture Key Institutions KINFRA Food Processing Park, Aligarh Muslim University (Malappuram Campus), Kottakkal Arya Vaidya Sala, KINFRA Neo Space Major Crops Paddy, Coconut, Tapioca, Areca nut, Cashew nut, Banana, Rubber, Pulses, Ginger, Pepper and Betel vine Industrial parks KINFRA Neo Space at Kakkancherry Industrial Cluster General engineering Industry, Wood Industry, Rubber Industry, Garments Industry Other Major Industries Handloom, Coir & Handicrafts.

Wood related business is widely common.

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Major economy contributors of the district being timber industry, fishery, tourism and spice trading Other Key factors Foreign money remitted is the highest in the state. The seed garden complex at Munderi is said to be the biggest farm in entire Asia.

Administrative Set up Particulars Numbers Revenue Divisions 2 Taluks 7 Corporations - Municipalities 12 Gram Panchayat 94 Source: Revenue Dept.,LSGD Elections 2015

Gross District Domestic Product Gross District Domestic Product (GDDP ) (2013 – 14) Base year: 2004-05 Particulars INR in Lakhs % Contribution 1 Agriculture & Allied Activities 323797 10.50% 2 Forestry & Logging 73721 2.39% 3 Fishing 28866 0.94% Agriculture and Allied 426384 4 Mining and Quarrying 14343 0.47% A TOTAL OF PRIMARY SECTOR 440727 14.29% 5 Manufacturing 114953 3.73% 5.1 Registered 51340 5.2 Un-registered 63613 6 Construction 363851 11.80% 7 Electricity, Gas and Water supply 18817 0.61% 7.1 Electricity 14734 7.2 Gas 580 7.3 Water supply 3502 B TOTAL OF SECONDARY SECTOR 497620 16.14% Industry 511963 8 Transport, Storage& Comm. 282248 9.15% 8.1 Railways 10864 8.2 Transport by other means 227923 8.3 Storage 1412 8.4 Communication 42048 9 Trade, Hotel & Restaurants 571138 18.52% 10 Banking & Insurance 131570 4.27% 11 Real estate ownership, Business ,legal 488309 15.83%

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12 Public Administration 131767 4.27% 13 Other Services 540397 17.52% C TOTAL OF TERTIARY SECTOR 2145429 69.57% DDP 3083776 Mid-year Population 4249310 Per capita Income(in Rupees) 72571

Source: Directorate of Economics & Statistics

Primary Sector Secondary Tertiary 14% Sector Sector 16% 70%

GDDP - Malappuram

Source: Department of Economics and Statistics, GSDP of Kerala & India (2004-05 to 2013-14) Agriculture and Allied Activities

Land Utilization Pattern Others, 469, 0%

Forest, 103417, 29%

Net area sown, 178389, 50% Land put to non agricultural use, 47363, 13% Barren & uncultivable Current fallow, Cultivable land, 1098, 0% 7710, 2% Fallow other waste, 6130, Still Water, than current 2% 6047, 2% fallow, 4823, 2%

Land Utilization Pattern (Area in Hectares) –Malappuram

Source: Agriculture Statistics 2013-14, Department of Economics & Statistics Kerala

“Others” include Permanent pastures & other grazing land, Land under misc. tree crops, marshy land, water logged area and Social Forestry

Net Sown Area = Total Cropped Area – Area sown more than once

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Water Resource Length of Coastal Line (in Kms) 70 Number of Rivers in the District 5

Number of Reservoirs - Reservoirs Water Spread Area (in Sq. Km) -

Source: Department of Economics and Statistics

Production of Mineral Deposits (2015-16)

1. Laterite stone is found abundantly in the midland areas. It is exploited economically for construction works and hundreds of quarries cutting laterite stone giving employment to thousands. 2. Another major economic important mineral is granite building stone.

Type Name of Mineral Production (in Tonnes) Major Mineral Granite Building Stone 16,99,320 Minor Mineral Ordinary Earth 1,38,764 Laterite 16,29,897 Brick Clay 10,347 Source: Dept. Of Mining and Geology

Animal Husbandry

Details of Farms, Slaughter Houses, Veterinary Institutions (2010-11) Type Total Number Cattle farms 148 Poultry farms for meat 343 Poultry farms for egg 249 Slaughter houses 154 Veterinary Institutions 234 Source: Department of Economics and Statistics

Agriculture Workers’ Population

Labour Population

Main Workers Population Cultivators 44% 50% Agricultural Labourers House hold Industry Workers Other Workers 1% 3% 2%

Industries

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Overview of Industrial Sector (as on 31.03.2016) Type Number Total industrial unit 15,337 Number of registered industrial unit 13,969 Number of registered medium unit Nil Estimated avg. no. of daily worker employed in small scale 5 industries (per unit) No. of industrial area 1

Trend of Investment, Employment and Units registered (as on 31.03.2016)

Trend of Units Registered

18000 16000 14000 12000 10000 8000 6000 4000 2000 0 2006 - 2007 - 2008 - 2009 - 2010 - 2011 - 2012 - 2013 - 2014 - 2015 - 07 08 09 10 11 12 13 14 15 16

Number of Registered Units Employment Investment (in Lakhs)

Source: District Industries Centre, Malappuram

Number of Registered No. of people Investment (in Lakhs) Units employed Since (2006) 6868 34849 62712 2016 1230 5701 8851

Existing Industries (as on 31.03.2016)

Details of Existing Micro and Small Enterprises

Investment (Lakhs No. of people Type of Industry No of Units Rs.) employed Agro based 4,623 56,616 23,577 Soda water 85 476 263 Ready-made garments 1,050 5,996 8,172 & embroidery Wood / wooden based 2,397 16,740 11,638 furniture Paper & Paper products 410 5,422 2,676

