The outlook on Voltas's electro-mechanical project (EMP) business —comprising 65 per cent of the total sales — has turned positive. The company is optimistic about the order inflow in this segment, as activity is picking up in the Middle East (about 60 per cent of the total EMP revenues). It is partly due to high crude oil prices resulting in higher infrastructure spending and commercial activity. The domestic EMP market, driven mainly by commercial real estate, is also recovering, albeit slowly.
International orders — 70 per cent of the total order backlog (5,000 crore) —mainly consist of the Middle East market, catering to Abu Dhabi, Dubai and Qatar. Voltas is also trying to increase exposure in Saudi Arabia and Oman. The company recently formed a 50:50 joint venture (JV) with Saudi Arabia-based Olayan Financing Company, which will be operational from April 2011.
Saudi Arabia is a lucrative market for Voltas due to its strong gross domestic product growth. The EMP market is almost the size of the GCC market and a lot of investments in infrastructure are planned. The JV will take up EMP projects and subcontract the same to Voltas for design, supply of equipment and project execution.
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