In a major lift for the small and medium enterprises (SMEs) engaged in the chemicals, dyes and dyestuff manufacturing in Gujarat, the upcoming global investment congregation, Vibrant Gujarat Global Investment Summit (VGGIS), 2011 will see memorandums of understanding (MoUs) worth Rs 4,000 crore being signsed between the state government and the dyes units for setting up manufacturing facilities at the petroleum, chemicals and petro-chemicals investment region (PCPIR) at Dahej in the southern part of the state.
According to industry sources, the government has recently concluded the process of inviting applications from the SME players. "The government has earmarked 500 hectares of land for the SMEs operating in dyes, pigments and intermediates. As many as 110 applications have been received from the SMEs across the state," said Shankarlal Patel, president, Gujarat Dyestuff Manufacturers' Association (GDMA). "The region would attract investments from the SMEs to the tune of Rs 4,000 crore, which will be promised during the VGGIS," Patel added.
The Dahej PCPIR has already attracted large chemical and petro-chemical players including Petronet LNG and Oil & Natural Gas Corporation Ltd (ONGC) to set up their facilities. Besides Dahej, the central government has planned two more PCPIRs each in Vishakhapatnam in Andhra Pradesh and Haldia in West Bengal."The plot size for the SMEs will be in the range of 5,000 sq mt to 2-3 lakh sq mt. Jay Chemicals, Bodal Chemicals, Atul, Surat Colour were among some of the key players who had applied for the plots at the PCPIR," Patel informed. The SMEs have been awaiting the allotment of plots at the PCPIR for long. Some of the industry players are not much pleased with the government's approach towards the SMEs. "The small units have been waiting for the land allotment since long, but nothing has come so far. I am apprehensive if anything will happen even after signing the MoUs in the VGGIS next week," told Ramesh Patel, director, Meghmani Organics Ltd.
Meanwhile, the industry players are of the opinion that the sector is currently reeling under the high-cost pressure as crude prices are scaling up. The derivatives of crude oil are the key ingredients of the industry.
"China has been giving us a tough competition in the dyes and chemicals sector. They have an advantage of high scale of production, while we have limited capacities, hence can not match with the Chinese competition. But looking at the recent growth in the industry due to post-recession revival, it seems that our market share in the global market will become around 12 per cent by March 2011," said Bipin Patel, a veteran chemical industrialist in Ahmedabad. The government officials could not be reached for the comments on the proposed land allotment to the SMEs at the PCPIR.