Patel Engg plans overseas expansion

Plans to invest Rs 400 cr in equipment and allied areas.

Patel Engineering, a leading player in the construction of dams, hydro-power and sewage projects, is aiming to ramp up its presence in export markets, especially such fast growing markets like the US and Africa.

Towards this end, the company plans to invest nearly $100 million (about Rs 400 crore) over the next two years, in equipment and allied areas, in a bid to strengthen its overseas operations.

Patel Engineering already has a subsidiary, ASI Contractor Inc, in the US, through which it implements projects in the region.

A top company executive said Patel Engineering aims to earn about 25 per cent of its turnover from foreign markets over the next two years, against about 10 per cent of its Rs 1132.87 turnover earned from foreign markets in the first nine months of fiscal 2007-08.

The company's total order book at the end of the December 2007 quarter was worth nearly Rs 5,500 crore.

Rupen Patel, managing director, Patel Engineering, said "One is witnessing large infrastructure projects being announced in the US and in Algeria and neighbouring countries. We are keen to leverage these growth opportunities."

In the domestic market, the company is attempting to leverage opportunities from several micro-tunelling projects (which is essentially sewage disposal infrastructure) that are being implemented by municipal authorities in urban areas.

As part of this strategy, Patel Engineering is planning to invest nearly Rs 100 crore over the next two-three years for purchasing additional tunnelling equipment.

The company is also looking to shortly complete an overseas acquisition of a coal mine, located either in Mozambique or Australia.

Patel Engineering is understood to be looking for an overseas acquisition of a mine in the range of $50 - $100 million and this acquisition is being done in a bid to ensure adequate coal supplies for its 1200 mw power project, being set up at Bhavnagar in Gujarat.

Patel Engineering has, through its subsidiary Patel Realty, developed 40,000 sq ft at its Corporate Park located in Jogeshwari, which has been leased out to corporates at a monthly rate ranging from Rs 120-150 a sq ft, on a bare shell basis.

The company expects to finish another 40,000 sq ft of development at Corporate Park by July-August 2008 and this will also be given out on lease.