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Chemical project promoters of Tamil Nadu have a lot to learn from Gujarat

By NS Venkataraman* 

When good investment opportunities in chemical industry exist which are known in a region and which are yet to be exploited, it can be said that the chemical industry in the region is at the cross roads. However, when there are good investment opportunities in chemical industry but which are ignored and focus shifted to some other sector, it can be said that the scenario amount to poor strategy.
Tamil Nadu government has now fixed a target for achieving one trillion dollar economy in the state by 2030. This is a bold and forward looking initiative and certainly this target is achievable, even though the year 2030 is only seven years away.
With the target of achieving one trillion dollar size economy, it is necessary to give due role and importance for the growth of the chemical industry, since several chemical products are feed inputs for several other industrial sector such as automobile, electronics, textile and so on. Growth of such chemical industry can promote chain of developments in number of other sector.
In Tamil Nadu, the ground reality is that very few major chemical projects have been set up in the state in the last several years. On the other hand, well established and large chemical and research projects have been closed down or have been given up.
There are number of such cases. A few examples are given below:

Sterlite Copper:

Sterlite Copper project in Tuticorin which was working for several years with good capacity utilization has now been closed down due to counter productive environmental activism, though several investigative studies on the functioning of the project by credible agencies have asserted that Sterlite Copper Project has not been causing pollution in Tuticorin region. The Green Tribunal have also ruled in favour of Sterlite Copper. Subsequent to the closure, the employees of Sterlite Copper and section of general public in Tuticorin region have appealed to Government of Tamil Nadu repeatedly to restart the Sterlite Copper plant. Sadly, Tamil Nadu government is not responding to such appeals.
Due to the closure of Sterlite Copper, India has now become an importer of copper, while India was exporting copper when Sterlite Copper unit was in operation.
Copper is a vital metal needed in several sector and international price of copper has now skyrocketed. The closure of Sterlite Copper in Tamil Nadu has really brought a bad name to Tamil Nadu that it is not an investor friendly state for chemical industry.

Natural gas pipeline project from Kochi:

The proposed natural gas pipeline project from Kochi to Tamil Nadu has also been shelved now for no valid reasons, as some poorly informed protestors carried out agitation against the pipeline project without understanding it’s significance. The natural gas pipeline from Kochi to Tamil Nadu could have resulted in an investment of Rs.15000 crore, which is now not to be.

LNG terminal at Enoore:

LNG terminal has been commissioned at Ennore with capacity of 5 million tonne per annum. However, the capacity of the LNG terminal is very much under utilized, as downstream projects based on LNG have not been adequately set up in Tamil Nadu to utilize the natural gas, which only indicates the lack of forward planning. Commissioning the LNG terminal without facilities for utilizing the LNG fully is similar to the act of putting the cart before the horse.

Titanium dioxide project in Tuticorin

Tamil Nadu has large deposit of ilmenite ore in Tuticorin region and the earlier proposal to set up a large titanium dioxide project in Tuticorin based on ilmenite ore by Tata group had to be shelved, due to counter productive agitation and protest.
Presently, India imports more than 2 lakh tonne of titanium dioxide every year, whereas the raw material for production of tTitanium dioxide namely ilmenite ore deposit is adequately available in the state.

Tapioca based products:

Around 80% of the tapioca cultivation in India is carried out in Tamil Nadu. Tapioca provides excellent investment opportunities, for production of derivative products such as tapioca starch and several starch based products such as L-Lysine, Mannitol, Citric acid and others, which are not presently produced in India and imported to meet the Indian requirement. There is potential investment opportunity of around Rs.1000 crores for setting up tapioca based complex in the state, which has not received attention so far.

Neutrino project:

Neutrino project in Theni district in Tamil Nadu has been hanging in balance for several years now, as protestors are blocking the project.
This is a research project of great importance and several credible agencies and scientific research institutions have clearly said that there would be no particular environmental issue due to the operation of neutrino project. One of the knowledgeable persons who wanted the neutrino project to be set up at the earliest was Dr. Abdul Kalam.
But, all these views have fallen on deaf years.

