Gujarat is likely to see one of the largest foreign direct investments (FDI) in recent years with Taiwan's state-run petroleum major China Petroleum Corporation Taiwan (CPC Taiwan) set to come up with Rs 400 billion petrochemical park at the Mundra SEZ.
The Taiwan state-run major may set up the project in tie-up with Adani Group. "Talks are in final stage. An agreement in this regard is likely to be signed during the next Vibrant Gujarat summit. The project may require around 800 hectare of land," said a person close to the development. This comes close to the heels of Taiwan External Trade Development Council (TAITRA) chairman James Huang stating that Taiwanese companies should team up Indian majors to explore business opportunities.
Huang told the Taipei Times that Adani Group and CPC Corp are in discussions to jointly build a petrochemical park in India's Mundra special economic zone. “This will be one of the largest foreign direct investments in Gujarat in recent years. The plant will produce products like ethylene and will also have a naphtha cracker unit,” the source added. However, both CPC Corp and Adani Group did not respond to the questions by Business Standard in this regard. The officials of CPC Corp already had a round of meeting with Gujarat chief minister Vijay Rupani too in this regard. Though CPC Corporation wanted Adani to take up a major stake in the projects, the Indian major’s participation in this regard is yet to take its final shape. Sources also hinted that the Taiwan company is also in talks with Andhra Pradesh government for the project.
Meanwhile, CPC chairman Tai Chein had reportedly raised concerns about the Gujarat project over the 26 per cent stake that Adani was supposed to take up in the project stating that the Indian company has changed its project. There were also concerns about the tariff structure and higher transportation costs from India. However, sources confirmed that a memorandum of understanding is likely to be signed during the ninth edition of the Vibrant Gujarat Summit (VGS), which will take place in Gandhinagar in January 2019.
This comes at a time when the proposed investments in Gujarat zoomed 40 per cent to Rs 790.68 billion in 2017, against Rs 561.56 billion in 2016. The number of investments too increased to 428 in 2017 from 415 a year before based on the industrial entrepreneur memoranda (IEMs) data available with the department of industrial policy and promotion (DIPP). Meanwhile, in 2018, the state received investment plans to the tune of Rs 83.65 billion so far with a total of 105 proposals. Last year, Karnataka topped the states in terms of IEMs with proposals worth Rs 1.522 trillion. Taiwan is also looking to invest in the 100 smart city projects being planned by the government.
CPC's business areas include oil and gas exploration and production, refining, petrochemicals, lubricants, solvents and chemicals; it is also Taiwan’s sole importer and supplier of natural gas.