By James Mathew
Company will be hiring about 200-250 people locally - both technicians and management staff - to run operations at Dubai plant
India-based power infrastructure major KEC International, which has acquired a transmission tower manufacuring facility in Dubai, plans to use it as a supply base for its global operations, a senior executive of the company has said.
The Dubai plant has a manufacturing capacity of 50,000 Metric Tonnes (MT) annually and is strategically located with the proximity to Jebel Ali Port and Al Maktoum International Airport.
“We currently supply about 35,000 MT tower transmission lines from our facilities in India for our various projects spread across the Middle East and North Africa (MENA) region. We will now use the Dubai facility for meeting our entire requirement in the region,” Rajeev Aggarwal, Chief Financial Officer (CFO) of KEC International, told Arabian Business.
“We will also be supplying towers manufactured at the Dubai facility for our global operations as also for third party requirements,” Aggarwal said.
KEC, part of the $3.6 billion diversified Indian business group RPG Group, has made the acquisition in Dubai through its subsidiary KEC Tower LLC in an auction sale conducted by Emirates Auction Authority for an estimated $14 million.
The Dubai transmission tower manufacturing facility was earlier owned by Gulf Jyoti International LLC Dubai, a joint venture of Gulf Investment Corporation of Kuwait and Jyoti Structures of India on 70:30 equity stake basis.
The plant has been shut for last 2 years, after Jyoti Structures went into insolvency in India.
Aggarwal said they were hopeful of resuming operations at the Dubai facility in another 3 months.
“We will be hiring about 200-250 people locally – both technicians and management staff - to resume operations of the company,” he said.
The KEC CFO said there has been an increase in tendering activities for EPC projects and power infrastructure equipment in the last 6-8 months in the Middle East region and the company was hopeful of a significant uptick in business opportunities in the region in the next one year.
“This acquisition will provide KEC a strategic foothold to serve the markets with high growth potential in Middle East and Africa,” Aggarwal said.
“It (the acquisition) will also enhance the company’s credentials to secure additional business in the MENA region on account of local price preferences and fiscal benefits,” he added.
KEC has major presence in the MENA region, with EPC (engineering, procurement and construction) operations in 12 countries and tower and cable supplies in 13 and 10 companies respectively in the region.
The Middle East region has been contributing about $200 million in revenue to KEC’s in the last 3-4 years. Currently the company has about seven projects with a total contract value of $300 million.
Aggarwal said the rationale behind the acquisition was mainly cost-benefits in terms of logistics, delivery times and proximity to the company’s EPC clients.
With the Dubai facility acquisition, KEC now has 6 facilities, manufacturing transmission towers, railway & solar structures, monopoles and hardware spread across India, UAE, Brazil and Mexico, making it one of the largest globally operating T&D player.