2Gujarat : An Enduring Strong Economy
High industrial growth :
Industrialisation :
Gujarat has demonstrated a
high industrial growth rate of 12.5% from 2002 - 2007
Gujarat is home to over 800 large
industries and 3,20,000 micro, small and medium
enterprises
Source: Socio Economic Review 2007-08
Population :
Geographical area :
Gross State Domestic Product (GSDP) :
Per Capita Income :
Urbanisation :
Over 50 million (5.0% of India)
1,96,000 sq. km (6.2% of India)
US$ 45.3 billion
US$ 915 at current prices
37.4%
Composition of GSDP as per economic activity
(2006-07)
44.0%
37.8%
18.2%
Primary Sector
Secondary Sector
Tertiary Sector
3Presence across industry sectors
Gujarat : A Thriving Industrial State
Worlds largest producer of castor and cumin
Worlds largest gas based single location sponge iron plant
Worlds largest producer of processed diamonds
Worlds 3rd largest producer of denim
Asia's largest grass root petroleum refinery at Jamnagar
India's largest producer of cotton
India's first LNG chemical port terminal at Hazira
Petroleum products
Chemical & Pharma
Engineering Industries
Food & Beverages
Textiles & Apparels
Mineral based industries
Metallurgical Industries
Others
31.2 %
22.9 %
12.6 %
9.7 %
6.5 %
2.9 %
7.5 %
6.7 %
Significant share in key sectors & products
42%
35.0%
42.3%
50.0%
58.0%
65.0%
80.0%
85.0%
98.0%
Pharmaceuticals
Cotton
Groundnut
Chemicals
Petrochemicals
Plastic industry
Diamond processing
Salt processing
Soda ash production
Fabrics30.0%
Source: Socio Economic Review 2007-08
Contribution to National Economy
30.0%
22.0%
21%
17.0%
15.6%
14.0%
10.0%
9.5%
Stock market capitalization
Coastline
Exports
Fixed capital investment
Value of output
Net value added
by manufacture
No. of Factories
Employees
4Power
Gujarat: Robust Infrastructure
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
An extensive water grid network of 75,000 km for irrigation and drinking
It will cover 75% population of the state by 2010
Transformation of economy through natural gasGas
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
Dependable power supply key to industrial development
Water
Gujarat: Robust Infrastructure
Gujarat Ports opening the gateway to prosperity
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
Ports
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)
Airports
Surfaced road length one of the highest in GujaratRail and Road
State-of-the-art road infrastructure: Indias 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)
5
The Chemicals and Petrochemicals Industry in India
India has a robust base for chemicals and petrochemicals-driven
businesses. Though the industry has undergone drastic
changes, Indian chemicals and petrochemicals share has been
continuously increasing on a constant basis.
The size of Indian Chemical industry is estimated at around US$
35 billion approx., which is equivalent to about 3% of India's
GDP. The total investment in Indian Chemical Sector is approx.
US$ 60 billion generating an employment of 1 million.
Further, the industry is widely expected to continue its growth
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.
Currently, per capita consumption of products of chemical
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.
Global chemicals and petrochemicals industry
India ranks twelfth in the world for production of chemicals and petrochemicals by volume.
Source: Global Chemicals and Petrochemicals Industry Report, April 2006, Data monitor
Indian chemical and petrochemicals industry to
grow to US$50 billion by 2009
1,600
1,700
1,800
1,900
2,000
2,100
2,200
2004 2005 2006 2007 2008 2009
All figures in USD billion
6
Gujarat: Chemicals and Petrochemicals Hub of India
Gujarats chemicals and petrochemicals industry is one of the fastest
growing sectors in the States economy and is the leader in the
production of chemical and allied products in India. The industry offers
a wide spectrum of opportunities for investors from India and abroad.
The well-diversified chemical industry has a complete portfolio of
chemical products including petrochemicals and downstream,
pharmaceuticals, dyes and intermediates.
