Friday, August 13, 2010

BGR in Rs 4,400-cr tie up with Hitachi, plans boiler unit

BGR Energy Systems Ltd has signed a memorandum of understanding (MoU) with Hitachi Ltd of Japan and its subsidiary Hitachi Power Europe GmbH Germany, to set up boiler and turbine manufacturing facilities in Tamil Nadu. The two projects will entail an investment of around Rs 4,400 crore and are expected to create 3,500 jobs.
With the establishment of these two ventures, BGR Energy will be the third company in India (after BHEL and L&T) to be able to offer complete boiler-turbine-generator (BTG) solutions to the Indian power industry.
B G Raghupathy, chairman and managing director, BGR Energy Systems, said that the company entered into an agreement with Hitachi Power Europe GmbH, and floated a new company BGR Turbines Company (P) Ltd, which would set up a turbine manufacturing facility with an investment of around Rs 3,000 crore.
Equity portion in the company will be Rs 900 crore. "For 26 per cent stake in the new company, Hitachi has invested Rs 234 crore, while the remaining will be invested by BGR Energy Systems," he said.
The new facility will commence production in 2012 and will have a manufacturing capacity of five units per annum of 660 Mw, 800 Mw and 1,000 Mw.
Another MoU was singed with Hitachi Ltd, Japan, to float BGR Boilers Pvt Ltd, which will set up a boiler manufacturing unit with an investment of around Rs 1,400 crore. The plant will go on steam by 2012 and will have a capacity to manufacture five units per annum of 660 Mw, 800 Mw and 1,000 Mw.
Equity investment in the company will be Rs 420 crore, of which Hitachi's equity investment will be around Rs 126 crore, and the rest would be BGR Energy's equity investment, said Raghupathy.
"We have identified three locations in Tamil Nadu to set up the manufacturing facilities and moved the proposal to the state government and waiting for their approval. We prefer to set up the facility close to a port," he added.
"Our focus will be on the domestic market," added Hiraku Ikeda, deputy general manager, Hitachi Power Systems Company.
Raghupathy added that while the equity portion would be funded through internal accruals, the company was expecting to achieve financial closure over the next six months.
BGR Energy Systems Ltd is a Chennai-based company which is engaged in supplying systems and equipment as well as undertaking turnkey engineering projects.
http://sify.com/finance/bgr-in-rs-4-400-cr-tie-up-with-hitachi-plans-boiler-unit-news--news-kijbvjjejcb.html