The Hindu Business Line : Insulator co Saravana in talks for buying facility in Europe

Chennai, Feb. 26 The Chennai-based high voltage electro-porcelain insulator maker Saravana Global Energy Ltd (SGEL) is in talks with an insulator manufacturer in one of the European countries to acquire a manufacturing facility.

Speaking to Business Line, the Founder-Chairman and CEO of SGEL, Mr Padam J Challani, said the company was in the advanced stage of discussion and the deal would be finalised in a couple of months.

“The overseas company’s product lines, manufacturing processes, quality standards etc are in sync with those of our company and so we are interested in this acquisition. This will get us better inroads in the European Union and augment our exports.”

At present, the share of exports is around five per cent and in couple of years it would reach 40 per cent in the expanded turnover, he said.

SGEL makes sub-station insulators and has been rate contractors (preferred suppliers) for a host of customers including ABB, BHEL, Siemens and State electricity boards.

So far it has been manufacturing sub-station insulators at its manufacturing facility in Vadalur near Neyveli. In order to get in to manufacturing hollow insulators —meant for transmission lines, isolators, circuit breakers and switchgears, SGEL is setting up a green field facility at Chengleput.

The total project cost is Rs 200 crore and the company has received equity investment from NYLIM Jacob Ballas India Fund III, LLC (NYLIM JB India Fund), a Mauritius-based private equity investor. The $ 25-million (Rs 100 crore) funding was syndicated by MAPE Advisory Group. The rest of the funds required would be mobilised through a combination of debt and internal accruals, Mr Challani added.

The new plant with a capacity of 24,000 tonnes of insulators per year will be commissioned during June 2009. This will add to the existing capacity of Vadalur plant of 15,000 tonnes.

SGEL is also in talks with a leading MNC company in Europe to get ‘worldwide rate contractor’ status. Product evaluation has been going on now and the company would get the contract signed in couple of months, he said. This would enable the company to directly supply to different projects of the MNC across the globe, he said.

The company is also planning to make polymer insulators that find applications in transmission lines up to 2000 kV. At present, these insulators have huge potential in Europe and the US, as these are weather and tremor resistant due to its flexibility. It can find market in India once the transmission capacity is increased from the present 800 kV. Mr Challani said the project would envisage an investment of Rs 25 crore and be mobilised through internal accruals.

The company registered turnover of Rs 65 crore during 2006-07 and it hopes to report Rs 125 crore during the current fiscal.

The jump was due to the ramping-up of capacity at its Vadalur plant from 7,000 to 15,000 tonnes per year during the current fiscal.

Next year it would report Rs 250 crore due to the contribution from the second plant also, he said.

With the new plant it place SGEL would have the entire spectrum of power equipment products, he added.

More Stories on : Overseas Investments | Electrical Goods | Tamil Nadu

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page