Footwear behemoth Pou Chen to enter TN; to invest Rs 500 crore

The investment by the Taichung City-based firm, which caters to Adidas and 15 other global brands, is likely to generate a large number of employment opportunities, an industry source told DT Next.

Update: 2022-12-31 02:20 GMT
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CHENNAI: Tamil Nadu is gearing up to welcome the New Year on a bright note, with Pou Chen Corporation of Taiwan, the world’s largest branded athletic and casual footwear manufacturer, all set to invest more than Rs 500 crore to set up a unit in the State. The investment by the Taichung City-based firm, which caters to Adidas and 15 other global brands, is likely to generate a large number of employment opportunities, an industry source told DT Next.

The Pou Chen investment will provide a major fillip to the State’s leather industry, which is still smarting from the pandemic crisis, the source said.

The government’s plan is to establish 20 to 25 manufacturing units under the leather and footwear policy across the State, said a government official.

Explaining the plan, the official said the idea is to ensure at least a 50 km perimeter between one footwear unit and another. “This will mean spaced out development and an employment potential for 15,000 to 20,000 people,” the official said on condition of anonymity.

At present, two Taiwanese footwear manufacturers Feng Tay and Hong Fu (Ranipet) besides Kothari Industrial Corporation (Perambalur) are key players in the sector.

Even as its third unit in Tindivanam is under construction, Feng Tay is mulling the fourth unit in the State, talks on which are still in the preliminary stage, the official added.

Tiruchy is among the locations that the company is scouting, it is learnt.

The Pou Chen investment was to have materialised in 2006 itself, when Feng Tay set up shop in the special economic zone unit in Cheyyar. Back then, the contract manufacturer was contemplating expanding operations into India as a diversification strategy over China.

What helped Tamil Nadu attract big-ticket investments from these firms is its ‘look East Asia’ strategy, a former official told this newspaper.

Rather than tapping the oft-visited US and Europe markets, it instead focused on identifying country-wise “fields of specialisation” that were seldom in the investment scouting radar. That explains the presence of the country’s maiden Korean brand, Hyundai, in the automotive sector, and Foxconn from electronics firms, the person said.

“Not only did we decide to go to a pond where there are many fish to catch, but also worked on benefit analysis and not having a mindless investment promotion approach. So, instead of luring polluting industries, the emphasis was on large-scale employment and growth of business,” he added.

Investments from Pou Chen and Feng Tay were hard-won accounts that came in the face of tough competition from Andhra Pradesh, the former bureaucrat said, noting that besides land and other incentives, women employees, running into tens of thousands, was a key factor due to ready-made talent pool.

Pointing out that Tamil Nadu accounts for 25 per cent of leather exports and 40 per cent of footwear exports, a veteran leather industry player credited this success to the pro-active and investor-friendly policies that helped position the State as a preferred investment destination.

Earlier in August, the government had unveiled Tamil Nadu Footwear and Leather Products Policy, 2022, which aims to attract Rs 20,000 crore investment in the leather sector by 2025, which could create two lakh jobs.

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