KEC International, through its wholly-owned subsidiary KEC Towers LLC, has acquired an automated transmission tower manufacturing facility for ₹100 crore.

This facility, with a capacity of 50,000 tonnes per annum, is located in mainland Dubai and was acquired through an auction sale conducted by Emirates Auction Authority, the company said in a statement.

Value-accretive

Talking to BusinessLine , KEC International Managing Director and Chief Executive Officer Vimal Kejriwal said that the acquisition comes at a time when the company is seeing demand pick up in West Asia and North Africa markets. “We believe this acquisition to be value-accretive to our stakeholders. If we had done this inorganically, it would taken us 3 years in addition to ₹300-400 crore in capital,” added Kejriwal.

Firstly, value will come from the location of this tower which is Dubai. “With the Dubai port 30 minutes away from the facility, it will save us logistics cost as well as time taken for shipments. It will cut down 30-40 days, which is the time that would have taken for the company to ship from an Indian port.

Kejriwal also pointed out that this acquisition is a part of the business continuity plan in case manufacturing is impeded. The coronavirus outbreak has disrupted the global supply chain, and several companies are resorting to contingency plans to ensure that supplies are continued.

Connect with customers

With this acquisition, KEC has six facilities, manufacturing transmission towers, railway and solar structures, monopoles and hardware spread across India, UAE, Brazil and Mexico with a total manufacturing capacity of up to 4,22,200 tpa. The deal also enhances the credentials to secure additional business in West Asia and the North Africa region on account of local price preferences and fiscal benefits.

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