Paradeep Plastic Park

Transcription

1 Project Information Memorandum Paradeep Plastic Park Odisha Odisha Industrial Infrastrcture Development Corporation

2 Table of Contents 1. Project Background Plastic Industry Profile SPV Profile Odisha State Profile Proposed Business Plan for the Park Land and Site Analysis Proposed Master Plan Project Cost and Means of Finance Policy Support and Incentives Project O&M and Implementation Framework Statutory Clearance/ Approval Status Project Impact Note: This Project Information Memorandum presents only indicative information on proposed Seafood Park components and development details. There can be some changes during actual implementation based on demand from the concerned stakeholders 1

3 1. Project Background (a) Department of Chemicals and Petrochemicals (DCPC), Ministry of Chemicals & Fertilisers (MoCF), Government of India (GoI) has formulated the Scheme for setting up of Plastic Parks with a view to synergise and consolidate the capacities in Indian Plastic Industry through cluster development. (c) (d) Government of Odisha through its Odisha Industrial Policy, 2007 has mandated Odisha Industrial Infrastructure Development Corporation, (IDCO) with promoting the PCPIR at Paradeep on PPP mode and further suggested that concerned State Government Agencies and Central Institute of Plastic & Engineering Technology (CIPET-Bhubaneswar) shall also be involved. Govt. of Odisha expects to attract investments of Rs trillion with the Paradeep PCPIR and other related proposals in the region. IOCL who is in the process of setting up a three lakh barrels per day refinery at Paradeep is the Anchor Tenant for the PCPIR. The proposed Plastic Park shall be an important milestone in this direction. The IOCL refinery, on completion shall be single and major source of entire raw material requirement for the proposed Plastic Park. It is expected that bulk of the demand for the plastic products to be manufactured in the proposed Plastic Park would come from the Paradeep PCPIR itself 2. Plastic Industry Profile (a) The entire chain in the Plastic industry can be classified into (A) manufacturing of Polymers and is called upstream and (B) conversion of polymers into plastic articles and is known as downstream. (c) (d) (e) A Wide variety of plastics raw materials are produced from petrochemicals to meet the material needs of different sectors of the economy. These polymeric materials are broadly categorized as commodity, engineering and specialty plastics Worldwide Plastics Industry witnessed a steady growth which is reflected in the increased consumption figures of all types of Plastics materials. Asia has been world s largest plastics consumer for several years, accounting for about 30% of the global consumption excluding Japan, which has share of about 6.5%. Next to Asia is North America with 26% share, then Western Europe with 23% share in the global market. The key growth segment remains Packaging which accounted for over 35% of the global consumption. Amongst the individual Plastics Materials, Polyolefin accounted for 53% of the total consumption, (PE with 33.5%, PP with 19.5%) followed by PVC 16.5%, PS-8.5%, PET & PU - 5.5%, Styrene copolymers (ABS, SAN, etc) 3.5% other engineering & high performance & specialty plastics, blends, alloys, thermosetting plastics 13%. The Indian plastics market is comprised of around 25,000 companies and employs 3 million people. Barring 10% - 15% of the firms, which can be classified as medium scale operations, all the units operate on a small-scale basis. The top 100 players account for just 20% of the industry turnover. However, the degree of 2

4 fragmentation is large and despite the small size of operations of the players, they are able to operate profitably. Further, the high growth in demand ensures that the market is able to absorb the excess capacity in quick time. Overall, the degree of competition can be considered high in the Indian plastic processing industry. (f) (g) (h) The State of Gujarat in Western India is the leading plastics processing hub and accounts for the largest number of plastics manufacturers, with over 5,000 plastics firms. The growth rate of the Indian plastics industry is one of the highest in the world, with plastics consumption growing at 16% per annum (compared to 10% p.a. in China and around 2.5% p.a. in the UK). With a growing middle class (currently estimated at 50 million) and a low per capita consumption of plastics, this trend is likely to continue. The Plastindia Foundation estimates that per-capita plastics consumption in India is likely to reach 16kg by The main Plastic processing technologies in India is as tabulated in the below table. Table 1: Processing Technologies Technology Percentage Injection Moulding 58% Extrusion 30% Blow Moulding 10% Others 2% (Source: Plastic Industry in India, British Plastic Foundation) (i) (j) (k) A Plastic Polymer and allied cluster (PPAC) is operating at Balasore which is approximately 125 KM from Paradeep and which was developed by IDCO in phases in the outskirts of Balasore town in Ganeswarpur, Somnathpur and Balgopalpur in Remuna Block. The industrial estates in the above three locations form the three nodal centres for PPAC where most of the industrial activities are concentrated. GoI through its IIUS scheme has also assisted for developing this Cluster. Currently, around 100 units are operating from the cluster. Among the significant units, majority are polymer based. Jaiswal Plastics Ltd, Jagdamba Polymers, Gampas Plastech, OEL, Kumar Ceramics, Birla Tyres, Balasore Alloys, Emami Paper and Oripol are some of the major operating units. The industries manufacture PVC pipes, molded furniture s woven sacks etc for raw material the units are dependent on western India market. However with the availability of feedstock in PCPIR they shall procure necessary PVC resins, HDPE resins etc from Paradeep. 3. SPV Profile (a) Project will be domiciled in the SPV, Paradeep Plastic Park Limited (PPPL) The SPV has been incorporated as a Public Limited Company of the State Government in June 2013 and The earmarked land has been transferred to SPV 3