While the State chemicals industry exhibits several similarities to the
global chemical industry, there are several characteristics specific to
the Gujarat across sub-segments. At the industry level, Gujarat
chemical industry is characterised by:
High domestic demand potential, as the Indian markets develop and
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: E&Y Analysis
Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007
Gujarat
Chemical Industry
Cost Advantages
High Domestic
Demand Potential
Globalization
ConsolidationCost
Reduction
R&D
Focus on core business
Increased use
of IT
Low export
focus
Fragmented
industry
Low levels
of R&D
Gujarat
Chemical Industry
Cost advantages
High domestic
demand potential
Globalisation
ConsolidationCost
reduction
R&D
Focus on core business
Increased use
of IT
Low export
focus
Fragmented
industry
Low levels
of R&D
7
Gujarat: Strengths
51%
8%
8%
6%
4%
23%
Gujarat Maharashtra Uttar Pradesh
Tamil Nadu Punjab Other States
61%15%
11%
13%
State-wise share in production of selected major
chemicals (2006-07)
State-wise production of petrochemicals
(2006-07)
*Other states include Andhra Pradesh, Assam, Chhattisgarh, D&NH,
Haryana, HP, Karnataka, Kerala, MP, Orissa, Punjab, Rajasthan, TN, UP
and Uttaranchal
Gujarat Maharashtra West Bengal Other States*
8
The chemical industry in Gujarat is a significant component of the
States economy, contributing to more than 51% of Indian production
of major chemicals with revenues at approximately more than INR
US$ 3 billion. Gujarat contributes 15% of the total national chemical
exports.
Petrochemical Industry in Gujarat produces 13.048 Mn Tonnes of
petrochemical products and also contributes around 62% to the total
production of the country.
Bulk of the exports from this sector go to markets such as USA,
Europe and other developed nations a clear sign of the global
competitiveness.
Gujarat has been the ideal destination for several leading MNCs
including BASF, Bayer, DuPont, GE Plastics, Cairn Energy, Solvay,
Shell, British Gas, Perstrop, Huber, Heubach Colours and Cheminova.
Source: Performance Of Chemical & Petrochemical Industry At A Glance (2001-2007),
Ministry Of Chemicals & Fertilizers Government Of India, Industries Commissionerate, GoG
Gujarat: Strengths
The State has one of the largest grassroot petrochemical refinery in the world
Source: CMIESource: Annual Survey of Industries (ASI)
Gujarat : Chemical & Petrochemical Industry
Gujarats chemical production
Dyes and intermediates
Rubber & plastics
Basic chemicals
Refined petroleum
products
0.25
0.80
0.80
10.60
12.20
23.60
0.6
1.5
7.9
35.6
32.1
75.5
Agrochemicals
Chemicals and
Petrochemicals
All figures in USD billions Gujarat India
Gujarat Contribution to India
50%Acetic acid
37%
56%
50%Ethylene
85%
38%Phosphatic fertilisers
20%
41%Caustic Soda
100%
Methanol
Polymers
Salt
Nitrogenous fertilisers
Soda-ash
Other key investors: BASF, Bayer,
Rallis India, Alembic, IPCL, Novartis,
Zydus, Ranbaxy, Cadila, IFFCO, etc.
Reliance: State-of-the-art petroleum
refinery at Jamnagar with a capacity of
27 million tonnes per annum (540,000
barrels per day)
GSFC: Diversified Fertiliser and chemical
product portfolio. About US$650 million
of investment. India's first joint sector
industrial complex
Anchor Industries
Hot Beds for Leading Players
9
Share of Gujarat
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.
Exposure to high and volatile energy,
feedstock, and raw material costs, as these
costs account (on average) for more than 60%
of a commodity chemical producers cost
structure
Cyclicality, currently moving towards the next
peak
Low-cost production from the Middle East is
likely to have a growing impact
Global migration of customer base to emerging
markets, especially China
Stringent environmental regulation
Improved performance of producers
with greater backward integration
Global expansion to capitalise on
inherently lower - cost and/or higher
growth markets
Low-cost manufacturing base
Scale and operational efficiency
Global reach, either through export
activity or in-country production
Technological advantage; potential for
licensing process technologies
Advantage GujaratDominant issues Strategic impact
Source: E&Y Analysis
Gujarat: Flourishing Chemicals and Petrochemicals Industry
10
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.
Exposure to high and volatile energy,
feedstock, and raw material costs, as these
costs account (on average) for nearly 35% of a
specialty chemical producers 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
Advantage GujaratDominant issues Strategic impact
Source: E&Y Analysis
Gujarat: Flourishing Chemicals and Petrochemicals Industry
11
Gujarat: Flourishing Chemicals and Petrochemicals Industry
With three cracker complexes, Gujarat has a total
capacity of 1180 KTA. There is an increase in the
capacity build-up in the State.
