Gujarat : An Enduring Strong Economy

 Population : Over 50 million (5.0% of India)

 Geographical area : 1,96,000 sq. km (6.2% of India)

 Gross State Domestic Product (GSDP) : US$ 45.3 billion

 Per Capita Income : US$ 915 at current prices

 Urbanisation : 37.4%

 High industrial growth : Gujarat has demonstrated a Composition of GSDP as per economic activity
(2006-07)
high industrial growth rate of 12.5% from 2002 - 2007

 Industrialisation : Gujarat is home to over 800 large 18.2%

industries and 3,20,000 micro, small and medium Primary Sector 44.0%

Secondary Sector
enterprises
37.8%
Tertiary Sector

Source: Socio Economic Review 2007-08

2
Gujarat : A Thriving Industrial State
Contribution to National Economy Presence across industry sectors
Stock market capitalization 30.0%

Coastline 22.0%
Petroleum products 31.2 %
Exports 21% Chemical & Pharma 22.9 %
Engineering Industries 12.6 %
17.0%
Fixed capital investment Food & Beverages 9.7 %
Value of output 15.6%
Textiles & Apparels 6.5 %
Mineral based industries 2.9 %
Net value added 14.0%
by manufacture Metallurgical Industries 7.5 %
No. of Factories 10.0% Others 6.7 %

Employees 9.5%

Significant share in key sectors & products

Soda ash production 98.0%

Salt processing 85.0%

 World’s largest producer of castor and cumin

Diamond processing 80.0%  World’s largest gas based single location sponge iron plant
Plastic industry 65.0%
 World’s largest producer of processed diamonds
Petrochemicals 58.0%
 World’s 3rd largest producer of denim
Chemicals 50.0%
 Asia's largest grass root petroleum refinery at Jamnagar
Groundnut 42.3%

Pharmaceuticals
 India's largest producer of cotton
42%

Cotton
35.0%  India's first LNG chemical port terminal at Hazira
Fabrics
30.0%

Source: Socio Economic Review 2007-08

3
Gujarat: Robust Infrastructure
Power Dependable power supply – key to industrial development

 Present power generation capacity is 9,628 MW; plans afoot to raise it to 25,000 MW by 2012
 Per capita power consumption is 1,354 units against the national average of 665 units
 Rich availability of natural gas (34 MMCD) and lignite (1,072 MMT)
 24-hour 3-phase uninterrupted power supply

Gujarat is the only State to carry out interlinking of rivers Water

 An extensive water grid network of 75,000 km for irrigation and drinking

 It will cover 75% population of the state by 2010

Gas Transformation of economy through natural gas

 Gujarat State Petronet Limited (GSPL) supplies piped gas to 13 districts, 5 more districts will be added
 Total length of Integrated Gas Grid will be 2,200 km, of which 1,453 km is complete and the rest is
under construction

4
Gujarat: Robust Infrastructure
Rail and Road Surfaced road length – one of the highest in Gujarat

 State-of-the-art road infrastructure: India’s first National Expressway between Ahmedabad to Vadodara operational
 Total road length is 74,018 km - 95% surfaced road
 Rail length in Gujarat of 5188 km (8.25% of India)

Gujarat Ports opening the gateway to prosperity

Ports
 42 ports along 1,600 km coastline, major port at Kandla other important ports at Mundra and Pipavav.
 Landmark projects such as LNG port terminal at Hazira developed by Shell India Limited,
Green field port at Mundra developed by Gujarat Adani Port Limited, LNG terminal at Dahej
developed by Petronet LNG Ltd. and Pipapav port developed by Gujarat Pipapav Port Ltd

Airports Airport connectivity – a cutting edge for business

 13 airports - Vadodara, Surat, Jamnagar, Rajkot, Bhavnagar, Porbandar, Bhuj, Keshod,

Mandvi, Mundra, Kandla, Palanpur, Deesa and Ahmedabad (International Airport)

5
The Chemicals and Petrochemicals Industry in India
India ranks twelfth in the world for production of chemicals and petrochemicals by volume.