5 4. Odisha State Profile (a) Odisha is located in the east of India. It is surrounded by the states of West Bengal to the north-east, Jharkhand to the north, Chhattisgarh to the west and north-west, Telangana to the south-west and Andhra Pradesh to the south (c) Odisha has 485 km of coastline along the Bay of Bengal on its east, from Balasore to Ganjam It is the 9th largest state by area with a geographical area of 1,55,707 sq. km which constitutes 4.87% of total land area of India, and the 11th largest by population with the population of 41,947,358 (d) Odisha economy has grown at a modest rate of 5.6% at prices in As per the Advance Estimates, the anticipated growth rate of Odisha in is 8.78% at Market Prices in real terms at base. The anticipated growth rate is 8.08% as per factor cost (9.02% at current Market Prices) 4

6 Figure 1: Real Growth rates (%) of GSDP for Odisha GSDP real growth rate (%) (AE) (e) During the year , the share of the Service Sector is expected to be 51.16%, that of the Industry Sector 33.45% and that of the Agriculture Sector 15.39% in real terms at prices Figure 2: Sector Composition (%) of Odisha Economy Dynamics of Composition (%) of Odisha's Economy Agriculture Sector Industry Sector Service Sector (AE) (Source: Economic Survey of Odisha) (f) (g) Per capita income is an important indicator of standard of living of the people. The per capita income (real NSDP) of Odisha during is estimated at Rs. 28,384 as per the advance estimate which accounted for a growth rate of 7.31% over Industry sector in Odisha has emerged as a major driver of State s economy in recent decade. As per the advanced estimates for the year , the share of the broad Industry Sector to GSDP of Odisha is 33.44% as against 33.08% for the year

7 (h) (i) During the year , the share of the manufacturing subsector is 12.57% and that of the mining and quarrying subsector stands at 6.31% to GSDP of Odisha The broad sector has grown in real terms at prices at 6.60%, the growth of the manufacturing subsector being 4.19% and that of the mining and quarrying subsector only 2.30% Figure 3: Number and Investment of Large Industries in Odisha in Investment Amount (Rs. Crores) Others (27) Chemcial and allied (14) Glass and ceramic (25) Engineering and metal based (147) (Source: Economic Survey of Odisha) (j) (k) (l) Odisha Industrial Policy Resolution (IPR), 2015 provides a robust policy framework for industrial promotion and investment facilitation in the State. IPR 2015 offers a number of incentives and policy directives with an objective to accelerate the pace of industrial growth in India Odisha Industries (Facilitation) Act, 2004 has been enacted and the Odisha Industries (Facilitation) Rules, 2005 have been framed and issued with a view to ensure single window clearance system in the State If the estimated demand is compared with availability, the State has had a constituent surplus. As regards to the supply of power, there are three sources:- the State the Center Captive Power Plant by major industries (m) In , the State s share was 52% and that of the Central sector was nearly 42%. The remaining 6% came from Captive Power Plants and other sources (n) Odisha s road network is 3.3 million km long and carries 65% of freight and 80% of passenger traffic. The road network of the State consists of national highways, state highways, major district roads and village rural roads 6

