The Hindu Business Line : Patel’s move to expand overseas

Patel’s Engineering efforts to increase the share of overseas business is beginning to reflect in its order book. The company announced the bagging of a reservoir dam project in the US through its wholly-owned subsidiary. The order – Taum Sauck Reservoir Dam Reconstruction Project, worth $280 million ( Rs 1,130 crore) is to be routed through a joint venture between Patel’s subsidiary ASI Contractor and Fred Weber, a US-based civil contracting company and will use roller compacted concrete (RCC) technology.

RCC specialist: Patel Engineering already has access to US markets through its subsidiaries. It had also managed to gain technology (through the subsidiaries) that provides it an edge over other Indian companies and helps it compete internationally. RCC is a technology used for building dams by effectively reducing execution time through use of fly ash instead of cement.

This internationally accepted technology has already been used by Patel for domestic projects and has provided it with higher margins in the face of lower competition.

The current order is an indication of Patel’s desire to expand in markets in the US and Africa. While its current exports is about 10 per cent of revenues, capex plans of about $100 million would be targeted at improving foreign operations. Locally, Patel is present in micro-tunnelling and dam projects.

It specialises in high margin areas of RCC dams and micro-tunnelling. The company’s bid to improve overseas operations may provide further boost to the top line and also provide cushion against any domestic slowdown in orders.

With what appears to be the beginning of Greenfield and replacement infrastructure project order flows in Africa and the US respectively, Patel’s move to leverage the opportunities appears timely.

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