 India has a robust base for chemicals and petrochemicals-driven Global chemicals and petrochemicals industry
businesses. Though the industry has undergone drastic
changes, Indian chemicals and petrochemicals share has been
continuously increasing on a constant basis.

2,200

 The size of Indian Chemical industry is estimated at around US$ 2,100

35 billion approx., which is equivalent to about 3% of India's 2,000

1,900
GDP. The total investment in Indian Chemical Sector is approx.
1,800
US$ 60 billion generating an employment of 1 million.
1,700

1,600
 Further, the industry is widely expected to continue its growth 2004 2005 2006 2007 2008 2009

All figures in USD billion

performance with a CAGR of 9.2% in the period of 2004-09, as
against the global projected CAGR of 3.4% for the same period.

Indian chemical and petrochemicals industry to

 Currently, per capita consumption of products of chemical
grow to US$50 billion by 2009
industry in India is about 1/10th of the world average. Over the
last decade, the chemical industry in India has evolved from
being a basic chemical producer to becoming an innovative
industry.
Source: Global Chemicals and Petrochemicals Industry Report, April 2006, Data monitor

6
Gujarat: Chemicals and Petrochemicals Hub of India
 Gujarat’s chemicals and petrochemicals industry is one of the fastest
growing sectors in the State’s economy and is the leader in the
Globalisation
Globalization
production of chemical and allied products in India. The industry offers
Increased use
Increased use
a wide spectrum of opportunities for investors from India and abroad. of IT
IT High domestic
High Domestic
R&D
R&D

demand potential
Demand Potential
 The well-diversified chemical industry has a complete portfolio of
chemical products including petrochemicals and downstream, Cost
Cost
Low
Low export
export Gujarat Low
Low levels
levels
focus
focus of
of R&D Consolidation
R&D Consolidation
pharmaceuticals, dyes and intermediates. reduction
Reduction Chemical Industry

 While the State chemicals industry exhibits several similarities to the Fragmented
Fragmented
Cost advantages
Cost Advantages
industry
industry
global chemical industry, there are several characteristics specific to
the Gujarat across sub-segments. At the industry level, Gujarat
Focus on
Focus oncore
corebusiness
business
chemical industry is characterised by:

 High domestic demand potential, as the Indian markets develop and Source: E&Y Analysis
per capita consumption levels increase

 High degree of fragmentation and small-scale operations

 Limited emphasis on exports due to domestic market focus and

smaller scale of operation

 Low cost competitiveness as compared to other countries

Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007

7
Gujarat: Strengths

 The chemical industry in Gujarat is a significant component of the State-wise share in production of selected major
chemicals (2006-07)
State’s economy, contributing to more than 51% of Indian production 23%
of major chemicals with revenues at approximately more than INR
US$ 3 billion. Gujarat contributes 15% of the total national chemical
4% 51%
exports.
6%

 Petrochemical Industry in Gujarat produces 13.048 Mn Tonnes of 8%

8%
petrochemical products and also contributes around 62% to the total
Gujarat Maharashtra Uttar Pradesh
production of the country. Tamil Nadu Punjab Other States

 Bulk of the exports from this sector go to markets such as USA, State-wise production of petrochemicals
(2006-07)
Europe and other developed nations – a clear sign of the global
13%
competitiveness.
11%
 Gujarat has been the ideal destination for several leading MNCs
including BASF, Bayer, DuPont, GE Plastics, Cairn Energy, Solvay,
15% 61%
Shell, British Gas, Perstrop, Huber, Heubach Colours and Cheminova.

