KEC International all charged up for acquisitions, CEO says

[caption id=“attachment_6728” align=“alignleft” width=“380” caption=“KEC International is looking to grow the non-transmission tower business from 26% to 40%. Reuters”]  [/caption]

KEC International, a listed transmission equipment maker, will continue to hunt for acquisitions to diversify its order book, which currently stands at Rs 7,800 crore. About 74% of that order book is from the transmission business. Ramesh Chandak, CEO, KEC International, said the company could look at growing the contribution of the non-transmission tower business to40% over three years.

The company is also focussing on enhancing revenue from markets outside India. Chandak said there is typically a 40% shortfall in power generation capacity in every Five-Year Plan. “Lower-than-expected power generation means less demand for transmission equipment,” he said.

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The situation, he added, was not very different in the US. The company estimated two years ago that over the next few years, the US would replace transmission lines across the country, which would generate business worth $ 47 billion for equipment companies. “The process is slow in the US too,” he said.

With an eye on the US market, KEC International acquired SAE Towers in the US for close to $100 million last year. It hopes to leverage the relationships built by this company to secure more orders.

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The company entered the railway signalling system business by acquiring a local private company, Jay Railway Signalling System, for Rs 14 crore. Chandak said the company would continue to look for targets to diversify the product portfolio and geographical spread of revenue.

The company’s operations in Syria, Egypt and Tunisia have been affected marginally by the Arab uprising in those countries. The company gets 15% revenue of the total Rs 4,568 crore from the Middle East and North African region. Chandak said that the company will have to look for new geographies to maintain the growth momentum.