Backend savings fundamental

Having spent a lifetime in the business of steel wire making, Jhawar knows the wonders that backward integration do to his bottomline. So while working on an expansion plan, he is keenly looking at opportunities for backward integration.

The tycoon believes complete integration of the mines into his operations will help him make an additional saving of Rs 130 cr every year. With two coal mines under his belt, the tycoon is also looking to set up a captive 15 MW power plant, which would partly insulate his operations from high power costs. Alongside his expansion on the domestic turf, Jhawar is looking to strengthen his overseas operations as well.

He will soon be setting up a manufacturing facility on the land he purchased recently at Houston, in US. The Greenfield plant is likely to be operational by the end of October 2006. Knowing that he also needs to strengthen his presence in the European market, Jhawar is planning to set up a distribution center in Rotterdam, Netherlands at a cost of Rs 25 cr. Now that’s what we call wired up.

Engineering takeovers

Engineering and construction baron Atul Punj has over the years gradually built up a reputation in execution of overseas infrastructure projects. But the tycoon is taking a big leap into the future and is on the verge of acquiring a major construction firm in Singapore. The deal in all probability will be a first of its kind maneuver for an Indian construction firm. Though the tycoon refuses to talk, market watchers believe this takeover will cost around $50 mn over and above the existing guarantees the Singapore firm has pledged for different projects.

The tycoon believes the Singapore firm, which has an expertise in projects such as airports, ports, water and sewage treatment plants, underground storage facilities and large processing plants, will help his, Punj Lloyd expand its turf.

The takeover is expected to add to Punj Lloyd’s top line. Meanwhile, the tycoon is looking West too, and has just inked a 49:51 joint venture in Saudi Arabia. But just because his key forays are all around the world, Punj is not ignoring opportunities in the domestic market.

The tycoon has just bagged the Spread 1 Dahej-Uran pipeline project worth Rs 138 cr. Interestingly, the tycoon, despite his primarily engineering and construction focus is not prepared to limit himself to that arena.

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