Gujarat Maharashtra West Bengal Other States*

*Other states include Andhra Pradesh, Assam, Chhattisgarh, D&NH,
Haryana, HP, Karnataka, Kerala, MP, Orissa, Punjab, Rajasthan, TN, UP
and Uttaranchal

Source: Performance Of Chemical & Petrochemical Industry At A Glance (2001-2007),

Ministry Of Chemicals & Fertilizers Government Of India, Industries Commissionerate, GoG

8
Gujarat: Strengths

Gujarat : Chemical & Petrochemical Industry

Hot Beds for Leading Players
Gujarat’s chemical production Gujarat’ Contribution to India

All figures in USD billions Gujarat India Share of Gujarat Anchor Industries

Chemicals and 23.60 75.5 Soda-ash 100%

GSFC: Diversified Fertiliser and chemical
Petrochemicals
12.20 32.1 Caustic Soda 41% product portfolio. About US$650 million
 Refined petroleum
of investment. India's first joint sector
products
10.60 35.6 Nitrogenous fertilisers 20% industrial complex
 Basic chemicals

 Rubber & plastics 0.80 7.9 Phosphatic fertilisers 38%

Reliance: State-of-the-art petroleum
Salt 85% refinery at Jamnagar with a capacity of
27 million tonnes per annum (540,000
Dyes and intermediates 0.80 1.5 Ethylene 50%
barrels per day)
Polymers 56%
Other key investors: BASF, Bayer,
Agrochemicals 0.25 0.6 Methanol 37% Rallis India, Alembic, IPCL, Novartis,

Acetic acid 50% Zydus, Ranbaxy, Cadila, IFFCO, etc.

Source: Annual Survey of Industries (ASI) Source: CMIE

The State has one of the largest grassroot petrochemical refinery in the world

9
Gujarat: Flourishing Chemicals and Petrochemicals Industry
Commodity chemicals

 Gujarat has its inherent strengths in the area of commodity chemicals. The high growth in domestic economy is driving
demand for a large number of products that are in turn driving the demand for commodity chemicals-based products.
Global scale plants located in the State offer competitive opportunity for exports. The figure below illustrates the key
dynamics of the commodity chemicals segment.

Dominant issues Strategic impact Advantage Gujarat

• Exposure to high and volatile energy, • Improved performance of producers • Low-cost manufacturing base
feedstock, and raw material costs, as these
costs account (on average) for more than 60% with greater backward integration • Scale and operational efficiency
of a commodity chemical producer’s cost
• Global expansion to capitalise on • Global reach, either through export
structure
inherently lower - cost and/or higher activity or in-country production
• Cyclicality, currently moving towards the next
peak growth markets
• Technological advantage; potential for
• Low-cost production from the Middle East is
likely to have a growing impact licensing process technologies
• Global migration of customer base to emerging
markets, especially China
• Stringent environmental regulation

Source: E&Y Analysis

10
Gujarat: Flourishing Chemicals and Petrochemicals Industry
Speciality chemicals

 Speciality chemicals is extremely service intensive and demands technical expertise in applications engineering and
customer servicing. Growth in oil, paints, textile and rubber se ctors have fueled the demand for speciality chemicals in
Gujarat. Major players in the speciality segment in the State in Clude Ciba Speciality, Clariant India, Foseco, Hico Products
and Balmer Laurie.

Dominant issues Strategic impact Advantage Gujarat

• Exposure to high and volatile energy,

feedstock, and raw material costs, as these
costs account (on average) for nearly 35% of a
specialty chemical producer’s cost structure
• The cyclicality is lesser than commodity
chemicals, but still impacted by economic
trends
• “Commoditisation” of specialties
• Global migration of customer base to
emerging markets, especially China
• Stringent environmental regulation
• Strong emphasis on R&D and new
product commercialisation
• Restructurings and other cost -
control efforts
• Global expansion to capitalise on
inherently lower-cost and/or higher
growth markets
• Fit within existing portfolio
• Proven R&D effectiveness;
intellectual property portfolio that
may offer licensing and/or other
revenue generation capacity
• Global reach, either through export
activity or in-country production