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Investment (Lakhs No. of people Type of Industry No of Units Rs.) employed Leather based 588 5,002 2,646 Chemical/ Chemical based 24 11,534 232 Rubber, Plastic & petro based 644 28,856 8,769 Mineral based 48 2,208 224 Metal based (Steel Fab.) 658 3,084 2,884 Engineering units 1,722 7,053 6,939 Electrical machinery and transport 399 4,530 1,794 equipment Repairing & servicing 1,965 23,009 10,197 Others 724 8,477 3,475 Total 15,337 179,003 83,486 Source: District Industries Centre, Malappuram

Medium Scale Enterprises:

Large Scale Industries/ Public Sector Undertaking

1. Keltron Electro Ceramics Ltd, Kuttipuram 2. Keltron Tool Room, Kuttipuram 3. KSRTC Body workshop, Eddappal 4. Malappuram Cooperative Spinning Mill, Paranakkad 5. Edarikkode, Co-operative Spinning Mill Edarikkode 6. MALCOTEX, Kuttippuram

Connectivity

Road Connectivity Roads Connectivity Length in Kms National Highway 150 State Highway 375 Major District Road 2148 Other district & Rural 1153 Rural road/Agriculture roads 17405 Source: Economic Review 2015-16

Communication (as on 2014-15) Type Number Telephone connection 6,10,522 Post offices 432 Density of telephone (Nos/1000) 148 Source: Economic Review 2015

Social Infrastructure

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Health Institutions as of 2014-15 Type Number Allopathic Hospital 10 Ayurvedic Hospital 11 Community health centers 20 Primary health centers 86 Sub Centers 514 Total 641 Source: Compiled from Economic Review 2015,

Banking as of 2014-15 Type Number Commercial Bank 428 Source: Economic Review 2015

Education Institution as of 2014-15 Type of School Number Primary school 851 Upper Primary 357 Secondary & senior secondary schools 489 Source: Economic Review 2015

Colleges Number Arts and Science 33 Engineering 7 Dental 3 Ayurveda 1 Medical 1 Nursing 4 Management 3 Pharmacy 3 Polytechnic 4 TTI 21 Total 80 Source: Keralacolleges.com

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b. R&D Centres c. Education & Training Centres 4. Textile a. Handlooms, Spinning mills b. Apparels & Garment manufacturing 5. Food Processing a. Dairy Development b. Wood Based Products c. Spices Exports 6. MSME a. General Engineering b. Wood and Furniture c. Food Processing 7. Service Industry a. Light Engineering b. Wood based Industry c. Automobile workshop d. ITI Enabled Service

Key Projects

1. EDU- HEALTH City 2. Eranad Knowledge City 3. SME Park

Kozhikode

District at a Glance Particular Total Geographical area 2,344 Sq. Km Population 30,89,543 Nearest Railway Station Kozhikode (2 km from DHQ) Nearest airport Calicut International Airport (28 From DHQ) Major Exports Footwear, Marine Products, Software, Food products, Soaps, Battery, Umbrella Industrial Cluster General engineering Industry, Food processing, Rubber Key Institutions Cyberpark, IIM Kozhikode, National Institute of Technology (formerly known as REC), Indian Institute of Spices Research, Centre for Water Resources Development & Management (CWRDM), Western Ghats Field Research Station (Zoological Survey of India), Regional Filaria Training and Research Centre (under the National Institute of Communicable Diseases) Major Crops Coconut, rubber, tea, coffee, pepper, cardamom, areca nut, ginger, nutmeg, cinnamon, tapioca and Paddy Industrial parks Cyber parks, Nellikode Industrial Growth Centres of KSIDC, Kinalur Other Major Industries Marine processing units with major fish landing centres like Beypore, major film production companies, spices, silk etc. major traditional industries like handloom, coir, cashew, bricks & tiles, handicrafts

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Other Key factors One of the major tourist destination of the state

Administrative Set up Particulars Number Revenue Divisions 1 Taluks 4 Corporations 1 Municipalities 7 Gram Panchayat 70 Source: Revenue Dept.,LSGD Elections 2015

Gross District Domestic Product Gross District Domestic Product (GDDP ) (2013 – 14) Base year: 2004-05 Particulars INR in Lakhs % Contribution 1 Agriculture & Allied Activities 221877 6.48% 2 Forestry & Logging 36830 1.07% 3 Fishing 79405 2.32% Agriculture and Allied 338112 4 Mining and Quarrying 9678 0.28% A TOTAL OF PRIMARY SECTOR 347790 10.15% 5 Manufacturing 128220 3.74% 5.1 Registered 57266 5.2 Un-registered 70954 6 Construction 517793 15.11% 7 Electricity, Gas and Water supply 38947 1.14% 7.1 Electricity 31192 7.2 Gas 542 7.3 Water supply 7213 B TOTAL OF SECONDARY SECTOR 684960 19.99% Industry 694638 8 Transport, Storage& Comm. 383669 11.20% 8.1 Railways 7665 8.2 Transport by other means 310906 8.3 Storage 232 8.4 Communication 64867 9 Trade, Hotel & Restaurants 758679 22.14% 10 Banking & Insurance 167013 4.87% 11 Real estate ownership, Business ,legal 467988 13.66% 12 Public Administration 191081 5.58% 13 Other Services 425337 12.41% C TOTAL OF TERTIARY SECTOR 2393768 69.86% DDP 3426518

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Mid-year Population 3142373 Per capita Income(in Rupees) 109042 Source: Department of Economics and Statistics

Primary , 10.15%

Secondary, 19.99%

Tertiary , 69.86%

GDDP - Kozhikode

Source: Department of Economics and Statistics, GSDP of Kerala & India (2004-05 to 2013-14) Agriculture and Allied Activities Land Utilization Pattern

