|
 |  | ASSAM INDUSTRIAL DEVELOPMENT COPRPORATION LTD |
| | ASSAM INDUSTRIAL DEVELOPMENT COPRPORATION LTD |
PLASTIC PARK AT TINSUKIA
Why a Plastic Park?
A Plastic Park is planned based on the following:
Availability of raw materials
Market demand
Availability of skilled manpower
Strategic location of state.
Attractive incentives from both State and Central Government
Availability of Raw Materials: Gas Cracker unit
Based on the availability of natural gas in Assam a Gas Cracker unit is under implementation at Lepetkata in the Dibrugarh district. The company in the name and style of Brahmaputra Cracker & Polymers Ltd. is jointly formed by GAIL, OIL and Government of Assam and is expected to be commissioned by 2012 with the following product mix:
| Product | Amount |
|---|---|
| LLDPE /HDPE | 220,000 TPA |
| LLDPE /HDPE | 220,000 TPA |
| POLYPROPYLENE | 60,000 TPA |
| RAW PYRO GASOLINE | 55,750 TPA |
| FUEL OIL | 12,500 TPA |
The potentials of Gas Cracker Project at Lepatkata, Dibrugarh after commissioning if exploited to its full will create avenues for generating employment direct and in-direct to a minimum of one lakh people in its ancillaries, down stream and other services related enterprises. This provides tremendous scope and responsibility on the Government for development of down stream plastic industries. In order to facilitate the growth of plastic industries the government of Assam wants to set up a plastic park near the gas cracker project and has for this purpose identified 500 acres of land in Tinsukia District of which around 400 acres is in the advanced stage of acquisition.
Plastic market scenario in the N.E. Region and Assam
The present plastic consumption pattern (1-2 Kg) in the State of Assam is much below the national average (6-7 Kg) due mainly to the shortage of raw material and other connected issues. Considering the fact that plastic market is supply driven, it is expected that consumption of plastic products in the region will increase many fold on setting up of more units once raw material is readily available from the project. The main reason for low level of polymer consumption in the State is the absence of polymer processing facilities associated with high transportation cost of products from outside the State. Absence of adequate industrial/construction sectors also one of the reasons for low consumption of plastic products in the industrial sector. The national per capita consumption of plastic was 1 Kg during eighties which was increased to 1.8 kg during nineties and after establishment of petrochemical complexes of RIL, IPCL, GAIL and HPL, the consumption jumped to over 4 Kg at present. Therefore, the N.E. region too can be expected to achieve consumption level at per with the national level if localized availability of these products at affordable prices is made possible. The picture is also clear considering the fact that production of polymer in the country during 1990-91 was 0.9 million tonnes which was increased to 4 million tonnes during 2002-2003. The per capita consumption of plastic in India still far behind the consumption level of China (14 Kg) and the world (24 Kg) and hence, tremendous scope exists for expansion of polymer sector in the State where it is still in the nascent stage. The Govt. of India has planned to reach per capita consumption level of 6 Kg by 2009 and aimed to achieve major polymer consumers in the world by 2012. The total population of the N.E. region is around 40 million where Assam's share is 27 million constituting around 67% of the total population. The State has highly favourable factors for development of plastic processing industries due to attractive fiscal incentives both from the State and Central Government's Industrial Policies. The State of Assam is the entry point for the entire North Eastern region surrounded by international borders with South East Asian countries offers tremendous scope for polymer market including scope for exports.
Downstream Products of Gas Cracker Project at Lepetkata based on Market Demand survey
Based on the availability of products from the gas cracker project under implementation at Lepetkata in the Dibrugarh district of Assam and market demand and scenario at present the following industries can be implemented:
| LLDPE (110,000 TPA) | HDPE(110,000 TPA) | ||
| APPLICATION | QUANTITY(TPA) | APPLICATION | QUANTITY (TPA) |
| Film | 66,000 | Raffia | 22,000 |
| Injection Moulding | 11,000 | Blow Molding | 27,500 |
| Roto Molding | 16,500 | Pipe(PE-80/100) | 22,000 |
| Extrusion | 5,500 | HM-Film | 19,250 |
| Wire&Cable | 11,000 | Injection Molding (HMI) | 19,250 |
| Total | 110,000 | Total | 110,000 |
Efforts for building a skilled Manpower base for the Plastic industry
Envisaging a demand for skilled manpower with the commissioning of the Gas Cracker unit the Government of Assam with support from the Government of India has drawn out a massive plan to overcome this demand. Special high end technical courses have been introduced in Universities, Colleges and Institutes to develop specialized technical personnel. To develop the skilled labour force all the Industrial Training Institutes in the sate has been equipped and courses started. CIPET (Central Institute for Plastic Engineering and Technology) at Guwahati has also introduced specialized courses and also cooperating in developing the skilled labour force through the ITIs.
Location of the Plastic Park
Mott MacDonald assigned to make a detailed study on downstream of Gas Cracker unit suggests Tinsukia for locating Plastic Park Vicinity to the raw material source and availability of all other required parameters like availability of power, water, transport communication the project is proposed at Gelapukhuri near the Tinsukia Town. An area of around 1500 bighas (~ 500 acres) has been identified and around 400 acres of which is in the final process of acquisition. The proposed site for the Plastic Park is located 3-4 kms from the Tinsukia town. The land is carved from sick tea garden with 70% of the land covered with tea bushes and balance barren piece of plain land. A PMGSY road is passing through the land dividing into 3 portions. The NH 37 is about 4 kms from the site. There is a proposal to have a city by pass which will be about 0.5 kms from the site thus offering good connectivity to the site in future. The proposed Assam gas cracker project which will supply the raw materials for the units is about 50 kms from the site. It is 5 kms from the Railway Station and 45 km from Dibrugarh Airport.
