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HIMACHAL PRADESHNovember 2010
2
Investment climate of a state
• Skilled and cost-effective labour
• Labour market flexibility
• Labour relations
• Availability of raw materials and natural
resources
• Tax incentives and exemptions
• Investment subsidies and other incentives
• Availability of finance at cost-effective terms
• Incentives for foreign direct investment, (FDI)
• Profitability of the industry
• Procedures for entry and exit of firms
• Industrial regulation, labour regulation, other
government regulations
• Certainty about rules and regulations
• Security, law and order situation
• Condition of physical infrastructure such as
power, water, roads, etc.
• Information infrastructure such as telecom, IT,
etc.
• Social infrastructure such as educational and
medical facilities
Resources/Inputs
Incentives to industryPhysical and social
infrastructure
Regulatory framework
Investment climate of a state is determined by a mix of factors
HIMACHAL PRADESH November 2010
3
Contents
Advantage Himachal Pradesh
State economy and socio-economic profile
Infrastructure status
State policies and incentives
Business opportunities
Doing business in Himachal Pradesh
HIMACHAL PRADESH November 2010
4
Himachal Pradesh – State profile• Located in the Northern region of India, Himachal
Pradesh has a population of 6.1 million (as per Census 2001).
• The state has an area of 55,673 sq km and accounts for 5.8 per cent of the total land area in India.
• As its borders, the state has Punjab to the West and Southwest, Jammu and Kashmir to the North, Haryana to the South, Uttar Pradesh to the Southeast and China to the East.
• Himachal Pradesh‟s administrative capital is Shimla. The state is divided into 12 districts.
• Being a sub-Himalayan state, Himachal Pradesh has a varied climate that changes with altitude. The climate ranges from warm and sub-humid tropical at low altitudes to cold and icy at high altitudes. There are three main seasons: winter from October to February, summer from March to June and rainy from July to September.
• The common languages spoken are Hindi, Pahari, and Punjabi.
Source: Maps of India
Himachal Pradesh November 2010
ADVANTAGE HIMACHAL PRADESH
5
Pharmaceuticals and food processing hub
Policy and fiscal incentives
Himachal Pradesh has attracted investments in the pharmaceuticals,
IT and engineering industries. Agriculture also plays a significant role
in the state‟s economy. The state has a robust food processing
sector.
The state offers a wide range of fiscal and policy incentives for
businesses under the Industrial Policy, 2004. Additionally, the state
has well-drafted sector-specific policies for the biotechnology and IT.
Rich labour poolThe state has a large base of skilled labour, making it a favourable
destination for knowledge-based sectors. Further, the state has a
large pool of semi-skilled and unskilled labour.
Advantage Himachal Pradesh … (1/2)
Source: Maps of India
ADVANTAGE HIMACHAL PRADESH
Himachal Pradesh November 2010
6
Facilitating infrastructure
The state has well-developed social, physical and industrial
infrastructure and virtual connectivity. It has a strong hydro-
power base because of its water resources and topography. It is
supported by enabling policies.
High economic growth
Himachal Pradesh is targeting 8.5 per cent annual economic
growth rate during the Eleventh Five-Year Plan period (2007-
2012).
Stable political environment
The state has a stable political environment with a single-party
government. The State Government is committed towards
creating a progressive business environment.
Advantage Himachal Pradesh … (2/2)
Source: Maps of India
ADVANTAGE HIMACHAL PRADESH
Himachal Pradesh November 2010
7
Himachal Pradesh in figures … (1/2)
Parameter Himachal Pradesh All-states Source
Economy
GSDP as a percentage of all states‟ GSDP 0.6 100.0 CMIE, as of 2007-08, current prices
Average GSDP growth rate* (%) 7.4 11.8 CMIE, 2000-01 to 2007-08, current prices
Per capita GSDP (US$) 899.0 992.5 CMIE, as of 2007-08, current prices
Physical infrastructure
Installed power capacity (MW) 2,030.2 159,398.49Central Electricity Authority, as of March
2010
GSM cellular subscribers (No) 4,790,604 456,586,162Cellular Operators Association of India, as
of June 2010
Broadband subscribers (No) 20,981 4,981,976 As of October 2008
National highway length (km) 1,409 70,548Ministry of Road Transport & Highways,
Annual Report 2008-09
Airports (No) 3 133 Airport Authority of India
Social indicators
Literacy rate (%) 76.5 64.8 Census of India, 2001
Birth rate (per 1,000 population) 17.7 22.8Ministry of Health & Family Welfare, RHS
Bulletin, March 2008
ADVANTAGE HIMACHAL PRADESH
*Calculated in Indian rupee terms
Himachal Pradesh November 2010
8
Himachal Pradesh in figures … (2/2)
Parameter Himachal Pradesh All-states Source
Investment
FDI inflows (US$ billion) 0.8* 120.2Department of Industrial Policy &
Promotion, April 2000 to May 2010
Outstanding investments (US$
billion)16.3 1,972.6 As of March 2010
Industrial infrastructure
PPP projects (No) 1 515 www.pppindiadatabase.com
SEZ (No) 3 155In-principle approval as of August 2010,
www.sezindia.nic.in
Parameter Himachal Pradesh Government
Policy support
Sector-specific policies Industry (overall), power, IT, biotechnology
Availability of labour Ample skilled and unskilled labour available.
*Includes Chandigarh, Punjab and Haryana
PPP: public private partnership; SEZ: special economic zone
ADVANTAGE HIMACHAL PRADESH
Himachal Pradesh November 2010
9
Key industries with policy thrust and factor advantages
Medium HighLow
Medium
High
Textiles
Food
processing
IT and
electronics
Biotechnology
Chemicals
Auto
componentsLight engineering
Industry attractiveness matrix
Metals
Construction
*Factor advantage
Polic
y th
rust
*Factor advantages include benefits due to geographical location and availability of factors like talent pool, natural resources and capital
PharmaceuticalsTourism
ADVANTAGE HIMACHAL PRADESH
Himachal Pradesh November 2010
10
Contents
Advantage Himachal Pradesh
State economy and socio-economic profile
Infrastructure status
State policies and incentives
Business opportunities
Doing business in Himachal Pradesh
HIMACHAL PRADESH November 2010
11
Socio-economic snapshot of Himachal Pradesh
Parameters Himachal Pradesh
Capital Shimla
Geographical area (sq km) 55,673
Administrative districts (No) 12
Population density (persons per sq km)* 109
Total population (million)* 6.1
Male population (million) 3.1
Female population (million) 3.0
Population growth rate 1991-2001 (%) 17.5
Sex ratio (females per 1,000 males)* 968
Literacy rate (%)* 76.5
Male (%) 85.4
Female (%) 67.4
Life expectancy at birth (years)
Male 65.7
Female 65.4
STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
Sources: Economic Survey 2009-2010, Ministry of Health and Family Welfare, 2008
*Census 2001
Himachal Pradesh November 2010
12
3.0
3.1
3.3
3.6
4.1
4.3
4.6
5.4
6.2
5.8
0.0 2.0 4.0 6.0 8.0
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
Himachal Pradesh‟s GSDP
• In 2008-09, Himachal Pradesh‟s Gross State Domestic Product (GSDP) was US$ 5.8 billion. It grew at a CAGR of 7.5 per cent between 1999-2000 and 2008-09.
• The secondary sector has been the fastest growing sector; largely driven by growth in construction and manufacturing.
Himachal Pradesh‟s GSDP (US$ billion)
Source: CMIE
STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
CAGR
7.5%
Himachal Pradesh November 2010
13
Himachal Pradesh‟s NSDP
• The Net State Domestic Product (NSDP) of Himachal Pradesh was about US$ 6.7 billion in 2008-09.
• The average NSDP growth rate between 1999-2000 and 2008-09, was about 10.8 per cent.
Himachal Pradesh‟s NSDP (US$ billion)
Source: CMIE
STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
2.7
2.9
3.2
3.7
4.1
4.5
5.0
5.9
6.8
6.7
0.0 2.0 4.0 6.0 8.0
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
CAGR
10.8%
Himachal Pradesh November 2010
14
The secondary sector has an increasing share in Himachal
Pradesh‟s economy
Percentage distribution of GSDP
Source: CMIE
CAGR
• The secondary sector‟s share in the state economy has increased from 36.6 per cent in 1999-2000 to 42.5 per cent in 2008-09. It was driven by high growth of electricity (15 per cent) and construction (9 per cent) sectors.
• Community and personal services are the primary constituents of the state‟s tertiary sector.
• In terms of share within the primary sector, agriculture continues to be a significant contributor to the state economy.
STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
4.8%
6.9%
18.6 23.1
42.5 36.6
38.9 40.3
0%
20%
40%
60%
80%
100%
2008-09 1999-00
Primary Secondary Tertiary
9.1%
Himachal Pradesh November 2010
15
Per capita GSDP
• The state‟s per capita GSDP in 2008-09 was US$ 834.3. It increased at a CAGR of 5.3 per cent between 1999-2000 and 2008-09.
