Chapter 6

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CHAPTER NO.6

CASE STUDIES

6.1 SUNDAR INDUSTRIAL ESTATE (SIE)

Spread over an area of 1602 Acres, SIE is located approximately 45 km from the

centre of Lahore on Sunder Raiwind Road. It is one of the largest and the most modern

industrial estate in Punjab. The main features of the project are strategic clustering of

specific industries for allowing shared usage of common services, the provision of

utilities (Power, Water, and Gas) and a well built road network. The project was

envisioned to encompass effluent treatment services, technical training centre, and

commercial centre and one-window operation aimed to create a customer friendly

environment. As noted above, industrial estates can be classified by a number of factors,

such as location, industrial activity, motivation, and ownership. The location of the estate

might be “urban”, “semi urban” or “rural”. An estate also varies according to the

functions it performs and the nature of firms operating in the estate. A “composite estate”

is composed of industries belonging to various sectors, an “ancillary estate” contains

numerous small enterprises linked to an overarching sector while a “single trade estate”

contains firms relating to a similar industrial sector. The objectives of an estate can be

“developmental”, “promotional” or “dispersal”. The sponsorship of an estate can be

“governmental”, “private” or “private-assisted”. Sundar Industrial Estate, analyzed within

this framework of classifications, can be categorized as a composite semi-urban estate,

hosting industries from over eight different sectors and located close to rural and urban

areas. Its objectives are developmental and its ownership is private-assisted.

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Figure 6.1: Master plan of Sundar industrial estate

Source: www.sundar industrial estate.com

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6.2CONCEPTION & DESIGN

The estate was conceived in 2004 and became operational in 2007. In the initial

phase, Pharmaceuticals, Food Processing & Storage, Engineering and Textile were

encouraged. Other industries allowed came under the “miscellaneous “industry category.

A total of 691 plots were created. Most of these plots were meant for small to medium

sized industries. The average lot size was half an acre to two acres with bigger plots of up

to 11 acres to accommodate large industries. Out of 1,603 acres about 1,028.56 acres

were industrial plots while the remaining area was dedicated to roads, infrastructure,

amenities, utilities, commercial area, green belt, etc.

The degree of speculation spurred determines the degree of industrialization and success

of an estate. The preferential policies of the government (including inexpensive land, tax

breaks and export tax exemption etc) provide the necessary stimulus for investment in a

project. While in SIE’s case, the estate did spur a great deal of speculation even though

the fiscal incentives provided by the government were quite low. These included: land at

a discounted rate (plot price was discounted from Rs. 5 million to 3.5 million per acre,

meaning a subsidy of 1.5 million per acre), the Capital Value Tax (CVT) on transfer of

property was reduced from Rs. 100 per sq.yard fixed by the federal government to 2%

and additionally soft loans of Rs 1.5 billion for initial investment in the project were

made available. Apart from these no other fiscal incentives were provided as the federal

government in Pakistan does not have a policy for specific incentives for industrial

estates. The speculative element of SIE can be judged from the fact that although all plots

Were sold in 2004, still by 2010 a majority of plots were not industrialized. Thus the new

provincial government recently launched a colonization drive to restrain speculation and

to try to weed out non serious investors.

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6.3 PLOT DISTRIBUTION

Small & medium entrepreneurs were focused, hence majority of plots are of sizes

between ½ acre to 2 acre. However, there are some bigger plots to accommodate large

industrialists as well.

Plots were created of the following sizes:

½ Acre 112 Plots

1 Acre 396 Plots

2 Acres 101 Plots

3 Acres 37 Plots

4 Acres 14 Plots

5 Acres 34 Plots

Above 5 Acres 22 Plots

TOTAL : 702 Plots

6.4 LOCATION & TRANSPORTATION:

The selected location of Sundar Industrial Estate offers tremendous potential for

growth and success. It is located in a lagging area adjacent to Bhai Kot village, only 9km

away from the town of Raiwind which hosts a large number of industrial set ups, and 25

km South of Lahore. Although SIE is not located in an urban area, a well connected road

network provides easy access to urban markets.

