Apache Footwear Limited, a China-based authorised manufacturer of Adidas sports shoes, will set up a Rs 500-crore (Rs 5 billion) manufacturing facility in Nellore district in Andhra Pradesh.

In a step towards this direction, Apache signed a memorandum of understanding in Hyderabad on Friday with the Andhra Pradesh government in the presence of state Chief Minister Y S Rajasekhar Reddy, Overseas Indian Affairs Minister Oscar Fernandes, and Apache chairman Johnson Tsai.

The facility is expected to create jobs for 40,000 women workers. 

Speaking on the ocassion state Major Industries Ministries J Geeta Reddy said, "Apache has selected Andhra Pradesh as its preferred location for establishment of its unit as the state government has extended incentives, concessions and wholehearted support for the venture."

Apache Footwear produces 12 million pairs of sports shoes annually. The company employs nearly 19,000 people at its two manufacturing facilities in China. For the last two years, Apache Footwear has been ranked No 1 company globally in quality and key performance indicators awarded by Adidas.

Herzogenaurach, Germany-based Adidas is placed second in the world sporting goods market.

The foreign investment involved in the Andhra Pradesh facility would be the equivalent of Rs 500 crore, which would be used mainly to develop a world-class production facility on par with all international Adidas shoe-manufacturing factories.

The estimated production will be one million pairs per month in varying sizes in the first year of production. The company plans to double its production capacity and workforce. The state government has agreed to subsidise the training for workers who belong to Andhra Pradesh at Rs 1,000 per worker per month for a period of one year.

This project, which would be developed on a 314-acre site leased by the government as a sector-specific special economic zone for footwear with all infrastructure facilities, would create employment for weaker sections such as Dalits, Adivasis and other backward classes.

Photograph: Jewella C Miranda