Others, 524, 0%

Forest, 41386, Land put to non 17% agricultural use, 29798, 13% Barren & uncultivable land, 784, 0% Net area sown, 151899, 65% Cultivable waste, 2585, 1% Fallow other Current than current fallow, fallow, 1581, 2151, 1% 1% Still Water, 3933, 2%

Land Utilization Pattern (Area in Hectares) –Kozhikode

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Source: Agriculture Statistics 2013-14, Department of Economics & Statistics Kerala

“Others” include Permanent pastures & other grazing land, Land under misc. tree crops, marshy land, water logged area and Social Forestry

Net Sown Area = Total Cropped Area – Area sown more than once

Water Resources

Number of Rivers in the District 5 Number of Reservoirs 3 Reservoirs Water Spread Area (in Sq. Km) 31.72

Source: Department of Economics and Statistics

Production of Mineral Deposits (2015-16)

Name of mineral Production in tonnes Granite building stone 1449800

Laterite building stone 239988

Ordinary sand 181837 Ordinary earth 137157 River sand 14166 Brick clay 2877 Source: Dept. Of Mining and Geology

Animal Husbandry Details of Farms, Slaughter Houses, Veterinary Institutions (2010-11) Type Total Number Cattle farms 44 Poultry farms for meat 23 Poultry farms for egg 9 Slaughter houses 80 Veterinary Institutions 183 Source: Department of Economics and Statistics

Industries

Overview of Industrial Sector (as on 31.03.2016) Type Number Total industrial unit 18623 Registered industrial unit 8560 Registered medium unit 9 Estimated avg. No. of daily 23 worker employed in small scale industries (per Unit) Employment in medium 1009 industries Turnover of small scale industries (in Lakhs) 1841206

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Turnover of medium & large scale industries (in Lakhs) 82463 Source: District Industries Centre, Kozhikode

Trend of Investment, Employment and Units registered (as on 31.03.2016)

Trend of Units Registered

45000

40000

35000

30000

25000

20000

15000

10000

5000

0 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

NUMBER OF REGISTERED UNITS EMPLOYMENT

INVESTMENT (In Lakh)

Source: District Industries Centre, Kozhikode

Number of registered No. of people Investment (in units employed lakh) since 2006 8560 83794 56494 2015-16 1156 36824 3721

Existing Enterprises (as on 31.03.2016) Details of Existing Micro and Small Enterprises

Type of industry Number of units Investment (in lakhs) No. Of people employed Agro based 1374 9350 6328 Soda water 57 186 216 Cotton textile 64 509 256 Woolen, silk & artificial. 7 11 (NA) Thread based clothes. Jute & jute based 4 85 33 Ready-made garments & 447 2190 3459 embroidery Wood/wooden based furniture 365 926 1542 Paper & Paper products 161 3947 1083 Leather based 109 1649 1079 Chemical/Chemical based 40 220 325 Rubber, Plastic & petro based 2455 4366 2455 Mineral based 526 3042 3231 Metal based (Steel Fab.) 208 924 1032

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Engineering units 618 2194 2054 Electrical machinery and 115 545 578 transport equipment Repairing & servicing 1002 7173 7261 Others 159 1083 840 Total 7711 38399 31772 Source: District Industries Centre, Kozhikode

Existing Medium Scale Enterprises:

Type Number Investment No. of people (in Lakhs) employed Private 7 3587 886 Public 1 650 83 Partnership 1 335 20 Others 1 700 20 Total 10 5272 1009

Existing Large Scale Industries/ Public Sector Undertaking

1 M/s Kerala feeds ltd, thiruvangur, koyilandy 2 Peekay steel casting, Nallalam 3 Peekay rerolling mills, Cheruvannur 4 Steel complex, Cheruvannur. 5 Malabar spinning mill( thiruvannur cotton mill

Connectivity

Road Connectivity Roads Connectivity Length in Kms National Highway 130 State Highway 377 Major District Road 2064 Other district & Rural 208 Rural road/Agriculture roads 9604 Source: Economic Review 2015-16, Panchayat level statistics, 2011

Communication (as on 2014-15) Type Number Telephone connection 165129 Post offices 410 Density of telephone (Nos/1000) 54 Source: Economic Review 2015

Social Infrastructure Health Institutions as of 2014-15 Type Number Allopathic Hospital 12 Ayurvedic Hospital 8

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Community health centers 64 Unani Hospital 15 Dispensaries 410 Primary health centers 142 Sub Centers 18 Total 669 Source: Compiled from Economic Review 2015,

Banking as of 2014-15 Type Number Commercial Bank 423 Source: Economic Review 2015

Education Institutions as of 2014-15 Type Number Primary school 718 Upper Primary 318 Secondary & senior secondary schools 447 Source: Economic Review 2015

Colleges Number Arts and Science 38 Engineering 7 Dental 3 Ayurveda 1 Medical 3 Hotel Management 1 Homeopathy 1 Nursing 6 Management 2 Pharmacy 3 Polytechnic 2 TTI 24 Total 91 Source: Keralacolleges.com

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Investment Opportunities 1. IT & IT Enabled Services a. Software Development b. Business Process Outsourcing c. Knowledge Process Outsourcing d. Software Training Centres 2. Tourism a. Medical Tourism/ Ayurveda b. Hotels & Hospitality c. Tours & Travels 3. Textile a. Handlooms, Power looms, Cotton Weaving b. Apparels & Garment manufacturing 4. Others a. Timber Industry b. Animal Husbandry & diary development c. Tiles & Brick manufacturing d. Pepper & spice trading 5. MSME a. Agro/Food based units especially Coconut based. b. Light/Mechanical/Automobile Engineering Products and c. Service Sector. d. Wood Products. e. Footwear. f. Handicraft g. Rubber& Plastic Products. h. Paper and paper products i. Construction materials. j. IT related & software development. k. Modular furniture. l. Printing and Allied Units m. Readymade garments and allied textile products