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Figure 6.2: location plan of sundar industrial estate

Source: Google earth

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6.4.1 CRITICAL REVIEW ON LOCATION OF SIE

Pakistan has a population of about 180 million fed through its prime agricultural

lands of the provinces of Sindh and particularly Punjab. According to international

standards, locating industrial estates in agricultural areas (primate agriculture land in this

case) is a widely criticized policy because it can have tremendous social, economic and

ecological consequences. Nadeem argues that SIE was imposed on prime agricultural

land while ecological considerations and the possible negative effects of creating an

industrial estate in this area have not been given sufficient weight age. He challenges the

SIE’s Environmental Impact Assessment’s declaration that most impacts of SIE are low-

adverse to medium-adverse, disagreeing that the land used for the project was barren,

while making a case that SIE has had significantly negative environmental impacts and

only minimal efforts were made to comply with environmental regulation as well as to

compensate the affected individuals. His main claim that the land was used for

agriculture prior to SIE project development is supported by this author’s own

observations and visits to the estate as even today large surrounding areas are under

cultivation (some vacant plots within SIE give a sight of agricultural land). But now that

SIE has-been established it is particularly important to ensure that industrial waste and

associated effluents are properly treated to not adversely affect the agricultural

surroundings of SIE. In analyzing the location of SIE based on the access to labor market,

degree of industrialization of the host community, access to major cities, distance from

large industrial complexes and transportation infrastructure, the SIE gets a mixed

assessment. While the distance from large industrial site of Raiwind and road

infrastructure are good, the cost of transporting labor, raw materials and finished goods is

higher given the distance from Lahore. Additionally the lack of transport facility within

and to the estate hinders both labor and investor accessibility1.

1 Obaidullah Nadeem, Public Participation in Environmental Impact Assessment of Development Projects (Lahore: UET, PhD thesis,

2010)

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6.5 INFRASTRUCTURE FACILITIES:

Location factor is further augmented by a comprehensive set of infrastructure

facilities offered at SIE unparallel to any other industrial estate in Pakistan. A comparison

of SIE’s infrastructure to industrial estate’s across the country makes it evident that SIE

has set a new precedent for industrial standards in Pakistan. The other industrial estates

have failed to provide the very basic facilities to its occupants and had been an

illustration of mismanagement and uncongenial environment prior to 2004.Some other

industrial estates which failed to provide basic facilities like QIE had operated without a

road network, sewerage system, water drainage system and solid waste disposal system

up until recently. A simple comparison is the internationally compatible underground

electricity distribution system at SIE not available in any other industrial estate in the

Punjab.

It is evident from the literature review that well functioning infrastructure is a major

determinant of vocational decisions and is imperative for the success of an industrial

estate. Infrastructure that facilitates the induction and generation of investment is pivotal

for an IE. The central motivation of establishing SIE was to compensate for the lack of an

estate equipped with appropriate infrastructure in the province of Punjab. According to

ex-CEO, “SIE was established with a clear vision of providing quality infrastructure

which was absent in all industrial estates in Punjab.” Outstanding infrastructures are thus

one of the primary distinguishing features of SIE and play an instrumental role in its

performance. An important function of the estate is to provide common facilities to the

investors. These can be categorized into common production or service facilities. The

common production facilities include separate units or equipment to provide special

services for use by estate tenants.26 Some of the proposed common production facilities

at SIE include a Common Effluent Treatment Plant (CETP), a technical training centre

and a pharmaceutical laboratory but construction has not yet begun for any of them.

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6.5.1 COMMON SERVICE FACILITIES PROVIDED BY SIE ARE GIVEN

BELOW.

• Reinforced Concrete Road Network

• Underground Electricity Distribution System

• Water Supply System

• High Pressure Gas Pipelines

• Underground Sewerage System

• Telecommunications System

• Hospital/Emergency Medical Services(Social Security)

• Fully Equipped Fire Station

• Walled industrial estate with limited entry/exit points

• Estate Owned Security Arrange ements.

• Potable Water.

• Petrol Stations.

• Mosque.

• Computerized Weighing Station.

• Technical Training Facilities.

• Security system.

• Fire protection.

• Medical care.

• Warehouses.

• Disposal of estate waste.

• Weighbridge.

• Exhibition hall.

• A central repair workshop.

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6.5.2 ROAD NETWORK

A well-working and reliable road network is essential for smooth operations in the

estate to ensure easy mobility of goods and raw materials in and out of the estate. The

road size at SIE allows easy and swift mobility and is adequate for the estate’s current

needs. The main road has six lanes, is 200 feet wide while the inner roads are 120 and 80

feet wide respectively. This allows for smooth flow of traffic even in times of vehicle

loading, unloading and parking2

6.5.3 DRAINAGE SYSTEM

The current drainage system at the estate has not received a satisfactory

evaluation from the experts. Its soaking wells located in the green belts are not providing

adequate drainage and it is recommended that a conventional storm water drainage

system should be designed for the SIE. Generally governments provide incentives to the

industrial sector to encourage and promote a drainage system. These can either be

provided to all entrepreneurs, or to industrialists operating in specific geographical areas

of the estate.

