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BGR Energy May Forge JV With Hitachi Arm

21 June, 2010

Japanese major Hitachi Group appears to be upping its ante in India. BGR Energy Systems, a heavy electrical equipment maker, may enter into an equity joint venture with a unit of Hitachi.

The Hitachi arm is likely to pick up to 50% stake in the Indian joint venture with BGR in the power plant equipment space, sources close to the development told VCCircle.

The deal may help BGR gain from Hitachi’s technical knowhow while the latter will get a direct presence in India. BGR, which currently imports boiler, turbine, generator (BTG), will now be able to manufacture these in India.

The ventures are expected to be in the areas of turbines and boilers. The development comes as BGR Energy’s subsidiaries, BGR Boiler Pvt. Ltd and BGR Turbines Pvt Ltd, entered into technical collaboration with Hitachi in April this year.

The German unit of the Japanese multinational entered into an agreement for 660 MW, 800 MW, 1000 MW and 1100 MW supercritical steam generator  (boilers) with BGR Boiler Pvt Ltd, the company had informed the exchanges. BGR Turbines Company Pvt. Ltd. entered into technical

collaboration with Hitachi Ltd for 660 MW, 700 MW, 800 MW and 1000 MW for supercritical steam turbine and generator.

BGR Energy had earlier entered into a joint venture with global engineering major Foster Wheeler AG, which later fell through. An email sent to BGR Energy spokesperson remained unanswered at the time of filing this story. When contacted, the spokesperson declined to comment.

BGR has submitted bids for four projects worth Rs 14,000 crore, including for the engineering, procurement and construction of a 2X660 MW power plant in Rajasthan worth Rs 12,000 crore, its CFO P R Easwar Kumar recently told DNA. BGR also has plans to become an independent power producer as it looks to integrate its operations.  BGR Energy recently got a 1,320 mw coal-fired plant project in Orissa and is also currently developing a 2X660 mw coal-based project in Tamil Nadu.

Citigroup Venture Capital International-backed BGR recently reported an increase in consolidated total income to Rs 3,077.93 crore in FY10 from Rs 1,935.45 crore last year. Net profit grew by 74.32% to Rs 201.45 crore in the year ended March 31, 2010.

The share prices of BGR Energy were trading at Rs 772.6 at close of trade, up by nearly 1.83%. The share prices reached a high of Rs 773 in the morning trade today.

Hitachi has been increasing its presence in the country through acquisitions and joint ventures. Recently, Hitachi Construction Machinery Company increased stake in Telcon Construction Equipment Company to 60%, buying another 20% from Tata Motors for a consideration of Rs 1,159 crore. Hitachi Transport System, another Hitachi offshoot, acquired Flyjac Logistics for nearly Rs 246 crore, establishing a solid footing in India’s logistics and warehousing space.

Recently, the group was also part of the six Japanese firms that entered into an MoU for the development of the Delhi-Mumbai Industrial Corridor.


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BGR Energy May Forge JV With Hitachi Arm

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