Sonthalia flags off SEZ project work

The Kolkata-based Sonthalia group of companies, a major exporter, has entered into a joint venture with IL&FS Ltd for development and implementation of four special economic zones (SEZs) projects.

According to sources in the Sonthalia group, IL&FS could also financially participate in the SEZ projects.

"The group has adopted a completely different route to setting up the SEZs- land has been acquired from small sellers first before proceeding for filing of application for SEZs, thereby avoiding the problems being faced by promoters who are announcing projects first and then trying to take over land", said the source.

The group also chose to focus on the information technology (IT) IT enabled services (ITES) sectors rather than going in for manufacturing or multiproduct SEZs that would have required large plots of land and meant much greater difficulties in land acquisition, added the source.

The aim was to be the first SEZ to be commissioned in SEZ since the new rules for such zones came into force.

The group's IT SEZ at Panagarh in Bardhhaman district, 150km west of Kolkata on National Highway 2 (NH2), was ahead in this race, having received formal approval from the Board of Approvals (BOA) and thereafter being notified in August 2007.

In keeping with its policy, the group acquired the 71 acres for the SEZ first from small farmers before filing for approval and notification.

The environmental impact assessment (EIA) study and project development activities had already started, said the source. The group was now marketing the SEZ to possible client units interested to take up space at this SEZ.

The site was being landscaped and engineered to make it suitable for IT hardware units, as also business process outsourcing (BPO) units, call centres and similar services.

The second IT SEZ was being set up at Rajarhat, 15km east of Kolkata, in two separate modules of 50 hectares and 40 hectares.

Formal approval for both the SEZs were in hand.

The group was now busy marketing the SEZs to IT companies to take up space.

The two SEZs were located within 2km of each other.

The third proposed SEZ would focus on bio-technology and would also come up at Panagarh.

Formal approval from BOA was in hand and the group was now searching for suitable partners in India and abroad for this SEZ covering 10 hectares.

The group recently filed an application before BOA for a fourth SEZ focused on non-conventional energy, also at Panagarh, said Mukesh Tandon, general manager and president (projects) in the group. The group proposed to market this SEZ as the country's only 'Solar SEZ'.

The Sonthalia group would be the anchor occupant there with its proposed solar cell fabrication unit while the rest of the space was being marketed with companies interested in projects in the non-conventional energy sector as possible collaborators.

This SEZ would focus on solar cell and photo-voltaic equipment. Group chairman S K Sonthalia, now regional chairman of the Export Promotion Council for EOUs & SEZ Units, and co-promoter R K Sonthalia, started off in the Falta SEZ with a unit that was today one of the largest foreign exchange earners from Falta SEZ.

The Sonthalia group was also a jewellery manufacturer and exporter with a unit inside Manikanchan, the jewellery sector SEZ building here, besides being a merchant exporter and the largest plastics recycling company in the country.

Around Rs 600 crore of the group's Rs1000 crore turnover came from direct exports. The experience of operating in the Falta SEZ was an advantage in development of SEZs as the group was aware of the problems that could be faced by SEZ occupiers, said Tandon.

The group recently tied up with Indian Institute of Technology at Kharagpur for technical support for setting up the fabrication unit in the 'solar SEZ' and to conduct a feasibility study for the solar fab unit. The solar unit was being set up in technical collaboration with a specialized Taiwanese company.

The unit would first make ploy crystalline solar cells in the first phase, followed by forward integration into manufacture of integrated photo-voltaic equipment.

The only other SEZ where work was currently on in Bengal was the IT SEZ carved out by bifurcating the Calcutta Leather Complex (CLC), promoted by M L Dalmiya & Co. (MLDC). It was created after MLDC did not get enough takers for CLC.

The leather complex was yet to be fully commissioned and was way off its implementation schedule. Many leather units were still operating from locations inside Kolkata city in violation of legal and admimistrative orders.