8 (o) (p) (q) Railway routes pass through 23 districts of the State, excluding Boudh, Deogarh, Kandhamal, Kendrapara, Malkangiri, Nabarangpur and Nayagarh. By the end of , the State had 2540 km of railway lines. Railway density (railway route length per thousand sq. km) in the state is around 16 km, while national railway density is around 20 km There is presence of major ports at Paradeep and Gopalpur. Being a maritime State with 480 km coastline, it has 13 potential sites for development of minor ports Telecom acts as a stimulus for the development process. The telecommunication network in Odisha has vastly expanded over the years. During , there were 2.55 telephone subscribers in the state, which is about 2.78% of that of India 5. Proposed Business Plan for the Park (a) The main objectives for promotion of the Plastic Park is to make it a state-of-art manufacturing base for the downstream plastic industry comprising conversion of polymers into plastic articles with support facilities ranging from warehouse for raw material and finished products, simulation and testing facilities as well as finishing and packing under one roof. (c) The Park would thus have units engaged in injection moulding, blow moulding and extrusion moulding and shall cater to the requirements of a wide array of applications like agriculture, infrastructure, automobile, construction, consumer goods, telecommunication, packaging, healthcare etc., for export and domestic market The raw materials for the plastic processed articles are the polymers in the form of granules made out of resins and compounds manufactured in the upstream industry. The upstream industry process flow resulting in polymers is presented in the figure below. 7

9 Figure 4: Manufacturing Process for Raw Material for Downstream Industry Crude oil/ Petroleum Naphtha/ Natural Gas Fractional Distillation & Selective Absorption p-xylene Ethylene Butene-1 Benzene Butadiene Propylene DMT Ethylene Glycol Ethylene Di-Chloride Ethyl Benzene Styrene Adipic acid Bisphenol A NH3 Acrylonitrile H2SO4 NH3 Alcohol Vinyl Chloride HMD DMC/ COCl2 Acrylates Polyester HDPE/ LLDPE Nylon Polybutadiene Polyacrylates Polyvinyl Chloride LDPE Polystyrene PC Acrylic Fibre PP (d) These following polymers form the basic raw material for the downstream plastic industry as listed below and are made available in the form of granules/ resins etc. (i) Polyester (ii) Polyvinyl Chloride (PVC) (iii) Low Density Polyethylene (LDPE) (iv) Linear Low Density Polyethylene (LLDPE) (v) High Density Polyethylene (HDPE) (vi) Polystyrene (vii) Nylon (viii) Polycarbonate (ix) Polybutadiene (x) Acrylic Fibre (xi) Polyacrylates (xii) Polypropylene (e) IOCL the Anchor Tenant at Paradeep, in its Phase-I A along with the refinery using its FCC streams is setting up a Poly Propylene Unit through gasification process with a production capacity of 7 lakhs tons per annum and a PVC Unit with production capacity of 6 lakhs tons per annum. 8

10 (f) In the phase II IOCL shall set up a Naphtha Cracker unit producing Ethylene and Propylene with capacity of 10 lakh tons per annum and 5 lakhs tons per annum respectively. 6. Land and Site Analysis (a) The Plastic Park is proposed to be located near Siju Village in Kujanga Tehsil of Jagatsinghpur District in Odisha State on 120 Acres of land to be carved out from the 474 Acres of Land available with IDCO The site is about 2.5 Km from NH-5A in Siju Village in Kujanga Tehsil, Jagatsinghpur District (c) The site at present is directly accessible from the IOCL Main Road connecting NH-5A and IOCL Refinery. IDCO further proposed to develop a 150 wide road from NH-5A providing another direct access to the site. Figure 5: Satelite Image of Site for Paradeep Plastic Park Figure 6: Satellite Image of IDCO Land in the Project Site 9

