INRnews - Indian Real Estate & Property News

The Eredene Group will invest up to INR 420 million (£5.25 million) for a 50% interest in the joint venture company with Apeejay Surrendra, the owners of Typhoo Tea and a global Indian business which employs more than 40,000 people in real estate, tea, hospitality, shipping, and retail and financial services. Apeejay Surrendra is Eredene’s investment partner, and Eredene has an exclusive agreement to source new projects with them in nine states in Eastern India.

The land for the project has already been specifically zoned for industrial use by the Haldia Development Authority (HDA). Full planning consents are expected to be received in Q2 2008. The gross development cost for the project is approximately £24 million. This will be funded through a total equity investment of £10.5 million shared in equal proportion between Eredene and Apeejay Surrendra. The remainder will be funded through debt.

Eredene’s investment in the project will be phased, with £3.5 million expected to be committed by the end of January 2008 and the balance during the course of the year. Construction is due to commence in 2008 and first revenues are expected in 2009.

The logistics park site is approximately seven km from the Port of Haldia and around 140 km from Kolkata. It is situated in a strategic location in Haldia, a fast growing port and a large-scale petrochemicals centre with an oil refinery, fertilizer facilities, manufacturing plants and various light industries. It will be developed to provide distribution warehousing and transport services as well as ancillary facilities such as commercial offices, hotels, shopping malls, and light processing workshops.

The Haldia logistics park is the Eredene Group’s fourth investment since it announced a broadened investment strategy in June 2007. The Eredene Group has now committed a total of £25.6 million in real estate projects in India, 46% of the £55.4 million of net funds it raised in 2006.

Alastair King, founder and Chief Executive of Eredene, commented: “Haldia is a fast growing chemical hub and this will be the first organised integrated logistics park there. This is our first joint venture with Apeejay Surrendra who are investing on identical terms alongside Eredene on this project. This is also our first project in East India where Apeejay Surrendra are strong and experienced.”

Karan Paul, Chairman of Apeejay Surrendra, commented: “The Eredene Group has a team with core experience in real estate and infrastructure connected with ports and logistics and we see them as natural partners in this development in Haldia. We look forward to working with them on this and future projects.”

Haldia has good road and rail connectivity to the rest of India through two national highways (NH 41 and NH6) and a rail line linking it to the South Eastern Railway network. Some of the biggest national and international petrochemical companies have manufacturing plants in Haldia, including Indian Oil Corporation, Tata Chemicals, Mitsubishi Chemical Corporation and Haldia Petrochemicals Ltd.

The West Bengal Industrial Development Corporation (WBIDC) and Tata Steel have recently established a joint venture company at Haldia to build a coking plant to produce 800,000 tonnes of coke a year. The WBIDC has also announced that an additional chemical industry centre, known as the ‘Mega Chemical Industrial Estate’, is also being proposed on a 10,000-acre site in Haldia.

The State of West Bengal has two modern ports - Kolkata and Haldia - which together handled 53.0 million tonnes of cargo in 2005-06, the second highest among major ports in India. In the last four years (2002-2006), the two ports increased their cargo volume by 22.6 million tonnes, an increase of 74%. Currently both ports are being modernised and upgraded to cope with this growth which has also spurred demand for logistics and distribution facilities of the type that the JV company is building in Haldia.

Haldia Port is located around 140 km south of Kolkata. It is situated at the confluence of the Haldia and Hooghly rivers and has comprehensive port cargo handling capabilities with a fully equipped container facility and a specialised jetty for handling bulk chemicals.

Eredene’s first new project in its broadened investment strategy is an investment of up to £16.4 million in a company developing around 185,000 low-income residential units on the outskirts of Mumbai (announced on 31 July 2007).

Eredene's second project is an £850,000 investment in a 28-acre Container Freight Station (CFS) project in the Southern State of Tamil Nadu where it has a 49% stake in a special purpose vehicle developing a site which will service both the ports of Chennai and Ennore (announced 28 September 2007).

Eredene's third project is a 32-acre CFS project in the south of Gujarat State where it is investing up to £3 million for a 40% stake in a special purpose vehicle which is developing the first dedicated CFS at Pipavav, a fast growing port (announced 8 October 2007).