NEPC in a Rs 20 crore expansion mode

NEPC India Ltd, which posted a net profit after eight years, is gearing up for capacity expansion.

The company is setting up an unit at Pondicherry to manufacture 1,800 wind turbines per annum, with an investment of Rs 20 crore over the next two years. It is also eyeing offshore investments in 2006.

The company, which still has an accumulated loss of Rs 60 crore, is proposing to make this investment with internal accruals. "Our order books are full for the next three years," Tirupathi K Khemka, managing director, NEPC India, told Business Standard.

This proposed project effectively means over two-fold increase in the company's production capacity. The company had made 600 machines in 2003-04 at its Ambattur plant. It is targeting to make 900 turbines in the current year. The installed capacity at Ambattur is for 700 turbines.

The initial investment in the project will be around Rs 4-5 crore Khemka said.

The work on the project will start in mid-June and the unit is likely to be commissioned by December, 2004. The 300 kw turbine, which is an improvised version of NEPC's current 225 kw model, is still on the design table. It is expected to cost about 10-15 per cent more than the 225 kw turbine.

The company, which parted ways with its Danish collaborator NEG Micon in 1996-97, has now tied up with Germany's RE Power for technology to make turbines in the 750kw to 2.5 mw range.

Interestingly, one of the key fallout points with Micon was over the Danish company's keenness to bring in higher capacity turbines.

To date the Khemkas are of the opinion that India is not the market for high capacity turbines. The current German tie-up is slated to service the African markets. The Khemkas are also looking at setting up a plant in South Africa with an investment of $10 million.

Since breaking up with Micon, NEPC has been working at greater degree of indigenisation. Today, the import component of its turbines have been reduced to about 3-5 per cent.

It domestically outsources about 60 per cent of its inputs. The rest is manufactured by the company.

PAT up to Rs 1.90 cr

The turnaround in 2003-04 saw NEPC India make phenomenal strides in its operational income, which rose by over seven times from Rs 18.33 crore in 2002-03 to Rs 159.02 crore in 2003-04.

The company closed the year with a total turnover of Rs 159.07 crore compared with Rs 23.16 crore during the last year and a profit after tax of Rs 1.90 crore as against the loss after tax of Rs 13.28 crore.