• District-wise distribution of per capita income is quite varied. Districts such as Lahaul, Spiti and Solanhave a relatively higher per capita income, because of their high value-added cash crops and the presence of industrial areas. On the other hand, districts such as Chamba have a significantly lower per capita income.
• The technology and energy sectors have been the key drivers of increase in per capita income.
Source: CMIE
Per capita GSDP
STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
US$ 505.4 511.2 531.9
578.1641.1 655.6 701.8
806.7899.0 834.3
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
1000.0
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
Himachal Pradesh November 2010
16
Distribution of households by income
• Distribution of households by socio-economic classification (SEC) indicates that majority of households in the state fall in the educated and self-employed or medium-to-high income classes.
Percentage distribution of urban households by SEC*Percentage distribution of rural households by SEC*
Source: BW Marketing Whitebook, 2009-2010;
*See Annexure for SEC classification of households
STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
3.5
6.6
7.9
8.3
20
23.6
11.7
18.5
3.1
9.5
10.6
11.5
23.1
18.4
10.2
13.5
0.0 5.0 10.0 15.0 20.0 25.0
A1
A2
B1
B2
C
D
E1
E2
Himachal Pradesh All-India
Urban4.1
11.8
40.6
43.4
5.2
31
43.1
20.7
0.0 10.0 20.0 30.0 40.0 50.0
R1
R2
R3
R4
Himachal Pradesh All-India
Rural
In per cent In per cent
Himachal Pradesh November 2010
17
Consumer expenditure on household goods and services
Source: Household Consumer Expenditure in
India, 2007-08 NSS 64th Round
Share of average monthly per capita expenditure on
household goods and other services • Himachal Pradesh is ahead compared to all-India
in share of per capita expenditure on education, medical services and durable goods.
STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
52.3%
3.7% 6.3% 3.6%
45.8%
4.4% 6.6% 5.3%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Food Education Medical Durable goods
All-India Himachal Pradesh
Rural
Himachal Pradesh November 2010
18
Key industries in Himachal Pradesh
Key industries in Himachal Pradesh
• Textiles
• Pharmaceuticals
• Food procurement and processing
• Light engineering
• IT and electronics
• Cement
• Tourism
• The rich natural resources of the state are favourably suited for investments in major sectors such as procurement of agricultural produce, hydroelectric power, cement and tourism.
• The districts of Solan, Sirmour, Kangra and Unalead in terms of investments attracted.
STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
Himachal Pradesh November 2010
19
Maize, wheat and apples are the key agricultural products
CropAnnual production
(„000 tonnes)
Wheat 531
Maize 677
Rice 118
Fruit 874
Vegetables 1,090
Potato 145
• In 2008-09, the total production of the major crops of the state (food grains, vegetables and fruit) was 3.4 million metric tonnes.
• Maize was the major crop among the food grains, followed by wheat and rice.
• The state has a prominent horticulture industry. Apple production stood at 510,000 metric tonnes in 2008-09 and accounted for approximately 81 per cent of the state‟s total fruit production.
• Other major fruits grown in the state include peach, apricot, cherry, mango and litchi.
Source: Economic Survey 2009-2010
As of 2008-09
STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
Himachal Pradesh November 2010
20
Himachal Pradesh‟s exports trends
• Himachal Pradesh‟s exports increased by an estimated 18.6 per cent in 2009-2010 over the previous year.
• Major exports from the state were from pharmaceuticals, textiles and power industries.
Growth in exports (%)
Source: Capital Markets
STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
54.1
13.6
-32
128.8
22.6-4.2
15.1
4.1
15.6
18.6
-50.0 0.0 50.0 100.0 150.0
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
Himachal Pradesh November 2010
21
64%
15%
10%0.4%
7%
2%
Electricity
Manufacturing
Services
Mining
Construction
Irrigation
Investments and FDI inflows
• Himachal Pradesh had outstanding investments of US$ 16.3 billion as of March 2010.
• FDI inflows from April 2000 to May 2010 amounted to US$ 772 million.
• The bulk of the investments were in the power (64 per cent) and manufacturing (15 per cent) sectors.
Break up of investments by sector
Source: CMIE, as of March 2010
STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
*Includes Himachal Pradesh, Punjab, Chandigarh and Haryana
Himachal Pradesh November 2010
22
Contents
Advantage Himachal Pradesh
State economy and socio-economic profile
Infrastructure status
State policies and incentives
Business opportunities
Doing business in Himachal Pradesh
HIMACHAL PRADESH November 2010
23
• Ample workforce availability makes Himachal Pradesh an attractive investment destination.
• About 32 per cent of the workforce is classified as main workers, 16.9 per cent as marginal workers and 50.8 per cent as non-workers.
• Agriculture still remains the largest employer, engaging over 65 per cent of the workforce.
• Labour relations are cordial with few strikes, lockouts and lost man-days because of industrial disputes.
Labour availability
INFRASTRUCTURE STATUS
Himachal Pradesh November 2010
24
Road network
• Since much of the state is hilly, roads play a vital role in transportation.
• Of the total road length of 32,926 km, National Highways account for 1,409 km.
• Roads have been assigned a high priority by the Government of Himachal Pradesh. In 2009-2010, the government outlay for road development and related activities was US$ 101 million.
Source: Maps of India
INFRASTRUCTURE STATUS
Himachal Pradesh November 2010
25
Airports
Domestic airport
• There are three airports – at Kullu (Bhuntar), Kangra (Gaggal) and Shimla (Jubbar Hatti).
• In addition, there are 57 operational helipads and another 12 new helipads being planned.
• An airport has been proposed for Sundernagar, to match international standards (which can accommodate landing of an Airbus A-320 or a Boeing 747 aircraft).
• Night landing facilities are proposed to be given for all the three existing airports.
INFRASTRUCTURE STATUS
Himachal Pradesh November 2010
26
Railways
• Himachal Pradesh falls under the Northern Railways network.
• Two narrow gauge lines connect Kalka with Shimla and Jogindernagar with Pathankot; with a route length of 96 km and 113 km, respectively.
• A 33 km broad-gauge line connects the Nangal Dam to Charuru.
Source: Maps of India
INFRASTRUCTURE STATUS
Himachal Pradesh November 2010
27
Power … (1/2)
Installed power capacity (MW)
Sources: Economic Survey 2009-2010 , Central Electricity
Authority, as of March 2010
• In 2009-2010, the state had a power generation installed capacity of 2,030.2 MW.
• Himachal Pradesh is naturally suited for hydro-power generation and accounts for around 25 per cent of India‟s total hydro-power potential.
• It has a high level of village electrification; about 17,183 of 17,495 villages had been electrified by the end of December 2009.
• In order to provide electricity to all the households in the state, the Rajiv Gandhi VidyutikaranYojna (RGGVY) scheme has sanctioned US$ 72.1 million.
INFRASTRUCTURE STATUS
1,687.3
1,866.0 1,858.0 1,896.5 2,030.2
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
2005-06 2006-07 2007-08 2008-09 2009-10
Himachal Pradesh November 2010
28
Power … (2/2)
• State-owned power generation in Himachal Pradesh is managed by the Himachal Pradesh Power Corporation Limited (HPPCL) .
• Power transmission is overseen by the Himachal Pradesh Power Transmission Corporation Limited.
• Himachal Pradesh‟s power sector was ranked seventh in the country by the State Power Sector Performance Ratings study conducted by the Power Ministry of India in 2006.
• It is one of the few states in India where power delivered to consumers is 100 per cent metered and its distribution system has 97.4 per cent availability.
Source: Asian Development Bank report on “India, Capacity Building for Himachal Pradesh Power Sector Agencies,” November 2008
INFRASTRUCTURE STATUS
Himachal Pradesh November 2010
29
Telecom
• As of March 2010, the state had 4.99 million wireless subscribers and 360,000 wire-line subscribers.
• The state has a high tele-density of 79.4 per cent (as of March 2010), compared to the all-India average of 52.7 per cent.
• Himachal Pradesh has a high density of optical-fibre cable (OFC) per unit area with a 8,500 km network.
Telecom infrastructure
GSM cellular subscribers: 4,790,604^
Broadband subscribers: 20,981*
Post offices: 2,777#
Sources: Cellular Operators of India, November 2009,
Department of Telecommunications, March 2010 ,
Himachal Pradesh in Figures, 2009
*As of October 2008
^As of June 2010#As of 2008-09
INFRASTRUCTURE STATUS
Himachal Pradesh November 2010
30
• Shimla is one of the 65 cities that have been identified under the Jawaharlal Nehru Urban Renewal Mission (JNNURM) for local infrastructure development.
• Under JNNURM, four projects costing US$ 32.3 million have been sanctioned for Shimla.
