The decision comes at a time when India's drug manufacturing industry is tipped to grow 10 per cent over the next three years as more pharma firms shift some or all of their manufacturing operations there to cut costs.
The new facilities will be constructed over 130 hectares at Panoli, Gujarat, and it is planned that they will become operational during 2009, said the firm.
With an investment of Rs 115 crore (€19m), the new processing area will consist of 10-15 industrial units belonging to both Indian and foreign pharmaceutical companies in addition to JB Chemical's own units.
As well as contract manufacturing, the new facilities will also undertake in-house manufacturing.
JB Chemicals already has two US Food and Drug Administration (FDA)-approved facilities in the area - a bulk drug unit and a formulation unit - that manufacture the firm's own drug products.
It is estimated that the new industrial units, with a direct investment of over Rs 800 crore, will generate 6,000 new jobs as well as the indirect employment of 15,000 people.
Since 2000 the Indian government has been establishing various SEZs in order to boost exports in local regions across a number of industries, including pharmaceuticals.
The benefits offered by the latest SEZ proposed by JB Chemicals would give "a significant further boost to exports," the company said.