Sanghvi Movers plans Rs 300 crore capex

Riding on the infrastructure sector boom in the country, industrial cranes hirer Sanghvi Movers Limited (SML) has planned to expand its fleet of cranes by investing about Rs 300 crore in the next two years.

The investment in the current year (2007-08) would be Rs 165 crore while the company will invest Rs 140 crore in the year 2008-09, SML chairman and managing director Chandrakant Sanghvi told Business Standard.

"We plan to have a fleet of 280 cranes with an asset gross block of Rs 765 crore," Sanghvi said, adding that the manufacturers of cranes the world over have stopped accepting fresh orders as the delivery schedules are long and they can't commit prices today.

Sanghvi informed that the company has invested Rs 41 crore for new cranes in the first quarter ending June 2007 and has tied up funds from a consortium of bankers for the rest of the investment.

After working for a long time with Oil & Natural Gas Limited, SML has gradually shifted its focus to the wind mills sector and currently earns about 60 per cent of its business from two clients; Suzlon Energy and Enercon, Sanghvi said.

He, however, stressed that the market expansion has indicated that there will be a further shift in the business mix, as nearly half the company¿s income is expected to come from the power sector. The other major sectors will be petroleum and steel plants, he said.

Sanghvi said the company has shifted its strategy from acquiring used cranes to buying freshly built cranes and also from low capacity equipment to heavy duty equipment.

"Today the clients want to complete the projects faster so they prefer to assemble the entire payload on the ground and then erect it in one go thereby saving significantly on time cost and of course financial burden," he said.

SML has thus a high proportion of cranes with capacity of 350 tonnes and more and is the world's 12th largest and Asia's largest fleet of cranes.

Sanghvi said the company is also looking at opportunities in the offshore crane hiring business and invest in barge mounted cranes for the oil drilling sector. He said there are indications from clients such as Suzlon that that the latter will want SML to be its partner in EPC business overseas.

The client will supply the windmills and also undertake to erect them, using cranes supplied by SML, he explained.