Dhunseri Group has lined up a Rs 1,250-crore investment in Panagarh to set up a packaging material unit, making it the largest private sector proposal on industry to come up after Mamata Banerjee came back to power for the third time in May.

The first phase of the unit will be ready by 2023, calling for an investment of Rs 450 crore. The next two phases will come up subsequently by 2026. Put together, these plants will make about 160,000 tonnes of plastic-based packaging material that goes into the making of packets for tea and wafers.

The foundation stone for the first unit was laid by chief minister Banerjee on Wednesday at Panagarh on a 38.1-acre land provided by the West Bengal Industrial Development Corporation at its industrial park.

The unit will be the first to make plastic packaging material in the eastern region, Chandra Kumar Dhanuka, executive chairman and promoter of the Dhunseri group, said.

After completion, this project will generate around 500 direct and 1,000 indirect employment.

“It will initially serve the demand of the eastern region. But when fully functional, we will send material to other parts of India as well as export,” Dhanuka said.

The project will be executed by Dhunseri Poly Films Pvt Ltd, a wholly owned subsidiary of Dhunseri Ventures Ltd, which will bring in Rs 170 crore as equity for the first phase.

The company is taking a Rs 280-crore loan from a German bank and the rest from HDFC Bank.

Order for the plant and the machinery has been placed with a German firm as well. Once fully functional, the business can generate Rs 1,500 crore revenue.

Apart from tea gardens in Assam, Dhunseri has three PET resin plants with Indo-Rama in Haldia, Panipat and Egypt.