International BusinessEssar Steel approaches govt to denotify steel SEZ at Hazira
Essar Steel has approached the government to denotify a sector-specific Special Economic Zone developed by it in Hazira, Gujarat, as this would enable the company to sell the produce also locally.
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The global slowdown in overseas demand has affected the SEZ plans of two major players in the sector in Gujarat-Essar Steel and Welspun Gujarat Stahl Rohren Ltd.
Essar has invested close to Rs 8,000 crore in the four manufacturing units, sources close to the development said.
While industrial houses were clamouring for SEZ projects a few years ago, given their export potential and tax breaks, a large number of them are now keen on exiting these projects owing to the demand slump in developed countries. Government has already allowed DLF and Maytas Ventures, besides others to surrender their SEZs.
"Owing to the change in the global perspective it would be difficult to achieve exports envisaged at the time of setting up of the SEZ units," Essar has said in the application before the inter-ministerial Board of Approval (BoA) headed by Commerce Secretary Rahul Khullar.
Essar had set up four units at the SEZ in Hazira to consolidate the steel exports in view of the buoyancy in the steel industry in year 2006. The developer has also stated that the units would opt out of the SEZ scheme but continue to operate at the same location under the Domestic Tariff Area (DTA) rules consequent to the final exit permission.
Welspun Gujarat is meanwhile considering to shift its existing unit outside its Engineering SEZ at Anjar in Gujarat.