Establishment of Machinery Manufacturing Unit for Cement, Dairy, Sugar, Ceramic, Rubber. Heavy Engineering Government of Gujarat

Transcription

1 Establishment of Machinery Manufacturing Unit for Cement, Dairy, Sugar, Ceramic, Rubber Heavy Engineering Government of Gujarat

2 Contents Project Concept 3 Market Potential 5 Growth Drivers 6 Gujarat Competitive Advantage 8 Project Information 10 - Location/ Size - Infrastructure Availability/ Connectivity - Raw Materials required/ Key players - Key Considerations - Project structure - Potential collaboration opportunities Project Financials 15 Approvals & Incentives 17 Page 2

3 Project Concept What are heavy industry machines Heavy industry machines are heavy equipment (also known as process plant equipment) used in various process industries for the production of goods. Heavy industry majorly includes cement, chemicals, petrochemicals, ceramics, rubber among others. Project Overview The proposed project involves establishing a facility for manufacturing machinery/equipment in plants producing cement, diary, petrochemicals, ceramics, rubber etc. at Dahej Petroleum, chemicals and petrochemicals investment region (PCPIR) The manufacturing process in the proposed unit will include sourcing raw pipes/coils, welding of raw steel, grinding, deep hole drilling, heat treatment, assembly and finishing The total cost of setting-up of a process plant equipment manufacturing facility is estimated to be ~ INR 6 billion The proposed unit is critical infrastructure considering the robust demand for the plant equipment from end users in the sector. Cement production is set to reach 550 million tonnes in the 2020 from the present production levels of 479 million tonnes (FY2016) Similar trends can be noted in other sectors such, as chemicals (projected to grow at CAGR 17.4% between 2015 and 2017), ceramic tiles (likely to grow at a CAGR of 12.2% between ), and oil & gas (refining capacity in India is expected to grow at (CAGR of 11.7% between ). Major types of heavy industry machines Evaporator Evaporators are used to convert liquid in to gaseous state. In manufacturing processes, evaporators are primarily used to remove liquid impurities from a solution. It is majorly used in chemicals, beverage and dairy among other industries. Pressure vessels Pressure vessels are containers designed to hold liquids/gases at a pressure substantially different from atmospheric pressure. Pressure vessels are majorly used in oil refinery, pharmaceutical, nuclear reactors, submarines etc. Heat exchangers Heat exchangers are used to transfer heat between fluids, which are separated by a physical boundary. Heat exchangers find applications in petroleum refinery, nuclear, waste water treatment industries among others. Page 3

4 Project Concept Rotary kilns Rotary kilns are pyroprocessing (process in which materials are subjected to high temperature) device used to raise materials to high temperature in a manufacturing process. Rotary kilns are majorly used in producing cement, lime, titanium dioxide, alumina etc. Towers and columns Towers and columns are majorly used in oil refineries and chemicals industry for fractional distillation. Fractional distillation is a process to separate the liquid mixtures into its component parts on the basis of difference in volatilities, Others Crystallizers: These are used in industry to achieve solid-liquid separation. Stirrers: These are used to mix liquid/solid solvents homogeneously (used in dairy industry). Furnace: These are used for high temperature heating. Reactors: These are devices for containing and controlling chemical reactions. *Other major process plant equipment include boilers and turbines, which are covered separately in BTG (boilers, turbines and generators) profile; towers and columns are also covered separately in oil equipment profile. Page 4