Key Projects

1. National Institute of Warship/Submarine Design & Indigenization Centre by Mazagon Dock Limited (MDL) at Beypore, Kozhikode 2. Kerala Sustainable Urban Development Project aided by World Bank 3. Sarovaram (Tourism Project) 4. Monorail Project, Kozhikode 5. Beypore Port Development Project 6. Kuttiyadi Coconut Industrial Park

Wayanad

District at a glance Total Geographical area 2,131 Km2 Population 8,16,558 Nearest Railway Station Kozhikode railway station (75 Km from DHQ)

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Nearest airport Karipur International Aiport (97 Km from DHQ) Major Exports Spices Key Institutions M.S Swaminathan Research Foundation, Ambedkar Memorial Rural Institute for Development (AMRID), Research & Extension Wing of Coffee Board Major Crops Coffee, tea, cardamom, vanilla, spices and condiments Industrial parks KINFRA Small Industries Park at Kalpetta

Industrial Cluster Agro based products, Minerals and mining

Other Key Factors Second largest wildlife sanctuary in Kerala

Administrative Set up Particulars Numbers Revenue Divisions 1 Taluks 3 Corporations - Municipalities 3 Gram Panchayat 23 Source: Revenue Dept.,LSGD Elections 2015

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9 Trade, Hotel & Restaurants 112237 13.49% 10 Banking & Insurance 47112 5.66% 11 Real estate ownership, Business ,legal 138305 16.62% 12 Public Administration 28443 3.42% 13 Other Services 111566 13.41% C TOTAL OF TERTIARY SECTOR 520742 62.60% DDP 831919 Mid-year Population 827258 Per capita Income(in Rupees) 100563 Source: Directorate of Economics & Statistics

Primary Sector 28%

Tertiary Secondar Sector y Sector 63% 9%

GDDP - Wayanad

Source: Department of Economics and Statistics, GSDP of Kerala & India (2004-05 to 2013-14) Agriculture and Allied Activities

Land Utilization Pattern Others, 107, 0%

Forest, 78787, Net area sown, 37% 115144, 54% Barren & uncultivable land, 71, 0%

Land put to non agricultural use, 11295, 5% Cultivable waste, Still Water, 3904, 963, 1% 2% Fallow other Current than current fallow, fallow, 589, 2106, 1% 0% Land Utilization Pattern (Area in Hectares) - Wayanad

Source: Agriculture Statistics 2013-14, Department of Economics & Statistics Kerala

“Others” include Permanent pastures & other grazing land, Land under misc. tree crops, marshy land, water logged area and Social Forestry

Net Sown Area = Total Cropped Area – Area sown more than once

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Water Resources Length of Coastal Line (in Kms) - Number of Rivers in the District 1 Number of Reservoirs 2 Reservoirs Water Spread Area (in Sq. Km) 29.37 Source: Department of Economics and Statistics

Production of Mineral Deposits (2015-16) Type Name of mineral Production (in tonnes) Major mineral Nil Nil Minor mineral Granite building stone 965950 Ordinary sand 33016 Ordinary earth 226546 Source: Dept. Of Mining and Geology

Animal Husbandry Details of Farms, Slaughter Houses, Veterinary Institutions (2010-11) Type Number Cattle farms 80 Poultry farms for meat 32 Poultry farms for egg 1 Slaughter houses 40 Source: Department of Economics and Statistics

Agriculture workers population

Agriculture workers Population

Main Workers Population 27% Cultivators

50% Agricultural Labourers 1% House hold Industry Workers 13% Other Workers

9% Industries

Overview of Industrial Sector (as on 31.03.2016) Type Number Registered industrial unit 2530 Registered medium & large unit 3 Estimated avg. No. Of daily worker employed in small 5 scale industries Employment in large and medium industries 148 No. of industrial area 1 Turnover of small scale industries. (In Lakhs) 74100

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Type Number Turnover of medium & large (In Lakhs) 7400 Source: District Industries Centre, Wayanad

Trend of Investment, Employment and Units registered (as on 31.03.2016)

Trend of Units Registered

8,000 6,000 4,000 2,000 -

INVESTMENT EMPLOYMENT NUMBER OF REGISTERED UNITS

Source: District Industries Centre, Wayanad

Number of registered No. of people Investment (in units employed lakh) since 2006 2530 13161 21210

2015-16 184 777 911

Existing Enterprises (as on 31.03.2016)

Details of Existing Micro and Small Enterprises

Type of industry Number of Investment No. of people units (lakhs.) employed Agro based 581 3,167 2,790 Ready-made garments & embroidery 310 754 1,486 Wood/wooden based furniture 357 2,671 2,092 Paper & paper products 24 138 108 Leather based 21 439 180 Chemical/chemical based 91 736 769 Rubber, plastic & petro based 61 345 235 Metal based (steel fab.) 288 1,141 1,126 Engineering units 220 1,455 1,462 Electrical machinery and transport 132 1,250 728 equipment Repairing & servicing 173 1,176 733 Others 272 7,936 1,452 Total 2,530 21,209 13,161 Source: District Industries Centre, Wayanad

Existing Medium Scale Enterprises:

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Type of Sector Number Total Investment (in No. of people employed Lakhs) Private 2 1100 83 Co-operative Society 1 800 65 Total 3 1900 148

Existing Large Scale Industries/ Public Sector Undertaking Nil

Connectivity

Road Connectivity Roads Connectivity Length in Kms

National Highway 55

State Highway 129

Main District highway 900

Other district & Rural 80

Rural road/Agriculture roads 4261

Source: Economic Review 2015-16, Panchayat level statistics, 2011

Communication (as on 2014-15) Type Number Telephone connection 29807 Post offices 162 Density of telephone (Nos/1000) 36.46 Source: Economic Review 2015

Social Infrastructure

Health Institutions as of 2014-15 Type Number Allopathic Hospital 4 Ayurvedic Hospital 3 Community health centers 9 Primary health centers 14 Sub Centers 32 Unani Hospital 1 Dispensaries 4 Private Hospitals 17 Total 84 Source: Compiled from Economic Review 2015