Gujarat has the highest share of polymer production in
the country.
The major driver for the growth of chemical and
petrochemicals industry in the State has been the
availability of feedstock. Gujarat has a total of over
1230 KTA of ethylene capacity and 1475 KTA of
propylene capacity respectively.
Petrochemicals: polymer industry
2.2PSu Family/ PEEKPanoliGharda Chemicals
7PA, PMMABarodaGSFC
12Engineering PlasticsBarodaGE
92ABS/ SANBarodaLanxess ABS Ltd
90GP/PS/HIPSGandharBASF
405PE/PVCGandhar
PP/PE/PVC
PP/PE/PVC/PET
PP
Polymer
295BarodaIPCL
Hazira
Jamnagar
Location
1380
1030RIL
Capacity (KTA)Company
Petrochemicals and Chemicals
Sodium nitrite and nitrate, agro-chemical intermediates, pharmaceuticals intermediates, rubber chemicals intermediates,
dyes intermediates and fine and specialty chemicalsDeepak Nitrite
Benzene, butadiene, butyl acrylate, methyl acrylate, orthoxylene, caustic soda, chlorine and acrylonitrileIPCL
Nitro Benzene, Alkylated Anilines & Toluidines, Chloro Phenols, Fluoro Compounds, AgrochemicalsAarti Group
Caustic soda (lye, flakes, prills), sodium hypochloride, liquid chlorine, compressed hydrogen gas, HCl, caustic potash
(lye, flakes), potassium carbonate, polyaluminum chloride, aluminum chloride anhydrous etcGACL
Methanol, toluene di-isocynate, aniline, nitrobenzene, methyl formate, nitiric acid, ammounium nitrate, calcium carbonate, catsol, urea,
calcium ammounium nitrate, diammounium phosphate , single super phosphate, ammounium sulphate, ammounium nitrophosphateGNFC
Caprolactum, methyl ethyl ketoxime, melamine, anhydrous ammonia, nylon-6, urea, ammonium sulphate, sulphuric acid and bio-fertilisers
Key Products
GSFC
Company
12
Industry Value Chain
Source: Ernst & Young Analysis
Storage, packaging and distribution
Raw materials
Intermediate
building block
synthesis
Functional
chemical
synthesis
Value addition
and
processing
Finished
intermediate
by-products
Business support services
Chemical industry value chain
13
Industry Value Chain
Source: Ernst & Young Analysis
Petrochemical industry
value chain
Exploration
and
developmentHydrocarbon
production
Upstream
processing
Downstream processing
PolymersFibre
intermediates
Rubber
chemicalsPlastics
14
Refining and
blending
Shipping
Storage
Distribution
Market
Focus Areas
Source: Ernst & Young Analysis
High performance chemicals
Engineering plastics
Pigments and coating products
Refinery downstream projects
Mineral resource - based projects
Specialty chemicals
Nanotechnology-based projects
Bio refineries
15
16
Longest coastline 1600 km
Chemical Port Terminal (3.0 MMT capacity) - only one in
India
LNG Terminals at Dahej (10 MMT) and Hazira (5 MMT)
42 Ports (including one major port at Kandla)
Cargo handled at Kandla is 41.5 MMT (12% of India)
Cargo handled by other ports is 89.3 MMT (80% of India)
Container handling - P&O at Mundra & Maersk at Pipavav
Mundra & Pipavav - important ports in private sector
6 Hazardous solid waste disposal sites: Vatva, Naroda,
Nandesari, Ankleshwar*, Surat*, Vapi* (* ISO 14001
Certified)
Incinerators for hazardous industrial waste in: Nandesari,
Ankleshwar, Surat, Vapi
6 Treated effluent conveyance pipelines in: Ahmedabad,
Vadodara, Dahej, Ankleshwar, Sachin, Sarigam
19 Common effluent treatment plants
Infrastructure Chemical and Petrochemicals Industry in Gujarat
5 Soda ash
plants
(2,930,000 MT)
8 Chloralkali
plants
(810,000 MT)
6 Chemical
fertiliser
complexes
5 Petrochemical
complexes
Large Petroleum
Refineries
(57.2 + 30MMT)
Tata Chemicals
Gujarat Heavy Chemicals
Nirma
