The project is likely to be completed by the spring of 2006.
The chairman of Schott AG, Udo Ungeheuer, said, "We will be in a position to produce the premium brand of special glass tubing Fiolax locally and enable Indian pharmaceutical packaging industry to advance its level of quality for both domestic and export markets".
Globally, the pharmaceutical tubing sector was the largest user of the product, followed by solar panels and home products.
"This is the reason that Schott is investing Rs 4000 crore for the expansion of its existing plant capacity, which produce 6400 tonne of out put per annum,." he added. After the new plant became operational, the Vadodara plant capacity would be doubled, Ungeheuer stated.
For the present project, the fund will be raised partly from internal resources of SGIP and some amount will be raised by the means of corporate loan, informed Ungeheuer.
The Indian pharmaceutical packing market was worth about Euro 32 million.
Mohan Joshi, director of SGIP, said, "At present, the Vadodara plant produces glass tubing made of neutral glass clear (NGC) and neutral glass amber (NGA), and after the new furnace is operational by the end of 2006, it will produce Fiolax glass tube, which is being imported presently".
With the production of Fiolax in India, the cost of this product in market is likely to go down by 15 to 20 per cent as it will not attract custom duty of 15-20 per cent. The company will source silica sand from Allabahad and Jaipur and import other raw materials from USA, China and other countries.