MUMBAI: Manufacturing companies across the country — especially those in the pharmaceuticals and biotech segments — are busy setting up their own special economic zones (SEZs), to reap the benefits promised in the SEZ Act announced by the Centre in February this year.
The SEZ Act offers innumerable benefits to manufacturers, including 100% income tax exemption for 10 years, zero minimum alternate tax, zero dividend distribution tax and exemption from all indirect taxes on construction of the zone.
As per the Act, 100% income tax exemption will be provided for the first five years, 50% for the next five years and less than 50% for the next five years on creation of a special reserve.
The players in the fray include Ranbaxy, Dr Reddy’s, Biocon, Zydus Cadila, Serum Institute, Divi’s Labs, and Jubilant Organosys.
Pune-based vaccines major, Serum Institute, is investing Rs 1,200 crore in 3 phases for its recently inaugurated SEZ. Its proposed pharma park in an area of 250 acres would be completed by 2010.
Pharmez, the pharma SEZ planned by Zydus Cadila’s Zydus Infrastructure Ltd, has received approval from the Union ministry of commerce & industry last month. With this, the first phase of Pharmez is likely to be completed by mid-2007 and total investment in the park is expected to be to the tune of Rs 1,000 crore.
Biotechnology major Biocon has also received the clearance in May 2006 for its SEZ which is spread over 90 acres. The company has allocated Rs 650 crore fund for the SEZ, named Biocon Park.
The commerce ministry in May approved Hyderabad-based Divis Labs’ plans for a sector-specific SEZ for pharmaceutical ingredients at Chippada in Andhra Pradesh. The 250-acre SEZ will have an investment of Rs 12 crore.
Dr Reddy’s is also learnt to have received an approval to develop a 146-acre pharmaceutical SEZ in Ranga Reddy District of Andhra Pradesh. Ranbaxy is also planning to set up an SEZ in Mohali. Jubilant Organosys has also received approval from Karnataka Government for a SEZ in Mysore.
Recently, the Karnataka government granted approvals for setting up biotechnology SEZs to the Prestige Group, Dynasty Sapphire and Shapoorji Pallonji in Bangalore.
The 1,400-acre Jawaharlal Nehru Pharma City, built by Ramky Group, has received the ministry’s nod recently.
