India's Dahej SEZ Optimistic of Exceeding $12.99 Billion in Export Revenues

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Dahej multi-product Special Economic Zone (SEZ), a joint venture between Oil & Natural Gas Corporation Limited (BSE:500312) (ONGC) (New Delhi) and Gujarat Industrial Development Corporation (GIDC) (Gandhinagar, Gujarat), is expected to attract investments of about $6.59 billion to $7.57 billion. This announcement was made by R J Shah, the chief executive officer of Dahej SEZ Limited (Gandhinagar, Gujarat), at the recently held Nigeria-India Business and Investment Forum (NIBIF-2010), which was organized by Confederation of Indian Industry (CII) (New Delhi).

Shah indicated that land has been allocated to 32 companies, of which 10 projects are in advanced stages of development. Upon attaining full commercial operations, exports from the SEZ could exceed $12.99 billion.

Some of the large investors include Torrent Power Limited (BSE: 532779) (Ahmedabad, Gujarat), DIC Fine Chemicals Private Limited (Kolkata, West Bengal), ONGC Petro Additions Limited (OPAL) (New Delhi), and Torrent Pharmaceuticals Limited (BSE: 500420) (Ahmedabad, Gujarat).

Torrent Power is setting up a 1,500-MW, gas-fired power plant with an investment of $1.73 billion to $2.16 billion. OPAL is proposing to invest about $4.33 billion to set up an integrated petrochemicals complex. Several engineering and chemicals manufacturers also have expressed interest in setting up facilities at the Dahej SEZ. Shah indicated that Dahej SEZ Limited also had received proposals from German, Belgian, Japanese and U.S. companies. To date, the SEZ has received investments of about $433 million.

The Dahej SEZ is at Vagra Taluk, in the Bharuch district of Gujarat. The SEZ, which will be spread across 1,719 hectares of land, is part of the Dahej Petroleum Chemicals and Petrochemicals Investment Region (PCPIR). It will be developed in two phases, both linked by a 6-kilometer-long and 30-meter-wide corridor.

As of December 1, 2009, land allocation was completed for 23 companies, including Sun Pharmaceuticals Industries Limited (BSE:524715) (Mumbai) and Pidilite Industries Limited (BSE: 500331) (Mumbai), for the first phase of the SEZ. Land has also been approved for nine companies, including Torrent Pharmaceuticals and Godrej and Boyce Manufacturing Company Limited (Mumbai), for the second phase. Land has been offered to companies on lease for a period of 30 years.

In September 2009, Dahej SEZ Limited approved proposals for two hospitality projects submitted by Sapthagiri Hospitality Private Limited (Vadodara, Gujarat) and Dahej Hospitality Private Limited (Gandhinagar). Each company will develop a 100-room hotel, with individual investments of $32.48 million.

Gujarat, which is in the western region, is one of India's fastest-growing economies. The state is home to some of the country's largest industrial establishments. Its 1,670-kilometer coastline makes it an ideal location for petrochemical complexes, chemical plants, and export-oriented units. Gujarat accounts for nearly 67% of petrochemicals, 80% of salt, and 40% of pharmaceuticals manufactured in India. The state contributes about 39% to India's industrial output.

In the last few years, the state-sponsored "Vibrant Gujarat Summit" has given a boost to Gujarat's industrial infrastructure and economy. The two-day summit, held every two years, aims at showcasing Gujarat's industrial potential and attracting investments from domestic and international companies. In 2009, 8,662 memorandums of understanding worth $243 billion were signed, with 45 participating nations.

India is one of the first Asian countries to recognize the importance of Export Processing Zones (EPZ). In 1965, India established its first EPZ at Kandla in Gujarat. In April 2000, the SEZ policy was announced to attract domestic and foreign investments and strengthen economic growth. Today, India has seven government-controlled SEZs at Mumbai, Kandla, Vishakapatnam, Noida, Cochin, Falta and Chennai. Additionally, there are 12 SEZs, which have been approved by the state governments and operated by private sector companies.

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