Asian Paper and Pulp Withdraws Biggest FDI in Andhra Pradesh

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Asian Paper and Pulp, a subsidiary of Sinarmas, is one of the largest industrial houses in Indonesia had signed an MOU with Andhra Pradesh Government last year. According to that, APP will invest Rs 24,000 crore ($3.5 billion) in its proposed pulp and paper manufacturing unit at Ravuru in Gudluru Mandal of Prakasam district.

It is supposed the single biggest FDI so far in the country. The project with a capacity of 5 million metric tonnes per annum will be the largest unit of APP at a single location. The unit was supposed to come up in 2,471 acres of land and generate 4,000 direct and 12,000 indirect jobs. But then, the project is now dropped.

As per a report in First Post, Asian Paper & Pulp has taken this decision mainly due to the new policies of the Jagan Reddy’s Government. This will come as a big blow to the new government as it is starting at empty coffers. Unless Jagan can generate revenues and mobilize resources, he will be under tremendous pressure to meet the increasing expenditure due to his election promises.

Suspecting all the projects signed during Chandrababu Naidu, the new Chief Minister is harming the investor sentiment. His measures to date have unnerved foreign investors and damaged the business environment of the state. Unless he does not do something now, it will make things increasingly difficult.

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