Thaindian News

Chennai, May 27 (IANS) Chennai-based multi-national company (MNC) Va Tech Wabag Ltd, operating in the water treatment space, has chalked out multi-pronged strategies to make its mark internationally, said a top company official here Friday.

The MNC is working on its overseas acquisitions, consolidation of overseas operations, focusing on operation and maintenance (O&M;) of water projects and synergising global procurement for improving its international performance.

“We are hopeful of closing one or two acquisition deals this fiscal. We are looking at Latin American and Eastern European countries for acquisitions. We have a cash balance of around Rs.350 crore which will be used for acquisitions,” Managing Director Rajiv Mittal told reporters here announcing the company’s annual results for 2010-11.

He said the company will be consolidating its overseas presences while converting its branches in China and Turkey into wholly owned subsidiaries.

Asked about the impact of the Libyan crisis on the MNC’s operations in that country, Mittal said: “Financially there is no impact for the company as we have got our money from the bankers based on the Letters of Credit. Further the project is covered under export credit insurance from an Austrian institution OeKB.”

The Rs.1,241 crore revenue company has decided to focus more on O&M; contracts of water projects as the margins are double that of engineering, procurement and construction (EPC) contracts.

“Our plan is to have O&M; revenues contribute around 20-25 percent to the company’s topline,” Mittal said.

Va Tech Wabag has floated a joint venture in Oman partnering with Zawawi group to tap the O&M; business there. The Omanese partner holds 30 percent stake in the joint venture company.

Va Tech Wabag is the EPC and O&M; contractor for the Rs.1,033 crore desalination project coming up near here.

“The EPC component is around Rs.533 crore and the O&M; component will be around Rs.500 crore. The project will be completed by 2012,” he said.

As a part of two different consortiums Va Tech Wabag has bagged EPC contracts worth Rs.155 crore in Maharashtra — Rs.100 crore from Ulhas Nagar Municipal Corporation as part of Konark Infrastructure and Rs.55 crore from Aurangabad Municipal Corporation as part of SPML Infra consortium.

The value of O&M; contract for the Ulhas Nagar project for 30 years is valued at Rs.600 crore and that of Aurangabad project is Rs.72 crore for a 17 year period.

Mittal expressed confidence in converting the two Memorandums of Understanding (MOU) signed with the Gujarat government - one for waste water treatment plant and another for desalination plant - into contracts this fiscal.

According to him, the company’s order book position stands at Rs.3,402 crore.

Last fiscal, the company closed its books with a consolidated revenue of Rs.1,241.8 crore and an after tax profit of Rs.52.6 crore (excluding an exceptional item of Rs.12.9 crore) as against Rs.1,229.5 crore and Rs.44.8 crore (excluding exceptional item of Rs.3.1 crore) posted during 2009-10.

The Board of Va Tech Wabag Thursday, approving the last fiscal’s accounts, has recommended a dividend of Rs.10 per equity share of Rs.5 each.