Banking as of 2014-15 Type Number Commercial Bank 115 Rural Banks 28 Co-operative Banks 45 PLDB Branches 3 Source: Economic Review 2015

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Education Institutions as of 2014-15 Type of School Number Primary school 111 Upper Primary 74 Secondary & senior secondary schools 67 Source: Economic Review 2015

Colleges Number Arts and Science 8 Engineering 1 Hotel Management 1 Nursing 1 Polytechnic 2 TTI 8 Total 21 Source: Keralacolleges.com

Investment Opportunities

1. Tourism a. Medical Tourism (Ayurveda) b. Adventure tourism c. Hotels & Hospitality 2. Agriculture & Animal husbandry a. Dairy b. Floriculture, Medicinal plants & Herbal medicines c. Spices & manufacturing of spices extracts d. Coffee &Tea cultivation e. Timber units 3. Education a. International School 4. Potential for New MSME a. Potential for craft goods like bamboo product b. Agro Food Processing Sector

Key Projects

1. KINFRA Small Industries Park, Wayanad

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Kannur

District at a Glance Particulars Kannur Total Geographical area 2,966 Sq Km Population 25,25,637 Nearest railway station Kannur Railway Station (25 km from DHQ) Nearest airport Calicut International Airport (115 Km from DHQ) Major Exports Textiles, Wood Products Key Institutions National Institute of Fashion Technology, Institute of Handloom and Textile Technology, Apparel Training and Design Centre, Indian Naval Academy. Major Crops Cashew, Coconut, Rubber, Pepper Industrial parks KSIDC Industrial Growth Centre, Kuthuparamba KINFRA Small Industries Park, Thalassery KINFRA Textile Park, Nadukani Cyber Park, Taliparamba Industrial cluster General Engineering, Wood Industries, Offset printers Industry, Beedi Industries Industries Textile, Handloom and Wood-based industry Other Key Factors Asia's largest cinnamon estate producing cinnamon spice

Administrative Set up Particulars Numbers Revenue Divisions 1 Taluks 4 Corporations 1 Municipalities 9 Gram Panchayat 71 Source: Revenue Dept., LSGD Elections 2015

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7.3 Water supply 3695 B TOTAL OF SECONDARY SECTOR 503931 17.74% Industry 514262 8 Transport, Storage& Comm. 272475 9.59% 8.1 Railways 6628 8.2 Transport by other means 209198 8.3 Storage 1943 8.4 Communication 54706 9 Trade, Hotel & Restaurants 624420 21.98% 10 Banking & Insurance 144943 5.10% 11 Real estate ownership, Business ,legal 379923 13.38% 12 Public Administration 157298 5.54% 13 Other Services 418483 14.73% C TOTAL OF TERTIARY SECTOR 1997542 70.32% DDP 2840500 Mid-year Population 2553509 Per capita Income(in Rupees) 111239 Source: Directorate of Economics & Statistics

Primary Sector 12% Secondar y Sector Tertiaty 18% Sector 70%

GDDP – Kannur, Source: Department of Economics and Statistics, GSDP of Kerala & India (2004-05 to 2013-14)

Agriculture and Allied Activities

Land Utilization Pattern

Others, 710, 0%

Forest, 48734, 16% Land put to non Barren & agricultural use, uncultivable 32457, 11% land, 1690, 1%

Cultivable waste, Net area sown, 7897, 3% 192923, 65% Fallow other than current fallow, 3117, 1%

Current fallow, Still Water, 6472, 3112, 1% 2%

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Land Utilization Pattern (Area in Hectares) - Kannur

Source: Agriculture Statistics 2013-14, Department of Economics & Statistics Kerala

“Others” include Permanent pastures & other grazing land, Land under misc. tree crops, marshy land, water logged area and Social Forestry

Net Sown Area = Total Cropped Area – Area sown more than once

Water Resources Length of Coastal Line (in Kms) 82 Number of Rivers in the District 6 Number of Reservoirs 1

Reservoirs Water Spread Area (in Sq. Km) 6.48

Production of Mineral Deposits (2015-16) Production (in Type Name of mineral tonnes) Major mineral Granite building stone 997100 Laterite 597405

China clay 75 Minor mineral Ordinary sand 696621 River sand 15898 Ordinary earth 8060 Source: Dept. Of Mining and Geology

Animal Husbandry Details of Farms, Slaughter Houses, Veterinary Institutions (2010-11) Type Total Number

Cattle farms 75 Poultry farms for meat 19 Poultry farms for egg 15 Slaughter houses 37 Veterinary Institutions 169 Source: Department of Economics and Statistics

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Agriculture worker’s population

Workers Population

Main Workers Population Cultivators 43% 50%

Agricultural Labourers House hold Industry Workers Other Workers 1% 4% 2%

Industries

Overview of Industrial Sector (as on 31.03.2016) Type Numbers Total industrial unit 18080 Registered industrial unit 6904 Registered medium & large unit 5 Estimated avg. No. of daily worker employed in small scale industries 1.19 Employment in large and medium industries 147 No. of industrial area 5 Turnover of small scale industries (in Lakhs) 86100 Turnover of medium & large scale industries (In Lakhs) 14571 Source: District Industries Centre, Kannur

Trend of Investment, Employment and Units registered (as on 31.03.2016)

Trend of Units Registered

25,000 20,000 15,000 10,000 5,000 -

NUMBER OF REGISTERED UNITS EMPLOYMENT INVESTMENT (lakh Rs.)

