Aurangabad has a peculiar problem. It has all the makings of a great industrial town, and yet it is not able to attract many investors.
From steel and paper to automobiles, pharma and distilleries, the city has it all. But the last big investment here was when German auto major Skoda set up its plant, investing Rs 250 crore (Rs 2.50 billion) a few years ago. But Skoda's new plant is coming up in Ranjangaon near Pune.
The city's business community is currently wooing Skoda's parent company Volkswagen to set up another base in the city. Ketan Lakhani, secretary of the chamber of Marathwada industry and agriculture, said, "It was the city industrialists who persuaded Skoda to set up a base here. The government has consistently neglected Aurangabad."
Volkswagen's top management recently visited the city's industrial estates, including the premier Shendra 5-star industrial estate. "We are hoping they will return with a positive answer," said Gautam Nandavat, CIMA president.
The pharma sector is Aurangabad's major pillar. But many pharma units are exiting the city. They are shifting to states like Himachal Pradesh and Uttaranchal that offer excise-free zones. Already, Lupin and Wockhardt have set up large plants at Bhatti in HP.
Anil Save, owner of Savera Pharma and Atra Pharma, said, "With major pharma companies choosing to set up their new plants away from Aurangabad, the small- and medium-scale units that were supplying to them will go out of business." Save estimates that at least 35-40 units would be out of business by the end of the financial year.
Save himself is planning to shift to biotech research. He has just tied up with a US-based firm to do contract research on chloroplast derivatives.
"I cannot compete with units which do not have to pay excise. The only way to survive for units like mine is to shift to new areas where opportunities are opening up."
Save is clear that if they do not get on the bandwagon now, it will be curtains by the end of the year. Even long-time Aurangabad-loyalist Bajaj is setting up a new plant in Bhatti.
Aurangabad has 5 industrial areas -- Chikalthana, Jalna, Paithan, Waluj and Shendra. They are home to around 3,343 small-scale units, out of which only 1,401 were working, according to the third census of SSI units conducted in 2002-03.
"Another way these units can survive is by moving out to other areas where octroi is not levied, and selling the existing land for re-use for retailing or commercial development," said Mukund Bhogle, managing-director Duraware, the makers of Nirlep non-stick kitchenware.
"Small-scale units will profit if they re-locate out of the city limits. But, the MIDC should allow some flexibility in land-use. We don't mind sharing a per cent of the appreciated value of land with the MIDC. It will give the city quality retail and commercial spaces. These spaces can be developed at reasonable costs within the city limits and give the industry a new lease of life," said Bhogle.
