The Hindu Business Line : TN leather sector disappointed with Apache going to AP

Industry people had been optimistic that the investment would come to Tamil Nadu and it was predicted that this was the beginning of a trend that would see manufacturers from Taiwan and China looking at diversifying production bases coming to the State.

Chennai , Jan. 8

A MISSED opportunity for Tamil Nadu - that is the leather industry's reaction to reports of Apache Footwear Ltd setting up shop in Andhra Pradesh.

Apache Footwear, which supplies shoes for Adidas and has manufacturing facilities in China, was originally to have set up the sports shoe manufacturing facility in Tamil Nadu and had been in discussions with the State Government.

But the industry here has been caught by surprise by the Andhra Pradesh Government's announcement that Apache was setting up a Rs 500-crore facility in Nellore.

Even in October 2005, industry representatives had been optimistic that the investment would come to Tamil Nadu. At the time, it was predicted that this was the beginning of a trend that would see manufacturers from Taiwan and China looking at diversifying production bases coming to Tamil Nadu.

Apache was at that time believed to be looking at Sriperumbudur, about 55 km west of Chennai, to set up the manufacturing facility at a cost of Rs 250 crore. It had sought about 250 acres land and recognition as a Special Economic Zone.

But Apache's decision to look elsewhere should be viewed with concern, manufacturers say. The State cannot afford to lose such investments from global leaders. The benefit of such investments in any location is not just in terms of money but the catalytic role that it plays in attracting more investments.

Integrated units such as that of Apache's would bring in numerous investment opportunities in component manufacturing, employment opportunities and increased exposure to the global markets.

The industry in Tamil Nadu is taking some consolation from the hope that the investment in Nellore would mean significant opportunities for the raw material manufacturers here. As authorised manufacturer for Adidas shoes, Apache would be mostly in non-leather segment but there would still be need for leather. Tanneries here can target the new customer if they can match the quality. Similarly, component manufacturers too would be benefited.

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