5 Market Potential Global process plant equipment market Pressure vessels and heat exchangers are major process plant equipment used across industries Global pressure vessel market (US$ b) E Source: Markets and Markets 2021E Global heat exchangers market (US$ b) Source: Transparency market research Indian process plant equipment market Global pressure vessels industry is likely to grow at a CAGR of 5.4% between driven by demand from chemicals, petrochemicals, oil and gas industry. The demand for heat exchanger is expected to grow at a CAGR of 7.2% between driven by demand from power industry. Asia-Pacific (particularly China and India) is expected to lead the demand for process plant equipment (including pressure vessels and heat exchangers). Indian process plant equipment industry (INR crore) 13,520 FY10 CAGR: 12.3% 24,149 FY15 Source: Process Plant and Machinery Association of India Source: Global Heavy Equipment and Industrial Machinery Global Report 2015, News wire website, accessed 22 July 2016 Engineering industry in India IBEF website, Process plant equipment is part of capital goods industry (which also includes electrical equipment, food processing machinery and printing machinery among other industries). Process plant equipment contributed around 8% to the total demand in Indian capital goods (INR 2.8t) industry in FY15. There are more than 200 process plant machinery manufacturers in India. Around 65% of the these manufacturers are small and medium scale enterprises. Process plant industry is expected to grow at a CAGR of 13.1% between FY15-18 led by strong demand from end user industries, potential in replacing imports and favorable government policies. Page 5

6 Growth Drivers Opportunities in substituting imports with domestic manufacturing Process plant equipment industry in India in FY15 (INR crore) 24,149 Exports 7,684 Domestic 11,216 consumption 12,933 Potential opportunity for domestic manufacturing Local production meets only around 54% of the total process plant equipment demand, pointing to growth potential for domestic manufacturing in replacing imports. Market size Production Imports Source: Department of heavy industries, GoI Favorable government policies GoI released capital goods policy, 2016 with a focus on incentivizing domestic production and reducing reliance on imports. The policy targets to increase Indian capital goods production by more than threefold from INR 2.3t in FY15 to INR 7.5t in It aims to make India net exporter of capital goods. The policy targets to increase exports from current 27% of total production to 40% by 2025 through a stable duty structure and enabling environment. Further, the policy targets to enhance contribution of domestic production in total market to 80% from 60%. The policy will facilitate the sector growth by: Improving technology penetration across capital goods sub-sectors Increasing skill availability Promote growth and capacity building of MSMEs (Micro, small and medium enterprises). Page 6

7 Growth Drivers Robust demand from end user industries Cement Indian cement production capacity (million tonnes) 390 CAGR: 7.2% FY15 FY16E FY17E FY20E Source: Indian brand equity foundation India is the 2 th largest cement producer in the world (largest producer is China) The growth in Indian cement industry is likely to be driven by strong demand from infrastructure and housing sector. Upcoming capacity addition for cement production is expected to boost the demand for process plant equipment. Chemicals Indian chemicals industry (US$ b) 118 CAGR: 17.4% e Source: Indian brand equity foundation In terms of volume, India is the 3 rd largest chemicals producer in Asia and 6 th largest globally. Indian chemicals industry is expected to grow on demand for polymer chemicals (driven by packaging and automotive industry), specialty chemicals (construction industry) and agro chemicals. A double digit growth in chemicals industry will drive the demand for process plant equipment. Others Ceramic tiles industry in India is likely to grow at a CAGR of 12.2% between (expected to reach 732 sq. meters by 2019). Rising urbanization, increasing per capita income and Government of India (GoI) initiatives such as housing for all by 2022 are likely to drive demand for ceramics. Page 7 Ceramics Oil and gas Dairy MMTPA: Million metric tonnes per annum India is the second largest refiner in Asia (having MMTPA of refining capacity in 2014). By 2017, refining capacity in India is expected to reach 310 MMTPA, growing at a CAGR of 11.7% between driven by strong demand for energy. Dairy industry in India is likely to attract investment of INR b between Rising demand for branded dairy products and investments by organized sector players will create demand for process plant from the industry. Power sector is another major driver for process equipment industry (refer to BTG profile)