Facilities proposed to be developed
The facilities to be developed in the Plastic Park are:
Proposed Tinsukia Plastic Park should have a World class infrastructure and business environment to attract large units in the country. The Park will be equipped with world class industrial, commercial, social and administrative support infrastructure including residential areas, entertainment and recreational facilities, captive power plant, third party logistics services offering seamless connectivity with the markets. All the common facilities like training, Q.C, designing, tool rooms, recycling units etc would be integrated into the project to make it self sufficient in all respect. The focus of the zone administration would be in seeing that investors succeed in their business through a totally pro business approach. The mix of the systems and services and the efficiency benchmarks will be comparable to the best. The entire complex should be developed by involving a professional private developer.
Proposed Plot mix in the park
The proposed land sizing in park will be in multiples of 1, 2, 5 and 10 acres. The flatted spaces will be in multiples of 1000 sq. mtrs. The recommended overall plot size mix and the area covered under each size are as below:
| PLOT | Plot Size(Acres) | Plot Nos. | Area Covered(Acres) |
| Large processing | 10 | 15 | 150 |
|
20 | 100 | |
| 2 | 10 | 20 | |
| 1 | 50 | 50 | |
| Small & Ancillary | 0.5 | 20 | 10 |
| 0.25 | 40 | 10 | |
| Total | 115 | 340 |
Project area statement
The total saleable plotted area of the plastic park has been worked out based on 96% of the total gross area of the parks. The overall saleable areas work out to about 390 acres. Almost 340 acres would be saleable plotted area for manufacturing activities; 50 acres would be for common facilities. Almost 40 acres would be saleable area in the non processing activities like residential, commercial and some of the social infrastructure.
Partners for Project
The project to be implemented in the PPP model and the private partners for the Special Purpose Vehicle (SPV) will be experienced in implementing / operating such Parks in the country. Notice of Expression of Interest (EOI) for SPV partners has been floated all leading news paper across the country. Special awareness meeting with probable partners and investors in the Park was also organized at Mumbai, Ahmedabad and Kolkata.
Revenue streams
The project developer will be able earn through various revenue streams including lease rentals, user charges and earning from setting and operating up independent business entities either on its own or through involvement of sub developers-Power plant, residential, commercial, ware housing, common facilities etc. In our project viability we have only calculated the returns based on basic development and marketing of plots and maintenance of the complex. Returns on other facilities to be created will be additional. The first sale/lease in PARK is expected to be made in early 2012 and will carry on over 1 to 2 years.
Project cost
The cost of the Tinsukia plastic product PARK project covering a physical area of 500 acres is estimated at Rs. 125 crores. The cost includes land acquisition and development in addition to costs incurred in creating the internal infrastructure and other miscellaneous fixed assets. The cost does not include cost for setting up power plant, residential complexes and other commercial and common facilities or other major facilities which will be set up as independent project entities through sub developers. The Cost of the Plastic Park covering a physical area of 500 acres is estimated at Rs. 125.00 crores. The details of project cost with each development element are is below:
| Land Acquisition and possession | Rs. 26.00 crores |
| Site / Facilities Development Cost | Rs. 85.00 crores |
| Preliminary & Pre-operative cost | Rs. 4.00 crores |
| Contingency | Rs. 10.00 crores |
| Total | Rs. 125.00 crores |
Need for Government Funding
It is envisaged that the successful operation of the Plastic Park will not only add to the economic growth of the state but the entire North Easter Region. The major factors that will culminate to this economic growth are: The downs stream projects of Gas Cracker envisage creating employment opportunities to a lakh people. This park will be the major point for generating employment. It will generate entrepreneurship from the entire North Eastern Region. NEDFi has already initiated special entrepreneurship development drive in all the other seven states of this region. The participation of entrepreneurs from the entire N.E. region during the N.E. International PlastoFair 2010 at Guwahati anticipates an encouraging participation in the Plastic Park. This park will be a concentrated centre for development of down stream industries of the Gas Cracker unit. Several common services will be created to maximize productivity and minimize capital investment of the individual units. This in turn will reduce the overall operating cost of production. The reduced operating cost coupled with the attractive incentives from the state and central government will make the products from this Park competitive in the national and international market. A major drawback of our region is that the Project Cost for setting up an industry in this region is higher than setting up a similar industry in the rest of the country outside the N.E. region due added transportation cost of the machineries and other requisites for setting up of a project which has to brought from the rest of the country. To overcome this factor it is proposed that projects proposed in the Park will be provided land at a very reasonable charge. For better implementation of projects the Government of India is encouraging setting up of infrastructure projects in the PPP sector. This achieves several objectives like speedier implementation, better operational management and sustainability. To achieve the above goals it is very important that project is implemented with Government funding and not institutional finance.
Means of Finance Proposed
Considering the Government's role to develop entrepreneurship and the Plastic Industry in North Easter Region the means of finance for developing the Park is proposed on Government's funds / grants. The breakup for Project Cost on the means of finance is as follows:
| Equity a. Government of Assam | Rs. 26.00 crores |
| Others | Rs. 29.00 crores |
| Fund from NEC / DoNER, Govt. of India | Rs. 70.00 crores |
| Total | Rs. 125.00 crores |
|
 |
 |