Saurashtra Chemicals
Dhrangadhra Chemicals
GACL
IPCL
UPL
Shriram
Atul Products
Indian Rayon
Tata Chemicals
IFFCO
GSFC
GNFC
KRIBHCO
IPCL
RIL
ONGC
IOC
RIL
Essar
Mithapur
Veraval
Bhavnagar
Porbandar
Dhrangadhra
Baroda & Dahej
Dahej
Jhagadia
Jhagadia
Atul
Veraval
Mithapur
Kalol & Kandla
Baroda & Jamnagar
Bharuch
Hazira
Baroda & Dahej
Hazira & Jamnagar
Dahej
Baroda
Jamnagar
Jamnagar
Source: Industries Commissionerate, Government of Gujarat and CMIE
Gujarat: An Investment Destination
Resources
Feedstock for chemical industries
Oil (418 MMT) and Natural Gas (34 MMCD)
Lignite (1072 MMT)
Petroleum refining (57.2 + 30 MMT) and petrochemicals
Quality
workforce
Least man days lost due to industrial unrest
Large pool of skilled technical personnel available
39 engineering colleges offering undergraduate courses having 12,500 seats
49 Polytechnics offering diploma courses in engineering having 16,500 seats
Mineral reserves
Bauxite 105 MMT
Bentonite 105 MMT
Limestone 11,860 MMT
Salt 10 MMT
Castor oil 237,000 MT (45% of world production)
Rationale for
investment
opportunities
Excellent infrastructure
Proximity to feedstock
Conducive industrial environment
Progressive policies
Large potential market
Key growth
areas
Petrochemicals
Basic chemicals
Specialty chemicals
Knowledge chemicals
Agrochemicals
Engineering thermoplastics compounding
Large plastic crates/ pallets
PVC profiles for doors and windows
Plasticisers
Pigments
Source: Industries Commissionerate, Government of Gujarat and CMIE
Gujarat: An Investment Destination
17
Gujarat: The Way Forward
Source: Industries Commissionerate, Government of Gujarat and Economic Times
18
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.
Speciality
chemicals
Basic
chemicals
Knowledge
chemicals
High domestic demand potential,
Limited exports due to domestic market focus
Low cost competitiveness as compared to
the other countries
Major drivers for the industrial growth
Development / upgradation of infrastructure
Special incentives for backward area units
Special financial assistance for R&D projects
Gujarat: key development initiatives
Government policies
Research and development
Common industrial
infrastructure
Economies of scale
Cost competitiveness
Access to global markets
Domestic demand
Area and LocationName
Gujarat Hydrocarbon
and Energy SEZ, Bharuch
Asia Pacific
Corporation Ltd.
Jayant SEZ,
Bharuch
Jubilant Chem
SEZ,Bharuch
107 Ha, In-principal approved
450 Ha, In-principal approved
106 Ha, Formally approved
160 Ha, Formally approved
Source: Gujarat Industrial Development Corporation., GoG
Chemicals/Petrochemicals Investment Locations
Three SEZs
Fourteen industrial estatesEight chemical product clusters
Vapi, Valsad
Sarigam, Umergam, Valsad
Sachin, Choriyasi, Surat
Pandesara, Surat
Vilayat, Bharuh
Ankleshwar, Bharuch
Jhagadia, Bharuch
Panoli, Ankleshwer, Bharuch
Dahej, Vagra, Bharuch
P.C.C. , Vadodara
Nandesari, Vadodara
Area
(hectares)Name of the estate
Vatwa, Ahmedabad
Naroda, Ahmedabad
1163.77
395.00
770.90
218.27
1000.00
1611.65
1605.97
1037.37
6130.96
666.38
271.67
534.41
362.94
127.88 Odhav, Ahmedabad
Location
Valsad
Bhavanagar
Ahmedabad
Bharuch
Vadodara
Anand
Mehsana
Jamnagar
19
Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007
Petroleum, chemicals
& and petrochemicals
investment region
Chemical product clusters
(8)
Chemical industrial
estates (GIDC) (14)
Petrochemical industry
complexes
Chemical industry
Complexes
Chemical/ Petrochemical
SEZs (4)
Rajkot
HAZIRA
PIPAVAV
Vilayat
Ahmedabad
Surat
DAHEJBhavnagar
Mehsana
Anand
