Manufacturing companies in Gujarat looking for alternate manufacturing base

Excerpt: Chemical companies in Gujarat that account for more than 60 percent of India’s chemical industry, are exploring a second manufacturing base outside of that State.

With its favourable ecosystem and great legacy, Tamil Nadu should seize the opportunity to attract investments from chemical companies in Gujarat that are looking for an alternative base now, Vijay Sankar, President, Indian Chemical Council and Deputy Chairman, Sanmar Group, said today.

“Tamil Nadu has always been a pioneer in the chemical industry. It lost out in recent decades. However, things are changing and the State has the potential to attract huge investments in chemicals because of domestic and international developments,” he pointed out while addressing a CII seminar on Opportunities and Challenges in the Chemical Industry.

Chemical companies in Gujarat that account for more than 60 per cent of India’s chemical industry, are exploring a second manufacturing base outside of that State.

Tamil Nadu has immense scope to attract them as the State has a huge coastline, the presence of capital goods equipment manufacturers and acknowledged talent pool – an ecosystem that fits for the chemical sector, he added.

In Ankleshwar-Vadodara area in Gujarat, there are about 2,000 chemical units/companies, which is significantly higher than the combined units in South India. Despite having an impressive legacy, Tamil Nadu accounts for just about five per cent of the chemical industry.

“There is no reason why it should not be multiple times of the current share,” Sankar said.

A slowdown in China and the China-US trade war is giving India a very big opportunity, especially in the chemical and petrochemical sectors. The State can seize opportunities on this front as well.

He also discussed the challenges in terms of infrastructure faced by the Indian chemical industry though the sector’s pollution and environment challenges are nowhere near China’s. “India is developing the chemical industry in a sustainable way, unlike China,” he noted.

Highlighting State’s interest in attracting investments in chemical and petrochemical sector, K Gnanadesikan, Additional Chief Secretary, Tamil Nadu Industries Department, said the State government would provide a structured package of assistance for any petrochemical complex that would come up in the State.

“Such investments will create large downstream industries as also the ecosystem that Tamil Nadu badly needs,” he added.

However, the government is concerned about ensuring environmental security while attracting such investments.