• The projects have been sanctioned for completion between 2007-08 and 2009-2010. The key areas of development are roads and flyovers, water supply, solid-waste management and sewerage.
• The Government of Himachal Pradesh has constituted a state-level steering committee under the chairmanship of the Chief Minister and has nominated Himachal Pradesh Housing and Urban Development Authority (HIMUDA) as the state-level nodal agency for implementing the planned projects under JNNURM.
Urban infrastructure
Sources: JNNURM, Ministry of Urban Development, www.urbanindia.nic.in; Municipal Corporation, Shimla
INFRASTRUCTURE STATUS
Himachal Pradesh November 2010
31
Public private partnership projects
Contract authority ProjectInvestment
(US$ million)PPP type Status
Roads
National Highway
Authority of IndiaZirakpur-Parwanoo road 100.2 BOT-Toll
Under
construction
Source: www.projectstoday.com
BOT: Build-operate-transfer
• Himachal Pradesh has one project being implemented under the public-private partnership (PPP) mode;
it has a project cost of US$ 100.2 million.
INFRASTRUCTURE STATUS
Himachal Pradesh November 2010
32
• The male literacy rate is 85.3 per cent and female literacy rate stands at 67.4 per cent. The Government is taking several initiatives to bridge this gap.
• Sarva Shiksha Abhiyan, a programme to ensure universalisation of elementary education, is being implemented in the state on priority basis.
• The state is also planning to establish 16 new universities, in an effort to give a boost to higher education.
• With the introduction of new industrial training institutes/centres (ITI/ITC), annual seats for vocational training stand at over 18,750 in the state.
Education sector … (1/2)
Educational infrastructure
• Engineering colleges: 14
• Medical colleges: 2
• Dental colleges: 5
• Polytechnics: 25
• ITI/ITC: 139
INFRASTRUCTURE STATUS
Source: Economic Survey 2009-2010
As of December 2009
Himachal Pradesh November 2010
33
Literacy rates (%)
Literacy rate 76.5
Male literacy 85.4
Female literacy 67.4
Sources: Economic Survey 2009-2010, VII All-India Education Survey, 2007-08
*As of December 2009
• Private participation is being encouraged in technical and vocational education.
Himachal Pradesh primary education statistics
Number of schools (2009-2010)* Primary: 10,748
Middle: 2,338
High/higher and senior secondary schools:
2,100
Pupil-teacher ratio (2007-08) 22:1 (primary)
28:1 (upper primary)
16:1 (secondary)
Net-enrolment ratio in primary schools (2007-08) 99
Education sector … (2/2)
INFRASTRUCTURE STATUS
Himachal Pradesh November 2010
34
• Himachal Pradesh has better health indicators than the all-India average.
• The State Government has launched Health Mission, 2008, to provide effective and efficient health services.
Himachal Pradesh‟s health indicators
Birth rate* 17.7
Death rate* 7.4
Infant mortality rate** 44
Life expectancy at birth (years)
Male
Female
65.7
65.4
Source: Ministry of Health & Family Welfare, 2008
*Per thousand persons
**Per thousand live births
Health infrastructure
Health infrastructure
• Civil hospitals: 52
• Community health centres*: 73
• Primary health centres*: 449
• Sub-centres: 2,071
• Dispensaries: 23
INFRASTRUCTURE STATUS
Source: Economic Survey 2009-2010
As of 2008-09
*As of December 2009
Himachal Pradesh November 2010
35
Financial infrastructure
• Himachal Pradesh has 20 commercial banks operating in the state, of which eight are private sector banks.
• Deposits and advances of all banks in the state have increased significantly over the period from September 2008 to September 2009, registering a growth rate of 22.5 per cent and 15.4 per cent, respectively.
Financial institutions in Himachal Pradesh
Co-operative societies 4,382
Commercial bank branches 776
Regional rural bank branches 152
State cooperative bank branches 407
Central cooperative bank branches 183
Source: Economic Survey 2009-2010
As of September 2009
INFRASTRUCTURE STATUS
Himachal Pradesh November 2010
36
Cultural infrastructure
• The Himachal Pradesh Sports Council oversees the sports-related activities of the state.
• The Indira Gandhi State Sports Complex provides training for judo, badminton, volleyball, gymnastics, table tennis, boxing, wrestling, and martial arts. The complex also has a fitness and an aerobics facility.
• The state is also constructing another stadium in Dharamsala, with an investment of almost US$ 1 million.
• Adventure sports, such as river rafting, para-gliding and trekking are also popular given the climate and topography of Himachal Pradesh.
• The key hotels in Shimla are East Bourne & Spa, Wildflower Hall and the Oberoi Cecil. In Dharamshala, the key hotels are the Clubhouse and Asia Health Resorts, while the Hotel KulluValley, the Ambassador in Manali are the most popular hotels at Kullu-Manali.
• KangraValley is considered the cultural capital of Himachal Pradesh; its is home to Dharamshala and Mcleodganj, a hub for Buddhist-Tibetan culture. The district has several Buddist monasteries and Hindu temples.
• The S.M. Convention Centre in Palampur, is one of the largest of its kind in the state; it has 25 rooms, five banquet halls, seminar rooms and a board room.
INFRASTRUCTURE STATUS
Himachal Pradesh November 2010
37
Infrastructure Description
Industrial areas Set up at Baddi, Barotiwala, Parwanoo, Kala Amb, Paonta Sahib, Mehatpur, Tahliwal, Amb,
Sansarpur Terrace and Golthai.
Baddi Barotiwala Nalagarh
industrial area
The industrial area has been promoted by the Ministry of Commerce and Industries,
Government of India. It has emerged as a hub for textiles, pharmaceuticals and packaging
industries.
Biotechnology park
The Government has proposed to set up a biotechnology park at Nalagarh. The process for
selection of promoters has been finalised in April 2010 and necessary infrastructure will be
procured by 2010-11.
Nanotechnology parkThe nanotechnology park is proposed to come up on a 400-acre area near the biotechnology
park.
Special economic zones (SEZ)
SEZs have been approved in Kangra, Una and Solan at an estimated cost of US$ 1.8 billion. It is
proposed that Kangra and Solan will have multi-product SEZs and Una will have an airport-
based SEZ.
Inland container depot (ICD)
An ICD is being developed at Baddi for the benefit of exporting industries through Container
Corporation of India. A memorandum of understanding (MoU) has been signed between
Himachal Pradesh Government and Container Corporation of India.
Industrial infrastructure … (1/2)
INFRASTRUCTURE STATUS
Himachal Pradesh November 2010
38
Industrial infrastructure … (2/2)
Name and location Primary industry Description
Baddi TextilesLocated in the Solan district, the Baddi industrial area has several pharmaceutical,
textile, auto ancillary, paper and printing units.
Barotiwala Multi-industry Located in the Solan district; hub for small scale industries.
Parwanoo Light engineeringLocated in the Solan district; the city is an industrial cluster for high-density
polyethylene (HDPE) pipe companies.
Chambaghat Electronics
Located on the Shimla-Kalka highway in the Solan district, the industrial area has
prominent companies such as Himachal Futuristic Communications Limited and
Shivalik Bimetal Controls Limited.
Paonta SahibPharmaceuticals/
chemicals
Located in the Sirmour district, the industrial area has a number of
pharmaceutical and chemical companies.
Tahliwal and Gagret Electronics Located in the Una district, it has prominent telecommunications companies.
Amb industrial area Engineering/autoAmb has prominent engineering and automotive companies such as International
Cars and Motors Limited.
Sansarpur Terrace EngineeringLocated in the Kangra district, it has some of the leading engineering companies
of North India.
Golthai Multi-industry Located in the Bilaspur district, it has been identified as a mini growth centre.
• In an effort to provide infrastructure support to entrepreneurs, the Himachal Pradesh Government has developed 38 industrial areas and 15 industrial estates.
INFRASTRUCTURE STATUS
Himachal Pradesh November 2010
39
Industry Location SEZ (No)
Multi-product Kangra and Solan district 2
Airport-based Una 1
SEZs and industrial estates
Source: www.sezindia.nic.in
• There are three in-principle approved SEZs in Himachal Pradesh as of August 2010.
• In an effort to provide infrastructure support to entrepreneurs, the Himachal Pradesh Government has developed 38 industrial areas and 15 industrial estates.
• Industrial areas have been set up at Baddi, Barotiwala, Parwanoo, Kala Amb, Paonta Sahib, Mehatpur, Tahliwal, Amb, SansarpurTerrace and Golthai.
• Further, the state is focusing on sector-specific infrastructure for biotechnology, IT and tourism.
INFRASTRUCTURE STATUS
Himachal Pradesh November 2010
40
Major infrastructure projects being implemented
Infrastructure typeInvestments
(US$ million)
Power* 6,871.4
Road 236.1
Minerals 8.0
Total 7,115.5
• Over US$ 7.1 billion of investments have been made in ramping up Himachal Pradesh‟sindustrial infrastructure as of March 2010.