Source: E&Y Analysis

11
Gujarat: Flourishing Chemicals and Petrochemicals Industry
 With three cracker complexes, Gujarat has a total Petrochemicals: polymer industry
capacity of 1180 KTA. There is an increase in the
capacity build-up in the State.
Company Location Polymer Capacity (KTA)
Jamnagar PP 1030
 Gujarat has the highest share of polymer production in RIL
Hazira PP/PE/PVC/PET 1380
the country.
Baroda PP/PE/PVC 295
IPCL
 The major driver for the growth of chemical and Gandhar PE/PVC 405
BASF Gandhar GP/PS/HIPS 90
petrochemicals industry in the State has been the
Lanxess ABS Ltd Baroda ABS/ SAN 92
availability of feedstock. Gujarat has a total of over
GE Baroda Engineering Plastics 12
1230 KTA of ethylene capacity and 1475 KTA of
GSFC Baroda PA, PMMA 7
propylene capacity respectively. Gharda Chemicals Panoli PSu Family/ PEEK 2.2

Petrochemicals and Chemicals

Company Key Products
GSFC Caprolactum, methyl ethyl ketoxime, melamine, anhydrous ammonia, nylon-6, urea, ammonium sulphate, sulphuric acid and bio-fertilisers
Methanol, toluene di-isocynate, aniline, nitrobenzene, methyl formate, nitiric acid, ammounium nitrate, calcium carbonate, catsol, urea,
GNFC
calcium ammounium nitrate, diammounium phosphate , single super phosphate, ammounium sulphate, ammounium nitrophosphate
Caustic soda (lye, flakes, prills), sodium hypochloride, liquid chlorine, compressed hydrogen gas, HCl, caustic potash
GACL
(lye, flakes), potassium carbonate, polyaluminum chloride, aluminum chloride anhydrous etc
Aarti Group Nitro Benzene, Alkylated Anilines & Toluidines, Chloro Phenols, Fluoro Compounds, Agrochemicals
IPCL Benzene, butadiene, butyl acrylate, methyl acrylate, orthoxylene, caustic soda, chlorine and acrylonitrile

Deepak Nitrite Sodium nitrite and nitrate, agro-chemical intermediates, pharmaceuticals intermediates, rubber chemicals intermediates,
dyes intermediates and fine and specialty chemicals

12
Industry Value Chain
Chemical industry value chain

Storage, packaging and distribution

Intermediate Functional Value addition Finished

Raw materials ‘building block’ chemical and intermediate

synthesis synthesis processing by-products

Business support services

Source: Ernst & Young Analysis

13
Industry Value Chain
Upstream Petrochemical industry
processing
value chain

Exploration
and
development
Hydrocarbon
production
Refining and
blending

Shipping

Downstream processing Storage

Distribution

Market

Fibre Rubber
Polymers Plastics
intermediates chemicals

Source: Ernst & Young Analysis

14
Focus Areas

High performance chemicals

Engineering plastics

Pigments and coating products

Refinery downstream projects

Mineral resource - based projects

Specialty chemicals

Nanotechnology-based projects

Bio refineries

Source: Ernst & Young Analysis

15
Gujarat: An Investment Destination
Infrastructure Chemical and Petrochemicals Industry in Gujarat

 Longest coastline – 1600 km Large Petroleum IOC Baroda

Refineries RIL Jamnagar
(57.2 + 30MMT)
 Chemical Port Terminal (3.0 MMT capacity) - only one in Essar Jamnagar
India
• 5 Petrochemical IPCL Baroda & Dahej
 LNG Terminals at Dahej (10 MMT) and Hazira (5 MMT) complexes RIL Hazira & Jamnagar
ONGC Dahej
 42 Ports (including one major port at Kandla)
• 6 Chemical IFFCO Kalol & Kandla
 Cargo handled at Kandla is 41.5 MMT (12% of India) fertiliser GSFC Baroda & Jamnagar
complexes Bharuch
GNFC
 Cargo handled by other ports is 89.3 MMT (80% of India)
KRIBHCO Hazira
 Container handling - P&O at Mundra & Maersk at Pipavav
• 8 Chloralkali GACL Baroda & Dahej
 Mundra & Pipavav - important ports in private sector plants IPCL Dahej
(810,000 MT) UPL Jhagadia
 6 Hazardous solid waste disposal sites: Vatva, Naroda,
Shriram Jhagadia
Nandesari, Ankleshwar*, Surat*, Vapi* (* ISO 14001 Atul
Certified) Atul Products
Veraval
Indian Rayon
Mithapur
 Incinerators for hazardous industrial waste in: Nandesari, Tata Chemicals
Ankleshwar, Surat, Vapi
5 Soda ash Tata Chemicals Mithapur
 6 Treated effluent conveyance pipelines in: Ahmedabad, plants Gujarat Heavy Chemicals Veraval
Vadodara, Dahej, Ankleshwar, Sachin, Sarigam (2,930,000 MT) Nirma Bhavnagar
Saurashtra Chemicals Porbandar
 19 Common effluent treatment plants Dhrangadhra Chemicals Dhrangadhra

