Ever since Gujarat decided to walk on the path of industrialisation, the State has witnessed a tremendous boom in its economy. Huned Contractor takes into account the latest developments.

News of progress reaches out fast. And not only do they attract from those within but also those who are in the outer circle. And therefore, following on the heels of Japan, it is the government of Canada that has now accepted an invitation from Gujarat to act as a 'partner country' to the Vibrant Gujarat 2011 Summit. Canada is the second country to partner the fifth edition of the global summit to be held on January 12 and 13, 2011. Meanwhile, Japan, which partnered in the 2009 event, will continue its association next year as well, an official press release stated. While Japan will demonstrate its world-class technology and industrial practices, Canada will provide a focus on alternative energy, and clean and green technologies to improve the quality of work and life.

The 2011 summit will also enable Canadian companies to invest and forge joint ventures in Gujarat's growing green energy sector. In 2009, the Gujarat government was the first in India to set up a separate department for climate change after signing a MoU with Clinton Climate Initiative for setting up of large-scale solar power parks totalling 3,000 MW capacity.

In an unrelated development but one which focuses on how Gujarat is progressing towards its objective of creating the maximum amount of green power, the Mumbai-based Apar Group recently announced a partnership deal with Neat Energy Inc of the US to set up a solar power generation facility of up to 40 MW near Bhuj in Kutch district at an investment of up to Rs 600 crore.

Initially, the company would set up a 5 MW solar photovoltaic plant expending Rs 60 crore, which would be subsequently scaled up. This was revealed by the company's chairman Dr Narendra Desai. "The company plans to acquire land on the Bhuj-Bhachau road in Kutch district and the installation of the solar power equipment will be completed in 18 months thereafter," he added.

Earlier, Apar Corporation and Neat Energy had set up a trial unit of about 80 kW at a farm near Mumbai. "Gujarat is likely to produce more than 1,000 MW of solar power in the near future and the State could even surpass countries like Germany, the USA, and Spain," Dr Desai said. According to Dr Pranav Ashar, CEO, Neat Energy, his company is also exploring possibilities of setting up solar power projects in States such as Rajasthan and Maharashtra as well.

Given such proactive measures it comes as no surprise to find Gujarat emerging as the leader among the top five States - Maharashtra, Orissa, Andhra Pradesh, and Karnataka being the other four - by attracting about 11 per cent of the total investment proposals of Rs 104.93 lakh crore for 20 States as on March 31, 2010, according to a study undertaken by the Associated Chamber of Commerce and Industry in India (ASSOCHAM).

Releasing the study, the association's secretary general, D S Rawat, said that Gujarat had attracted investment proposals of Rs 12.01 lakh crore while Maharashtra was a close second with Rs 10.36 lakh crore. What has also worked in favour of Gujarat is the success of its special economic zones.

The ten functional SEZs located in Gujarat, out of the country's 111, have contributed 45 per cent of the country's exports from the special economic zones in 2009-10. These SEZs contributed about Rs 99,481 crore worth of physical exports during 2009-10, which is more than the national figure of SEZs' export in the entire financial year 2008-09, i.e., Rs 99,000 crore. The total national exports from SEZs during 2009-10 were worth Rs 2,20,711 crore.

According to Upendra Vasishth, Development Commissioner, Jamnagar SEZ, the physical exports of the SEZs in the first four months of the current fiscal (April-July 2010) were worth Rs 46,179 crore, a growth of 216 per cent over the previous fiscal's corresponding period (Rs 21,407 crore). This growth was due to the rise in the exports from Reliance SEZ (RSEZ) at Jamnagar, which exported products worth Rs 31,779 crore (Rs 12,428 crore), a growth of 256 per cent. Excluding RSEZ's contribution, the other SEZs in Gujarat exported products worth Rs 8,979 crore and Rs 14,400 crore in the first four months of 2009-10 and 2010-11, respectively, he stated in a release.

The SEZs in Gujarat have attracted an investment of nearly Rs 60,000 crore in the last three years and the investments are continuing to flow in. As an industry expert points out, the primary factor that attracts investments to a State is the availability of infrastructure, especially energy. Here, Gujarat has been at the forefront by getting as many energy producing companies on its soil as possible.

One recent case is that of Adani Power Ltd (APL), the power business arm of the Ahmedabad-based Adani Group, which has announced the successful synchronisation of its third unit of 330 MW at Mundra in the Kutch district, thus achieving the capacity of 990 MW of coal-fired thermal power generation. The chairman of the group, Gautam Adani, recently said that the company expects to commission the last unit of 330 MW, and the first supercritical technology-based unit of 660 MW by the end of this year. "APL expects to achieve generation capacity of more than 16,000 MW by the end of 2013. All our projects at Mundra, Tiroda, Kawai, Dahej, Bhadreshwar, and Chhindwara are moving according to schedule and the necessary work for transmission is also moving in synchronisation with the generation schedule," he added.

Meanwhile, the State-promoted Gujarat Industries Power Corporation Ltd (GIPCL) is now planning to invest around Rs 3,000 crore in its second phase of nearly 600 MW on a greenfield thermal power project in the next two years. The company has already invited proposals on engineering, procurement and construction (EPC) basis in an international competitive bidding for setting up of the Surat Lignite Power Plant (SLPP), Station II, by August 31 this year. It proposes to have two units of 250 MW each with option of up to 300 MW each of unit size. The power plant will be based on the eco-friendly circulating fluidised bed combustion (CFBC) technology. The Vadodara-based GIPCL's SLPP is an independent power producer (IPP), which supplies power to Gujarat Urja Vikas Nigam Ltd (GUVNL), the State's transmission and distribution company, through a power purchase agreement (PPA).