• Over 95 percent of the investments in infrastructure have been made in the areas of power generation and distribution.
*Generation and distribution
Source: CMIE
INFRASTRUCTURE STATUS
Himachal Pradesh November 2010
41
Contents
Advantage Himachal Pradesh
State economy and socio-economic profile
Infrastructure status
State policies and incentives
Business opportunities
Doing business in Himachal Pradesh
HIMACHAL PRADESH November 2010
42
Hydro Power Policy, 2007
Aim: To focus on capacity addition, energy security, access and availability, affordability, efficiency, environment and local
employment.
Key initiatives and stipulations:
• Projects up to 2 MW have been earmarked for the investors in Himachal Pradesh and for projects between 2 MW and 5 MW,
first preference to be given to the residents of Himachal Pradesh.
• Projects above 5 MW and up to 100 MW to be allotted to the independent power producers (IPP) via the MoU route and for
those above 100 MW via international competitive bidding. The State Government retains the right to equity participation in
private sector projects above 100 MW, up to a maximum limit of 49 per cent.
• Release of 15 per cent of minimum discharge downstream of the dam/diversion structure to be ensured during the lean season.
• In order to ensure employment to local people, a minimum of 70 per cent of total employees, officers, executives engaged by
the companies should be from the state.
• The concept of involving local people in the development of the “project affected area” has been specially devised, wherein local
area development committees (LADC) have been formed. Developers are supposed to earmark 1.5 per cent of the project cost
for the development of local areas through the LADCs.
• Promote activities such as construction of hydro-power projects, strengthening of transmission and distribution networks to
facilitate transmission of power from these projects and its distribution for utilisation within the state.
Sector-specific policies … (1/11)
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Hydro Power Policy, 2007(continued)
Incentives and concessions:
• 100 per cent foreign equity permitted on the automatic approval route, as long as it does not exceed US$ 326 million.
• Waiver of 40 per cent financing limit from Indian financial institutions.
• Himachal Pradesh Power Corporation Limited to purchase power at US$ 0.05 per kWh for projects up to 5 MW.
• Banking and wheeling facilities are permitted at 2 per cent, which includes transmission losses.
• Five-year moratorium on payment of electricity duty for companies which consume electricity that they produce.
Sector-specific policies … (2/11)
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Tourism Policy, 2005
Aim: To make tourism the prime engine of economic growth by positioning the state as a leading global destination by the year
2020.
Key elements and future strategy:
• Create a tourism sub-plan, which is integrated and coordinated with other state departments such as public works, urban
development, irrigation and public health, horticulture, forest, power, etc.
• Upgrade civil infrastructure in major tourist destinations, such as Shimla, Manali, Dalhousie, etc. This would include setting up of
hill stations, spas and resorts, ski slopes, airports, tourist centres and entertainment complexes, luxury hotels, etc.
• Invest in developing a skilled workforce, in order to deliver high quality professional services, for instance, by developing more
food craft institutes in Kangra and Kullu.
• Develop a new marketing strategy to raise awareness of the Himachal Pradesh as a brand and increase the inflow of tourists.
• Facilitate authorisations and permissions for film makers interested in shooting in the state, by creating a single-point authority,
i.e., the commissioner-cum-director of tourism.
• Improve connectivity to and within the state, including by road, rail and air.
• Strengthen the Tourism Development Board so that it can carry out various developmental and tourism promotional activities.
• Encourage private sector investment by simplifying procedures for clearances, etc.
Sector-specific policies … (3/11)
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Tourism Policy, 2005 (continued)
Thrust areas:
• Rural tourism
• Eco-tourism
• Pilgrimage tourism
• Adventure tourism
• Promoting „unexplored Himachal‟
• Health tourism
• Arts, crafts and souvenirs
Incentives and concessions as per the “Special Package of Incentives” scheme of 2003.
Sector-specific policies … (4/11)
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Sector-specific policies … (5/11)
Industrial Policy, 2004
Aim: To develop infrastructure with lesser number of regulations and provision for speedy clearance of new projects.
Key targets and initiatives:• To increase installed capacity addition in power by 6,100 MW by 2010.
• Special priority for providing power connections to 100 per cent export-oriented units, IT, biotechnology, FDI projects and tourism sector.
• No electricity duty to be charged on power generated from captive diesel-power plants.
• Permission requirements for captive generating sets to be time bound and simplified; provision for third-party sale of power.
• Supplementing the special package of incentives given to the state by the Central Government with specific concessions and facilities to ensure sustainable industrial development.
• Setting up of single-window clearance and monitoring agency under the chairmanship of the Chief Minister, along with single-window agencies at major industrial towns of Parwanoo, Baddi, Paonta Sahib, Goalthai and Sansarpur Terrace.
• Evolving a „best practices‟ standard in government departments at the delivery end, such as the state power utilities, LabourDepartment and Department of Excise.
• Setting up of activity-specific industrial areas such as food parks, electronics city, export processing zones and biotechnologyparks.
• Reforms in the Labour Department regarding annual inspections and maintenance of registers.
• The State Government, in February 2009, amended the Incentive Rules, 2004, to include biotechnology process-based industrial and non-industrial products, processing laboratories and research and development facilities as thrust industries.
• Also liberalised the process of transfer of industrial plots and sheds in the industrial areas.
STATE POLICIES AND INCENTIVES
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Industrial Policy, 2004 (continued)
Incentives and concessions:
The Central Government has formulated the “Special Package of Incentives” for the states of Uttarakhand and Himachal Pradesh:
• New and existing industrial units that are set up in growth centres, industrial infrastructure development centres, industrial
estates, export processing zones, theme parks (food processing parks, software technology parks, etc.), are entitled to the
following:
• 100 per cent excise duty exemption for a period of 10 years from the date of commencement of commercial
production.
• 100 per cent income tax exemption for initial period of five years, and thereafter, 30 per cent for companies and 25 per
cent for others for a period of five years from the date of commencement of commercial production.
• All new industries that are set up in notified locations are eligible for a 15 per cent capital investment subsidy of their investment
in plant and machinery, subject to a ceiling of US$ 65,217.
• Thrust sector industries are entitled to the same concessions as listed above, without any area restrictions.
• The Central Government gave an in-principle approval to extend the package by one year, after its expiry in March 2010.
Sector-specific policies … (6/11)
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Industrial Policy, 2004 (continued)
The Industrial Policy identifies the following “thrust industries” for Himachal Pradesh:
• Floriculture
• Medicinal herbs and aromatic herbs
• Honey
• Horticulture and agro-based industries
• Food processing industry
• Sugar and its byproducts
• Silk and silk products
• Wool and wool products
• Woven fabrics
• Sports goods
• Paper and paper products
• Pharmaceutical products
• Information and communication technology (including
computer hardware call centres)
• Bottling of mineral water
• Eco-tourism
• Industrial gases
• Handicrafts
• Non-timber forest products
The Central Government‟s special package of incentives for the above sectors have contributed significantly to the industrial
growth of the state, especially, in the areas of pharmaceuticals and tourism.
Sector-specific policies … (7/11)
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IT Policy, 2001
Aim: Action plan to harness the potential benefits offered by IT
Key initiatives:
• Department of Information Technology (DoIT) acts as a single-point interface for setting up an IT unit in the state.
• IT software and services are deemed to be manufacturing activity.
• All IT units with a connected load exceeding 100 KW to be charged a concessional rate of electricity duty at the rate of 10 paisa
per unit for a period of five years from the date of commencement of commercial production.
• Provision of tax-related incentives.
• Accredited training institutions to be eligible for claiming industry status (subject to norms) to benefit from industry concessions.
• Special packages for investment proposals above US$ 2.5 million or if the company is a Fortune 500 company.
• Continuous power supply to the IT industry, in consideration of it being treated as a “continuous process” industry.
• Registered IT units within the declared Software Technology Park (STP), IT habitats and hi-tech cities to be eligible for relaxation
of floor area ratio (FAR) to the extent of 50 per cent.
• Exemption from land and building tax within the declared STP, IT habitats and hi-tech cities.
• Creation of a venture capital fund of US$ 5 million in association with Small Industries Development Bank of India (SIDBI).
Sector-specific policies … (8/11)
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IT Policy, 2001(continued)
Incentives and concessions:
• IT and related services are considered as a part of manufacturing; the companies are eligible for the same incentives and
concessions as other industries under the Industry Policy, 2004.
• Under the Industrial Policy, 2004, IT and IT services is defined as „thrust industry” and is eligible for a special package of
incentives such as income tax exemption/concession, central excise exemption and capital subsidy.
• Companies within this sector are eligible for industrial power tariff and other power-related incentives and concessions, which
are applicable to other industrial consumers.
• Tax-related incentives:
• Exemption from central sales tax (CST) for new IT industrial units until March 2013. Existing units who have availed of this
exemption for less than six years and eight months are also eligible.
• 100 per cent income tax exemption for initial five years of operation, and thereafter a 30 per cent rebate for another five
years.
