The Hindu Business Line : Virgo Engineers expands overseas, steps into China

Pune, July 10 Pune-based manufacturer of industrial valves Virgo Engineers Ltd (VEL) is expanding both its overseas and domestic operations with a gusto that has prompted the Netherlands-based magazine Valve World to give it top bil ling and put it on the cover of its May 2007 issue.

The company that has been dubbed “a global company with world class vision” by Valve World set up a procurement office in China last month as a precursor to setting up manufacturing operations there over the next 18 months, founder director and Chief Executive Officer, Mr Mahesh Desai says.

With 85 per cent of the production of its major product, ball valves, earmarked for export, VEL invested in an overseas facility in Italy last year, deemed the global hot bed for valves. Virgo Europe Spa, the wholly owned subsidiary near Milan commenced production of large valves (30"-56") earlier this year. A couple of months ago, Virgo also enhanced its holding in the Oklahoma based ViNtrol Inc from 70 per cent to 100 per cent, and moved its assembly operations to bigger premises to enhance production.

Plant in Coimbatore

In the domestic arena, in addition to three manufacturing facilities at Pune, including a hi-tech plant at Hinjewadi that got off the ground last year, VEL is setting up a new plant at Coimbatore, considered the valve capital of southern India. The process of land acquisition is over and the greenfield plant is scheduled to go on stream in April next year.

To justify its billing as “one of the world’s fastest growing valve companies”, VEL, that was established in 1986 with a capital of Rs 2 lakh, closed the last fiscal with a topline of Rs 306 crore. It expects to close this year at over Rs 500 crore, despite the dollar depreciation, and touch Rs 1,000 crore over the next two years. The growth will be both organic and inorganic says Mr Desai. “We will add products along the way, and even look at acquisitions,” he adds.

Late last year, VEL raised $10 million from Tano India Private Equity Fund. A proposal to enter the capital market with an IPO is expected to come up at a board meeting slated for next month.

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