Dow`s Rs 200-crore chemical project stuck in land issue

Dow International Chemicals' plans to set up a chemical unit in Gujarat has hit a roadblock and is likely to get delayed due to land related issues.

The US-based Dow Chemicals has firmed up plans to set up an epoxy resin unit in Dahej for an estimated investment of Rs 200 crore. For this the company had sought 100 hectares land from Gujarat government.

"The company had indentified land adjacent to SEZ area in Dahej, near the seacoast. Gujarat Industrial Development Corporation (GIDC) has shown other land parcels. However, the company wants the area it has zeroed in on. GIDC does not have this land and it is yet to acquire it from the state government, following which Dow can occupy it," said government sources close to the development.

Dow is not the only company to face land-related issues. Earlier Walchandnagar group which was planning Rs 350 crore develop port facilities for specialised structures and equipment for oil, gas at Dahej had said that it is planning to opt for Andhra Pradesh as its demand for land is not being expeditiously followed by the state government.

Dow has been pursuing the project with the state government for over a year now. "We have been requesting the government to accord priority in providing land to such prestigeous companies," said government sources.

Dow is the world's largest supplier of chlorinated organic products and services. Recently, Dow Europe GmbH formed a 50:50 joint venture with Gujarat Alkalies and Chemicals Limited (GACL) for setting up a Rs 600 crore plant at Dahej. The new joint venture company is called DOW-GACL Solvdenture and the plant will be commissioned in 2011.

Dahej, which has recently been declared as a Petroleum, Chemicals and petrochemicals region (PCPIR) is seeing a lot of investment in the region apart from the Dahej Special Economic Zone Ltd (DSL).

DSL is a joint venture between GIDC and ONGC wherein GIDC holds 26% equity stake and ONGC holds 24%. The SEZ will mainly cater to the chemical and petrochemical industries. Investments to the tune of Rs 25,000 crore are expected to flow in here. ONGC is planning to set up a Rs 16,000-17,000 crore petrochemical complex in the SEZ.

Companies like Japanese ink-maker Danippon Ink and Chemicals (DIC) and makers of Fevicol brand Pidilite industries, Godrej & Boyce, ABG Shipyard and Saraswati Industrial, Gujarat Flurochemicals, Dorf Ketal have decided to set up their shops in the SEZ.

"Over two dozen companies are in various stages of setting up their shops in the SEZ. Procedure for land allotment is going on in many cases," according to a government source.