Sector-specific policies … (9/11)
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Biotechnology Policy, 2001
Aim: To focus on developing new technologies in the areas of biotechnology for agriculture, animal husbandry and healthcare.
Key initiatives:
• Upgrade infrastructural support to research and development (R&D) institutions for skill development in biotechnology.
• Intensify R&D work in potential areas of biotechnology including agriculture, animal husbandry and human health.
• Conserve and commercially exploit bio-resources of the state for sustainable development.
• Attract entrepreneurs for setting up of biotechnology-based industries.
• Provide suitable institutional framework to achieve the objectives.
Sector-specific policies … (10/11)
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Biotechnology Policy, 2001 (continued)
Incentives and concessions:
• Biotechnology is identified as a “thrust sector” under the Industrial Policy, 2004 and is eligible for incentives and concessions
under the policy.
• The State Government proposes to establish two separate biotechnology parks, one between Solan and Shimla and another
between Shahpur and Jogindernagar in the PPP mode; land will be made available to prospective entrepreneurs.
• The entrepreneurs will be free to set up their units in other established industrial areas in the state.
• For registered biotechnology units within the declared biotechnology park or industrial area, relaxation of up to 50 per cent of
floor-area ratio (FAR) norms. For units that are in the other areas, relaxation of up to 25 per cent is permissible, subject to
population density, infrastructure availability and local geology.
• Biotechnology units will be considered at par with fruit-, vegetable- and maize-based units and shall enjoy the same concessions
such as goods and service tax (GST) exemption, CST concessions, procurement of raw materials at 1 per cent GST, allotments
of plots/sheds at reasonable prices in industrial areas/estates, etc.
• Power will be supplied at industrial rates; biotech units will be exempt from routine power cuts, load shedding, and peak time
restrictions.
Sector-specific policies … (11/11)
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Company logos cited in this section are registered trademarks of the respective companies
Contents
Advantage Himachal Pradesh
State economy and socio-economic profile
Infrastructure status
State policies and incentives
Business opportunities
Doing business in Himachal Pradesh
HIMACHAL PRADESH November 2010
54
Agro-based industry
• Agriculture is the main occupation of the state and a major source of employment, though its share in the GSDP has been declining.
• Food processing industry is mainly in the areas of traditional processing of agricultural and horticulture raw material.
• Agri-procurement has lately been an investment area for corporate entities.
• The area under fruit cultivation increased from 792 hectares in 1950-51 to about 204,629 hectares in 2008-09.
• Apple is one of the most important crops in the state, constituting about 81 per cent of the total fruit production. The state produced 510,000 metric tonnes of apples in 2008-09.
Key players
• Adani Agri fresh
• Reliance
• Dharampal Satyapal Group
• Himachal Pradesh Horticulture Produce
Processing and Marketing Corporation (HPMC)
• Nestle India
• Dabur
• Mahaan Group
• Himalayan Organics
BUSINESS OPPORTUNITIES
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Cremica Group Cremica Group is a prominent player in both the Indian food retail and the food services industry;
the company recorded a revenue of US$ 90 million in 2008-09. The business activities of the
company include Cremica Frozen Foods, EBI Foods, Mrs Bector‟s Desserts and Cremica Agro India.
The company is commissioning a plant at Tahliwal Industrial Area, Una, for manufacturing biscuits
and Indian snack foods. It is a 100 per cent automated facility with a monthly manufacturing capacity
of 5,000 tonnes of biscuits.
Adani Agri Fresh Adani Agri Fresh, a 100 per cent subsidiary of Adani Enterprises, which had revenue of US$ 2.45
billion in 2009-2010, has set up three controlled-atmosphere storage units at an investment of US$
33 million and capacity of 6,000 metric tonnes each; involved in procurement, storage and
transportation of apples, apricots and vegetables. It procured about 24,000 metric tonnes of apples in
2007-08 for storage as well as spot sales; the company plans to procure 35,000 tonnes of apples
from the Shimla and Kinnaur belt in 2010-11.
Reliance Reliance Retail is a subsidiary of the Indian conglomerate, Reliance Group. It recorded revenues of
US$ 28 billion and has created a supply chain for procurement of apples, peaches, apricots and
vegetables in the state.
Dharampal Satyapal
Group
Diversified conglomerate with presence in chewing tobacco, spices, beverages and hospitality. The
group recorded revenues of US$ 340 million in 2008-09. The group has two plants in Baddi,
Himachal Pradesh. The company produces the “Catch” brand of mineral water at its Kullu facility and
“Pass Pass” mouth freshener.
Food procurement and processing – company profiles … (1/2)
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Food procurement and processing – company profiles … (2/2)
Nestle India Nestle has a presence in India for almost a century with seven production facilities across the
country. The company produces chocolate and confectionaries, prepared dishes and cooking aids,
beverages and milk products and nutrition. It had revenues of US$ 1.1 billion in 2009-2010 from its
Indian operations . In December 2009, Nestle India announced that it had received approval to set
up a US$ 54.3 million food and beverage manufacturing facility in the Una district which will provide
direct employment to 650 people.
Dabur Dabur is one of the country‟s largest consumer goods companies. It had revenues of US$ 600 million
in 2008-09; the company manufactures several of its products in Himachal Pradesh, including honey
and amla.
Mahaan Group Delhi-based Mahaan Group specialises in dairy products as well as in other food products, such as
bakery items, beverages, confectionary items, salad dressing, sauces and soups. It has a dairy plant
based in Paonta Sahib, which manufactures dairy whitener, skim milk powder and other milk-based
products, as well as a processing facility for skim milk.
Himalayan Organics Himachal Organics is a Kullu-based exporter and supplier of organic food products. The company‟s
product range includes fruits and vegetables such as lettuce, brussel sprouts, broccoli, plums and
apples as well as cereals such as red rice.
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Pharmaceuticals
• Himachal Pradesh is among the fastest growing regions for the pharmaceutical industry in India, driven by the incentives announced by the State Government in its Industrial Policy, 2004.
• Around 300 pharmaceutical companies have set up operations in the state, including Ranbaxy, Dr Reddy‟s, Morepen and Torrent Pharmaceuticals.
Key players
• Ranbaxy Laboratories
• Cipla
• Torrent Pharmaceuticals
• Dr Reddy‟s Laboratories
• Panacea Biotec
• Gopal Lifesciences
• Morepen
• Mankind Pharmaceuticals
• FemCare Pharma Limited
• Indoco Remedies
• Promed
• Alkem
• Ozone Ayurvedics
• Abyss Pharma Private Limited
• Dabur
• Zydus Cadila
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Pharmaceuticals – company profiles … (1/4)
Ranbaxy Laboratories
Limited
Ranbaxy is among India‟s leading pharmaceutical companies with business operations in 40 countries
and manufacturing facilities in six countries. It has a manufacturing facility at Paonta Sahib, district
Sirmaur. The company manufactures fermentation-based products such as Lovastatin and Pravastatin.
In 2008, Japanese conglomerate Daiichi Sankyo became the largest shareholder in Ranbaxy. In July
2009, Ranbaxy announced that it would set up another plant in Solan district with an outlay of US$ 7.3
million. In 2009-2010, the company‟s revenue crossed US$ 1 billion.
Cipla Cipla has one of the largest product portfolios with over 1,000 products and revenue of US$ 1.2 billion
in 2009-2010. The company established a manufacturing facility at Baddi with an investment of roughly
US$ 11 million in 2005. The unit manufactures bulk drugs, tablets and capsules, creams,
aerosols/inhalation devices and injections/sterile solutions.
Torrent Pharma Limited Torrent Pharma is one of the largest pharmaceutical players in the domestic market. The company
commissioned a new formulation manufacturing facility at Baddi in November 2005 with an investment
of US$ 30.6 million, which has a capacity to manufacture 3,600 million tablets, 400 million capsules and
18 million oral liquid bottles per annum. The manufacturing capacity at the Baddi facility has been
increased by around 30 per cent to meet the increased export demand.
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Pharmaceuticals – company profiles … (2/4)
Panacea Biotec Panacea is one of India‟s prominent pharmaceutical and biotech companies involved in research,
manufacturing and marketing of pharmaceutical formulations. It recorded revenues of US$ 186.7
million in 2009-2010. The company filed 1,158 patents as of 2009-2010, of which 325 have been
granted. It employs over 3,200 people. Its pharmaceutical and vaccine formulations facility is located in
Baddi, with a production capacity of 900 million tablets, 120 million hard-gelatin capsules, 150 million
soft-gelatin capsules, 60 million herbal capsules and 600 million doses of vaccines per annum.
Dr Reddy‟s Laboratories
(DRL)
Established in 1984, Dr Reddy‟s ranks among the top 15 generics players in the world. It is the first
pharmaceutical company in Asia-Pacific (outside Japan) to be listed on the New York stock exchange
(NYSE). It has presence in 35 countries with operations in over 115 countries; overseas business
contributes around 86 per cent to the total revenue. The company aspires to become a discovery-led
global pharmaceutical company and one of the top 10 generic companies in the world. It has a
presence in therapeutic categories such as anti-infectives, cardio-vascular, diabetes, dermatological,
pain management, nutritional, dental, urological and oncology. The company has a finished dosage
facility in Baddi.
Gopal Lifesciences Gopal Lifesciences is a Himachal Pradesh based pharmaceutical firm, located in Baddi, which
manufactures tablets, capsules and liquid medication. The company is involved in both contract
manufacturing as well as its own manufacturing.
Morepen Set up in 1984, Morepen Laboratories is an Indian pharmaceutical firm specialising in active
pharmaceutical ingredients as well as formulations manufacturing. It had revenues of US$ 33 million in
2009-2010. The company has three manufacturing facilities in the state at Masulkhana, Parwanoo and
Baddi.
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Pharmaceuticals – company profiles … (3/4)
Mankind Pharmaceuticals Mankind Pharmaceuticals is a prominent Indian pharmaceutical company specialising in drugs such
as prescription antibiotics, antifungals, gastrointestinals, etc. It had revenues of US$ 200 million in
2008-09. The company has a US Food & Drug Administration (USFDA)-approved manufacturing
unit at Paonta Sahib, which has a production capacity of 60 million ampoules and 30 million vials in
a single shift.
Fem Care Pharma Limited Fem Care Pharma is an Indian company that operates in the personal care, pharmaceutical and
specialty chemicals businesses. It recorded revenues of US$ 34.4 million in 2008-09, of which the
pharmaceutical division contributed US$ 2.7 million. The pharmaceutical division is located in
Nalagarh and specialises in dermatological products.
Indoco Remedies Indoco Remedies is an Indian pharmaceutical formulations and active pharmaceutical ingredients
(API) manufacturing and marketing firm. It had revenues of US$ 85 million in 2009-2010. The
company has a US$ 9 million manufacturing facility in Baddi, which has an annual production
capacity of 1.5 billion tablets, 3,000 kilolitres of liquid orals, 200 tonnes of creams and ointments
and 1,500 tonnes of toothpaste.
Promed Set up in 1990, the company manufactures and exports pharmaceutical formulations. It has a
manufacturing facility in Nalagarh and manufactures products such as nasal drops, eye drops,
inhalation products, wound care products and injectibles.
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Pharmaceuticals – company profiles … (4/4)
Alkem Laboratories Founded in 1974, Alkem is one of the prominent pharmaceutical companies in India; it has a Baddi
facility with a built-up area of 220,000 sq ft, which produces tablets, capsules, dry powder injectibles
and oral suspensions.
Ozone Ayurvedics Ozone Ayurvedics is a division of Ozone Group. It manufactures and supplies personal care products
such as anti-acne and anti-blemish creams, soaps, face wash, face packs, as well as herbal and Ayurvedic
products. The company had revenues of US$ 34.9 million in 2008-09. It has a manufacturing facility in
Baddi.
Abyss Pharma Private
Limited
Abyss Pharma is an Indian pharmaceutical formulations company, which began operations in 1985. It
produces a variety of products ranging from tablets and capsules to ear drops, injectibles and
sunscreens.
Dabur Dabur is one of the country‟s largest consumer goods companies. It had revenues of US$ 607.7 million
in 2009-2010. The company manufactures several of its products in Himachal Pradesh, including its
throat lozenges brand Honitus, glucose and digestive brand, Hajmola.
Zydus Cadila Zydus Cadila is a pharmaceutical company, which manufactures both formulations as well as active
pharmaceutical ingredients (API). It is headquartered in Ahmedabad. The company had revenues of
US$ 762 million in 2009-2010. The company employs over 10,000 people worldwide. It has a
formulations manufacturing facility at Baddi.
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Textiles
• The textiles industry in Himachal Pradesh is mainly focussed on spinning, however, some companies such as Vardhman are also engaged in weaving and dyeing.
• Handloom and carpet weaving have developed as small scale industries.
• SEL Manufacturing Company announced in September 2008 that it would be setting up a technical textile park in the state, at a cost of US$ 124.4 million. The park will be spread across 100 acres of land and is estimated to create over 10,000 jobs.
Key players
• Birla Textile Mills
• Winsome
• Vardhman
• Malwa Cotton
• Himtex Textiles Private Limited
• Sara Textiles Limited
• Himachal Fibre Limited
• Nirmal Furnishing Fabrics
• GPI Textiles
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Textiles – company profiles … (1/2)
Malwa Cotton Spinning Mills Malwa Cotton Spinning Mills is a subsidiary of VSO Group. The company has a
manufacturing facility at Paonta Sahib, which manufactures cotton, acrylic, polyester and
viscose.
Vardhman Group The group recorded revenues of US$ 2.1 billion in 2009-2010. It has three state-of-the-art
spinning facilities at Baddi with a combined installed capacity of over 240,000 spindles, and a
daily capacity of 150,000 metres. Its products include yarns, fabrics, sewing threads and fibre.
The company is among the largest producers and exporters of yarns and grey woven fabrics,
tyre cord yarns and sewing threads. The company also set up a finishing operation in Baddi,
under the name Auro Textiles, which has a production capacity of 160,000 metres per day.
Winsome Group The group has a spinning facility at Baddi. It produces yarns in a variety of shades in melange,
package dyed, and fibre-dyed yarns. The company plans to expand its spinning capacity by
13,000 spindles and dyeing capacity by 10 tonnes per day. Expansion plans announced in
August 2009 involve expenditure of about US$ 31 million.
Birla Textile Mills Division of Chambal Fertilizers and Chemicals Limited, a flagship company of the KK Birla
Group of companies. The company‟s Baddi plant has an installed capacity of more than
80,000 spindles.
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Himtex Textiles Private Limited. Established in 2007, Himtex produces cotton yarn. It has a rotor capacity of 1,040. The
company‟s spinning facilities are located in Una. It plans to double its number of rotors in
2009-2010.
Sara Textiles Limited It is the textile arm of the Sara Group, which specialises in textile manufacturing and sales. The
company has a modern terry towel manufacturing unit in Nalagarh, besides a textile export
unit and a spinning unit.
Himachal Fibre Limited Established in 1982, the company is a manufacturer of multiple types of yarn, such as cotton
yarn, melange yarn, open-end yarn, blended yarn, etc. It had revenue of US$ 16.9 million in
2008-09. It has a manufacturing unit in the Barotiwala industrial area, Solan.
Nirmal Furnishing Fabrics Nirmal Furnishing Fabrics was set up in 1982. It is a 100 per cent subsidiary of Nirmal Spinning
Mills Private Limited and specialises in shawl manufacturing. It has a composite textile mill in
Baddi, with the latest shuttle-less looms.
GPI Textiles Limited GPI Textiles is a part of the Ispat Group and is one of the largest and most modern spinning
plants in the country, with over 84,000 spindles and 960 rotors, producing over 23,000 metric
tonnes of yarn per annum. The company is based in Nalagarh.
Textiles – company profiles … (2/2)
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Light engineering goods
• The light engineering goods industry in Himachal Pradesh includes precision engineering components, automotive components, steel and fabrication units and cylinder manufacturing.
• Kala Amb in Paonta Sahib has a large number of steel fabrication mills.
• Auto component units are, mainly, based in Parwanoo (Solan district).
• International Cars and Motors Limited has a factory at Una.
Key players
• Gabriel
• Purolator
• International Cars and Motors Limited
• Blue Star India
• Spray Engineering Devices Limited
• TVS Motor Company
• Deepak Power Storage Enterprises
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Light engineering industry – company profiles … (1/2)
Gabriel India Gabriel is a flagship company of the US$ 400 million Anand Automotive Group; it manufactures
ride-control systems and engine bearings. The company supplies to all three segments of the
market: original equipment, aftermarket and exports. It produces 20 million units per annum.
In November 2008, the company started operations at the Parwanoo plant. The plant manufactures
shock absorbers and components for two-wheelers. It has an annual capacity of 2.4 million shock
absorbers and 400,000 struts.
Mahle Filter Systems India
Limited
Purolator is a joint venture between Anand Group and Arvin Meritor (US). It is one of the largest
producers and exporters of air, oil and hydraulic filters in the country. The company has clients
from automotive, railways and aviation industries. It has set up its second plant at Parwanoo and
production began in February 2010. The plant has an annual capacity of 22 million filters.
International Car and
Motors Limited (ICML)
ICML is a US$ 285 million subsidiary of the Sonalika Group. It sells multi-utility vehicles under the
brand name Rhino. The company has an installed capacity of 2,000 vehicles per month, a state-of-
the-art facility at Una and technical collaboration agreement with MG Rover of the UK.