11 (d) The proposed location for the Plastic Park is well connected with road, rail and air connectivity and is strategically placed to cater to the needs of the hinterland as well as major industrial clusters across the State and Country. NH-5A : 2.5 Km SH 12 : 3 Km Nearest Bus Paradeep : 5 Km Rail Paradeep : 3 Km Sea Paradeep : 10 Km Nearest Bhubaneswar : 120 Km Paradeep PCPIR : 1 Km Paradeep IOCL Refinery : 5 Km (e) (f) The site of 120 acres is in the shape of a square with irregular boundary on the south while the rest of the sides are regular. Proposed 150 wide IDCO road connecting the NH-5A passes adjacent to western boundary of the site. Also proposed parallel to the western boundary is the Haridashpur-Paradeep railway line. The site is bounded by private/ agricultural lands on the South and by IDCO land on all other sides. The site has a gentle and minimal slope from the west to east towards an existing canal that runs through the IDCO land and the average slope across the site is 1:300. The entire site is course sandy loam in nature, the details of which shall be ascertained through geo-technical investigations. The site has no major constraints but necessitates filling by about two feet to match the levels of the IOCL main road 7. Proposed Master Plan (a) The master plan for the park has been so designed to maximize the area under industrial plots and the common facilities that support the industrial needs. Accordingly, industrial plots account for 58.1% and common amenities account for about 10.2% of the total area. The proposed land use pattern is presented as below:- Table 2: Land Use Pattern S. No Components Area (Acres) % of Area 1 Roads % 2 Utilities (Common Infrastructure) % 3 Common Facilities (Amenities) % 4 Industrial Plots % 5 Open Spaces/ Green Areas % Total % 10

12 (c) (d) The Park is envisaged as a self-contained facility with appropriate common facilities and social infrastructure facilities. Common amenities would consist mainly of facilities provided in line with the requirements of the plastic park as well as the norms applicable to such development The concept envisages a central and functional provision of common facilities in the site along the main approach road. This would form a social node, or service hub for the entire site effectively crystallizing the image of the Park in a single location and to present an impressive façade from the main entry to the heart of the Park Various infrastructure components planned for in the Park are presented in the Table below: Table 3: Project Components for Paradeep Plastic Park S. No Infrastructure Components Road network & Storm Water Drainage Footpaths & Utility Corridors Domestic & Industrial Water Supply System Sewerage Collection System Physical/ Utility Sewerage Treatment Plant 1 Infrastructure Solid waste Management & Plastic Waste Recycling Street Lighting System Electrical Distribution System Telecommunications Administration & Park Management offices Service Providers offices Investor services centre PPEC-CIPET centre for testing & training Support Services/ Design & product sampling facilities 2 Common Amenities Trade & Display facilities Warehousing facilities/ Raw material depot Packaging Unit Crèche, first-aid Centre, Bank Kitchen and dining facilities Housing for managers, executives 3 Social Infrastructure Dormitories for Workers Building for Production Factory Buildings for Production 4 Activities (e) The master plan for the proposed Plastic Park has earmarked a total area of acres for creation of a total 80 industrial plots of various sizes as above mentioned. The average industrial plot sizes provided for and the numbers are presented in the table below 11

13 Table 4: Industrial Plot Distribution S. No. Type of Units Nos. Area/ Unit Total Area (Acres) (Acres) 1 Micro Small scale Medium scale Large scale Total (f) However the plot sizes are intended to be kept flexible for the changing demand and accordingly, the master plan shall ensure that different plots may either be merged together or a single plot may be further sub-divided. 8. Project Cost and Means of Finance (a) Based on the detailed estimates for the various facilities proposed in the Park, the cost of the components eligible under the Scheme for Setting up of Plastic Parks is estimated at about Rs. 10,678 Lacs Table 5: Project Cost Details S. No Name of the Component Amount (Rs. Lacs) Share (%) 1 Land ( Acres) 2, % 2 Physical/ Utility Infrastructure 5, % - Site Development & Compound Wall Road Network 1, Storm Water Drainage Water Supply Sewerage system Integrated Solid Waste Management System Power Supply 1, Street Lighting Telecom & IT Infrastructure Signage and Landscaping Common Amenities including Equipment for 2, % Testing/ Training/ Design facilities - Administration Complex PPEC including Equipment/ Plant & 1, Machinery - Ware housing facility Truck Parking facility Workers' Dormitories and Managerial Accommodation 4 Soft Interventions % 5 Administrative, Contingencies and Pre-operative % Expenses 6 Design, Engineering & Supervision Fees % 12

