TNEB and BHEL to set up 1600 MW project in Tuticorin Dist

Tamil Nadu Electricity Board (TNEB) and Bharat Heavy Electricals Ltd (BHEL) will be setting up a 2 x 800 MW super-critical thermal power project, the first such project in the state, at Udangudi in southern Tuticorin District at an investment of Rs 8700 crore.

Both BHEL and TNEB have floated a special purpose vehicle, Udangudi Power Corporation, to implement the 1600 MW coal-fired power critical power project, aimed at augmenting generating capacity of TNEB to meet the growing demand for power in the state.

State electricity minister Arcot N Veerasami laid the foundation stone for the project on 22 February in the presence of Union minister of state for power Jairam Ramesh. BHEL and TNEB signed the joint venture agreement for the proposed project in November 2008.

The project will see TNEB and BHEL investing 26 per cent each as equity while the remaining portion will be raised as debt from financial institutions.

While the power project is awaiting clearance from environment ministry, the feasibility report and the detailed project report have been finalised. Over 760 acres of land at Udangudi have been allotted for the project. The first unit of the project will be commissioned by March 2013 and the second unit by September 2013.

BHEL will supply boilers and turbine generators for the project. