Ess Dee plans hub in state

Calcutta,April 1: Pharmaceutical packaging company Ess Dee Aluminium Ltd plans to set up its mother plant in Bengal.

The unit will require an investment of Rs 400 crore in the first phase and employ skilled people. Ess Dee will send the formal proposal to the state government after its board approves the plan.

The unit will be an aluminium rolling mill producing sheet from slab. The process is energy intensive,necessitating a captive power plant. The sheet is used to make foils for packaging drugs.

Ess Dee is interested in Bengal because the state has substantial coal for use by the captive plant. The availability of skilled workers has also enticed the company,set up by Mumbai-based Bengali entrepreneur Sudip Datta.

The company needs around 40-50 acres for the unit,preferably in Burdwan,Bankura or Purulia. It will procure aluminium slabs from Orissa. Ess Dee has a tie-up with Garmco of Bahrain for foilstock.

The company wants to enter the food packaging business as well and is focusing on backward integration to have control over critical resources.

"The company wants the state government's assistance in three areas: to get land,a recommendation for a coal mine and an assurance of a 24x7 working environment for 365 days," a source familiar with the development told The Telegraph.

The company,which supplies to Cipla,Pfizer and Dr Reddy's Lab,has eight units across Daman,Himachal Pradesh,Goa and Maharashtra. The ninth plant will come up soon in Sikkim where the company recently acquired land.

Ess Dee is also setting up a unit in Dubai for the US market at an investment of $40-45 million. It may also snap up a plant in South Africa. The company has plans for more plants overseas.

The Bengal unit will be the mother plant for all its activities and is therefore critical to the growth of the company which entered the capital market in December 2006.

Overseas expansion will be funded through internal accruals and if necessary,the company may consider the FCCB (foreign currency convertible bonds) route.

The project will be a sort of homecoming for Dutta who is from Durgapur and had left the state at a young age.

If Ess Dee's global plans fructify,the Bengal unit will grow in size,require investments and generate jobs.