In order to enhance the image of Gujarat as a pharma hub, the Mumbai - based HBS Realtors and the JB Mody Group are jointly developing a 312 acre state of the art pharma Special Economic Zone (SEZ) with world class infrastructure facilities at Panoli, Bharuch, Gujarat. Kayvanna Shah, CEO, JB SEZ in an interview with Suja Nair Shirodkar gives an overview on the current status of the SEZ, new projects, future plans and the efforts being taken by the group for marketing the SEZ and reaching out to pharma companies.
What is the current status of the pharma SEZ and when will it be fully operational?
Located at Panoli, Bharuch district, our SEZ has already received notification from the Ministry of Commerce & Industries (MoCI) and environmental clearance from the Ministry of Environment & Forests (MOEF). To be more precise, all our approvals are in place. As of now a unit-holder or a company can start their construction if he wants. For construction, temporary power and water is available on site. Permanent power, water and common effluent treatment plant will be operational by FY 2011-12.
Spread over 312 acres of clear title land, construction at site is in full swing. Presently concretization of road along with development of drainage systems and infra facilities is in progress and the customs and marketing office will be on stream by December-end. Phase II of our plan is to develop an integrated township to cater to the requirements of the industrial units in the region with residential units, hospitals, educational institutes and recreational facilities.
What is the nature of investment on infrastructure for the construction of the SEZ zone?
As of now, the investment on infrastructure for the construction of the SEZ zone has exceeded Rs 100 crore. From our end, we have tied up with the best companies in their respective fields for setting up a power plant, supply of gas, effluent treatment plant etc.
We have also utilised the expertise of CPG Singapore to design the master plan of the SEZ and imported an unique security gate-house structure from Australia. In addition we have also put in a lot of efforts for marketing the SEZ and reaching out to pharma companies. Through this SEZ zone, the entire investment benefit to Gujarat is estimated at Rs 2,500 crore.
What are the incentives offered by the government for the SEZ?
The government has ensured a slew of incentives to the SEZ. Some of the other major incentives are 100 per cent FDI in the manufacturing sector permitted through automatic route, barring a few sectors and income tax exemption on export income for SEZ units for upto 15 years. There will also be exemption from customs duties and central excise duties on import of capital goods, raw materials, consumables, spares and many such others and exemption from duties on import and procurement of goods for the development, operation and maintenance of SEZ.
One of the incentives offered to a unit- holder is increasing external commercial borrowings by SEZ units upto US $ 500 million in a year without any maturity restrictions through recognised banking channels. Domestic sales are allowed on payment of full duty subject to import policy in force. The government has also provided the facility to retain 100 per cent foreign exchange receipts in Exchange Earners' Foreign Currency Account.
Other benefits include single- window clearance for central and state- level approvals, in-house customs clearance for export and import cargo, no cap on foreign investment for small sector reserved items and exemption from Central Sales Tax and Service Tax.
What is the USP of the pharma SEZ? How many companies have shown interest in it?
Till now we have got a very positive response as many companies have shown interest in setting up their unit in our SEZ. In fact prior to our SEZ being operational, a few mid-size companies have been already leased about 40 acres of land to set up their units. One of the biggest USPs of the pharma specific SEZ project is that it is designed for formulations, API and R&D and is situated in the heart of fully developed GIDC.
Since GIDC is a pharma and chemical industrial zone, there is easy availability of skilled labour and adequate raw-material supply. As far as logistics and connectivity is concerned, the SEZ is located very near to Panoli station and six kms from Ankleshwar. It is also close to the upcoming Delhi-Mumbai freight corridor and is situated adjacent on the NH-8 Mumbai-Ahmedabad highway. Two airports notably Baroda and Ahmedabad are located at 80 kms and 220 kms respectively from our site. Dahej (60 kms) and Hazira (85 Kms) are the nearest located ports.
Master planning of the entire layout has been undertaken by CPG Consultants, Singapore. Their inspiration while designing the SEZ was the human cell structure. Moreover, core utilities like water, power, gas, telecom and waste and effluent treatment etc shall be provided to the unit-holders at their factory door-step.
Through direct and closed sales, how many buyers are into the project till now?
As mentioned earlier, we have already leased approximately 40 acres till now out of 240 saleable acres. These include few mid - size pharma companies which would soon commence construction for setting up their formulation plant.
How do you plan to market the SEZ in the Vibrant Gujarat 2011 ?
We had launched and introduced our project to the industry at Vibrant Gujarat last year. However, this year we are not participating as an exhibitor but will be present as a visitor.
Currently we are advertising in various pharmaceutical dailies and are one of the exhibit sponsors for the CPhI conference which is being held in Mumbai in early December. We plan to undertake marketing activities through such platforms for the next coming quarters as well.
What were the challenges faced while developing the SEZ project? How did you overcome it?
Thankfully, till now we have not faced any major hurdles in developing this project. For this we would thank the concerned officials who have been co-operative with us for getting approvals or for getting clearance of project report for unit - holders.
What is your vision for the future?
The SEZ is dedicated to the manufacturing of pharmaceutical finished formulations, API's and their intermediates and service activities related to research and development and contract manufacturing. Our vision is to develop a SEZ offering world-class facilities thereby creating an industry benchmark of sorts. On completion, JB SEZ will be a landmark development, not only for Gujarat but also a dream that many pharma companies will soon see as an exciting reality and a step forward in the pharmaceutical and economical progress of India.