Chemicals/Petrochemicals Clusters
Area310 sq km including
existing estate and SEZs
210 sq km under
land acquisition
20
Jamnagar Vadodara
Valsad
Chemicals/Petrochemicals Investment Locations
Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR)
400 km north of Mumbai
30 km from Mumbai-Delhi
national highway and railway
110 km from airport
Total Area 29,500 Hectares
Chemical & petrochemical industries - 11,700 Ha
Related engineering industries - 2,200 Ha
Green belt - 3,600 Ha
Roads, rail and corridor - 6,000 Ha
Housing and social infrastructure - 1,000 Ha
Transport and warehousing - 1,000 Ha
Recreational zone - 500 Ha
Power, Water, Infrastructure - 500 Ha
SEZ - 1,800 Ha
Ports - 200 Ha
PCPIR master plan
Source: Gujarat Industrial Development Corporation., GoG
21
Narmada River
Dahej
Bharuch
Gu
lfo
fK
ha
mb
ha
t
Baroda
VAGARA
BHARUCH TALUKA
BHUKHI CREEK
NARMADA RIVER
HOUSING
LEGEND
OPEN,GREEN,RECREATION
UTILITY
TRANSPORT ZONE,WARE HOUSES.
COMMERCIAL
EXISTING ESTATE
EXPANSION AREA OF EXISTING ESTATE
UNDER ACQUISITION.
CHEMICAL INDUSTRIES
DAHEJ ESTATE
DAHEJ ESTATE
DMIC Industrial Area Locations In Gujarat
PCPIR DELINEATED
BOUNDARY
VILLAGE BOUNDARIES
Region taken up under Indian Governments
Petroleum Chemical and Petrochemical
Investment Region (PCPIR) Policy
Brownfield area - least displacement issues
Existing GIDC estates at Dahej and Vilayat -
total area of 55 sq km within site
DAHEJ INDUSTRAL ESTATE
PROPOSED ONGC PETROCHEMICAL COMPLEX
DAHEJ-BHARUCH INVESTMENT REGION
VILAYAT INDUSTRAL ESTATE
Source: Gujarat Industrial Development Corporation., GoG
22
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.
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.
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.
Business descriptionCompany
23
Key Foreign Players in Gujarat
Key Foreign Players in Gujarat
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.
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.
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.
Business descriptionCompany
25
Educational Infrastructure
Source: Department of Technical Education, Department of Employment & Training
Locations of major educational institutions in Gujarat Some of the major academic institutions offering chemical
engineering course includes:
Nirma University of Science & technology, Ahmedabad
Government Engg. College, Valsad
L.D. College of Engg., Ahmedabad
There are 39 Engineering colleges in Gujarat offering course in
Chemical Engineering.
49 Polytechnics offer courses in Chemical sector in Gujarat and
some of them are located located at Rajkot, Bharuch and Valsad
Govt. Polytechnic, Rajkot
K.J. Polytechnic, Bharuch
Govt. Polytechnic, Valsad
Ahmedabad
Surat
Gandhinagar
Bhavnagar
Rajkot
Valsad
Bharuch
Navsari
Vadhvan
Nadiad
26
Vadodara
Initiatives by Government
Licensing policy
In Chemical sector, 100% FDI is permissible.
Manufacture of most chemical products inter-alia
covering organic / inorganic, dyestuffs and
pesticides is delicensed.
The entrepreneurs need to submit only IEM with the
Department of Industrial Policy and Promotion
provided no locational angle is applicable.
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.
Customs duty
The peak rate of customs duty on most Chemicals
is 7.5%
On basic raw materials like acid grade fluorspar,
sulphur, rock phosphate, natural borates is 5%
On most building blocks and feedstock the duty is
5% (ethylene, propylene, crude, naptha, benzene,
toluene, xylene, ethylbenzene)
Excise duty
On almost all chemicals the
excise duty is 16% .
