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Apache's SEZ appeal in rural Andhra

December 10, 2007 10:22 IST

It is an impromptu court at Tada, a village in the Nellore district of Andhra Pradesh. A group has collected on the sidewalks of the highway connecting Chennai with Kolkata, between vast expanses of paddy fields on either side.

An old farmer couple wants Ravi Reddy, man about town and the son of the local Panchayat president, to get their son back into the Apache Special Economic Zone that makes 160,000 pairs of sports shoes every month for Adidas.

After assuring them that he will take care of their son's case, Reddy flashes a green entry card and says: "I can get in and out of this SEZ any time I want. I have so far placed around 600 people in this factory, all local villagers, and they want more."

Ever since the Chinese-owned Apache SEZ went into full-scale production exactly a year ago, a lot has improved for Tada and its 100,000-plus inhabitants.

No fewer than 4,500 people have obtained jobs on an average salary of Rs 3,500 per month. Most are between 18 and 25 years, and 30 per cent of them are women.

Some people have come all the way from Chennai and Hyderabad to look for jobs here. Suddenly, young working hands have become a scarce commodity in the Nellore district. Local grocers and tailors are faced with an acute shortage of hands.

Rentals have doubled and land prices have shot up, in some cases 10 times, in the last year or so. Reddy says several real estate companies have started buying land to build housing colonies.

And there are visible signs of prosperity all around. Tada is well lit at night with Apache donating 183 tube lights. Ramakrishna, who works in a petrol station, says that sale on credit at local groceries has become a thing of the past: "Some households, where both husband and wife work, take home as much as Rs 10,000 a month. And they are spending it too."

"Wait here till 6 in the evening, you will see at least 300 new motorcycles come out of the factory," says Balaji who has just finished his lunch duty at the Apache canteen, where he attends to some 3,300 employees.

In spite of rampant criticism, Apache is one example of how SEZs have started delivering the goods.

Exports from the 22 SEZs up and running are expected to more than double to Rs 67,000 crore (Rs 670 billion) in the current financial year.

These zones have added 52,000 jobs and the number is projected to rise to 2.1 million by December 2009.

The SEZ is spread over 300-odd acres. A km-long world-class road reaches visitors to its front office which is buzzing with employees in bright green T-shirts. Adidas does not allow visitors inside the factories to see their shoes in the development process.

H Ken, a Taiwanese in his late-20s, is amongst the 120-odd expats working at Tada. He says that Tada is smaller than Apache's facility at Guangdong in South China, where 18,000 people produce 1.2 million pairs of Adidas shoes every month.

"In India, we will be making 400,000 pairs by 2008 and will have nearly 10,000 people working here," he says, adding that by 2011-12, the workforce will go up to 30,000.

Also, productivity at Tada is half of that at Guangdong. The people working here are largely unskilled workers and have never been inside a manufacturing facility, leave alone a world-class shoe factory. They are being trained for the first time and are improving, according to Apache officials.

Ken and his colleagues are working hard to improve the productivity by regular training. "It is a good lesson for us too," he admits.

The people of Tada aren't complaining.

S Kalyana Ramanathan & G Balachandar in Tada