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Light engineering industry – company profiles … (2/2)
Blue Star India Blue Star is one of India‟s largest air conditioning companies. It had revenues of US$ 540 million in
2009-2010. The company employs 2,600 people in five manufacturing facilities across the country. In
2005, the company set up a 14,000 sq m manufacturing unit at Kala Amb.
Spray Engineering Devices
Limited
Spray Engineering Devices was established in 1992 and is a flagship company of Spray Engineering
Devices (SED) group. It is an engineering company, with focus on redesign and engineering of
processes and equipment. The company had revenues of US$ 38 million in 2008-09. The company
has a sheet metal manufacturing unit in Baddi, which was set up in 1996. A second unit was set up in
Baddi in 2001 and a third unit to process sheet metal (capacity of 35 tonnes per day) was also set
up in Baddi in 2006.
TVS Motor Company TVS Motor is one of the largest two-wheeler manufacturers in India. It had revenues of US$ 1
billion in 2008-09 and had over 4,000 employees. In 2007-08, the company began operations at its
new Nalagarh plant.
Deepak Power Storage
Enterprises
Established in 1940, Deepak Power Storage Enterprises is a part of the Deepak Group of
Companies. It is a prominent two-wheeler and four-wheeler battery manufacturer in North India. It
has a modern fully-automated manufacturing facility in Sansarpur Terrace, Kangra.
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Cement industry
• Himachal Pradesh has ample availability of quality limestone; the state supplies almost half of its cement produced to other states.
• Three new cement plants are being operated by Larsen and Toubro, Grasim Industries and Harish Chandra Limited.
• MoUs have been signed by India Cement Limited, Lafarge India Limited and JP Industries to establish three additional cement plants.
Key players
• ACC
• Ambuja Cements
• UltraTech Cements
• Jaypee Cements
BUSINESS OPPORTUNITIES
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69
Cement – company profiles
ACC ACC is one of India‟s foremost manufacturers of cement and concrete with 14 factories. It has plants at
Gagal, Bilaspur. The company has completed augmentation of its clinker and cement grinding unit with a
capacity of 4.4 million tonnes per annum (MTPA). In September 2009, the state allowed ACC to generate
electricity using the waste exhaust from kiln gases, an environmentally-friendly method.
Ambuja Cements Ambuja Cements is among the large cement companies in India with annual combined capacity of 16
million tonnes. It has an installed capacity of 2 MTPA in Darlaghat (Solan district). At the end of 2008, the
company announced a US$ 760 million expansion program. The capacity of the company‟s Nalagarh
grinding plant is to be expanded by 1.5 million tonnes and a new clinker unit to be set up in Rauri with a
capacity of 2.2 million tonnes.
UltraTech Cement
Limited
UltraTech Cement is a subsidiary of Grasim Industries Limited, which is the flagship company of the
Aditya Birla Group. It had an annual capacity of 45.7 million metric tonnes in June 2009. It specialises in
grey cement. The group revenue was US$ 4 billion in 2008-09. The company is setting up a US$ 217
million cement plant in Mandi, which would provide employment to 1,000 people.
Jaypee Cement Jaypee Cement has an aggregate annual capacity of 14.7 million metric tonnes and is among the largest
cement producers in the country. The company has aggressive expansion plans and is targeting an annual
capacity of 23 million metric tonnes and 30 million metric tonnes by 2010 and 2011 respectively. Jaypee
has a cement blending unit in Nalagarh, which has a production capacity of 2.5 million metric tonnes.
BUSINESS OPPORTUNITIES
Himachal Pradesh November 2010
70
IT and electronics industry
• Himachal Pradesh‟s IT policy and the incentives offered to the IT industry are aimed at promoting the state as an attractive destination for the industry.
• The state has proposed to set up software technology parks and several incentives are being offered to IT firms.
• The state has launched a venture capital fund dedicated to the IT industry with a corpus of around US$ 4.8 million. It is funded jointly by Small Industries Development Bank of India (SIDBI) and other state government agencies.
Key players
• Himachal Futuristic Communication Limited
• Microtek International
• Luminous TeleInfra Limited
• WeP Peripherals Limited
• Spice Mobile
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71
IT and electronics industry – company profiles … (1/2)
Himachal Futuristic
Communications Limited
HFCL is a leading telecom equipment manufacturer, particularly, transmission equipment,
optical-fibre cables, accessories and terminal equipment. It has two facilities at Solan with 1,500
professionals. The company is among the first Indian telecommunication companies to have
successfully subscribed a global depository receipts (GDR) issue. The company is working on
product development in areas such as Internet Protocol Digital Subscriber Line Access
Multiplexer (IPDSLAM), Wi-Max, Gigabit-capable Passive Optical Network (GPON), high-speed
IP infrastructure, mobility and system integration.
Microtek International Microtek International is an IT peripherals and power products company. It has set up a
motherboard manufacturing facility at Parwanoo with a capacity of 50,000 motherboards per
month.
BUSINESS OPPORTUNITIES
Himachal Pradesh November 2010
72
IT and electronics industry – company profiles … (2/2)
Luminous Teleinfra Limited Luminous is a company of the SAR Group; it provides telecom application solutions, which
aim to bring about a reduction in energy consumption and operating expenses. The group
revenue was US$ 124.4 million in 2007-08. In November 2008, the company announced plans
to set up a US$ 32.6 million 50,000 unit (per annum) manufacturing plant in Una, which would
produce telecom batteries, power management units and conversion devices.
WeP Peripherals Limited Established in 2000, WeP Peripherals started manufacturing dot-matrix printers; it has now
diversified into power solutions – uninterrupted power supply (UPS); the company has a
state-of-the-art manufacturing facility in Baddi, where it has the capacity to produce more
than 650,000 products per annum.
Spice Mobile Spice Mobile, a subsidiary of the Spice group is among the largest mobile handset makers in
India; it has a manufacturing facility in Baddi, in which it began production of mobile handsets
in March 2010. The company proposes to increase its local production and has made a US$
21.7 million investment for this expansion.
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73
Tourism industry … (1/2)
• Tourism is one of the most important sectors for the state economy in terms of foreign exchange earnings as well as creation of employment opportunities.
• The state is endowed with topographic diversity as well as with historical monuments and religious shrines.
• As of December 2009, there were 1,992 registered hotels and guest houses in the state.
Source: Directorate of Tourism, Himachal Pradesh
As of December 2008
Top tourist
destinations
Registered hotels and
guest houses (No)
Kullu 562
Shimla 377
Kangra 294
Solan 165
Chamba 150
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74
Total tourist arrivals in Himachal Pradesh
Source: District-level Economic Indicators, 2008
^As of 2008
No
of to
uri
sts
( m
illio
n)
Tourism industry … (2/2)
• The tourist inflow in the state has increased from 5.7 million in 2003-04 to 11.4 million in 2009-2010, representing a CAGR of 12.2 per cent.
DestinationNo of tourists ^
(in million)
Shimla 2.2
Kullu 2.1
Kangra 1.3
Bilaspur 0.7
Chamba 0.7
BUSINESS OPPORTUNITIES
5.716.55
7.147.95
8.829.75
11.4
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2003 2004 2005 2006 2007 2008 2009
Source: Economic Survey 2009-2010
Himachal Pradesh November 2010
75
Major industrial projects being implemented
Promoter ProjectInvestment
(US$ million)Location
Pharmaceuticals
Ankur Drugs & Pharma Limited Drug formulations project 43.5 Solan
Torrent Pharmaceuticals Limited Drug formulations project 21.7 Solan
Dabur India Limited Drug formulations project 28.3 Solan
Venus Remedies Limited Drug formulations expansion 21.7 Solan
Fresenius Kabi Oncology Drug formulations project 21.7 Solan
Cement
Jaiprakash Associates Limited Cement grinding project 201.1 Solan
Lafarge India Limited Cement plant 195.7 Mandi
Telecom
Luminous Teleinfra Limited Telecom batteries project 42.2 Una
Textiles
Cannon Industries Private Limited Spandex yarn project 34.6 Kangra
Jindal Specialty Textiles Limited Technical textile products project 32.6 Una
Vardhman Polytex Limited Textiles project 22.8 Solan
Source: www.projectstoday.com
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Himachal Pradesh November 2010
76
Key industrial projects being plannedPromoter Project Investment (US$ million) Location
Airport
Airports Authority of India Expansion of runway 22.1 Shimla
Pharmaceutical
Ankur Drugs & Pharma Limited Drug formulations project 43.5 Solan
Education
Employees‟ State Insurance Corporation Medical college 126.6 Mandi
Cement
Jaiprakash Associates Limited Cement plant 434.8 Solan
Grasim Industries Limited Cement plant 217.4 Mandi
Coromandel Cements Limited Cement plant 195.7 Shimla
J K United Cements Private Limited Cement plant 847.8 Chamba
Steel
Steel Authority of India Limited Steel processing project 21.7 Kangra
IT/ITeS
Government of Himachal Pradesh IT/ITeS SEZ 43.5 Shimla
Cement
Steel Authority of India Limited Limestone mining project 56.5 Solan
Source: www.projectstoday.com
BUSINESS OPPORTUNITIES
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Contents
Advantage Himachal Pradesh
State economy and socio-economic profile
Infrastructure status
State policies and incentives
Business opportunities
Doing business in Himachal Pradesh
HIMACHAL PRADESH November 2010
78
Key approvals required
Approvals and clearances required Departments to be consulted
Prior to setting up the unit
Registration District Industry Centre for SSI or large and medium industries
Allotment of land/shed State Department of Industries/Infrastructure corporation
Permission for land use District authorities, Department of Town and Country Planning
No-objection certificate under the Water and Air Act Himachal Pradesh State Pollution Control Board
Approval for construction activity and building plan Town and Country Planning Authority
Site environmental approval State Pollution Control Board and Ministry of Environment and Forests
Provisional trade tax registrations Central and state excise departments
Registration under Central Sales Tax act Central and state excise departments
Before commencement of production
No-objection certificate under Water and Air Act State Pollution Control Board
No-objection certificate Fire Department and Directorate of Factories and Boilers
Permanent trade tax registration Central and state excise departments
Registration under Central Sales Tax Act Central and state excise departments
After commencement of production/activity
RegistrationDepartment of Industries and respective sector departments such as
information technology/biotechnology, etc.