Source: Industries Commissionerate, Government of Gujarat and CMIE

16
Gujarat: An Investment Destination
Feedstock for chemical industries Mineral reserves
 Bauxite 105 MMT
 Oil (418 MMT) and Natural Gas (34 MMCD)
 Bentonite 105 MMT
Resources  Lignite (1072 MMT)
 Limestone 11,860 MMT
 Petroleum refining (57.2 + 30 MMT) and petrochemicals  Salt 10 MMT
 Castor oil 237,000 MT (45% of world production)

 Least man days lost due to industrial unrest

Quality  Large pool of skilled technical personnel available

workforce  39 engineering colleges offering undergraduate courses having 12,500 seats
 49 Polytechnics offering diploma courses in engineering having 16,500 seats

 Excellent infrastructure  Progressive policies

Rationale for
investment  Proximity to feedstock  Large potential market
opportunities
 Conducive industrial environment

 Petrochemicals  Engineering thermoplastics compounding

 Basic chemicals  Large plastic crates/ pallets
Key growth
 Specialty chemicals  PVC profiles for doors and windows
areas
 Knowledge chemicals  Plasticisers
 Agrochemicals  Pigments
Source: Industries Commissionerate, Government of Gujarat and CMIE

17
Gujarat: The Way Forward
Analysis of chemical and petrochemicals industry segments in domestic and global context suggests that following
factors play an important role in competitiveness and consequently investment decision in respect of the different
segments.

Basic Speciality Knowledge Major drivers for the industrial growth

chemicals chemicals chemicals
 High domestic demand potential,
Domestic demand
   Limited exports due to domestic market focus
Access to global markets  Low cost competitiveness as compared to
  the other countries
Cost competitiveness
  
Economies of scale Gujarat: key development initiatives
  
Common industrial
infrastructure   Development / upgradation of infrastructure

 Special incentives for backward area units

Research and development   
 Special financial assistance for R&D projects
Government policies   

Source: Industries Commissionerate, Government of Gujarat and Economic Times

18
Chemicals/Petrochemicals Investment Locations
Eight chemical product clusters Fourteen industrial estates
Location Area
Name of the estate (hectares)
Jamnagar
Mehsana Odhav, Ahmedabad 127.88
Anand Naroda, Ahmedabad 362.94
Vadodara Vatwa, Ahmedabad 534.41
Bharuch Nandesari, Vadodara 271.67
Ahmedabad P.C.C. , Vadodara 666.38
Bhavanagar Dahej, Vagra, Bharuch 6130.96
Valsad Panoli, Ankleshwer, Bharuch 1037.37
Jhagadia, Bharuch 1605.97
Ankleshwar, Bharuch 1611.65
Vilayat, Bharuh 1000.00
Pandesara, Surat 218.27
Sachin, Choriyasi, Surat 770.90
Three SEZs Sarigam, Umergam, Valsad 395.00
Name Area and Location Vapi, Valsad 1163.77
Jubilant Chem
160 Ha, Formally approved
SEZ,Bharuch
Jayant SEZ, 106 Ha, Formally approved
Bharuch
Gujarat Hydrocarbon
450 Ha, In-principal approved
and Energy SEZ, Bharuch
Asia Pacific
107 Ha, In-principal approved Source: Gujarat Industrial Development Corporation., GoG
Corporation Ltd.

