Kirloskar Brothers will soon be entering the turnkey projects business in the infrastructure development sector.
KBL chairman Sanjay Kirloskar said on Wednesday that the recent acquisition of Aban Construction has equipped the firm to look at the opportunity of working as the engineering, procurement and commissioning contractors for infrastructure projects, especially in the water and oil and gas sectors.
"We see significant synergy between KBL's core business and the construction business and now plan to aggressively grow the areas of business for Aban Construction by combining focus on the quality aspects of both the companies," Kirloskar said.
KBL acquired Aban Construction on Friday, for a consideration of Rs 57.5 crore (Rs 575 million). Aban has a strong reputation in the construction business and oil and gas pipelines.
Kirloskar said, the company can now bid for projects in oil and gas, tunneling of hydel projects or cross-country pipelines.
Another area of interest could be the construction of power plants, he said adding that this will add significantly to the company's customer base.
The firm will soon bid for a $12.5-million water project in Sudan and also explore opportunities in the overseas market, said KBL Director RK Srivastava. He added that the company, canalling and other civil construction activities.
Kirloskar clarified that Aban Construction will retain its identity and will be a wholly-owned company of KBL. "They will have to compete with others for participating in the projects, as the Kirloskar Group companies always 'sell' to each other; they don't buy from each other," he stressed.
He further added that the company is now present throughout the spectrum of services required by its customers and will expand its business in the pumps business. "This may happen in sync with the acquisitions of suitable pump manufacturing companies in India or abroad and selling to group company and SPP Pumps, UK for the world markets."
The Rs 204-crore (Rs 2.04 billion) that the firm got by selling its stake in Kirloskar Copeland is still intact and the company has a kitty of about Rs 250 crore (Rs 2.5 billion) for acquisitions.
"There is however no suitable acquisition target before the company," he said. He also indicated that the company may set up assembly units in Africa or South East Asia, where there are no pump manufacturing facilities currently.