Crude oil exploration project:

Crude oil exploration project in delta region has also been blocked due to protests.
While there are several lakhs of acres of agricultural land in delta region, a few thousand acres allotted for crude oil exploration would not have made any difference to the economy of the delta region, particularly when the interests of the affected persons would be suitably taken care of by the government.
But, this project has also been blocked, ignoring the findings of the cost benefit analysis.

Magnesite project:

Tamil Nadu has large deposits of magnesite ore in Salem and nearby region, which constitutes one of the high deposits in India. This industry now is in stagnation stage.

By processing the magnesite ore, dead burnt magnesite (DBM) was produced earlier to meet the requirement of refractory industry all over India. As DBM production has considerably tapered now, India has to import large quantity of DBM. This has happened, since no attention has been paid to set up magnesite ore beneficiation plants in the state.

Nagarjuna Petrochemical project:

Nagarjuna Petrochemical complex in Cuddalore, which is a large project became a non starter and went into insolvency. Tamil Nadu Industrial Development Corporation has an equity share in the project, however small it may be. Kolkata based group has purchased the unit in auction. It remains to be seen how and when this project would fructify, as revamping of the project is still in preliminary stage.

PCPIR Project:


Government of India proposed to implement Petroleum, Chemical and Petrochemical Investment Regions (PCPIR) in Cuddalore and Nagapattinam in Tamil Nadu. However, this project scheme has been shelved due to agitation and protest against the project by some environmental activists, who could not appreciate the significant industrial and economic growth that would happen in the region, which would far outweigh any issue in this scheme.

Salt project:

Tamil Nadu is the large salt producing region in the country after Gujarat. This traditional industry in Tamil Nadu has not been modernised to improve the quality of the salt and optimise the process parameters and penetrate the export market.
This task has been carried out remarkably well in Gujarat state.
On the other hand, some of the land area where salt was cultivated in Tamil Nadu has been diverted to some infra structure project.

Suspension of production in some units:

Several prospective chemical units have been closed down in the past years in medium and small scale sector. Such projects include South India Viscose in Mettupalayam, Indag Products in Cuddalore, Trichy Distilleries and Chemicals in Trichy, Tamil Nadu Explosives in Vellore, several fire cracker units in Sivakasi region and so on.
The products produced by all the above units have high level of relevance to the country’s needs and they have been left high and dry for whatever reasons.

Where do Tamil Nadu chemical industries go from here?:

One large project that has been announced recently is the petroleum refinery project in Nagapattinam. One only hopes that this important project would be commissioned as per schedule, though the work is in the preliminary stage at present.
There are also two or three medium scale projects announced such as hydrogen peroxide unit and a few expansions by some units to increase the capacity marginally.
The status of traditional industries such as leather and textile processing remain largely at the same level without much of significant modernization. The pharma units in Tamil Nadu are also largely stagnating and whatever proposals made are a few and far between.
While focused industrial parks such as for medicinal herbs have been announced, the progress appears to be slow and disappointing.
The most important chemical industry centres in Tamil Nadu are located in Manali, Cuddalore, Ranipet and Tuticorin. New projects are not being allowed in Ranipet, due to some environmental hazard caused in the area several years back by a basic chrome sulphate project. This issue of ground water contamination is yet to be sorted out by initiating necessary measures.
Other than a very few chemical projects mentioned above, with no other massive chemical projecst being proposed in Tamil Nadu now, one can say that Tamil Nadu is a net loser due to lack of focus for setting up chemical projects and the negative and counter productive attitude of some environmental and political groups against chemical projects in the state.
Of course, there have been good progress in other sectors such as automobile, auto component, auto tyres, electronic products and information technology. However, the lack of progress in chemical industry is conspicuous.
While periodical meetings take place in Tamil Nadu with participation of ministers, bureaucrats and top industrialists to discuss the prospects of chemical industries in the state, most of such meetings and conferences really end up as talk show, which is unfortunate.
Chemical Industries in Tamil Nadu have as much potentials as Chemical industries in Gujarat due to the availability of coastal belt, trained manpower and other advantages. Tamil Nadu stands far behind Gujarat in the development of Chemical industries. Obviously, the chemical project promoters including the promotional organisations in Tamil Nadu have a lot to learn from Gujarat.
---
*Trustee, Nandini Voice For The Deprived, Chennai

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