19
Chemicals/Petrochemicals Clusters
Chemical/ Petrochemical
SEZs (4)

Chemical industry
Complexes

Petrochemical industry Mehsana

complexes

Chemical industrial
estates (GIDC) (14)
Ahmedabad
Chemical product clusters
(8)

Petroleum, chemicals Anand

& and petrochemicals
investment region
Jamnagar Rajkot Vilayat Vadodara
BhavnagarDAHEJ
Area–310 sq km including
existing estate and SEZs
210 sq km under Surat
land acquisition

HAZIRA
PIPAVAV
Valsad

Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007

20
Chemicals/Petrochemicals Investment Locations
Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR
)
PCPIR master plan

Baroda

VAGARA
Gulf of Khambhat

Dahej BHUKHI CREEK

BHARUCH TALUKA

LEGEND
HOUSING
OPEN,GREEN,RECREATION

Narmada River UTILITY

DAHEJ ESTATE
TRANSPORT ZONE,WARE HOUSES.
DAHEJ ESTATE
Bharuch COMMERCIAL
EXISTING ESTATE
NARMADA RIVER EXPANSION AREA OF EXISTING ESTATE
UNDER ACQUISITION.
CHEMICAL INDUSTRIES

Total Area – 29,500 Hectares

• 400 km north of Mumbai
• Chemical & petrochemical industries - 11,700 Ha • Transport and warehousing - 1,000 Ha
• Related engineering industries - 2,200 Ha • Recreational zone - 500 Ha • 30 km from Mumbai-Delhi
• Green belt - 3,600 Ha • Power, Water, Infrastructure - 500 Ha national highway and railway
• Roads, rail and corridor - 6,000 Ha • SEZ - 1,800 Ha
• Housing and social infrastructure - 1,000 Ha • Ports - • 110 km from airport
200 Ha

Source: Gujarat Industrial Development Corporation., GoG

21
DMIC Industrial Area Locations In Gujarat
DAHEJ-BHARUCH INVESTMENT REGION

PCPIR DELINEATED
BOUNDARY

VILLAGE BOUNDARIES

VILAYAT INDUSTRAL ESTATE

• Region taken up under Indian Government’s

Petroleum Chemical and Petrochemical
Investment Region (PCPIR) Policy

• Brownfield area - least displacement issues

DAHEJ INDUSTRAL ESTATE
• Existing GIDC estates at Dahej and Vilayat -
total area of 55 sq km within site
PROPOSED ONGC PETROCHEMICAL COMPLEX

Source: Gujarat Industrial Development Corporation., GoG

22
Key Foreign Players in Gujarat
Company Business description

 Cheminova, a Denmark-based company, is a manufacturer of fine chemicals. Its main business

area is in plant protection products.
 Cheminova India Ltd.’s production facilities are situated in Bharuch district in the state of Gujarat.
 Products portfolio includes agrochemicals and agrochemical intermediates.

 Transpec Silox is a joint venture between Silox S.A of Belgium and Transpek Industry Limited of
India.

 The company has a production base in Vadodara, Gujarat.

 Transpec Silox Industry Limited produces and supplies zinc and sulphur-Based chemicals for
paints, textiles and dyes industries.

 Ciba (SWX:CIBN) is headquartered in Basel, Switzerland.

 Ciba Specialty Chemicals (India) Ltd. has a manufacturing facility at Ankleshwar. The company
operates in three market-focused segments: plastic additives, coating effects and water
treatment.

 Ciba Specialty Chemicals (India) Ltd. is also an international supply point for several Ciba
products, such as chemicals, industrial chemicals, dyestuff intermediates, dyestuffs and textile
chemicals.

23
Key Foreign Players in Gujarat
Company Business description

 Huber Chemicals India Ltd. is a subsidiary of JM Huber Corp, Germany.

 It is in the chemicals and engineering business and has a facility at Jhagadia, an industrial
estate in Bharuch, Gujarat.
 The company specialises in the production of printing chemicals.

