Dishman revives engineering SEZ project, land acquisition to complete in one year

AHMEDABAD: Ahmedabad-based Dishman group will acquire 100 hectares land and revive its engineering SEZ project, it scrapped two years ago. The project costs at Rs 300 crore and will come at Bagodara near Ahmedabad. The company will now attract engineering firms willing to invest in the state that is emerging as an auto hub, a top company official said.

Global auto manufacturers Ford Motors & Peugeot and India’s Maruti have announced plans of investing in the state. The SEZ project to be developed by Dishman Infrastructure Ltd, a 100% subsidiary of Dishman Pharmaceuticals & Chemicals Ltd, and will target ancillaries that will come in the Sanand region home to Tata Motors Nano facility. The process of land acquisition is in progress and 30 hectares have been acquired so far at Bagodara, 49 km from Ahmedabad. However, the entire process may take another year to complete.

Slowdown and a lacklustre manufacturing sector forced Dishman to scrap its engineering SEZ

in mid-2009. It then decided to merge the land with its adjoining pharma SEZ project at Bavla, near Ahmedabad. Dishman chairman JR Vyas earlier had apprehensions about the minimum alternative tax (MAT) levied in 2011 Budget on SEZs. However, now he has firmed up the project.

Investment by Tata Motors that relocated Nano project from West Bengal, changed the sentiment. There are talks that domestic companies Hero MotorCrop, Bajaj Auto & Hindustan Aeronautics (HAL), a public sector company specialised in production of aircraft and helicopters, too are eyeing Gujarat.

Auto ancillaries are critical for a thriving auto hub. Currently, most of these ancillaries are located in Rajkot or Vadodara. An analyst said the auto production capacity of Gujarat, mainly around Sanand, is projected at 7.6 lakh units by 2014. “This will rise, if Maruti’s production facility comes up.” he said. The installed capacity of Tamil Nadu is 12.8 lakh units, and that of Pune is 6.1 lakh units.

Dishman’s stock made its 52-week high in January 2011 at Rs 158.50 and hit a low of Rs 33.80 in December. On Thursday, the stock closed at Rs 36.45 on National Stock Exchange.