Essar Projects Ltd is adding new services to its products portfolio that go beyond just providing basic engineering, procurement and construction services. From picking up a small stake in the projects that it executes for its global clientele to providing training to operators and helping the promoters raise equity for expansion, the Ruias controlled company is seeking to add a new dimension to routine EPC contracts.
“The idea is to become a part of the project and be with the promoters all through the execution and beyond,” Alwyn Bowden, managing director, says.
It embarked on this transformation recently with the $407.6-million contract from Jurong Aromatics Corporation in Singapore, which planted its presence in the South East Asian market. Essars picked up 4.99 per cent equity in the project.
“This is the first time we are picking up a stake in a project. This is mostly to reassure the promoters that we are not just an EPC contractor, but a part of the project. We will remain invested in it till the commissioning,” Bowden told
The Jurong contract is part of the $2.4-billion greenfield aromatics complex in Jurong Island to produce 1.5 million tonnes of aromatics.
The firm is close to getting another major contract in Africa in the onshore oil and gas sector. In this contract, it will be providing the additional service of training the project operators during the execution stage so that they are ready to handle the plant after commissioning. “We will be using the operational expertise of our group companies to provide training,” Bowden said.
Services such as helping promoters raise finances and equity, select the right technology and provide equipment are also being added to the portfolio.
This is helping transform the company from an in-house entity to a global EPC company. In 2010, its third-party contracts constituted just 18 per cent of its business, the rest being for Essar Group companies. “External order book stood at $ 1.3 billion as on March 2013. We are aiming to increase it to $ 6.8 billion by 2015-16, which would be 96 per cent of our total orders,” he said.