Emco to enter high-voltage switchgears

Link: Emco to enter high-voltage switchgears.

Thane-based Emco Ltd, India's third-largest transformer company, has decided to add one more product to its portfolio.

The company is looking for prospective technology partners in Japan and China to enter into high-voltage switchgear manufacturing in the country.

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Rajesh Jain, chairman and managing director, Emco Ltd said, "Since the company is aspiring to become an end-to-end solutions provider in power transmission and distribution segment, a diversification into switchgear manufacturing is an obvious move."

He said Emco is currently looking to get into a technology sharing agreement with an overseas player, which is likely to be in Japan or China.

"Things are at an advanced stage and a decision will be taken in a few months time," Jain said. Two years down the line, the company will have a new manufacturing facility to roll out high-voltage switchgears, he added.

Jain said India's switchgear market is estimated at about Rs 8,000 crore now and growing at 14-15% per annum. "The major players in the high voltage range are ABB, Crompton Greaves, Areva T&D and Siemens."

Jain said Emco Ltd, whose core expertise so far has been transformer manufacturing, is now gradually moving towards project business.

"Under the project business, we will take up complete turnkey solutions in transmission and distribution - right from setting up of 400 KV substations, setting up of transmission lines of 400 KV to 760 KV, manufacturing transmission towers, metering solutions, providing transformers and high voltage switchgears," he said.

The project business is expected to contribute revenues to the tune of 25-30% for the financial year ended March 2008. In the next two years, the company expects this division to contribute over 50% of the total revenues. "Therefore, in two years from now, the project business will become the flagship business of the company," he said.

The revenue target is above Rs1000 crore in the next two years, Jain said.

Emco is also upgrading its tower manufacturing capacity from 20,000 metric tonnes, which it had after the acquisition of Baroda-based Urja Engineers, to 45,000 metric tonnes. The capacity expansion is to be completed by May 2008.

Analysts Rahul Agarwal and Navneet Iyengar, in a March 6, 2008 report said: "Post-expansion, the merged entity would have transmission-tower manufacturing capability of 45,000 MT. Urja is qualified to bid for all state government and PGCIL contracts. This provides Emco with an edge in terms of providing 400 KV transmission lines along with its 400 KV transformer manufacturing capability. The focus is to become an end-to-end solutions provider for the EPC business."