Source: District Industries Centre, Kannur

Number of registered No. of people employed Investment (in units lakh) Since 2006 6904 41211 74261

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2015-16 364 1807 3752

Existing Enterprises (as on 31.03.2016)

Details of Existing Micro and Small Enterprises

Type of industry Number of Investment No. of people units (lakhs) employed Agro based 1,091 7,492 4,116 Soda water 97 545 334 Cotton textile 223 1,564 2,082 Ready-made garments 722 3,260 5,078 & embroidery Wood/wooden based 801 12,524 6,505 furniture Paper & Paper products 62 862 425 Leather based 102 154 214 Chemical/Chemical based 195 2,749 1,163 Rubber, Plastic & petro 132 3,812 1,214 based Mineral based 6 211 31 Metal based (Steel Fab.) 183 1,137 857 Engineering units 614 1,957 2,127 Electrical machinery and 58 457 188 transport equipment Repairing & servicing 141 1,431 832 Others 2,477 36,105 16,045 Total 6,904 74,261 41,211 Source: District Industries Centre, Kannur

Medium Scale Enterprises: Nil

Large Scale Industries/ Public Sector Undertaking

1 Kerala Clays and Ceramic Limited 2 Cannanur Co-operative Spinning Mills Limited 3 Kerala State Handloom Development Corporation Limited 4 Keltron Component Complex Limited

Connectivity

Road Connectivity Roads Connectivity Length in Kms National Highway 80.5 State Highway 245 Main District highway 25641 Other district & Rural 2013 Source: Economic Review 2015-16,

Communication (as on 2014-15) Type Number

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Telephone connection 1071832 Post offices 382 Density of telephone (Nos/1000) 444 Source: Economic Review 2015

Social Infrastructure

Health Institutions as of 2014-15 Type Number Allopathic Hospital 9 Ayurvedic Hospital 9 Community health centers 11 Primary health centers 82 Sub Centers 109 Total 220 Source: Compiled from Economic Review 2015, Panchayat Level Statistics 2011 and DHS

Banking as of 2014-15 Type Number Commercial Bank 366 Source: Economic Review 2015

Education Institutions as of 2014-15 Type of School Number Primary school 730 Upper Primary 365 Secondary & senior secondary schools 352 Source: Economic Review 2015

Colleges Number Arts and Science 24 Engineering 3 Nursing 5 Polytechnic 3 TTI 11 Ayurveda 2 Medical 2 Management 4 Dental 1 Pharmacy 3 Total 58 Source: Keralacolleges.com

Investment Opportunities

1. Textile a. Handlooms, Power looms, Weaving

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b. Apparels & Garment manufacturing 2. Wood Industry a. Furniture b. Plywood and softwood 3. Tourism a. Medical Tourism/ Ayurveda b. Hotels & Hospitality c. Tours & Travels 4. IT & IT Enabled Services a. Software Development b. Business Process Outsourcing c. Knowledge Process Outsourcing d. Software Training Centres 5. MSME a. IT Enabled services b. Food Processing Units c. Cashew Processing d. Agro based, e. Garment Making

6. Service Industry

a. Ayurvedic health rejuvenation services, b. Ethnic Food court

Key Projects

1. Kannur International Airport 2. Azhikkal Port

Kasaragod

District at a Glance Total Geographical area 1,992 Km2 Population 13,02,600 Nearest Railway Station Kasaragod railway station (3 KM from DHQ) Nearest airport Mangalore Airport (60 Km from DHQ) Major Exports - Key Institutions Central Plantation Crops Research Institute, LBS College of Engineering, Rajiv Gandhi Institute of Pharmacy Major Crops Cash crops like coconut, Areca nut, Cashew, Rubber, Ginger, etc. Industrial parks KINFRA Small Industries Park at Seethangoli Industries Minerals and Mining

Administrative Set up Particulars Number Revenue Divisions 1 Taluks 4

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Particulars Number Corporations - Municipalities 3 Gram Panchayat 38 Source: Revenue Dept., LSGD Elections 2015

Gross District Domestic Product Gross District Domestic Product (GDDP ) (2013 – 14) Base year: 2004-05 Particulars INR in Lakhs % Contribution 1 Agriculture & Allied Activities 275237 20.40% 2 Forestry & Logging 20935 1.55% 3 Fishing 15068 1.12% Agriculture and Allied 311240 4 Mining and Quarrying 10489 0.78% A TOTAL OF PRIMARY SECTOR 321729 23.85% 5 Manufacturing 8847 0.66% 5.1 Registered 3951 5.2 Un-registered 4896 6 Construction 139479 10.34% 7 Electricity, Gas and Water supply 7830 0.58% 7.1 Electricity 5957 7.2 Gas 204 7.3 Water supply 1670 B TOTAL OF SECONDARY SECTOR 156156 11.57% Industry 166645 8 Transport, Storage& Comm. 143176 10.61% 8.1 Railways 11942 8.2 Transport by other means 104675 8.3 Storage 580 8.4 Communication 25978 9 Trade, Hotel & Restaurants 255026 18.90% 10 Banking & Insurance 74489 5.52% 11 Real estate ownership, Business ,legal 187987 13.93% 12 Public Administration 35494 2.63% 13 Other Services 175079 12.98% C TOTAL OF TERTIARY SECTOR 871251 64.58% DDP 1349136 Mid-year Population 1335521 Per capita Income(in Rupees) 101019 Source: Directorate of Economics & Statistics

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Primary Sector 24%

Tertiary Sector 65%

Secondary Sector 11% GDDP Kasaragod

Source: Department of Economics and Statistics, GSDP of Kerala & India (2004-05 to 2013-14) Agriculture and Allied Activities

Land Utilization Pattern

Forest, 5625, 3% Land put to non Others, 473, 0% agricultural use, 24185, 12%

Barren & Cultivable uncultivable waste, land, 3700, 8560, 4% 2% Fallow other than current fallow, 2138, 1% Current fallow, 2129, 1% Net area sown, Still Water, 148064, 75% 4292, 2%

