Mukesh Ambani – led, Reliance Industries Ltd (RIL) may rope in strategic investor for its Haryana Special Economic Zone project, which will be developede as a joint venture with Haryana government on about 9,600 acres of land.
RIL, in its annual report for 2009-10 has declared that it might bring in a strategic investor to halp maximize the potential of the investment made so far and make it a truly global investment destination. The report was issued to the shareholders for the company’s forthcoming annual general meeting to be held on Jun 18.
The RIL shares were trading down by 1.75 per cent, from the previous close on Monday, on the Bombay Stock Exchange (BSE). Meanwhile, the benchmark index, Sensex too traded lower by 1.65% at 16,198 points in the morning trades today. RIL shares have hit 52-week high at Rs 1,186.15 on June 12, 2009 and a 52-week high at Rs 859.15 on July 13, 2009.
The company has formed a joint venture with Haryana government to establish a large scale fully integrated economic enclave as SEZ. It has purchased about 9,600 acres of land and has obtained various approvals from government to establish the SEZ, the report said.
After hitting the slowdown bump when it commissioned its second refinery in December 2008, Reliance Industries Limited (RIL)’s special economic zone (SEZ) in Jamnagar has finished its first full operational year in March 2010 with a quantum leap forward.
Emerging as the single largest export zone in the country, the Jamnagar SEZ has seen its export nearly touch Rs 80,000 crore till March 2010.
“The physical exports from RIL’s Jamnagar SEZ stood at Rs 71,000 crore while Rs 8,000 crore has come from deemed exports. It is the largest SEZ in the country in terms of exports,” said Upendra Vasishth, Development Commissioner (Jamnagar SEZ).
With a capacity of 29 million tonne per annum, the Jamnagar Export Refinery Project (JERP), located in an SEZ, added nearly 20 per cent to the country’s refinery capacity.
Exports from the SEZ were primarily aimed at US and European markets, besides several other locations, including Asia and Africa.
In 2008-09, exports from all SEZs in India were at a modest Rs 99,689 crore. This year the country’s SEZ exports are expected to cross Rs 2 lakh crore, according to Central government sources. The overall figures are still being finalised, the official said.
Gujarat based SEZs have meanwhile contributed about 50 per cent of the country’s overall exports, sources said.
The exports from the 10 operational SEZs in the state have clocked Rs 1,12,600 crore, said government sources.
Topping the charts after Reliance, is Surat SEZ or SURSEZ with Rs 24,000 crore worth of exports in 2009-10. Nokia SEZ in Tamil Nadu ranks third with its exports expected to be in the range of Rs 15,000-18,000 crore, said sources privy to the development.
Last year, SURSEZ was the largest exporter in the country followed by Nokia SEZ.
Exports from Kandla Port Trust’s SEZ and Adani’s Mundra SEZ have been Rs 2200 crore and Rs 1300 crore respectively in the last fiscal.
According to ministry of commerce and industry’s official site, Andhra Pradesh leads with 72 notified SEZs, followed by Maharashtra which has 57 SEZs. Tamil Nadu has 55 SEZs and Haryana has 32 notified SEZs.
Andhra Pradesh leads with 21 operational SEZs against Tamil Nadu’s 19. Maharashtra and Karnataka rank third, with 15 SEZs operational SEZs each.
In all, there are 105 operational SEZs in the country with an overall export of Rs 1.5 lakh crore till December 31, 2009, according to official figures by the Ministry of Commerce and Industry.
Formal approvals have been accorded to 571 proposals, of which 348 SEZs have been notified. In Gujarat, so far 48 SEZs have formally been approved out of which 30 have been notified. Maharashtra has been approved 109 SEZs — the highest in the country — of which 57 have been notified.
Mukesh Ambani-controlled Reliance Industries (RIL) is likely to rope in Japanese firm Mitsui as an investor in its special economic zone (SEZ) project in Haryana, a clear indicator that the project is finally taking off.
Mitsui has given a letter of intent to Reliance to pick up 350-400 acres of land in the SEZ to set up a logistics park, the company sources said.
At about Rs 1 crore an acre, the deal size could be as high as Rs 400 crore, said a person close to the transaction.
Last year, RIL brought in IL&FS, a specialist infrastructure financing and management company, as a co-promoter to play a lead role in the management of the $10-billion project, long billed as India’s biggest and most ambitious SEZ project spanning as much as 25,000 acres.
Though the project suffered due to the economic downturn in the last quarter of 2008, it has gained traction recently as foreign investors have become keener to participate in one of the world’s fastest growing economies.
A company official told ET that besides Mitsui, two other Japanese firms are engaged in talks to invest in the Haryana SEZ. He, however, declined to reveal the other names stating that the talks were at a very preliminary stage.
Mitsui will buy the land on the Gurgaon-Farrukhnagar stretch. The Haryana SEZ was conceived in 2005 with a target of generating 5 lakh jobs and meant to house a cargo airport, a 2,000 MW power plant and with rail linkages to Delhi.
An RIL spokesperson said the company would not like to comment on what he described as ‘market speculation’. “As per the company policy, we would not like to comment on market speculations and individual transactions. Currently, requisite permissions, statutory approvals and clearances are being processed and we are working on the financial closure of the project,” the spokesperson said.
RIL, which has held a 90% stake in the project, had also considered tie-ups with global firms such as Walt Disney, Time Warner or Universal to establish theme parks and entertainment centres.
