Chennai: Engineering company Shriram EPC Ltd plans to diversify into the business of converting coal to fuel gas and is exploring opportunities to expand its wind and biogas power generation business in South-East Asia.
T Shivaraman
Managing director and CEO
However, he said it was difficult to estimate the contribution of these new businesses on revenues of the company that primarily provides engineering, procurement and construction services to energy projects, besides making wind turbines.
Deal sizes for the conversion of coal to fuel gas would vary between Rs40-140 crore, depending on the scope of the project, while converting coal to synthetic fuel could be worth around Rs300-400 crore each, Shivaraman said.
For coal gasification, the Chennai-based firm has an agreement with German company Envirotherm GmbH, which has technology to generate synthetic and fuel gas from solid feed material, among other capabilities.
Shriram EPC recently entered into an engineering, procurement and construction contract worth Rs40 crore with Jindal Steel and Power Ltd to supply producer gas through coal gasification.
More such deals are in the pipeline, Shivaraman said.
The company is also looking to expand in countries such as the Philippines, Thailand and Vietnam, among others.
Shivaraman said the company has received the letter of intent (LoI) for a 10MW wind power project from a Thailand-based client and is in talks with more for similar deals.
“The South Asian countries are agriculturally very rich but there is not much awareness (about wind power and bio-mass projects). Thailand is leading the other countries in the region but the data for the potential is not fully mapped,” he said.
The average deal size for a 1MW wind power project could be around Rs4-5 crore and the average wind farm size could vary anywhere between 7-15MW in South-East Asia.
The company had revenues of Rs703.04 crore and a net profit of Rs35.02 crore as on 31 March. Shriram EPC’s shares closed at Rs98.05, down 1.36%, on Friday, a day when the Bombay Stock Exchange’s benchmark Sensex rose 3.1% to close at 9,323.59 points.