Source: Ministry Of Chemicals & Fertilizers Government Of India
27
Government of Gujarat-SEZ Advantage
For SEZ units
Income tax incentives
100% tax holiday for a period of any 10
consecutive years out of 15 years beginning
from the year in which the SEZ is notified
Exempt from dividend distribution tax
Tax exemption on interest of long term
finance
Long-term capital gains arising on transfer
of shares in developer company tax exempt
No minimum alternate tax (MAT)
For developers of SEZs
Income tax incentives
10 year corporate tax holiday on export
profit 100% for initial five years and 50%
for the next five years
Common incentives
Indirect tax incentives
Nil customs duty
Nil excise duty
Exemption from central sales tax
Exemption from service tax
Exemption from securities
transaction tax
Exemption from tax on sale of
electricity for self generated and
purchased power
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 earners foreign
currency account
Other benefits
Full freedom in allocation of developed
plots to approved SEZ units on purely
commercial basis
Full authority to provide services like water,
electricity, security, restaurants and
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
Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007
rd
3 Vibrant Gujarat Global Investors Summit was held on January
12-13, 2007
31 MoUs and Announcements were signed in Vibrant Gujarat 2007
for projects to be established in the chemical and petrochemical
sector
Proposed investment US$ 3.25 billion
Scope of employment generation 14,295
Projects primarily related to establishing industrial parks and
production of:
Basic and fine chemicals
Specialty and performance chemicals
Organic and inorganic chemicals
Dyes and intermediates
29
31
13
18
1674013412
3645
0
10
20
30
40
2003 2005 2007
Year
0
5000
10000
15000
20000
Number of MoU Investment (INR Crores)
Investm
ents
No. of M
OU
s
* Detailed Sector/ Project Profiles for investment opportunities available at www.indextb.com
Investment Opportunities
Methanol production
Propylene oxide and propylene glycol
Cumene production
Phenol / Acetone
Nitrobenzene and aniline
Diphenylmethane di-isocyanate (MDI) and
toluene di-isocynate (TDI)
Polyvinyl chloride (PVC)
ABS resin
Polycarbonate resin
Polyethylene terephthalate (PET) chips
Styrene butadiene rubber (SBR)
Bi-axially oriented polypropylene (BOPP) Films
BOPET Films
Polyethylene (PE) multi layer film project
Polyolefins compounding and masterbatches
Polypropylene (PP) ropes
Fiber and filament
Plastic crates
Bisphenol-A
Mono-chloro acetic acid (MCA)
Bromine
Titanium tetrachloride / Titanium dioxide
Chlorosilanes
Synthetic zeolite - Zeolite A
Contract research and manufacturing services
(CRAMS)
Chemical and Petrochemical Projects
30
Invest in Gujarat : A world class Business Destination-
31
Kutch
Jamnagar
Porbandar
Junagadh
Amreli
Bhavnagar
Rajkot
Surendranagar
Banaskantha
Patan
Mehsana
Himmatnagar
Panchmahal
Dahod
Rajpipla
Valsad
Knowledge corridor
Chemicals, petrochem.
pharma, textiles and
engineering
Industrial corridor
(DMIC)
55 special economic
zones (SEZs) across
Gujarat
Gujarat International
Finance-Tec City
Petroleum, Chemicals
and Petrochemicals
Investment Region
(PCPIR)
Bio-Tech cluster
Soda ash and salt-
based industries,
cement and steel
pipes
202 industrial estates
across Gujarat
Soda ash and salt
based
Engineering and
ceramics
18 Captive Ports along
1600 km coastline
across Gujarat
Special Investment
Region (SIR)
Petroleum and brass
parts
To Delhi
To Mumbai
Savli Biotech Park
202 industrial estates across Gujarat
55 special economic zones (SEZs) across Gujarat
Ahmedabad
Agroprocessing, Dairy
and Engineering
Gandhinagar
Bharuch
Dholera
Navsari
Surat
Kheda
Vadodara
Anand
Industries Department, Govt. of Gujarat
iNDEXTb -Industrial Extension Bureau
Gujarat Industrial Development Corporation
Gujarat Infrastructure Development Board
http:// www.gujaratindustry.gov.in
http://www.indextb.com
http://www.gidc.gov.in
http://www.gidb.org
Gujarat Alkalis and Chemicals Limited http://www.gujaratalkalies.com/
Gujarat Narmada Valley Fertilizers Company Ltd. http://www.gnvfc.net/
Gujarat State Fertilizers & Chemicals Limited http://www.gsfc.gujarat.gov.in/
Key Contacts
32
NMaps used not to scale
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