Land Utilization Pattern (Area in Hectares) - Kasaragod

Source: Agriculture Statistics 2013-14, Department of Economics & Statistics Kerala

“Others” include Permanent pastures & other grazing land, Land under misc. tree crops, marshy land, water logged area and Social Forestry

Water Resources Length of Coastal Line (in Kms) 70 Number of Rivers in the District 12 Number of Reservoirs 1 Reservoirs Water Spread Area (in Sq. Km) 0.44 Source: Department of Economics and Statistics

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Production of Mineral Deposits (2015-16) Type Name of mineral Production (in tonnes) Major mineral Laterite 125,10,141 Minor mineral Ordinary sand 2,01,823 Granite stone 98,701 River sand 20,781 China clay 4,380 Source: Dept. Of Mining and Geology

Animal Husbandry Details of Farms, Slaughter Houses, Veterinary Institutions (2010-11) Type Total Number Cattle farms 145 Poultry farms for meat 220 Poultry farms for egg 15 Slaughter houses 46 No of Veterinary Institutions 111 Source: Department of Economics and Statistics

Agriculture workers’ population

Agricultural Workers' Population

Workers

Cultivators

41% Agricultural 50% Labourers House hold Industry Workers Other Workers 2% 4% 3%

Industries Overview of Industrial Sector (as on 31.03.2016) Type Numbers Registered industrial unit 4234 Registered medium & large unit 2 Estimated avg. No. Of daily worker employed in small 3.54 scale industries (per Unit) Employment in large and medium industries 1236 No. of industrial area 8 Turnover of medium & large scale industries (in Lakhs) 7100 Source: District Industries Centre, Kasaragod

Trend of Investment, Employment and Units registered (as on 31.03.2016)

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Trend of Units Registered 12,000 10,000 8,000 6,000 4,000 2,000 -

NUMBER OF REGISTERED UNITS EMPLOYMENT INVESTMENT (IN LAKHS)

Source: District Industries Centre, Kasaragod

Number of registered No. of people Investment (in units employed lakh) Since 2006 4,234 20,777 37,896

2015-16 257 1,111 6,370

Existing Enterprises (as on 31.03.2016)

Details of Existing Micro and Small Enterprises

Type of Industry Number of units Investment No. of people (in lakhs) employed Agro based 90 219 709 Soda Water 59 NA NA Cotton textile 100 209 975 Ready Made garments embroidery 604 747 2,493 Wood/wooden based furniture 101 1,442 893 Paper & Paper Products 43 254 226 Leather based 18 52 120 Chemical/Chemical Based 86 496 551 Rubber, Plastic & Petro based 139 1,036 744 Mineral Based 100 1,049 787 Metal based (Steel fab) 490 927 1,818 Electrical machinery and transport 12 33 36 equipment Repairing & servicing 84 137 224 Total 1,926 6,601 9,576 Source: District Industries Centre, Kasaragod

Medium Scale Enterprises: Nil

Large Scale Industries/ Public Sector Undertaking 1. HAL, KINFRA Park,

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2. BHEL

Connectivity

Road Connectivity Roads Connectivity Length in Kms National Highway 86 State Highway 142 Main District highway 1301 Other district & Rural 416 Rural road/Agriculture roads 2999 Source: Economic Review 2015-16, Panchayat level statistics, 2011

Communication (as on 2014-15) Type Number Telephone connection 13,67,495 Post offices 234 Density of telephone (Nos/1000) 374 Source: Economic Review 2015

Social Infrastructure

Health Institutions as of 2014-15 Type Number Allopathic Hospital 4 Ayurvedic Hospital 5 Community health centers 9 Primary health centers 40 Dispensaries 36 Total 94 Source: Compiled from Economic Review 2015

Banking as of 2014-15 Type Number Commercial Bank 206 Source: Economic Review 2015

Education Institutions as of 2014-15 Type of School Number Primary school 272 Upper Primary 153 Secondary & senior secondary schools 84 Source: Economic Review 2015

Colleges Number Arts and Science 12 Engineering 2 Dental 2 Nursing 1 Polytechnic 3 TTI 2

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Management 1 Pharmacy 1 Total 24 Source: Keralacolleges.com

Investment Opportunities

1. Manufacturing a. Wood & Rubber-based units, Light Engineering units b. Building materials, Mineral based units 2. Tourism a. Theme Parks, Resorts 3. Textiles & Handicrafts a. Garment manufacturing, Handloom, Handicrafts 4. MSME a. IT Enabled services b. Food Processing Units c. Cashew Processing d. Agro based e. Garment Making

Key Projects

1. KINFRA Small Industrial Park, Seethangoli 2. Cheemeni Power Project 3. Cyber Park, Cheemeni

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Annexure V – Brand Listing

Sector Brand/Company

Advertising & Media Time Ads

Advertising & Media Aiswaria Advertising

Advertising & Media Chitra Painters

Advertising & Media Teekeycee Advertisers

Advertising & Media Globex Media Advertising Network

Agriculture, Food Processing Poabs

Banking & Finance ESAF

Banking & Finance Equity Intelligence (EQ)