8 Gujarat - Competitive Advantage Advantage Gujarat Gujarat has a strong engineering industry* (including process plant equipment) which contributed 18% to the state industrial production and around 9% to national engineering output in FY15. The state is the chemical hub of India, contributing more than 50% to the total national production (Reliance Industries owned Jamnagar petroleum refinery is the largest refinery in Asia). The state has one of the largest dairy industry in the country, securing fourth position among Indian states in terms of milk produced in FY15. GCMMFL s (Gujarat co-operative milk marketing federation ltd.) Amul is one of the major dairy brand globally. Gujarat is the largest producer of ceramics in India, contributing more than 60% to the Indian ceramics industry. Morbi is the largest cluster of ceramics manufacturing in India. Major clusters in Gujarat Morbi (Ceramics) Dahej (Chemicals) Hazira (Petrochemicals) *Engineering industry includes: Heavy engineering (textile machinery, cement machinery, machine tools etc.), heavy electrical (boiler, turbine and generators), automotive and light engineering products (industrial fastener, casting and forging etc.). Other advantages Ease of Doing Business Jamnagar (Petrochemicals) Anand (Dairy) Only state which complies 100% with Environmental procedures. Gujarat fares highly when it comes to setting up a business, allotment of land and obtaining a construction permit. Ankleshwar (Chemicals) Flourishing Economy Gujarat s SDP (State Domestic Product) at current price stood at US$ 120b in FY15 growing by 11% over FY14 (the economy has grown at a CAGR of 12.1% between FY05-15), contributing around 7.31% to the India s GDP in Strategic location and excellent infrastructure Located on the west coast of India, Gujarat is well connected to the major cities of the world by air and sea routes. The state has 45 ports, 12 domestic airports and 1 international airport in addition to an extensive rail and road network. Page 8

9 Gujarat - Competitive Advantage Promoting special economic zones (SEZ) Sector wise SEZ in Gujarat (overall 79) IT/ITES 34% Gujarat is the first Indian state to formulate SEZ policy which facilitates easier exit options and flexible labor laws. Multi products Pharmaceutical 15% 12% SEZ in Gujarat receives corporate tax benefits on export for 10 years (100% for initial five years and 50% for next five years). Engineering goods Chemical Oil & Gas 9% 3% 3% The state ranks top among Indian states in terms of area covered under SEZ (29,439 hectare under SEZ development). Others Source: Indian brand equity foundation 24% Gujarat has overall 79 SEZs, of which 18 are operational, 26 are notified, 31 are formally approved and 4 have inprinciple approval. High availability of skilled manpower (engineers) Engineering seats in Gujarat by specialisation (Academic year ) Mechanical Computer Electronics & Communication Civil Electrical Information Technology Others 8% 8% 14% 13% 17% 17% 23% Total seats: 46,069 for admission through Gujarat Common Entrance Test As of June 2016, Gujarat had ~126 undergraduate engineering colleges and ~70 post graduate engineering colleges with intakes of ~68,447 and ~6,694 students per year, respectively. More than 80% of the seats were in selffinanced private colleges, while 15% seats were in Government colleges. Leading engineering colleges in Gujarat: Indian Institute of Technology (IIT), Gandhinagar Sardar Vallabhbhai National Institute of Technology, Surat Gujarat Technological University, Ahmedabad Nirma University - Institute of Technology, Ahmedabad Page 9

