KEI Industries to set up unit in Uttaranchal

Cable-maker KEI Industries Ltd is planning to expand its business and set up a factory in Uttaranchal with an investment of Rs 180-200 crore.

"KEI officials are in touch with us regarding their new unit in Uttaranchal," a state government official said.

The company would soon finalise details regarding the location of the new unit, the official said. The plant is expected to start production by December next year. The unit will be given excise duty exemption for 10 years and income tax exemption for five years.

The company said it had obtained board approval to raise up to $60 million in this regard. The board also approved raising Rs 200 crore from qualified institutional investors.

KEI Industries is expecting 73 per cent growth in net profit and 90 per cent rise in revenue in the current fiscal as it will begin to reap the benefits of some ongoing capacity expansion plans.

Giving business houses more reason to flock to hilly states with investments, the Centre, in August, allowed all the new industrial investments in Himachal Pradesh and Uttaranchal made before March 31, 2010, the benefits of excise duty exemption. The sunset clause has been amended to give three-year tax exemption from March 31, 2007.

According to the industrial package of January 3, 2003, the new units in the hilly states were given a host of concessions like corporate tax holiday and excise duty exemption. Under the package, a new unit has to set up and start commercial production or the existing unit has to expand or start commercial production by March 31, 2007. This has now been extended till March 31, 2010.

The extension is aimed at spurring development in these otherwise backward states by attracting investment, particularly from the large firms--a move that is paying dividend. Already, top industrial houses including the

The Tatas and Hindustan Lever Ltd, besides a number of pharma companies, have set up shop in Uttaranchal, which has attracted an investment of Rs 20,000 crore.