Chemicals Petrochemicals Details

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


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



11


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


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


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


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


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


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


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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