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Atlas Copco looks at Indian infrastructure equipment business

Atlas Copco looks at Indian infrastructure equipment business

Swedish equipment manufacturer Atlas Copco is considering investment opportunities in the Indian infrastructure business, especially in mining and hydropower, in an attempt to cash in on the boom in these sectors in an economy that is expanding at over 9% a year.

“We see tremendous opportunity in both the construction and the mining sector in India with the ongoing development in iron ore, coal, hydropower projects ... This gives the Atlas Copco group a good opportunity to participate as a serious ...equipment provider," said Jo Cronstedt, corporate business controller at Atlas Copco (India) Ltd.

In the year to March, Atlas Copco (India) earned revenues of Rs7,400 crore. India plans to add 16,501MW of hydropower generation capacity, one-fifth of the total generation capacity it plans to create, in the five years to 2012.

“Important hydroelectric power generation plants are being built and planned in the north-eastern part of the country where Atlas Copco has developed a large range of equipment for underground tunnelling work," Cronstedt said.

Hydroelectric power plants are more complex than thermal power plants and need specialized equipment and designs. Atlas Copco is also in talks with thermal power project developers for supply of equipment for coal mining.

“We are in close contact with all major producers and contractors in the power sector. As to naming our customers, we do not wish to expose any of them and consider that this is classified and propriety information," Cronstedt added.

Some of the company’s existing clients in India include Sinagreni Collieries Co. Ltd, Tata Steel Ltd, Steel Authority of India Ltd, Vedanta Resources Plc., NTPC Ltd, National Hydroelectric Power Corp. Ltd, Hindustan Construction Co. Ltd and National Highways Authority of India.

According to Dipesh Dipu, a manager with consulting firm PricewaterhouseCoopers, the mining business will grow on the back of rising demand for coal, bauxite and iron ore. The government recently allocated 15 coal blocks with reserves of around 3.6 billion tonnes capable of generating 18,000MW of power. Dipu added that continued growth in mining would depend on the ability of “equipment manufacturers" to “meet demand".

He said issues related to the “availability of equipment" were already beginning to hurt the sector.

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