6.5.4 WATER SUPPLY SYSTEM

The water supply system comprises of three tube wells with a capacity of 4 cusecs

each and ten elevated RCC water tanks of 100,000 gallon capacity each, providing a total

storage capacity of one million gallons of water for the entire estate. So for an area of

1,602 acres 1,000,000 gallons of water is available, meaning 624.2 gallons per acre

against the international standard of 4, 284 gallons per acre. This system can only serve

the estate for 45 minutes at peak demand. In line with international standards the storage

capacity of overhead water tanks needs to be increased.3

2 NESPAK, 2007 3 The standard is 40,000 liters per hectare for dry industry and 500,000 liters per hectare for high water consumption industry.

UNIDO, 1997.

.

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6.5.5 HIGH PRESSURE NATURAL GAS SUPPLY

The authorities have constructed high pressure natural gas pipe line network

throughout the estate to facilitate gas supply to the consumers. However, the gas supply is

controlled by SNGPL (state run utility). Due to the shortage of natural gas throughout

Pakistan, gas consumers in SIE also have to endure hours of gas load shedding. It is one

of the most crucial and pressing issues faced by the industrialists. The unavailability of

gas is forcing many businesses to shut down permanently and some temporarily. Most are

in a fix due to approximately 12-15 days per month of load shedding in the winters.

6.5.6 WASTE WATER COLLECTION SYSTEM

The disposal of wastewater is being carried out through septic tanks at different

locations in the estate. The NESPAK report states that septic tanks (settling tanks) should

be complemented by a Proper screening mechanism that minimizes entrance of solids

into the tanks. According to this review, the RCC pipes used in the wastewater disposal

system are undersized and the velocity in various pipe segments lower than needed

leading to deposition of solid particles which could potentially choke the system.

Minimum cover over RCC pipes should be 1 m (3.28 ft), however at SIE it is 2.5 feet

generally and 1 foot at certain locations. Out of the 25 investors interviewed, only 15

were satisfied with the wastewater system, considered it average and 8 rated it as poor.

This could also be due to various reported cases of excessive water present on the road in

front of factories with higher water usage like paper factories and dying mills. For

effective utilization of the current system, it is strongly recommended that thorough

cleaning of septic tanks is carried out on a routine basis.

6.5.7 SOLID WASTE MANAGEMENT SYSTEM

For an estate as large as SIE and claiming international standards, it is

unreasonable that solid waste collection and disposal services are provided. The landfill

site located within the estate.

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6.5.8 TRANSPORT

40% (10 out of 25) of the investors have to transport all their labor from Lahore to

SIE and another 44% (11/25) have more than 50% labor coming from Lahore. Keeping

these figures in view, a common transport (shuttle/bus service) service from Lahore to

SIE needs to be provided. Additionally, travel within the estate is highly inconvenient

and time consuming as walking from the main gate to factories located far can take up to

half an hour. More importantly, transporting all skilled labor from Lahore is not a

sustainable solution to a lack of skilled labor in the area and is particularly difficult in the

absence of a transport system from Lahore to SIE and residential area for labor within

SIE.

6.5.9 CANTEEN

A Canteen with affordable food is essential for the estate. In the absence of a

transport system within the estate, for a worker to go outside the estate for food, simply

walking towards the closest urban area may take up most of the lunch break. Thus many

factories provide food within their premises, but this may not be suitable for all industrial

units. Thus it is recommended that SIE needs to provide at least three Canteens in the

estate area.

6.5.10 MEDICAL SERVICES

One of the most critical service lacking is the medical service.100% of the

investors rated the medical services as poor. At least five indicated that no medical staff

was present when they visited the facility in time of need. They stated that the hospital

did not have adequate staff or equipment to deal with emergency cases and thus laborers

had to go to the nearest Social Security Hospital in case of emergency. The lack of local

and external transport service makes workers even more vulnerable in case of an

accident.

6.6 INDUSTRIAL ZONES AT SIE:

Pharmaceuticals

Food Processing

Engineering

Textile/Garments

Carpet

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Paper & Board

Plastics

Electronics

Chemicals

Paints

Steel

Auto parts

Wood products

Warehouse etc

Infrastructure and facilities provision at SIE has set a precedent for industrial estates in

the Punjab in terms of better planning and implementation. However, there is

considerable room for improvement.

6.7 THE SYMBIOSIS INSTITUTE AT KALUNDBORG IN DENMARK

The example of Kalundborg in Denmark strictly speaking is an example of an

industrial Network, and not an industrial estate. However, as a case study it is an

excellent illustration of the application of an Industrial Ecology approach and is certainly

relevant to an industrial estate. The example of Kalundborg is often quoted in the

literature, perhaps because it is simple enough to allow the idea of an industrial

ecosystem to be appreciated and yet sufficiently sophisticated to give a feeling for the

enormous potential of this approach.