10 Project Information Location suggested: Dahej Petroleum, chemicals and petrochemicals investment region (PCPIR) Dahej PCPIR is an indicative location for establishment of a process plant equipment manufacturing in Gujarat. Alternatively, the plant can be set up in other suitable locations in Gujarat. The region has high concentration of petrochemicals, chemicals and petroleum companies, which will provide significant potential market for process plant equipment manufacturers. Dahej PCPIR: Key highlights Area 527 hectares DMIC influence area Delhi Mumbai Industrial corridor (DMIC) District Land price Baruch INR ~1,440/ square meter (Jan 16) Vadodara Focus sectors Chemicals Petrochemicals Oil and gas Ahmedabad Source: GIDC Why Dahej Dahej SIR Surat Existing potential customers* Robust effluent disposal lines and solid waste disposal sites promote the growth of chemicals industry in the PCPIR. The region has the potential to address demand for process plant equipment from major dairy (Anand,130 kms) and ceramics hub (Morbi,460 kms) in the state. Proximity of Dahej PCPIR to ports (Dahej, Hazira, Dholera), DMIC and DFC (Dedicated freight corridors) provide easy access to broader markets (including exports)and raw materials. Page 10 Company name Reliance Industries Ltd Rallis India BASF Gujarat Fluorochemical United Phosphorous Ltd Gujarat state fertilizers and chemicals Ruchi Petrochemicals Deepak Nitrate *List is not exhaustive Industry Petrochemicals Chemicals Chemicals Chemicals Chemicals Chemicals Petrochemicals Chemicals

11 Project Information Infrastructure availability and connectivity Existing Dahej is connected with Delhi Mumbai Broad Gauge railway line at Bharuch. Proposed Bharuch-Dahej rail line (62 km). Delhi-Mumbai Dedicated Freight Corridor (DFC) will touch the PCPIR on the eastern side. Bharuch-Dahej broad gauge line to be connected to the DFC at Dayadra Jn. Utility Rail Air Existing 250 km from international airport at Ahmedabad. 90 km from domestic airport at Vadodara. 85 km from domestic airport at Surat. Proposed Greenfield airport for PCPIR. Water Road Existing 50 km of four-lane Dahej-Bharuch state highway connects six lane Delhi-Mumbai National Highway and National Expressway. Proposed 6 laning of Dahej-Bharuch road. 42 km of State Highways within PCPIR to be upgraded to four lane. Link Road (Stretch linking PCPIR to NH-8). Port Existing Minor ports at Dahej, Hazira (139 kms), Dholera (210 kms) and major port at Kandla (537 kms). Proposed Solid cargo port of Adani Group (3 MMTPA) to be expanded to 12 MMTPA. Marine Shipbuilding Park by Gujarat Maritime Board. Power Gujarat Industrial Development Corporation (GIDC) supplies 33 MGD raw water drawn from Narmada river. Gujarat Water Supply and Sewerage Board (GWSSB) provides drinking water through Narmada Canal.. Power is available in Dahej from Gujarat Urja Vikas Nigam Ltd. from 220 KV substation, linked with the state grid by 220 KV circuit line. Gas Gujarat Gas Company Ltd (GGCL) owns and operates nearly 900 km of distribution pipeline in Bharuch district. Sources: accessed on 23 July 2016 Page 11

12 Project Information Manufacturing process plant equipment* Raw pipes/coils of steel with desired diameter/width are sourced; depending on the process for which equipment will be used, raw materials with appropriate physical properties are chosen Raw steel is welded up to required diameter; the welding should be of highest quality due to critical nature of process plant equipment application As required grinding of internal diameter is done to obtain smooth finishing Deep hole drilling is done at specified points on the vessel Heat treatment of equipment is done to enhance physical properties The equipment is passed through various quality checks Assembling, finishing and packaging of equipment The equipment is finally shipped to the customer facility. *Above mentioned process is illustrative demonstration of pressure vessels manufacturing; manufacturing of other process plant equipment such as heat exchanger, evaporators may vary. Page 12