 Bayer AG, the German chemical giant, is a Fortune 500 company with global sales of US$33 billion.

 Its business operations are the responsibility of the sub-groups - Bayer HealthCare AG, Bayer Crop
Science AG and Bayer Material Science AG.

 In Gujarat, the company operates through Bayer Crop Science Ltd in Ankleshwar. The products
portfolio of Bayer Crop Science AG includes insectisides, fungicides, herbicides, seed treatment
and plant growth regulators.

 The Dow Chemical Company is the second largest chemical manufacturer in the world.
 A memorandum of understanding (MOU) has been signed between Gujarat Alkalies and
Chemicals Ltd. and Dow Chemical Canada Inc. to synergise and cooperate with each other.

 The two companies are expected to set up a greenfield unit in Dahej in Jan 2008 with an
investment of INR 60 billions.

 The products produced at the plant will be used by sectors, such as, pharma, industrial
coolants and dyes.

25
Educational Infrastructure

 Some of the major academic institutions offering chemical

Locations of major educational institutions in Gujarat
engineering course includes:

 Nirma University of Science & technology, Ahmedabad

 Government Engg. College, Valsad

Gandhinagar
 L.D. College of Engg., Ahmedabad
Ahmedabad
Vadhvan
 There are 39 Engineering colleges in Gujarat offering course in Nadiad

Chemical Engineering. Rajkot Vadodara

Bhavnagar Bharuch
 49 Polytechnics offer courses in Chemical sector in Gujarat and

some of them are located located at Rajkot, Bharuch and Valsad Surat
Navsari
 Govt. Polytechnic, Rajkot Valsad

 K.J. Polytechnic, Bharuch

 Govt. Polytechnic, Valsad

Source: Department of Technical Education, Department of Employment & Training

26
Initiatives by Government

Licensing policy Customs duty

• In Chemical sector, 100% FDI is permissible. • The peak rate of customs duty on most Chemicals

Manufacture of most chemical products inter-alia is 7.5%

covering organic / inorganic, dyestuffs and
• On basic raw materials like acid grade fluorspar,
pesticides is delicensed. Excise duty
sulphur, rock phosphate, natural borates is 5%

• The entrepreneurs need to submit only IEM with the

• On most building blocks and feedstock the duty is
Department of Industrial Policy and Promotion
5% (ethylene, propylene, crude, naptha, benzene,
provided no locational angle is applicable. • On almost all chemicals the
toluene, xylene, ethylbenzene) excise duty is 16% .
• Only the following items are covered in the

compulsory licensing list because of their

hazardous nature:

 Hydrocyanic acid and its derivatives

 Phosgene and its derivatives

 Isocynates and di-isocynates of hydrocarbons.

Source: Ministry Of Chemicals & Fertilizers Government Of India

27
Government of Gujarat-SEZ Advantage
For SEZ units
Income tax incentives
 10 year corporate tax holiday on export
profit – 100% for initial five years and 50%
for the next five years
Other benefits
 Exemption of electricity duty – 10 Years*
 Duty-free procurement of capital goods
(including second hand capital goods),
raw materials and consumable spares
from domestic market
 Full freedom for sub-contracting
 Facility to realise and repatriate export
proceeds within 12 months
 Facility to retain 100% foreign exchange
receipts in the export earner’s foreign
currency account
For developers of SEZs
Income tax incentives
 100% tax holiday for a period of any 10
consecutive years out of 15 years beginning Common incentives
from the year in which the SEZ is notified
Indirect tax incentives
 Exempt from dividend distribution tax
 Tax exemption on interest of long term  Nil customs duty
finance
 Nil excise duty
 Long-term capital gains arising on transfer
of shares in developer company tax exempt  Exemption from central sales tax
 No minimum alternate tax (MAT)
 Exemption from service tax
Other benefits
 Exemption from securities
 Full freedom in allocation of developed transaction tax
plots to approved SEZ units on purely
commercial basis  Exemption from tax on sale of
 Full authority to provide services like water, electricity for self generated and
electricity, security, restaurants and purchased power
recreation centres on commercial lines
 No net foreign exchange earning
requirement imposed

