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Chinese firms look for investment in Tamil Nadu

Chinese telecom giant Huawei and electronics firm Foxconn have expressed interest in investing in facilities in Tamilnadu. On discussions in Shanghai on Thursday, representatives from Huawei reaffirmed their commitment to set up a $500-million telecom equipment manufacturing facility near Chennai, officials said. A delegation, led by Deputy Chief Minister M.K. Stalin and Industries Secretary Rajiv Ranjan is meeting with executives from some of China's biggest infrastructure and telecom companies in Shanghai and Beijing, looking to promote investment. In Shanghai, Mr. Stalin on Wednesday launched a new product of Coimbatore-based manufacturing firm Lakshmi Machine Works (LMW), which in September 2009 set up a textile machinery plant in China's southern Jiangsu province, a first for South Indian companies in China. In a function, LMW handed over its newly-designed ring frame machines, used in yarn production, to its first three Chinese customers. On Sunday, Mr. Stalin will meet executives of electronics manufacturing firm Foxconn in Beijing, following a two-day stopover in Seoul, South Korea, for an investment promotion drive. Taiwan-based Foxconn employs an estimated 7,000 workers in its plant in Sunguvarchatram, near Chennai, and is one of the biggest industrial employers in Tamil Nadu along with South Korean automobile firm Hyundai. In China, much of the focus of the visit has been on attracting Chinese infrastructure and automobile companies to invest in the State. “We are focusing on certain sectors where we have a good ecosystem,” Mr. Ranjan told The Hindu on Thursday. “Automotive is one, and manufacturing is another, where Tamil Nadu is mature. We have been getting a lot of interest from Chinese companies, particularly in automobiles and infrastructure, and we hope to build on that after this short visit.”

Officials said they would also use this visit as a platform to encourage more firms from Tamil Nadu to look towards China for investment opportunities. LMW's $12-million manufacturing facility near Shanghai is among few examples of Indian companies that have set up manufacturing facilities in China and are directly looking to supply to the Chinese market. “As China is one of the world's biggest textile markets, as well as one of the largest industrial bases for ring frames, it made sense for us to come here to set up our first manufacturing plant outside India,” K. Soundhar Rajhan, Chairman of LMW's wholly-owned subsidiary in China, told news agencies in a recent interview at the company's facility in the Wujiang Economic Development zone, which employs 150 Chinese workers. The company has, so far, faced a challenge to penetrate the Chinese market, facing competition from a number of European firms already established here. But Mr. Soundhar Rajhan said with an increasing focus on high technology with rising labor costs in China, many Chinese textile companies had shown interest in their products.