Companies

VA Tech Wabag sees increase in order flows

R. Balaji Chennai | Updated on November 12, 2017

Focuses on China, Turkey, Saudi Arabia, Philippines

Industrial orders and public-private partnerships in water management support VA Tech Wabag's order flow in the domestic markets.

In the international markets, North Africa is a dampener as projects are stalled in some markets. But it has offered an opportunity to grow elsewhere for the multinational, integrated water management company, says its Managing Director Mr Rajiv Mittal.

Power and oil and gas have contributed to two-thirds of the order intake which was around Rs 1,300-1,400 crore last year in the domestic market. Normally, the municipal sector accounts for about 70-80 per cent of the company's orders. But due to State elections orders had dried up in the second half of last year, he said.

Industry orders are comparatively smaller, in the Rs 100-200 crore range; margins are tight and technology intensive. But cash flows are faster and more secure, he said.

But clear signs of reforms in public water sector bode well in the long term.

In Maharashtra, the company has bagged a couple of water treatment contracts in PPP projects each of about Rs 100 crore with 20-year servicing contract which represents a further Rs 80-100 crore business.

International Markets

In Gujarat, bids are to come out for large desalination and wastewater recycling projects which the company will jointly bid with Sumitomo Corporation, Japan, with which it has an alliance to partner in capital intensive, water infrastructure development.

International markets contributed about Rs 700 crore to the order book totalling Rs 3,400-3,500 crore, 25 per cent bigger as compared with the previous year.

China, Turkey, Saudi Arabia and the Philippines will be in greater focus as VA Tech now devotes more resources which were earlier devoted to North Africa. The company has floated a subsidiary in the Philippines; and in Saudi Arabia is scouting for a local partner.

North Africa Hit

In Libya, VA Tech Wabag's largest market in North Africa, there has been a ‘bit of set back' with two projects totalling €35 million stalled. But the company has Letters of Credit from strong European banks and nearly 70 per cent of the projects have been completed. It recently bagged a €28-million order which is yet to start and was set to bag €90-million order that did not materialise, he said.

In Egypt and Tunisia, the situation is back to normal but there are no new orders. Algeria its fourth market in the region the situation is normal.

Published on April 28, 2011

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