The Hindu Business Line : Simplex to foray into civil construction of gas pipeline, power

THE Rs 1,000-crore construction major Simplex Concrete Piles (India) Ltd is planning to enter civil construction in the emerging sectors of oil and gas pipeline, power transmission, hydroelectric and nuclear power generation during the year.

The company, which is increasingly taking part in the construction of refineries and petrochemical projects in India and abroad, currently enjoys an order book position of Rs 3,800 crore to be executed in the next two years.

Talking to newspersons here today, Mr Amitabh Mundhra, Director, said to enter into these highly specialised areas may lead to capital expenditure for acquisition of equipment.

Asked whether the company was considering taking the capital market route for infusion of fresh capital, he said, "As on date we do not need fresh funds. We will consider the option as and when the need arises."

Earlier, the company's Chairman and Managing Director, Mr B.D. Mundhra, said the company had grown by 53 per cent from Rs 652 crore to Rs 999 crore in 2004-05.

Profit-before-tax had shot up by 141 per cent to Rs 34 crore (Rs 14 crore) and profit after tax was up from Rs 9.7 crore to Rs 25.17 crore.

Keeping in tune with its improved performance, the company had also increased its dividend from 15 per cent to 45 per cent.

Elaborating on the reasons behind the improved performance, he said that the last two quarters of 2004-05 were particularly good for the company as its decision to move to engineering, procurement and construction (EPC) of large projects in power, petrochem had paid rich dividends.

Among the EPC contracts secured recently are Rs 100-crore civil construction of Qatar Petrochem; Rs 106-crore contract for New Doha Hotel at Doha in Qatar; Rs 980-crore turnkey contract from Nagarjuna Power Corporation in India; and Rs 208-crore contract from Jindal Power Ltd in Chhattisgarh. Overall, EPC contracts contribute 40 per cent to the company's revenues.

Piling continues to be a major business activity contributing 10 per cent of the total business.

The company is planning to enter the CIS countries. Mr Amitabh Mundhra said the large business potential in these countries was being explored.

Meanwhile, the company has decided to set up a 50:50 joint venture company with Almoayyed group of Qatar to undertake business opportunities in that country. Named as Simplex Almoayyed Wll, the company will initially undertake piling work.

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