SRF Limited, a leading Indian multinational in the chemical and packaging films business, has signed a significant land purchase agreement worth Rs 282.41 crore with Tata Steel Special Economic Zone Limited (TSSEZL) to fuel the expansion of its specialty chemicals operations.

The deal, disclosed in a regulatory filing to the stock exchanges, involves the acquisition of 100 acres of land within the Gopalpur Industrial Park in Odisha, a multi-product SEZ developed by TSSEZL.

Key Details of the Deal:

• Parties Involved: SRF Limited (Buyer) and Tata Steel Special Economic Zone Limited (Seller).

• Transaction Value: Rs 282.41 Crore (Rupees Two Hundred Eighty-Two Crores and Forty-One Lakhs).

• Asset Acquired: 100 acres of land on a freehold basis.

• Location: Gopalpur Industrial Park, Ganjam district, Odisha.

• Purpose: To set up a new manufacturing facility for the company’s chemical business.

Strategic Rationale Behind the Move

This acquisition is a strategic step by SRF to secure a large, contiguous land parcel for its long-term growth plans. The chemical sector is a major profit driver for SRF, and this new facility is expected to cater to the growing domestic and international demand for its specialty chemical products.

The choice of location offers several advantages:

1. SEZ Benefits: Being located within a Special Economic Zone provides significant fiscal benefits, including tax exemptions and duty-free imports for production, making exports more competitive.

2. Infrastructure: The Gopalpur Industrial Park is a developed zone with ready-to-use infrastructure like roads, water supply, power connectivity, and a port nearby, which will accelerate the project’s timeline.

3. Logistics: The proximity to the Gopalpur Port provides excellent logistics connectivity for importing raw materials and exporting finished goods, a critical factor for a chemical business.

What This Means for SRF

The new facility will allow SRF to diversify its manufacturing footprint beyond its existing sites and de-risk its operations. It is expected to house multiple plants for manufacturing advanced chemical intermediates and products, which are used in various industries including pharmaceuticals, agrochemicals, and refrigeration.

This expansion is aligned with SRF’s stated capital expenditure (capex) plans, which heavily focus on the high-margin chemical segment. The company has been consistently investing in scaling up its capacity to maintain its edge in the global market.

Market and Regulatory Reaction

The announcement was well-received by the market, reflecting investor confidence in SRF’s growth strategy. The company stated that the transaction is subject to customary closing conditions and necessary approvals as per the SEZ Act.

This move not only underscores SRF’s aggressive expansion strategy but also highlights the state of Odisha’s growing prominence as a preferred investment destination for large-scale industrial projects.