13 Project Information Major process plant equipment manufacturers in India Larsen & Toubro Walchandnagar Industries Ltd Godrej Boyce Manufacturing Company Ltd. Nuberg Engineering Raw materials required KCP Heavy Engineering Alstom India Isgec Heavy Engineering Ltd Carbon steel, stainless steel, aluminium, copper, nickel alloys, titanium, ceramic, polymers, alumina (used in furnace linings) are the major raw materials for manufacturing process plant equipment. Industry Location (Distance from Dahej) Steel re-rolled products Machine tools Fabricated metal products Ball and roller bearings Copper Steel Ahmedabad (234 kms) Vadodara (120 kms) Ahmedabad (234 kms) Jamnagar (444 kms) Vadodara (120 kms) Panchmahal (129 kms) Ahmedabad (234 kms) Jamnagar (444 kms) Anand (130 kms) Dahej Jhagadia (65 kms) Hazira (139 kms) Anjar (528 kms) Surendranagar (265 kms) Bhavnagar (272 kms) Rajkot (354 kms) Bhavnagar (272 Kms) Baruch (191 kms) Surendranagar (265 kms) Bhavnagar(272 kms) Rajkot (354 kms) Page 13

14 Project information Key considerations Potential decline in demand from chemicals industry Slowdown in cement industry Reliance on imports for feedstock and inverted tax structure (resulting in higher taxes on raw materials than end products) may pose risk to growth of Indian chemicals industry growth. Any slowdown in the chemicals industry will directly impact the demand for process plant equipment. Demand for process plant equipment from the cement industry is also likely to remain constrained due to prolonged slowdown in the industry. Cement industry in India is facing challenges majorly because of overcapacity (leading to low capacity utilization) and muted domestic demand. Imports of second hand machinery Imports of second hand machinery by Indian capital goods sector stands at around 20% of the total production, which is hurting the local manufacturers. End user industry prefers second hand machinery majorly because of low initial investment. Project structure Project is likely to a be a private investment by either of: an existing process plant equipment manufacturer new entrant/s in the industry foreign investor/s looking to enter Indian heavy equipment industry. Potential collaboration opportunities Company Doosan Construction and Engineering KNM Group Alstom ABB Larsen & Toubro Siemens KHD Humolt Wedag FLSmidth Tenova Takraf Hyundai Heavy Industries Benninger Textile Base country South Korea Malaysia France Switzerland India Germany Germany Denmark Germany South Korea Switzerland Page 14

15 Project Financials Cost of setting-up a process plant equipment manufacturing facility (for around 400 heavy equipment units) in Dahej is likely to be around INR 6 billion Project cost Project components & specifications Land 1 (Area: approximately 50 acres/202,000 sq. meters) Rate: (INR 1,440 per sq. meters.) Building (Area: approximately 140,000 sq. meters) Rate: (INR 11,600 per sq. meters) Cost (INR million) Plant, machinery, working capital and miscellaneous expenses 4086 Means of finance 2 Page 15 Total investment required : ~INR 6 billion* Estimated Debt as percentage of Capital 70% Debt raised (INR million) 4200 Equity invested (INR million) 1800 Manpower required ( ) Estimated debt raised (INR million): ~4200 Designation Number of employee President 1 Sr. Vice president (SVP), Vice President (VP), Assistant Vice President (AVP), 5-10 General managers, Sr. managers, managers, assistant. Managers Sr. engineers, engineers, assistant engineers Skilled workers Unskilled workers Benchmark project INR 5 billion investment by Godrej and Boyce manufacturing facility in Dahej spread across area of around 50 acres Source: *Actual cost of the project may vary depending on project site selection and scale of the plant

16 Project Financials Payback period Capacity (units) 400 Average capacity utilization in industry (%) 80 Production (units) 320 Average revenue per unit (AR) (INR million/ unit) 1 14 Industrial average EBITDA margin 9.6% Forecasting revenues at expected industrial growth rate 13.1% Time (years) Revenue (INR million) EBITDA (@9.6% of rev.) Undiscounted cumulative cash flows Investment 6000 Estimated payback period: 8.4 years *Straight line method is considered for depreciation for estimation purposes with zero salvage value Page 16

