Thoothukudi’s industrial resurgence: From Sterlite shutdown to EV production

Thoothukudi (TN): Seven years after protests brought the shutters down on the Vedanta-owned Sterlite Copper in 2018, Thoothukudi seems to have finally shaken off its anti-industry image. The closure hurt its economy real bad, spelling not just job loss but also crippling upstream/downstream units relying on the copper smelter for business.

There were those intermittent demand from locals for reopening of the polluting factory, but Sterlite Copper has shifted most of its equipment and chemicals to the Silvassa facility, having exhausted nearly all legal avenues for resuming operations.

Rising from its ashes was not easy for the city. But today, it has turned into a beehive of diverse industrial activity, sporting an electric vehicle (EV) making unit, a toehold in electronics and also renewable energy.

In a bid to revive the city’s fortune, the DMK government, after its 2021 election victory, established a furniture park to counter the negative perception. the park remains largely unoccupied. Then came the game-changer push by the state government to decentralise industrial investment beyond Chennai. Thoothukudi gained from this, being forwarded as one of the location when Vietnamese EV maker came scouting for investment location. Thoothukudi’s selling point was its port, giving easy access to export markets.

VinFast’s entry in January 2024, building its first Indian unit from scratch in 18 months, accelerated Thoothukudi’s industrial rejuvenation, drawing more investors to pick the ‘Pearl City’ as their destination.

It was VinFast’s decision in January 2024 to choose Thoothukudi for its first India plant – the manufacturing unit was built from the scratch in a record 18 months – did accelerate the investment push in the city with many firms following suit. On August 4, this year, VinFast rolled out its first car from the factory. It, now, plans to bring its suppliers to the region to foster an ecosystem.

A regional investment conclave in early August brought in more players. It saw Kaynes Circuits Pvt Ltd commit to a Rs 4,995 crore investment in a unit to make printed circuit boards (PCBs), including high-density interconnect and flexible ones. Yeemak & Jeanuvs pledged Rs 3,400 crore for multilayer PCB and radar system manufacturing unit. Singapore-based RGE will invest Rs 4,953 crore to establish its first man-made fibers plant in India.

Thoothukudi is also being promoted as a hub for India’s commercial space industry. The state government is planning a Space Park as ISRO is building its second spaceport in Kulasekarapattinam.

Adding to this momentum, Singapore’s Sembcorp Industries is building a Rs 36,200 crore green hydrogen and green ammonia unit in Thoothukudi. This, along with Tirunelveli’s rapidly growing Tata Power solar plant, is turning southern Tamil Nadu into a major destination for renewable energy projects.

“We had to send a clear message that the closure of one factory over environmental concerns should not dictate investment trends. The state consistently advocated for VinFast to choose Thoothukudi, and the transformation is now visible to all,” a senior government official said. 

Apart from the state government’s active promotion, Thoothukudi’s port and skilled workforce have played key roles in attracting companies. 

Pham Sanh Chau, CEO (Asia), VinFast, told DH that Thoothukudi was chosen after inspecting 15 locations in six states because it met the requirements for proximity to both a seaport and an airport. 

“We foresee Thoothukudi becoming the next major industrial and automotive hub. Its strategic location and port expansion plans make it the most viable option logistically for imports and future exports,” he added.

The CEO also highlighted Tamil Nadu’s “highly skilled workforce” as a key asset, expressing confidence that their expertise will help VinFast establish India not only as a key market, but also a global hub in sustainable mobility.

R Edwin Samuel, former Chairman of CII Thoothukudi zone, noted that investor sentiment was affected by Sterlite Copper’s closure, but the district’s resurgence over the past two years has established its reputation as a premier investment destination.

“VinFast started production in just 18 months, a remarkable pace and a positive indicator. The port provides a significant advantage, and further modernization of the port should be pursued. Offshore wind projects also have strong growth prospects, and the government should try to bring many projects to the region,” Samuel told DH.

He added that the new terminal at Thoothukudi airport will further improve connectivity, enhancing the region’s appeal to investors.