Adani's Mundra SEZ Attracts Investment of $666 Million from 21 Companies

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Researched by Industrial Info Resources (Sugar Land, Texas)--India's Mundra Special Economic Zone (SEZ), a sprawling 6,400-hectare area earmarked for the manufacturing sector, will soon receive an investment of $666 million from 21 companies that are interested in setting up projects in the SEZ, which is owned by the Adani Group (Ahmedabad, Gujarat) and is in Kutch, Gujarat.

In a fresh investment round, joint venture companies such as Kalyani Alstom Power, Alstom Bharat Forge Power and Thermax Limited (BSE:500411) (Pune, Maharashtra) turned out to be the early investors. The first two are joint venture companies formed by global power systems manufacturer Alstom S.A. (EPA:ALO) (Levallois-Perret, France) and engineering company Bharat Forge Limited (BSE:500493) (Pune), which is the flagship company of India's leading industrial houses, the Kalyani Group.

Alstom Bharat Forge Power will invest more than $280 million to manufacture power equipment, such as generators and turbines, while Kalyani Alstom Power will set aside $97 million to set up a facility that will produce condensers and heat exchangers.

Ahlstrom Fiber Composites (Helsinki, Finland), a part of the Ahlstrom Corporation (HEL:AHL1V) (Helsinki), will develop medical textiles fabric production facilities at an estimated investment of $58 million. A geo textile production facility will be established by Terram Limited (Gwent, Wales) at a cost of $13 million. Anjani Udyog Private Limited (Gurgaon, Delhi) has set aside $26 million for a technical textiles unit involved in the production of spun lace.

The Mundra SEZ has been organized sector-wise, accomodating a range of plant types including power, engineering, auto and downstream plants, metals, minerals, stones, plastics, pharmaceuticals, chemicals, textiles, timber, agriculture, furniture and apparel.

Adani is considering expanding the SEZ by another 10,000 hectares. Adani Power Limited (BSE:533096) (Ahmedabad), which is a group subsidiary, will set up a 4,620-MW power plant, which will ensure a stable source of power for the SEZ. Adani Enterprises Limited (BSE:512599) (Ahmedabad), in collaboration with Chemoil Energy Limited (SIN:AV5) (Hong Kong), will deliver marine fuel at the Mundra Port, which is a part of the SEZ. In addition, a desalination plant and effluent management facilities also will be present.

The Gujarat State Petroleum Corporation (BSE:532702) (GSPC) (Gandhinagar, Gujarat) is the most likely candidate for the liquefied natural gas (LNG) unit envisaged at Mundra.

Two more firms from Taiwan and Japan have expressed an interest in investing about $54 million in the Mundra SEZ. Talks are under way. However, the authorities are looking only for serious investors who will be using the port or railhead, and electricity facilities that are locally available. Reportedly, land allocation for the health care and hospitality segments have been completed, while Adani has created residential infrastructure within the zone.

The Mundra SEZ has access to the Mundra port, which is the largest private port in the country. The port handled more than 40 million tons of cargo in the 2009-10 period and aims to handle about 50 million tons in 2010. In addition to the container terminals, the zone is also linked to the national railhead by means of a 64-kilometer private railway line.

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