17 Approvals Indicative List of Approvals Approvals/clearance required Incorporation of company Registration/Industrial license Allotment of land No objection certificate (NOC) under air and water pollution control acts Approval of construction and country planning Use and storage of explosives Finance Registration under state sales tax act and Central and State excise act Code number for export and import Environmental clearance Hazardous waste import and export approval Industrial license for defense setting up defence manufacturing unit Exiting business Department to be approached and consulted Registrar of companies Secretariat if industrial assistance (SIA) for large and medium scale industries State industrial development corporation State pollution control board Town and country planning Municipal and local authorities Chief inspector of factories Pollution control board Electricity board Chief controller of explosives For loans higher than INR 1.5 crore, all India financial institutions like Industrial Development Bank of India(IDBI), Industrial Credit and Investment Corporation of India(ICICI), Industrial Finance Corporation of India(IFCI) etc. Sales tax department Central and state excise department Regional office of director general of foreign trade Ministry of environment, forest and climate change after conducting environment impact assessment (EIA) for any project Ministry of environment, forest and climate change District Industries Centres (DICs), DIC will forward the proposal to Industries Commissioner who will submit the report to State Level Approver Committee (SLAC) for final approval Ministry of corporate affairs GoG has introduced single window facilitation portal for investors providing undermentioned benefits: Centralized system to monitor applications User friendly and simplified application process for investors System for authorities and investors to check the status of applications The unit shall be facilitated through Investor Facilitation Portal for obtaining all the necessary state approvals/ clearances - Page 17

18 Approvals / Incentives Gujarat Industrial Policy 2015 Government of Gujarat has announced an ambitious Industrial Policy, in January 2015, with the objective of creating a healthy and conducive climate for conducting business and augmenting the industrial development of the state. Quantum of incentives The incentives under this policy will be available to all the Talukas listed in Government Resolution dated 25/7/2016 except areas falling within municipal corporations. Category of Project Location (Taluka) % of eligible fixed capital investment entitled for Incentive % of Net VAT reimbursement to the unit % of Net VAT to be paid to Government Incentive period (no. of years) Net VAT incentives Net VAT incentive will be reimbursed to the industrial undertaking in one financial year will not exceed one-tenth of the total amount of eligible incentive. Classification of the Project Amount (in INR crore) Ultra Mega Industrial Unit 500 Mega industrial Unit 400 Large Industrial Unit 150 Micro, Small or Medium Industrial Unit 50 Industries in the manufacturing sector can opt for either the general incentives under the Gujarat Industrial Policy or the incentives provided below if the proposed plant is an MSME (i.e. Plant and Machinery cost is less than INR 10 crore): : As per the Gujarat Industrial Policy-2015, following are the key incentives provided to the manufacturing sector (including machine tools): Interest subsidy of 5% with the maximum amount of INR 25 lakhs (~US$ 37,500 1 ) per annum for 5 years on the term loan of machinery and equipment anywhere in the state outside of municipal areas. Capital investment subsidy of 10 % loan amount disbursed by Bank/Financial Institution with a maximum amount of INR 15 lakhs in Municipal Corporations areas. Assistance for technology acquisition from recognized institution for manufacturing products will be provided by way of 50% of the cost payable subject to a maximum of INR 5 million (~US$ 75,000 1 ), including royalty payment for first two year. Assistance for venture capital to raise promoter contribution in the form of equity or loan through Gujarat Venture Finance Limited (GVFL). Page 18