DOING BUSINESS IN HIMACHAL PRADESH
Himachal Pradesh November 2010
79
Key nodal agencies
Single-window clearance
agency
• Agency for speedy clearance and in-principle approval to large and medium scale projects.
• Time frame for approval is 30 days.
• Since inception in January 2004, 36 meetings have been held and 753 projects with an
investment of US$ 5.37 billion have been approved up to March 2009.
Directorate of Industries
• Registration of small scale industries (SSI) and recommendation of medium and large scale
industries to the appropriate authority.
• Technical and general consultancy.
• Recommendation for financial assistance to financial institutions/banks for margin money and
loans.
• Industrial infrastructure development.
• Collection and maintenance of data relating to industrial units.
• Allotment of industrial plots, sheds and shops in districts.
• Liaison with and provide feedback to the central and state governments.
• Administration of all incentives to industries given by both central and state governments.
Himachal Pradesh Small
Industries and Export
Corporation
• Supply of raw material through appropriate depots.
• Supply of machinery on hire-purchase.
• Provision of assistance in export and marketing.
DOING BUSINESS IN HIMACHAL PRADESH
Himachal Pradesh November 2010
80
Cost of doing business in Himachal Pradesh
Cost parameter Cost estimate
Industrial land (per sq ft)Baddi industrial area: US$ 15 to US$ 50
Other industrial areas: US$ 12 to US$ 35
Office space rent
(per sq ft per month)US 10 cents to US$ 8
Residential rent
(1,600 to 2,500 sq ft house)US$ 250 to US$ 900 per month*
Hotel costs (per room, per night) US$ 20 to US$ 45
Power# (per kWh)Small and medium industries: US 8.4 cents to US 8.9 cents
Large industries: US 7.4 cents
Labour (minimum wage per month) US$ 48 to US$ 54
Water (per kl)Non-industrialised areas: US 12 cents
Industrialised areas: US 19 cents
Sources: Directorate of Industries, Department of Labour, Industry sources
*Simla or Kulu Manali
#Commercial and industrial
kl: kilolitre
DOING BUSINESS IN HIMACHAL PRADESH
Himachal Pradesh November 2010
81
Single-window clearance mechanism … (1/2)
• Single-window clearance mechanism (SWM), established under the Himachal Pradesh Industrial Facilitation Act, 2005. It has two-tier structure to grant exemption or relaxation from any of the provisions or rules of the Act.
• District Single Window Clearance Committee for each district in the state; chaired by the General Manager/Member Secretary, with senior-most officers of departments concerned in the district as members.
• State-level agency with the Chief Minister of Himachal Pradesh as its Chairman and various heads of departments as its members.
• Approvals for proposals with investments of over US$ 1.2 million, power requirement of above 5 MW and industries in the negative list such as forest-based, mining, etc., as defined by the Central and State Government – are decided by the state-level single-window clearance agency.
State-level Single Window
Clearance and Monitoring
Authority
Chief Minister of
Himachal
Pradesh
District-level single
window clearance agency
GM-
DIC/Member
Secretary
SWM structure in Himachal Pradesh
DOING BUSINESS IN HIMACHAL PRADESH
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82
Purpose:
• Provide first approval to medium and large scale investment proposals within 30 days of submission.
• Projects above US$ 1.2 million, power requirements above 5 MW, forest-based and industries indicated in the negative list by central and state governments–approved by the agency.
Single Window Clearance and Monitoring Agency: state-level nodal agency
Purpose:
• Provides sanctions and clearances for setting up small scale industrial units.
District Industry Centre (DIC): district-level committee for single-window clearance
Composition:
• The Chief Minister of Himachal Pradesh is the Chairman of the agency; other members include heads of the departments of town and country planning, labour, electricity, water, director of industries, industrial adviser.
Composition:
• Convened by the General Manager, DIC or member secretary, Single Window Clearance and Monitoring Agency
Single-window clearance mechanism … (2/2)
DOING BUSINESS IN HIMACHAL PRADESH
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83
Contact list
Key agency Contact information
Himachal Pradesh Industries
Department
Udyog Bhawan
Shimla
Phone: 91-177-2812613
E-mail: dirindus-hp@nic.in
Website: http://himachal.nic.in/industry/welcomelat.htm
Himachal Pradesh Small State Industries
and Export Corporation Limited
Kishore Bhawan, The Mall
Shimla
Himachal Pradesh - 171001
Phone: 91-177 2656713/ 2658266/ 2653070
E-mail: mail@hpssiec.com
Website: http://hpssiec.com/
Himachal Pradesh State Industrial
Development Corporation Limited
New Himrus Building
Circular Road
Shimla
Phone: 91-177-2624751, 2624752, 2624754, 2625422
Fax: 91-177-2624278
E-mail: hpsidc@sancharnet.in
Website: http://www.hpsidc.nic.in/tele.htm
DOING BUSINESS IN HIMACHAL PRADESH
Himachal Pradesh November 2010
84
Source: Market Research Society of India
Education/occupation
Illit
era
te
Schoo
l up t
o four
year
s/ litera
te,
but
no form
al
schoo
ling
Schoo
l up t
o
five
to n
ine y
ear
s
SSC
/HSC
Cert
ific
ate
cours
e, but
not
grad
uat
e
Gra
duat
e/P
ost
Gra
duat
e
genera
l
Gra
duat
e/P
ost
Gra
duat
e
Pro
fess
ional
Unskilled workers E2 E2 E1 D D D D
Skilled workers E2 E1 D C C B2 B2
Petty traders E2 D D C C B2 B2
Shop owners D D C B2 B1 A2 A2
Entrepreneurs: employee none D C B2 B1 A2 A2 A1
Entrepreneurs: employee < 10 C B2 B2 B1 A2 A1 A1
Entrepreneurs: employee > 10 B1 B1 A2
A
2 A1 A1 A1
Self-employed professionals D D D B2 B1 A2 A1
Clerical/salesman D D D C B2 B1 B1
Supervisory level D D C C B2 B1 A2
Officers/executives: junior C C C B2 B1 A2 A2
Officer/executive: middle/senior B1 B1 B1 B1 A2 A1 A1
AnnexureSocio-economic classification of urban and rural households: urban grid
DOING BUSINESS IN HIMACHAL PRADESH
Himachal Pradesh November 2010
85
Education
Type of house
Pucca Semi pucca Kuccha
Illiterate R4 R4 R4
Literate, but no
formal schoolR3 R4 R4
Upto fourth standard R3 R3 R4
Fifth to Ninth
standardR3 R3 R4
S.S.C./H.S.C. R2 R3 R3
Some college, but not
GraduateR1 R2 R3
Graduate/post
graduate (general)R1 R2 R3
Graduate/post
Graduate
(professional)
R1 R2 R3
Source: Market Research Society of India
Annexure … (1/2)
Socio-economic classification of urban and rural households: rural grid
DOING BUSINESS IN HIMACHAL PRADESH
Himachal Pradesh November 2010
86
Year INR equivalent of one US$
2000 46.6
2001 48.3
2002 48.0
2003 45.6
2004 43.7
2005 45.2
2006 45.0
2007 42.0
2008 40.2
2009 46.0
2010 47.4
Annexure … (2/2)
Exchange rates
Average for the year
DOING BUSINESS IN HIMACHAL PRADESH
Himachal Pradesh November 2010
87
India Brand Equity Foundation (“IBEF”) engaged
ICRA Management Consulting Services Limited (IMaCS)
to prepare this presentation and the same has been
prepared by IMaCS in consultation with IBEF.
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This presentation is for information purposes only. While
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HIMACHAL PRADESH November 2010
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