14 S. No Name of the Component Eligible Project Cost (Scheme for Setting up Plastic Parks) Amount (Rs. Lacs) Share (%) 10, % IDCO proposes to position the project for assistance by way of Grant of 50% of eligible components (ceiling of Rs. 40 crore) under the Scheme for Setting up of Plastic Parks (SPP) of Department of Chemicals and Petrochemicals (DCPC), Ministry of Chemicals & Fertilisers (MoCF), Government of India (GoI). (c) The balance requirement is proposed to be met by equity infusion by the sponsors/ promoters, other participating entrepreneurs and term loans. (d) The proposed means of financing for the project cost eligible under SPP is as below. S. No Sources Amount (Rs Lacs) % Share 1 Promoters / Equity Contribution 2, % 2 Unsecured advance from IDCO to SPV (Land 2, % Cost) 3 Grant under Scheme for setting up Plastic Parks 4, % 4 Term Loans 1, % Total 10, % 9. Policy Support and Incentives (a) The industrial units will be eligible for the incentives available for Priority Sector under Industrial Policy Resolution, 2015 of Government of Odisha (c) Government of Odisha will support quality infrastructure in the form of a capital grant to industrial parks/ cluster parks promoted by private sector or industry association or user units in a cluster format, with a grant of 50% of the infrastructure cost with a ceiling of Rs. 10 crore per park or cluster. In order to attract lead investment by a reputed investor which would promote and facilitate further investment in the designated industrial Park/ Estate, the following incentives shall be provided to the first tenant industry (i) 25% subsidy on cost of land (ii) VAT reimbursement for additional 2 years subject to the overall limit 10. Project O&M and Implementation Framework (a) The Industrial Units, Government of India and Government of Odisha through IDCO would be key stakeholders in the Project. The Project Management Consultant would provide the requisite techno-commercial and financial competencies to the stakeholders 13

15 (c) (d) The SPV shall enter into a Shareholders Agreement with all its shareholders detailing the rights and responsibilities in relation to the shareholding and new shareholders shall execute the Deed of Adherence The SPV shall enter into a Leave and License Agreement with the Units, which shall provide rights to the Units for setting up plastic products/ parts manufacturing facilities in the Park and also contractually bind the Units to pay all such charges as may be levied by the SPV for the allotment, development and maintenance of infrastructure assets and provide recourse by way of right to replace Units that have defaulted in respect of payments to the SPV or which do not commence operations within 6 months from the date of commencement of commercial operations of the Park The entire implementation and O&M framework for the Project would be documented by way of appropriate agreements and contracts as described in the schematic diagram below: Figure 7: Proposed Contractual Framework Figure 8: Project Implementation Schedule (w.r.t November 2015) Activity M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M13 M14 Bid Evaluation and Award of Contract for Single Package Tender Site Cleaning and Grading 14

16 Internal Road Storm Water Drainage Water Supply Network Sewerage Collection Network Electrical Supply System Common Facility Building 11. Statutory Clearance/ Approval Status Sl. No. Type of Approval/ Clearance 1 Government of India (GoI) Approval under DCPC Scheme for Setting up of Plastic Parks 2 Environmental Impact Assessment (EIA) Study 3 Consent for Establishment Approving Authority/ Body Department of Chemicals and Petrochemicals (DCPC), Ministry of Chemicals & Fertilizers (MoCF) Odisha Pollution Control Board (OPCB) State Pollution Control Board Approval Procedure Submission of Final Master Plan and DPR along with requite documentation as per Mega Food Park Scheme Guidelines The project requires the EIA study to be undertaken The project requires an application to be made through Form IV (A) (a) to the State Pollution Control Board for obtaining the Consent for Establishment Clearance for both air and water Current Status The Final Approval has been accorded to this project for sanction of Grant of Rs. 50 Crores Form 1 has been filed with OPCB The EIA study report is under preparation based on the ToR issued by OPCB Process under execution for filing the Application with the concerned authority 15

17 Sl. No. Type of Approval/ Clearance Approving Authority/ Body Approval Procedure 4 Power CESU The Project requires application under Consumer Category - Allied Agro-industrial Activities category to CESU through Form No.-2. Current Status Approval has been received from CESU for 500 KVA substation(construction power requirement) and for 2 x 8MVA 33/11 KV substation 12. Project Impact (a) The Plastic Park will directly benefit the Plastic sector in the State of Odisha and all other major industrial verticals like agriculture, infrastructure, automobile, construction, consumer goods, telecommunication, packaging, healthcare etc in Odisha will stand to benefit from savings on transportation and other costs due to the availability on demand of necessary plastic parts from the units to be setup in the proposed Plastic Park (c) Further the proposed Plastic Park shall be a stepping stone for the development of the Paradeep PCPIR The Park will create the potential for harnessing local entrepreneurship, consequential growth of secondary and tertiary sectors in the area in general and around the project site in particular 16