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AP plans a Rs 300-bn chemical complex

Syed Amin Jafri, in Hyderabad

Andhra Pradesh has ambitious plans to set up a mega chemical complex between the port cities of Visakhapatnam and Kakinada with an investment of Rs 250 billion to Rs 300 billion over the next seven to ten years.

The project profile will be announced in a special presentation by Indian Institute of Chemical Technology director, Dr K V Raghavan, on the inaugural day of the two-day conference on "Andhra Pradesh -- an Ideal Gateway to the Chemical World" which opens in Hyderabad on Friday.

Briefing newsmen on the eve of the conference on Thursday, Dr Raghavan said it would focus on the prospects of Andhra Pradesh hosting a mega chemical complex which would entail clustering of several big and medium scale companies, bringing about a synergy among them and making use of environmental-friendly technologies.

He said that Andhra Pradesh, which has made its mark in the fields of bulk drugs, pharmaceuticals, agro-chemicals, speciality chemicals and petrochemicals, has immense potential for such a mega chemical complex, in view of the presence of huge gas reserves in Krishna-Godavari basin, location of the Vizag refinery and the proposed Rs 200-billion LNG terminal at Kakinada.

"Andhra Pradesh can be the new gateway for the chemical sector," he added.

He said the proposed pharma city and petroleum hub at Visakhapatnam and the gas hub in the KG basin make it an ideal location for a mega complex, since the feedstock required for chemicals would be available in huge quantities.

A knowledge park is functioning near Hyderabad and a biotechnology park is in the offing.

Andhra Pradesh also has a string of research and development institutions, such as Indian Institute of Chemical Technology, Centre for Cellular and Molecular Biology and 40 other "knowledge providers" located in Hyderabad alone.

Dr Raghavan said that the major MNCs were moving towards Asian countries, particularly the South-East Asian nations, for location of mega complexes as part of their attempts at outsourcing their operations due to availability of cheap feedstock and quality manpower.

"Andhra Pradesh can become a major chemical hub in the country. The mega chemical complex will take seven to 10 years to take shape and involve investments of Rs 250 billion to Rs 300 billion. This will mean attracting lot of foreign investments," he said and pointed out that a Japanese delegation led by Dr Masami Inada, president, AISIN Cosmos was expected to evince interest in the mega project.

He said the mega chemical complexes would not only bring down the high environmental burden but also ensure huge value-additions and international marketing opportunities.

"India has the capabilities in the chemical sector. It has the intellectual strength, skilled manpower; technology capability for operations and what it is lacking is investments and access to modern technologies. If it is able to attract foreign investments and get access to new technologies, it can emerge as a strong force," Dr Raghavan observed.

Krishan Kalra, additional secretary-general, Federation of Indian Chambers of Commerce and Industry, said the worldwide turnover of chemical sector was $400 billion and chemicals accounted for 10 per cent of the global trade.

The United States, with 12,000 chemical industries, accounted for global output and Japan, with 4,500 units, contributed 16 per cent of global production.

India, which has 6,000 chemical industries, merely accounted for 1.5 per cent of the world production.

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