Japanese major Hitachi Ltd is forming two joint ventures with Chennai-based BGR Energy Systems, an EPC company for power plants. The joint ventures will design, manufacture, sell and service steam turbines/generators and boilers for super critical thermal power     generation in 660 MW to 1,000 MW range. BGR becomes the third Indian  company after Bharat Heavy Electricals (BHEL) and Larsen & Toubro to enter this space.

VCCircle was the first to report in June that Hitachi and BGR are likely to convert their technical collaboration into an equity joint venture.

The steam turbine and generator joint venture will be named BGR Turbines Company Private Limited, with BGR Energy Systems and Hitachi taking 74% and 26% stakes, respectively. The boiler joint venture is to be called BGR Boilers Company Private Limited, with BGR Energy Systems and Hitachi Power Europe, owning shares of 70% and 30%,   respectively. The goal is for BGR Turbines and BGR Boilers to generate combined revenues of around 100 billion yen ($1.16 billion) in fiscal 2017, said Hitachi.

The Chennai-based company said BGR Turbines will come up with an investment of Rs 3,000 crore while BGR Boilers will have an investment outlay of Rs 1,400 crore.

India is expected to see the construction of thermal power plants capable of generating 15 GW per annum of electricity and is thus poised to become a major market rivaled only by China, said Hitachi in a release.

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 closed at Rs 797.8, up by nearly 1.85%. The share prices reached a high of Rs 814 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.

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