CHENNAI: Days after South Korean automaker KIA Motors (on April 27) announced its $1.1 billion investment for a new factory in Anantapur district of Andhra Pradesh, the Tamil Nadu government on Thursday refuted reports alleging corruption to be the cause for the migration and asserted that KIA Motors had acted on its own accord in the matter.
In its official clarification on the issue, the government said the Korean auto major’s decision to set up its green field unit in Andhra Pradesh was based on its ‘internal policy’ and that Tamil Nadu continues to remain a favoured investment destination.
Reacting to media reports alleging corrupt practises in allocating land had led KIA Motors to shift to Andhra Pradesh, the government said “the whole story is totally baseless and done with an intention only to malign the government.”
The state industries department had in June-July 2016 invited KIA Motors to set up factory in Tamil Nadu when it was scouting for locations in the country to establish a manufacturing facility.
“The Government of Tamil Nadu offered a structured package of support including land, power, water, fiscal incentives and single window facilitation to the company,” the official release said.
The company undertook a feasibility study to set up plant outside Korea, the release quoting KIA Motors CEO and president, Han-Woo Park said he expressed ‘regret’ for not able to consider Tamil Nadu “due to business needs and requirements of the company.”
Park had also clarified that his company does not set up manufacturing units in states which also has the facilities of Hyundai Motors, the parent company. “Under such business needs and requirements of our company and stakeholders, I hope you kindly understand that we have not established our overseas plants in same states were plants of Hyundai Motor Company are located such as in United States, China, Europe,” Park was quoted as saying in the release.
Reiterating that KIA Motors decided not to set up factory only due to ‘their internal policy’, the government said, “Hyundai Motor India (the Indian subsidiary of Hyundai Motor Company) is a major shareholder in KIA Motors has announced additional investment in existing unit at Sriperumbudur to the tune of '5,000 crore.”
“This is a testimony to the fact that the government of Tamil Nadu has been extending complete co-operation and striving to provide best investment opportunity to all industries,” the release said.
Hyundai Motor India currently has two manufacturing facilities at Irungattukottai, Sipcot industrial park, producing several models across segments. It also exports to nearly 92 countries.