Banking & Finance GEO VPL Finance Private Limited

Banking & Finance Hedge Equities

Banking & Finance Kosamattam Finance

Banking & Finance KLM Group

Banking & Finance South Indian Bank

Banking & Finance State Bank of Travancore

Banking & Finance Irinjalakuda Credit and Leasing Company

Banking & Finance Federal Bank

Banking & Finance Kerala Financial Corporation

Banking & Finance Kerala Gramin Bank

Banking & Finance The New Trichur Company

Banking & Finance Acumen Capital Market India Limited

Banking & Finance Irinjalakuda Town Co-operative Bank

Banking & Finance Moat

Banking & Finance Niravath Jubily Chits India Pvt. Limited

Banking & Finance Karuvanoor Service Cooperative Bank

Banking & Finance, Healthcare, Gems & Jewellery Manappuram Group

Communication Kings Broadband

Construction Kap India

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Sector Brand/Company

Construction Formz Plus

Construction Powerlink Builders

Construction Lord Krishna Builders

Construction SPACE Builders

Drugs & Pharma MVM Ayurvedic Research Lab

Drugs & Pharma Leo Group

Education and Training SCMS Group of Educational Institutions

Education and Training FISAT

Education and Training Networkz Systems

Engineering Prime Roofing Solutions Private Limited

Food Processing Kitchen Treasures - Synthite

Food Processing Pappai Icecream

Food Processing Double Horse - Manjila Group

Food Processing GEO Seafoods

Food Processing Kerafed

Food Processing Neera

Food Processing Pavizham

Food Processing Aroma Fresh

Food Processing KSE Limited

Food Processing Meat Products of India

Food Processing Major Foods

Food Processing Tierra Food India Private Limited

Food Processing KPL Oil Mills

Food Processing Kilban Foods

Food Processing Elite Foods

Food Processing, Tourism & Hospitality Parisons

Furniture Paul & Sons WOODESIGNS

Gems & Jewellery Bhima

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Sector Brand/Company

Gems & Jewellery Josco

Gems & Jewellery M.O.D Signature Jewellery

Gems & Jewellery Sunny Diamonds

Gems & Jewellery Amy Jewellery Designs

Gems & Jewellery Alapatt Jewellers

Gems & Jewellery Malabar Gold

Gems & Jewellery Kalyan Jewellers

Gems & Jewellery Alukkas

Gems & Jewellery A. Geeri Pai Jewellers

Healthcare Aster Medicity

Healthcare Kandamkulathy Vaidyasala

Healthcare Kinder - Women's Hospital and Infertility Centre

Healthcare Sunrise Hospital

Healthcare Punarnava Ayurveda Hospital

Healthcare Vaidyaratnam

Healthcare Rajagiri Hospital

Healthcare Medivision

Healthcare KIMS Hospital

Healthcare Lakeshore

Healthcare Ananthapuri Hospital

Healthcare, Drugs & Pharma Kottakkal Arya Vaidya Sala

IT Litmus 7

IT Expose InfoTech India Private Limited

IT, Education and Training, Food Processing NEST Group

Manufacturing Premium Ferro Alloys Limited

Manufacturing V-Guard

Manufacturing Malabar Cements

Manufacturing Minar Group

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Sector Brand/Company

Manufacturing Thomson PVC Pipe

Manufacturing Kenza Group

Manufacturing INDWAY

Manufacturing Paragon

Manufacturing Catrix

Manufacturing Malabar Extrusion Private Limited

Manufacturing Sany Star

Manufacturing Aqua Tech

Manufacturing Artic Bath

Manufacturing Spinner Pipes

Manufacturing VKC

Manufacturing Safeguard Lightings (India) Private Limited

Manufacturing GK Electric Industries

Manufacturing E-Power Industries

Manufacturing ResiTech Electricals

ManuFacturing Star Enterprises

Manufacturing Zahra

Manufacturing Beacon Power Systems

Manufacturing HLL Lifecare Limited

Manufacturing Lunar Group

Manufacturing , Food Processing Mardec R.K. Latex Private Limited (MRK)

Manufacturing, Education & Training, Tourism & Hospitality, Transport Tolins Tyre

Manufacturing, Real Estate & Construction Nikshan Electronics

Anna Group - Anna Aluminium, Saras, Chakson, Kitex, Manufacturing, Textile Scoobee Day,

Others NOLTA - Kottaram Group

Others Pittappillil Agencies

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Sector Brand/Company

Others ABC Sales Cooperation

Others Kalpana Family Salon & Spa

Others Vision Motors Pvt. Ltd

Others Kudumbashree

Others Balan Associates

Others Ace Finepack

Others Global Labs and Consultants

Others Sharewealth

Others Navya Bake Shop

Others Nandanam Sanitaries

Others Phases

Others Aquaneeta

Others Lijan Greentech

Others Nare

Others R R Enterprises

Others Kerala Switchgear Sales Corporation

Others DC Books

Others Best Bakers

Others Cochin Bakery

Others Mango Bakers

Others Nila Bake House

Others Cake Hut

Others Lulu International

Others Dhathri Ayurveda Group

Real Estate & Construction Asset Homes

Real Estate & Construction CIAL

Real Estate & Construction Artech Realtors

Real Estate & Construction KINFRA

Real Estate & Construction Melonwood Homes

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Sector Brand/Company

Real Estate & Construction PRS Builders

Real Estate & Construction Property Nation

Real Estate & Construction Confident Group

Real Estate & Construction Kent Constructions Private Limited

Real Estate & Construction Skyline Builders

Real Estate & Construction Abad Builders

Real Estate & Construction Lord Krishna Builders

Real Estate & Construction Mather Group

Real Estate & Construction National Builders

Real Estate & Construction Desai Homes

Retail BISMI

Retail QRS

Retail Gem Lights Home Décor

Sector Name

Textile Milan Design

Textile Seemati

Textile Hantex

Textile Prince Fashions

Textile Silky Weddings

Textile Stills Shirs & Trousers

Textile Jayalakshmi

Textile Kalyan Silks

Textile Kalyan Kendra

Textile V-Star

Tourism & Hospitality Alhind Tours and Travels

Tourism & Hospitality Paragon Restaurant

Tourism & Hospitality Top in Town

Tourism & Hospitality VHS Hospitality Services

Transport Trans Asia Line

Page 132 of 134 Sector Brand/Company

Retail QRS

Retail Gem Lights Home Décor

Sector Name

Textile Milan Design

Textile Seemati

Textile Hantex

Textile Prince Fashions

Source: Dhanam Publication “Hot Brands of Kerala” Vol I, 2016, KPMG Analysis

Page 133 of 134 aa0 Thank you

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