While the manufacturing facility would be located in the Jawahar Pharma City, a pharma special economic zone near Visakhapatnam, the R&D facility would be set up in the phase 3 biotech park near Hyderabad.

Chief minister Y S Rajasekhara Reddy handed over the allotment letter for 50-acre land in the Vizag Pharma City to Kiran Mazumdar-Shaw, chairman and managing director of Biocon, who apprised the CM about the company's plans for Andhra.

The biopharma major is also acquiring 10 acres of land for the research facility in the biotech park, which is being developed by the Andhra Pradesh Industrial Infrastructure Corporation.

Though the chief minister's office maintained that the investment proposed by the company was about Rs 1,000 crore, Shaw, however told the media that Rs 500 crore (Rs 5 billion) would be invested in the Visakhapatnam facility. The company plans to start work on the Visakhapatnam project in six months.

About 500 employees would be recruited in the first phase, according to Shaw. According to government officials present at the meeting, while the major portion of the investment would go into the proposed biopharma manufacturing project in Vizag, the company would invest about Rs 500 crore in the first phase.

Over 2,000-acre Vizag Pharma City, being jointly developed by Ramkey Group and APIIC, has state-of-the-art facilities, including a common effluent treatment plant, besides park-level environmental clearance from the Centre that will help the company start the project work just in two-three months, official pointed out.

Several companies both local as well as outside the country such as SNF Chemicals of France have already acquired land in the park.

Biocon, which has a vantage position in the global market for generic stations, is focusing on diabetes and cancer drugs and entering into the field of recombinant biologicals such as insulin and monclonal antibodies.