Kolkata-based Hastings Jute Mill (HJM), a division of the premier jute export house Murlidhar Ratanlal (MREL) is setting up a jute park at Shaktigarh in Burdwan district, 110 km from Kolkata, at a cost of Rs 33. 65 crore on a 25-acre land.
A special purpose vehicle ( SPV) - Shaktigarh Jute Park Infrastructures Ltd ( JPIL), has been formed with HJM as the anchor investor and major stakeholder along with five other jute diversified production centres ( JDPCs) to set up the unit. The debt-equity ratio of the SPV has been pegged at an almost 1:1.
While the promoters contribution is Rs 9.15 crore, which is 27 per cent of the project cost, Jute Manufactures Development Council ( JMDC) has promised a grant of Rs 7.5 crore which is another 22 per cent of the remaining projected investment. The SPV will take term loans of Rs 17 crore, almost 51 per cent of the project cost, from banks and financial institutions (Fis)
“As the land deal is almost clinched we will shortly start construction work for setting up the jute park in the Burdwan-Memari belt. Other facilities from the government are also in line", said Sanjay Kajaria, director HJM.
The surrounding areas of the park are jute growing land and are close to the national highway and railway station for a link up with other parts of the state.
The estimated investment works out to 23 per cent of cost each on land and building common facilities, 40 per cent on factory buildings and the remaining 14 per cent on common infrastructure. The value of the land arranged by the SPV is estimated at Rs 7.5 crore considering the provisional price of Rs 30 lakhs per acre.
The proposed park will have integrated facilities for spinning, weaving, wet processing for various jute products including diversified items. There will be centralized auxiliary units like raw jute and jute product warehousing and packaging units. A spinning, mackloom, fine yarn, weaving (fine hessian and donnier loom) along with a sacking bag unit will be set up in the park.
The West Bengal government will provide a state capital investment subsidy of 15 per cent on fixed investment and an interest subsidy of 25 per cent on the annual interest liability of the term loan borrowed from banks and FIs for 6 years.
The project will also receive a waiver of electricity duty for 5 years from the date of commercial production. Moreover, there will be reimbursement of electricity charges at the rate of 30 per cent of such charges paid by the project for a period of 5 years from the time of commercial operations.
The proposed jute park will get incentive for employment generation by way of reimbursement of 80 per cent expenditure for paying ESI and EPF of employees for 6 years.
The project will get a refund on stamp duty and registration fee at the rate of 60 per cent on the land acquisition and purchase deals required for the project.
West Bengal is the major supplier of diversified products in the export and domestic markets. Currently the state has 600 units producing diversified products and employing 5000 persons.
