|
| Boom time for power equipment companies |
| PB Jayakumar / Mumbai Sep 02, 2009, 00:54 IST |
|
With huge amount of generation investment underway, supply chain rushes to keep pace
It’s raining orders for power sector equipment companies and allied supply chain industries.
The order books will swell further, as the government has allowed National Thermal Power Corporation and Damodar Valley Corporation to place orders for another lot of Rs 40,000 crore, reserved for domestic companies only.
Public sector Bharat Heavy Electricals Ltd is already sitting on an order book of Rs 1,24,000 crore and is struggling to double its manufacturing capacity to 10,000 Mw before the end of this year and to 20,000 MW by 2011, just to meet the current delivery timelines.
Larsen & Toubro’s joint ventures with Mitsubishi Heavy Industries of Japan for super-critical boilers and steam turbine generators are only in the construction phase, but the company has already bagged a 2x800 Mw steam turbine generator order from the Andhra Pradesh Power Development Corporation and Rs 4,000 crore worth of orders from the Jaypee Group for a 2x660 Mw power project at Nigrie in Madhya Pradesh.
L&T is investing around Rs 1,700 crore in the joint ventures with Mitsubishi at Hazira in Gujarat and another Rs 1,600 crore in building manufacturing capabilities for other allied power plant equipment and solutions.
While the order inflow in the entire first quarter of 2009-10 for L&T was Rs 9,500 crore, it bagged another Rs 12,000 crore in August. “L&T expects another Rs 10,000 crore orders in a month, mainly from the power sector. Infrastructure and oil and gas sectors will also support the order inflow,” A M Naik, chairman and managing director, said. The engineering major’s total order book position was Rs 70,030 crore at the end of 2008-09, a growth of 23 per cent over the previous year.
Sources said so far orders for about 45 supercritical units of about 45,000 Mw capacity have been placed by various power project developers. Of this, a majority are with overseas players, mainly Chinese companies. BHEL has tie-ups with Alstom and Siemens for manufacturing supercritical boilers and turbines. L&T-Mitsubishi, JSW-Toshiba, Bharat Forge-Alstom and Ansaldo-GB Engineering joint ventures are also building supercritical capacities in India.
Pune-based energy and environment solutions major Thermax’s order book has swelled to Rs 3,230 crore for the June quarter, 22 per cent more than the Rs 2,649 crore in the corresponding quarter of last year. Last week, the company teamed with US-based SPX Corporation to set up a joint venture for manufacturing air pollution handling systems for power plants, a niche area which lacks many manufacturers in India.
“Each of the boilers coming up in the country will require Rs 75-100 crore for setting up air pollution handling systems. We expect revenues of about Rs 500 crore in the medium term from this joint venture,” said S Unnikrishnan, managing director and chief executive of Thermax.
So, too, with ABB India, the Bangalore-based power solutions provider. It has an order book of Rs 76,223 crore, more than that of L&T. It mobilised Rs 21,116 crore of orders in the quarter ending June, and the majority are for electrical equipment and solutions.
Industry sources said due attention and investment have to be done in the transmission and distribution (T&D) sector to handle power evacuation issues once the new power plants start generation. “Inadequate T&D capacity will cause grid stability issues once the large power projects start generating,” said Rakesh Sarin, managing director of Wartsila India, a manufacturer of 25 Mw to 350 Mw flexible power solutions. Wartsila foresees huge growth potential in the coming years in this segment, he said.
Orders are also flowing for engineering, procurement and construction players and other Balance of Plant players. Even relatively smaller players such as BGR Energy, IVRCL Infrastructures and Simplex Infrastructure have a huge order backlog. BGR Energy has Rs 12,500 crore of orders at hand and IVRCL Infrastructures and Projects has Rs 15,000 crore worth, mainly from the power sector.
Similarly, power transmission players such as KEC International, Jyoti Towers and Kalpatharu Power Transmission are also having an unprecedented order backlog, said sources. Kalpatharu’s order book is at Rs 4,800 crore, including Rs 2,000 crore from overseas, and the company expects a growth of 25-30 per cent for the year. The RPG Group-promoted KEC International, one of the largest power transmission players in the world had, last week, bagged a major order worth Rs 780 crore. Its order book position, the best in its history, was close to Rs 5,155 crore for the quarter ended June. The company is confident of keeping the momentum in growth in the years ahead, according to its managing director and chief executive, Ramesh Chandak.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
