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KEC International to speed up mechanisation, automation

To compensate for COVID-induced labour shortage

Mass migration of labourers, KEC International, Mechanisation and automation, Shortage of workers, Jobless migrant workers, COVID-19 pandemic, Vimal Kejriwal, RPG Group, Power Transmission and Distribution, Cables and railways

With mass migration of labourers becoming a cause of concern, engineering firm KEC International has decided to adopt mechanisation and automation to compensate for the shortage of workers.

The COVID-19 pandemic and the subsequent lockdown prompted millions of jobless migrant workers to flee cities and return to their home towns.

"We have to live with this migration and we don''t think they will return any time soon. Also, we are not sure if we would get the same set of skilled labourers.

"Therefore, we will have to retrain and reskill the local labourers who have returned from other cities, the company's Managing Director and CEO Vimal Kejriwal said.

However, he noted that this cannot be a long-term solution and to improve productivity, the company will have to adopt mechanisation and automation.

"We are also reworking our capex plans. While we have decided to reduce our CAPEX in certain areas, we will instead deploy some funds on mechanisation and automation for improving productivity.

"We had planned a CAPEX of Rs 250 crore for the year, but we may now spend Rs 100 crore," Kejriwal added.

KEC, the flagship company of the RPG Group, is a turnkey solutions provider and engaged in the business of power transmission and distribution (T&D), cables and railways, among others.

The company has an order book and L-1 (lowest bidder) position in excess of Rs 24,000 crore. "This order book gives us clear visibility of revenue over the next 18-24 months. But in case of future orders, we are expecting good number of contracts being awarded by the government agencies in power T&D and railways as well as some metro projects. Some states have postponed tendering due to the lockdown, but are expected to award them in second quarter of the year," he said.

Asked about order inflows from the private sector, Kejriwal said, "There has been a slowdown in contracts from the private sector for quite some time and now with COVID impacting their businesses, we don''t expect them to come at least in the near future. So the dependence on government orders will be higher."

The company, which has significant international presence as well, reported about 3% decline in consolidated net profit at Rs 192.88 crore for the quarter ended March 2020 as against Rs 198.76 crore in the corresponding period last fiscal.

The company reported revenues of Rs 3,673.73 crore during the period as against Rs 3,845.51 crore a year-ago.

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June 2020
10 Jun 2020