6.8 THE HISTORY OF KALUNDBORG EIPS

The history of Kalundborg really began in 1961 with a project to use surface

water from Lake Tissø for a new oil refinery in order to save the limited supplies of

ground water (Christensen, 1999). The city of Kalundborg took the responsibility for

building the pipeline while the refinery financed it. Starting from this initial

collaboration, a number of other collaborative projects were subsequently introduced and

the number of partners gradually increased. By the end of the 1980's, the partners realized

that they had effectively "self-organized" into what is probably the best-known example

of a working industrial ecosystem, or to use their term - an industrial symbiosis.

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Figure 6.3: Satellite map showing kalundborg ECO-Industrial Park

Source: Google earth

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6.9 INDUSTRIAL SYMBIOSIS

Symbiosis means co-existence between diverse organisms in which each may

benefit from the other. In this context, the term is applied about the industrial co-

operation taking place in Kalundborg between a number of companies and Kalundborg

Municipality, all of which exploit each other’s residual or by-products mutually.The

Symbiosis co-operation has developed spontaneously over a number of decades and

today comprises some 20 projects. The exchange of residual products between the

companies is laid out in the diagram. The Industrial Symbiosis of Kalundborg is built as a

network co-operation between six

Processing companies, one waste handling company and the Municipality of Kalundborg.

The philosophy behind the Symbiosis is that the six companies:Energy E2 Asnæs Power

Station, the plasterboard factory BPB Gyproc A/S, the pharmaceutical plant Novo

NordiskA/S, the enzyme producer Novozymes A/S, the oil refinery Statoil A/S,

Bioteknisk JordrensSoilrem A/S as well as the waste company Noveren I/S and

Kalundborg Municipality exploit each other's residual or by-products on a commercial

basis.

One company's by-product becomes an important resource to one or several of the other

Companies. The outcome is reduced consumption of resources and a significant reduction

in environmental strain. The collaborating partners also benefit financially from the

cooperation because the individual agreement within the Symbiosis is based on

commercial principles.

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Figure 6.4: (material and energy flows in the kalundborg industrial ecosystem)

Source: Google images

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6.10 Exchange of Resources

6.10.1 STEAM AND HEAT

Asnæs Power Station produces heat for the city of Kalundborg and process steam

for the Statoil Refinery, Novo Nordisk A/S and for Novozymes A/S. The combination of

heat and power production results in a 30% improvement of fuel utilization compared to

a separateproduction of heat and power.

Approximately 4,500 households in Kalundborg receive district heat from Asnæs Power

Station. District heat has replaced approx. 3,500 small oil-fired units.Statoil Refinery

receives process steam and water from Asnæs Power Station. The steam Covers about

15% of the refinery’s total consumption of steam. The refinery uses the steam for heating

oil tanks, pipelines etc. Novozymes A/S and Novo Nordisk A/S use steam from Asnæs

Power Station for the heating and sterilization of the processing plants. Some of the

cooling water from Asnæs Power Station is used by a fish farm producing 200Tones of

trout and salmon on a yearly basis. The fish have better growth conditions in the heated

water.

6.10.2 WATER

The Kalundborg Region as well as the industrial companies is large consumers of

water. This is why the Symbiosis companies are seeking to recycle as much water as

possible. Asnæs Power Station has, for example, reduced its total water consumption by

60%. Previously Asnæs Power Station used ground water for its power and heat

production only. The ground water has now been substituted by surface water from the

lake of Tissø and treated wastewater from Statoil. These efforts have enabled Asnæs

Power Station to reduce its ground water consumption by 90%. Earlier, Novozymes A/S

also used ground water exclusively for processes requiring drinking water quality. 1

million cubic metres of ground water have now been substituted by lake water from Tissø

whose water has been processed up to drinking water quality by Kalundborg

Municipality.

As the water from Tissø is not an unlimited resource, the consumption of lake water has

gone down by 50%. Asnæs Power Station has accomplished this reduction by recycling

its own wastewater.

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6.10.3 WASTEWATER

The wastewater is led to a recycling reservoir together with the runoff from the

surrounding fields and surplus water from Tissø in the winter period. The recycling

reservoir has acapacity of 220,000 cubic metres of water, which are used in the power

station processes.

