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EMCO to foray into S Africa


Mumbai-based EMCO, engaged in manufacture and sale of transformers and single-phase electronic energy meters in India, is planning to enter the South African market through acquisition or by setting up a manufacturing facility. The company is planning to invest around Rs50 crore.

Back in India, the company recently bagged orders worth Rs720 crore for setting up 18 power substations across the country. The company is currently exporting transformers from India to the South African market and the export revenues from these markets are in the range of $5-6 billion.

EMCO has also tied up with South Africa-based Edison Power to form a new joint venture (JV) company EMCO Edison Power. In the new company, which is likely to receive an investment of $20 million (around Rs100 crore), EMCO will hold 51% equity while Edison will hold the remaining.

The JV will set up the manufacturing unit in South Africa, which will make transformers up to 20 MVA, with the total annual capacity of 2,000 MVA annually. The JV plans to become a reliable power equipment supplier in South Africa and grow in the region through organic and acquisition route.

The company will also supply the entire range of transformers to South Africa and the neighbouring countries. Apart from the routine contracts, major investments planned by Western Power Corridor (Westcor) and huge transmission and distribution sector capital outlay planned by Eskom in the region will definitely give a boost to the JV and its business.

Regarding turnkey electrical substation projects and power grid business in India, the company has bagged 17-18 orders for setting up substations across the country including Maharashtra, West Bengal and Karnataka. The cost of each project will be around Rs30-40 crore. The company’s current order book size is around Rs1,500 crore and is likely to close deals worth another Rs300 crore by April 2009.

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