FMCG cos go for expansion

When it comes to heavy tax incentives, the current sluggishness in the market takes a back seat at the cost of expansion.

A host of top companies, including ITC and HUL in Uttarakhand are going for sizeable expansion following the allotment of additional lands by the State Infrastructure and Industrial Development Corporation of Uttarkahand Ltd (SIDCUL) in the hill state where concessions and fiscal incentives are still available under the 2003 concessional industrial package.

The central Board of Customs and Excise CBEC last year had ruled that companies can go for expansion to avail hill-based tax benefits even after the expiry of tax incentives like cent per cent excise rebate on March 31, 2010.

Hindustan Zinc Ltd, a Vedanta group company, is all set to expand its Pantnagar industrial unit in Uttarakhand with an investment of Rs 300 crore. “We have allotted nearly 20 acres of additional land to Hindustan Zinc for expansion,” a government official told Business Standard.

The company in 2009-10 had set up a 300-tonne silver refinery plant at Pantnagar, where it was allotted 25 acres by the SIDCUL, the state government nodal agency for industrial development. Pantnagar is the key industrial estate where top-notch companies like Tata Motors, Nestle and Bajaj Auto had set up production units.

The company officials are now working out various plans for the expansion programme which include silver plating. Pantnagar unit is the second plant of Hindustan Zinc in the state where it has already set up a unit at the Haridwar integrated industrial area to produce zinc ingot.

The official said the company’s decision to go for expansion at Pantnagar was highly appreciable, especially at a time when the signs of recession are being felt the world-over.

ITC was also recently allotted more land and is undertaking expansion with an investment of over Rs 500 crore at Haridwar industrial estate.

Similarly, Hindustan Unilever Ltd has also been allotted 15 acres of additional land close to its Haridwar unit for expansion programme.

The company is investing closely around Rs 500 crore.

In the pharma sector also, nearly 10 companies, mostly small ones, are undertaking expansion programme at Selquie and other areas. “Basically the current market slowdown will not affect the expansion programme of companies as the demand in the market has not fallen much,” said Pankaj Gupta President of the Industries Association of Uttarakhand.