The wastewater from Novozymes A/S and Novo Nordisk A/S is part of a genuinely

symbiotic relationship: Novozymes A/S treats all wastewater up to a level corresponding

to the wastewater of an ordinary household. From Novozymes A/S, the treated

wastewater is pumped to the treatment plant of Kalundborg Municipality where a final

treatment process takes place.

The Novozymes A/S wastewater is of a relatively high temperature making it easier for

themunicipal treatment plant to treat its wastewater. In this collaboration process, the

environment is also the winner as the overall discharge of nitrogen into Jammerland Bugt

isvery limited. Wastewater is also discharged from Asnæs Power Station into the

treatment plant of Kalundborg Municipality.

6.10.4 REFINERY GAS

An “eternal” flare of surplus gas is part of the safety system in any refinery.

Statoil's refinery flare has been reduced to a mere night-light, because the refinery now

exploits its own surplus gas internally. Formerly a large portion of the gas was

transported by pipeline to BPB Gyproc and Asnæs Power Station to be used in their

production.

6.10.5 GYPSUM

The desulphurization plant of Asnæs Power Station, which removes sulphur

dioxide (SO2) from the flue gas, produces about 200,000 tones of gypsum on a yearly

basis. Desulphurization is a chemical process in which sulphur dioxide (SO2) is removed

while forming the by-product gypsum. The gypsum is sold to BPB Gyproc A/S, a

company that manufactures plasterboard products for the construction industry. The

gypsum from the power station reduces the import of natural gypsum significantly. Being

more uniform and purer than natural gypsum, power station gypsum is therefore well

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suited for the plasterboard production. Gypsum stemming from the municipal recycling

station of Kalundborg is delivered to BPB Gyproc A/S, thereby contributing - on a

smaller scale - to reducing imports of natural gypsum and the amounts of solid waste for

land filling.

6.10.6 SLUDGE

Sludge is a major residual product stemming from the municipal water treatment

plant in Kalundborg. The sludge is utilized at A/S Bioteknisk Jordrens Soilrem as a

nutrient in the bioremediation process. In this way, a waste product from one process is

applied as a useful resource in another process.

6.10.7 OTHER WASTE

Noveren I/S collect waste from all Symbiosis companies. Waste that is an integral

part of various processes. In return, the participating companies receive raw materials.

Noveren I/S produce electricity on the basis of landfill gas. This electricity is resold to

power companies. In addition, Noveren I/S delivers a total of approx. 56,000 tones of

combustible waste on a yearly basis corresponding to an energy consumption of approx.

6,500 private households in terms of power and district heating.

6.11 PROFITS

Such an approach can lead to a significant reduction in the environmental impact, as is

shownin Table7.2 (Erkman, 1998):On the other hand, this symbiosis also reduced the

cost. Each exchange is based on a separate contract between the two partners involved,

revenues can be estimated as coming from selling the waste material and from reduced

costs for resources. The partners estimate that they have “saved" $160 million so far

(Christensen, 1999). The payback time of a project is less than 5 years on average.

Therefore, a more rational utilization of resources can save money.

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Figure 6.5: Industrial Eco system at kalundborg Denmark

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6.12 CONCLUSION

According to the analysis above, we can find a number of advantages from the symbiosis

that is used in the EIP of Kalundborg.

Recycling by-products. The by-products from one company become the resource of

Another company;

Reduced the consumption of resources, e.g. water, coal, oil, gypsum, fertilizer etc.;

Reduced the environmental strain. Reduced CO2 and SO2 emission, reduced

discharges

Of wastewater and less pollution of wastewater etc.;

Improved utilization of the energy resources. Waste gases are used in the energy

Production;

Reduced the investment cost and shorten the payback time.

On the other hand, the symbiosis still has one disadvantage that in such a carefully

planned and integrated industrial system the individual parts would be too closely linked

and dependent on each other, rendering it fragile and hence likely to collapse.

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Sector

Number of firms

Engineering 15

plastic 14

Textile & Garments 11

Pharmaceutical 10

Metal 8

Chemical 4

Paper & Board 3

Miscellaneous 31

Total 105

Table 11: (Industry Distribution at SIE)

Source: sudar industrial estate

Reduction in consumption of resources

Oil

Coal

Water

45,000 tons/year

15,000 tons/year

600,000 m3/year

Reduction in waste emissions

Carbon Dioxide (CO2)

Sulfur Dioxide (SO2)

175,000 tons/year

10,200 tons/year

Valorization of "wastes"

Sulfur

Calcium sulfate (gypsum)

Fly ash (for cement etc)

4,500tons/year

90,000 tons/year

130,000 tons/year

Table 12: Environmental Aspects of the Symbiosis [Erkman, 1998].