SEZ scheme has been introduced to provide hassle-free environment and state-of-the-art infrastructure
Gujarat has liberal labour policy providing complete flexibility in SEZs
SEZ Development committee monitors infrastructure development for each SEZ

Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007 , * Section 15 –Sub Section II of GoG SEZ Act 04

28
Investment Trends
 3rd Vibrant Gujarat Global Investors’ Summit was held on January
12-13, 2007

 31 MoUs and Announcements were signed in Vibrant Gujarat 2007 40 20000

13412
16740

No. of MOUs
for projects to be established in the chemical and petrochemical

Investments
30 15000
sector
20 10000
31
10 18 3645 5000
 Proposed investment – US$ 3.25 billion
13
0 0
 Scope of employment generation – 14,295 2003 2005 2007

Year
 Projects primarily related to establishing industrial parks and
Number of MoU Investment (INR Crores)
production of:

 Basic and fine chemicals

 Specialty and performance chemicals

 Organic and inorganic chemicals

 Dyes and intermediates

Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007

29
Investment Opportunities
Chemical and Petrochemical Projects

 Methanol production  Bi-axially oriented polypropylene (BOPP) Films

 Propylene oxide and propylene glycol  BOPET Films

 Polyethylene (PE) multi layer film project
 Cumene production
 Polyolefins compounding and masterbatches
 Phenol / Acetone
 Polypropylene (PP) ropes
 Nitrobenzene and aniline  Fiber and filament
 Diphenylmethane di-isocyanate (MDI) and  Plastic crates
toluene di-isocynate (TDI)  Bisphenol-A

 Polyvinyl chloride (PVC)  Mono-chloro acetic acid (MCA)

 Bromine
 ABS resin
 Titanium tetrachloride / Titanium dioxide
 Polycarbonate resin
 Chlorosilanes
 Polyethylene terephthalate (PET) chips  Synthetic zeolite - Zeolite A
 Styrene butadiene rubber (SBR)  Contract research and manufacturing services
(CRAMS)

* Detailed Sector/ Project Profiles for investment opportunities available at www.indextb.com

30
Invest in Gujarat : A world-class Business Destination
To Delhi

Banaskantha Agroprocessing, Dairy

and Engineering
Bio-Tech cluster
Patan
Mehsana
Soda ash and salt- Kutch Himmatnagar Gujarat International
based industries, Gandhinagar Finance-Tec City
cement and steel
Ahmedabad
pipes Kheda Panchmahal
Surendranagar Knowledge corridor
Dahod
202 industrial estates Anand Industrial corridor
across Gujarat (DMIC)
Jamnagar Dholera Savli Biotech Park
Rajkot Vadodara
Petroleum and brass
parts Porbandar Rajpipla Petroleum, Chemicals
Bharuch and Petrochemicals
Engineering and Bhavnagar Investment Region
Amreli
ceramics Junagadh (PCPIR)
Surat

Soda ash and salt Chemicals, petrochem.

based Navsari pharma, textiles and
engineering

18 Captive Ports along Special Investment Valsad

Region (SIR) 55 special economic
1600 km coastline
zones (SEZs) across
across Gujarat
Gujarat
To Mumbai
55 special economic zones (SEZs) across Gujarat
202 industrial estates across Gujarat

31
Key Contacts

Industries Department, Govt. of Gujarat http:// www.gujaratindustry.gov.in

iNDEXTb -Industrial Extension Bureau http://www.indextb.com

Gujarat State Fertilizers & Chemicals Limited http://www.gsfc.gujarat.gov.in/

Gujarat Industrial Development Corporation http://www.gidc.gov.in

Gujarat Infrastructure Development Board http://www.gidb.org

Gujarat Narmada Valley Fertilizers Company Ltd. http://www.gnvfc.net/

Gujarat Alkalis and Chemicals Limited http://www.gujaratalkalies.com/

Maps used not to scale

N
32