In 2005, RIL signed an agreement with the Haryana State Industrial & Infrastructure Development Corporation (HSIIDC) under which both sides were to have directors in a ratio of 2:1 on the board of their joint venture company. The deal also involved HSIIDC giving nearly 1,400 acres for the project for around Rs 500 crore.
In 2006, when the SEZ rules were notified, there was a mad rush for setting up such projects. But demand for SEZs has cooled off since. Several big projects such as Reliance’s Navi Mumbai SEZ, Haryana SEZ, the Posco SEZ have been hit because of land acquisition problems, resistance from farmers and changing regulations.
Several projects that were announced at the peak of SEZ boom have either been called off or are stuck. Last year, real estate major DLF got four of its SEZs denotified by the commerce ministry. DLF had told the government that there was no demand for commercial space. Another real estate firm Parsvnath had put 12 of its SEZ projects on hold. Videocon had planned two SEZs in Maharashtra and four in West Bengal but has put its development plans in abeyance.
Reliance, Tata and Adani Group have emerged as the largest government land buyers of the state.
Together they have bought 4,830 hectare land from the state government in the last three years valued at Rs377.97 crore. This fact came to light in a written response given by revenue minister Anandi Patel to Congress MLA from Kalupur, Mohammed Farooq Shaikh.
Patel informed the state assembly that Reliance had been allotted 1,333 hectares of land for its SEZ in Jamnagar in addition to 57 hectare for marine tank farm and 1225 sq. mt for a refinery related project.
Tata Group has been provided 1,476 hectare, which includes 1,031 hectare for its ITproject in Gandhinagar and 445 hectare for much-hyped Nano car project in Ahmedabad. Tata has paid Rs11.35 crore for IT SEZ land; however, they have not paid any money for the prime land given in Sanand for the Nano car project.
Adani Group has been allotted 1,964 hectare of land for SEZ project in Kutch. “The Gujarat government has earned over Rs377.99 crore revenue by way of land allotment to these industrial giants,” the minister stated.
Mukesh Ambani led Reliance Industries has made investment of Rs 32,017 crore at the Special Economic Zone at Jamnagar for which the state had given over 1,333 hectare land for Rs 311.74 crore. The project has generated 2096 direct jobs, the state government said today.
Replying to a question asked by Congress MLA Faroq Sheikh regarding land given to Reliance, Tata and Adani groups for setting up projects, the state government provided details about the land allotted to these groups, rates charged by the government and investment made.
In Jamnagar, the state government has given over 12 hectare lands for refinery for Rs 13.47 lakh, 1,333 hectare land for Rs 311.74 crore for SEZ and 57 hectare land for Rs 25 crore for setting up a marine tank farm.
The Tata group has been given land in Gandhinagar for an IT project and in Sanand for the Nano car project.
According to the government, over 1,031 hectare land has been given to the Tata group for Rs 11.35 crore for an IT project where an investment of Rs 11,434 crore would be made generating over 8000 jobs once the entire project becomes operational.
The Reliance Haryana SEZ Ltd (RHSEZ Ltd) has bagged the prestigious “Amity Corporate Excellence Award for Corporate Social Responsibility” on February 26, 2010 at the twelfth Amity International business Summit & Research Conference (International Business Horizon) organized at Noida.
The Corporate Excellence Award for Corporate Social Responsibility received by Reliance Industries Haryana SEZ is a reflection of the humble contribution by RHSEZ in fields of education, health, women empowerment, child care, rural sanitation, protection of environment, investment consultancy and training of rural youths.
At a time when developers are increasingly scrapping their special economic zone (SEZ) projects, Reliance Industries’ SEZ at Jamnagar, which houses a Rs 25,000-crore refinery, emerged as the country’s largest SEZ in the current financial year, with exports crossing Rs 62,000 crore till January.
By March 2010, SEZ exports from Jamnagar refinery are expected to touch Rs 75,000 crore. This will contribute about 35-40 per cent of the country’s overall SEZ exports,” Development Commissioner (Jamnagar SEZ) Upendra Vasishth said. Reliance set up its refinery, over 700 hectares of the 1,700 hectares earmarked for the SEZ project.
“This year, Reliance’s Jamnagar SEZ has been the highest exporter, followed by Surat SEZ and Nokia SEZ,” the official added said.
Surat SEZ’s exports crossed Rs 20,000 crore till January this year. Nokia ranked third with Rs 10,000 crore of exports till December 2009. According to official figures, Surat SEZ’s exports were worth Rs 14,500 crore till December 2009, while that of the Jamnagar SEZ were over Rs 50,000 crore in the same period.
‘Operated at 115%’
Reliance Industries Group President Parimal Nathwani said: “Our SEZ refinery operated close to 100 per cent capacity and at 115 per cent in the third quarter. Exports from the SEZ were primarily aimed at US and European markets, besides several other locations, including Asia and Africa.”
With a capacity of 29 million tonnes per annum, the Jamnagar Export Refinery Project (JERP), located in an SEZ, added nearly 20 per cent to the country’s refinery capacity. Value-added products like acrylates for US markets have formed a bulk of RIL’s exports from SEZ.
“RIL’s exports of refinery products accounted for 23.6 million tonnes during 2009-10 (till the end of the third quarter), against 16.2 million tonnes during the same period in previous year. This was solely due to incremental export volumes from the SEZ refinery. Naphtha, gasoline, aviation turbine fuel, etc are some of the products that fetch us good export earnings,” said Nathwani.