Interestingly, unlike some of the other States, Gujarat's industrialisation is not related to any one specific sector. While it has textiles, automobiles, pharmaceuticals, agriculture and power on one hand, it also has information technology, tourism, business process outsourcing, oil & gas, and animal husbandry on the other.

Speaking of IT, which is always considered a barometer of a State's economic success, Microsoft, along with its partner firm Intech Systems Pvt Ltd, will expand its ERP offering to focus on SMEs in Gujarat, according to Subhomoy Sengupta, Group Director, Microsoft. "Together we shall be providing end-to-end solutions on Dynamics NAV, AX, and SharePoint to the manufacturing and oil and gas verticals in Gujarat and elsewhere," he said. Microsoft's business in Gujarat has increased at the rate of 40 per cent plus.

According to information provided by the Gujarat Industrial Development Corporation (GIDC), there has been impressive progress in the sectors of machinery and machinery tools as also manufacture of wool, silk and synthetic fibre textiles. The other manufacturing products that find favour in Gujarat are rubber, plastic, petroleum and coal products, transport equipments and parts, food products etc.

In an attempt to boost industry outside central hubs like Ahmedabad, Baroda, Surat and other major cities, the GIDC has developed around 257 mega industrial eStates such as the ones at Jhagadia, Vagra, Savli, Dahej, Anklaseshwar, etc. Meanwhile, Jamnagar, Porbandar, Jafrabad, and Bhavnagar have already achieved prominent status as centres of industry and trade.

Primarily though, it is the textile industry of Gujarat that needs a larger focus. Seen from a wider perspective, the textile industry has been one of the oldest and most important sectors of the Indian economy, contributing to almost one-third of foreign exchange earnings and 3 per cent of the GDP.

In Gujarat, the textile industry has contributed in a big way to the industrialisation process. In fact, the development of many industries like those of dyestuff, chemicals, engineering/foundry and cotton farming is solely dependent on this sector. The State is well known for the development of hybrid cotton, ginning, power looms, composite mills, spinning units, and independent processing houses.

The State is the largest cotton producer in the country. About 30 per cent of woven fabric from the organised sector and 25 per cent of decentralised power loom sector of the country comes from this State alone. A large number of fabric process houses are concentrated in Ahmedabad and Surat, which is considered the largest centre of art silk fabric, producing over 40 per cent of the art silk fabric of the country. The State accounts for 12 per cent share of the total textile exports of the country.

All such positives have primarily been due to the State's open-door policy of welcoming industrialisation. Now, in what could be a first for India, the Gujarat government is working on a logistics policy, inclusive of ports, roads, railways, and air systems. This was revealed by A K Sharma, secretary to the chief minister and chief executive officer, Gujarat Infrastructure Development Board.

"We are working on a draft policy for the sector that we will present to the government soon. Since the policy framework is in its early stages, all the stakeholders, including those from the industry, will be consulted before chalking it out. There is a need to create linkages between various standalone infrastructural projects such as ports and make them accessible through the creation of a more nodal system," he said. According to Samir Shah, Partner, JBS Group, there is a need for a uniform policy to help it complement the infrastructural growth of Gujarat. "The State has 41 ports, but many of them, including Pipavav and Mundra, are difficult to reach because of lack of connectors. Which is why many of the commodities that can be routed through Gujarat's coasts, are being brought in from Nhava-Sheva," he said. It is interesting to note here that Gujarat is growing faster than China in terms of dollar per day estimates. Elsewhere, in other recent developments, commercial production at dye and dye intermediates manufacturer Bodal Chemicals Ltd's new manufacturing plant at Padra, Vadodara, has already begun. The plant, set up at an investment of Rs 62 crore, has a manufacturing capacity of 650 tonnes a day and the company now has eight manufacturing facilities across Gujarat. Further, reinforced polymer composites manufacturer Kemrock Industries and Exports Ltd has commissioned India's first carbon fibre manufacturing facility at an investment of Rs 200 crore at Vadodara. The fully integrated plant includes polymerisation, wet spinning, and carbonisation and has an initial capacity of 400 tonnes a year. The technology knowhow for the plant has been provided from CSIR National Aerospace Laboratory, Bengaluru. "With the commissioning of this unit we complete the most ambitious project since our inception. In-house production of carbon fibre is the first step towards establishing a self-sufficient domestic capability to produce composite products for the aerospace, defence, and wind energy markets. The carbon fibre capability will be a strategic fit to our existing operations, augmenting our moulding ability," said Kalpesh Patel, CMD.On a lighter note, frozen fish from Gujarat is now becoming the mainstay on restaurant tables in the countries of South-East Asia. The catch from Gujarat coast has now become more diversified, and seafood processing and freezing capacities have been built up to cater to the new-found export demand.

The spurt in demand from the South-East Asian countries and increased catches-for-export from the Gujarat coast has transformed Pipavav into the biggest port for seafood export in the country.

And to round it up, Safari India, a regional tourism magazine covering South and South-East Asia, has recognised the Tourism Department of the Gujarat government as the best upcoming tourism department. The magazine, which covers India, Nepal, Sri Lanka, Bangladesh, Pakistan and South-East Asia, has chosen the State government's tourism department for its outstanding and professional efforts in promoting the local tourism industry in an innovative manner, according to an official release. To sum it up, all is certainly well in Gujarat, and becoming better.