Mitsubishi Plans Arm For Haldia Project

Mitsubishi Chemical Corporation, the chemicals arm of the $175.8-billion Japanese firm Mitsubishi, plans to float a new company for setting up the Rs 1,600-crore purified terephthalic acid (PTA) project at Haldia, West Bengal.

According to sources, the Japanese major has already applied to the registrar of companies. This will enable it to take possession of 500 acres of land that has been allotted to it by the state government.

Sources point out that floating a new outfit, which will be Mitsubishi Chemicals' Indian subsidiary, is necessary before taking possession of land within the Indian state. The Japanese firm will hold 95 per cent of the equity. This means a foreign direct investment of $427.5 million through a single project.

 

The chemicals arm of the Japanese behemoth had applied for clearance with the Foreign Investment Promotion Board (FIPB) last month and plans to take possession of the land in August, say sources.

They added Mitsubishi had hired the services of the UK-based consultancy firm Humphrey & Glasgow to provide advisory services to their operations in India.

The promoters of the Rs 1,600-crore project have already obtained the West Bengal Pollution Control Board clearance. It is in the process of preparing an application to the Union ministry for environment for a no-objection-certificate. It has already completed the rapid impact assessment scheme at the project site. The West Bengal Industrial Development Corporation will pick up a five per cent equity in order to provide all escort services and basic amenities to help the project take off.

This is the first instance of a Japanese major coming into the country with as much as 95 per cent of the equity. According to state government sources, the project is under implementation and on schedule.

Debt from Japanese financial institutions has been fixed at $300 million for the 3.5-million tonnes per annum capacity PTA plant. It is also proposed that a 30-mw captive power plant and a water treatment plant along with a residential complex be set up.

Mitsubishi will be responsible for bringing in the technology, raw materials (paraxylene and acetic acid), marketing and key personnel.