EIL eyes fourfold growth
EIL is targeting a fourfold increase in turnover over the next 3 years with an eye on expansion in the Middle East, Africa and the CIS countries.india Updated: Apr 05, 2006 12:52 IST
State-owned infrastructure major Engineers India Ltd (EIL) is targeting a fourfold increase in turnover over the next three years with an eye on expansion in the Middle East, Africa and the CIS countries.
The cash-rich company made profits of Rs 1.12 billion ($25 million) in 2004-05 and expects to substantially improve on it during the just concluded 2005-06 fiscal.
"In three years EIL hopes to increase its turnover fourfold from levels of 2004-05," EIL chairperson and managing director Mukesh Rohatgi said.
The optimism stems from the fact that EIL has "an order book of around Rs.8 billion, with the highest ever overseas jobs, which account for about 45 percent of orders, and expect to double the order book in 2006-07", he said.
Most of the projects being undertaken by the company are consultancy and services contracts as well as lump sum turnkey (LSTK) orders both in India and overseas.
Engaged in engineering services, energy conservation and environment audit projects in Qatar, Kuwait and the United Arab Emirates (UAE) through a presence in these countries, EIL is bullish about prospects in the Middle East with major projects being undertaken in the region.
"The Middle East is important as it is investing heavily in infrastructure, refinery and petrochemicals projects," said Rohatgi.
"We are looking at various opportunities and are not averse to joining a consortium as our major strength is engineering and procurement services."
The company has recently established its presence in Saudi Arabia and is planning to open an office in Libya soon.
"We have just opened an office in Saudi Arabia and are basically looking at refinery and petrochemicals projects. During the Saudi king's visit to India we had signed a general cooperation agreement. We are looking at engineering services, which might fructify into joint projects," said Rohatgi.
"For Libya, we have the requisite permission from our own government and should soon get the permission from local government agencies. We are looking at their refinery, port infrastructure, design and engineering work in exploration," he added.
The company is also looking at Algeria from where it got a condensate refinery project worth around $35 million last month. EIL had bagged the Skikda Refinery contract in Algiers from the state-owned oil and gas company Sonatrach.
"Work on the Skikda Refinery of 100,000 barrel per day capacity has already commenced. A grassroots refinery, EIL's work in Algeria involves technology upgrade, engineering skills enhancement and participation in the LNG train project," Rohatgi said.
EIL also has some engineering service and construction management contracts in Iran and is also trying to make foray in refinery upgrade in Ghana and Nigeria.
In January, the company won a $20 million detailed engineering services order for Kuwait Petrochemical Complex from a consortium of Italy's Technimont and South Korea's SK Engineering Corporation.
The company is also exploring opportunities in CIS countries like Kazakhstan, Turkmenistan, Uzbekistan and Azerbaijan having received encouraging responses from these countries.
Within the country, EIL is involved with most of the refinery projects being undertaken by state-owned energy majors. The company has an array of projects in hand, including the Panipat Refinery expansion project, Mumbai Refinery and the Visakhapatnam Refinery.
It has also been asked by the Oil Industry Development Board (OIDB) to complete a detailed feasibility study for setting up strategic oil storages in the country with a total capacity of five million tonnes.