19 Sources Slide No Sources 4 1. Global Heavy Equipment and Industrial Machinery Global Report 2015, News wire website, accessed 22 July Engineering industry in India IBEF website, million-new-jobs/articleshow/ cms 5 1. National capital goods policy Government initiatives to bring good growth in capital goods industry, Live Mint website, accessed 25 July Chemicals industry in India,IBEF website, January Cement industry in India, IBEF website, August SUGAR INDUSTRY IN INDIA TO REACH INR 1,033.5 BILLION BY FY 2020: KEN RESEARCH, Sugar news website, accessed 25 July Dairy sector to milk Rs 10k-cr investments in 5 years, BUSINESS STANDARD WEBSITE, INVESTMENTS-IN-5-YEARS _1.HTML, ACCESSED 25 JULY CERAMIC TILES MARKET IN INDIA, TECHNAVIO VIA EMIS 6 1. National capital goods policy Government initiatives to bring good growth in capital goods industry, Live Mint website, accessed 25 July Government approves Capital Goods Policy, aims 21-million new jobs. The Economic Times website, ext&utm_campaign=cppst, accessed 25 July ) Gujarat: Growth engine of India, August 2015, Indian brand equity foundation (GDP figure also) 2) Anti-dumping duty makes Gujarat's Morbi ceramics sparkle, The Times of India website, accessed 26 July ) Gujarat set to become India s manufacturing and petrochemical hub: Anandiben Patel, The Times of India website, 9 Dahej PCPIR accessed on 23 July Selection of raw materials for heat exchangers, accessed 27 July 2016 Dahej facility- Hindalco, Steel production in Gujarat, 13 Indian chemicals industry, Chemical industry to gain from 'Make in India' initiative, Business standard website, accessed 27 July 2016 Chemicals: Expect import duty reduction on feedstock, Rediff website, sector-chemicals-expect-import-duty-reduction-on-feedstock/ htm, accessed 27 July 2016 India's cement sector in trouble, Business standard website, accessed 27 July 2016 KNM Group, FLSmidth group, US/Industries/Categories/Products/Pyroprocessing/KilnsandDryers/KilnsandDryers Hyundai heavy equipment, Page 19

20 Sources Slide No Sources Assumptions Comparable project: 1) Godrej to invest Rs 500 cr for greenfield unit in Dahej, business line, accessed 28 July 2016 Assumptions: 1) Assuming proposed plant will be set up at Dahej SIR Benchmark project: Godrej and Boyce manufacturing facility Investment : INR500 crore in 2012 (we have adjusted the figures to inflation) Area : 50 acres Building: 35 acres Capacity: it is assumed that proposed plant will have capacity of around tonnes of equipment pa Capacity converted in units by estimating average weight of heavy equipment which comes out around 200 tonnes ( id=0&productid=84) Building cost : assumed INR 11,600/sq. meters 2) Capital structure is computed by assessing the D/E ratio of Godrej and Boyce The actual capital structure of a company will depend on case to case basis and will depend on several factors including exiting debt on the balance sheet, credit rating among others. 15 Assumptions 1) Average price per unit (from 2) 50% of the total investment in (lant, machinery, working capital and miscellaneous expenses is assumed to be invested in fixed assets) i.e 50% of =204.3; further crore is for building 3) Employee cost is assumed to contribute 8.8% to the total costs as per industrial standards 50% of the employee costs are assumed to be labor costs, which will fall under variable costs and rest are fixed costs + 50% of total employee cost is assumed to be fixed, while rest is considered under variable cost Source: 1) Godrej and Boyce Manufacturing Co. annual Report 2) Doosan Heavy Engineering annual report Gujarat Textile Policy, Industries and Mines Department, Government of Gujarat, 5 September Approvals required for setting up plant, accessed 8 July Environment clearance accessed 8 July Gujarat single window clearance, accessed 8 July Exiting business, accessed 9 July Manufacturing Sector Profile, Vibrant Gujarat website, 7 October Industries Commissionerate website, accessed on 1 June Textile industry welcomes amended TUFS, Business Standard, 2 January Approvals accessed 27 June ) Government puts out draft capital goods policy for suggestions, The Economic Times website, accessed 28 July ) National capital goods policy, DHI website, 3) Policy for capital goods introduced, The Hindu website, Page 20

21 Ministry of Heavy Industries and Public Enterprises Industries & Mines Department Gujarat Industrial Development Corporation Office of Industries Commissioner Industrial Extension Bureau This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope. It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision. Office of The Industries Commissionerate Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar Gujarat Ph.: / ID: iccord@gujarat.gov.in