Hype created on Korean biz fades away in Penukonda

Penukonda (Sathya Sai): With the investment of 1.1 billion USD in establishment of the South Korean automobile giant Kia Motors at Erramanchili in the historical town of Penukonda in 2019, a lot of hype had been created by the then TDP government on the possible impact of the establishment.

They projected that 300 auto ancillary units will make their way in and around Erramanchili and transform Penukonda into a Korean City. Of the 300 ancillary units, 100 units are said to be from South Korea. These ancillary units are expected to give a major fillip to industrial development and trigger socio-economic development of the region.

The announcement by the state government and Kia sources kindled hope in the youth of Rayalaseema that their long wait for jobs would end but even after the establishment of the automobile major, nothing much happened except 30 ancillary units and most of them of course are of Korean origin.

At the fag-end of the TDP regime as many as 16 companies had signed memoranda of understanding with the State government for setting up auto ancillary units to cater to Korean automaker Kia in Anantapur district. The companies invested Rs 4,790 crore to provide nearly 7,000 jobs. After Kia announced its project as many as 300 South Korean companies have shown interest in the State. Around 100 Korean companies are expected to invest in Andhra Pradesh in the next six months. It is said that about Rs 25,000 crore was expected to be pumped in from Korean companies but with the change in the government in AP, things took a different turn. Sources in Kia Motors told The Hans India that the hype of industrial development created by the then pro-active state government faded away with a new dispensation taking over.

They also attributed the slow pace of industrial development in Penukonda to the slowing down of economy post Covid-19. Priorities changed for everyone including Kia management, investors in ancillary units and even the state government. The impact of Covid-19 on the industry and on the economy is still evident. In future, other popular brands also are likely to establish production units in Penukonda region, the official said speaking on condition of anonymity. More than two years of Covid 19 played havoc on the automobile industry including Kia which had to down its shutters for some time.

District Industries Centre (DIC) general manager Nagaraju told The Hans India that about 30 units had set up shops in auto ancillary sector and the past proposals are no longer in vogue in a changed economic scenario. A few Indian promoters of ancillaries are still evincing interest and are in a phased manner coming forward in the normal course. Even in the recent Vizag Gobal Investments Summit, Kia management has not indicated on any new South Korean investment in ancillary sector.

Meanwhile, many engineering graduates and post- graduates, who dreamt of jobs in Kia, are disappointed at the way Kia is paying them. The wages are in contrast with international Kia standards. In fact, the employees have a feeling that either the Kia bosses are misled by Indian elements or they are deliberately exploiting the Indian educated workforce by paying a pittance like Rs 15,000-Rs 20,000 to employees, who are not direct recruitees of Kia.

Most of the workers' jobs outsourced are getting a pittance. The high expectations have collapsed. Only the top managerial positions are directly recruited by Kia bosses and are paid decent salaries.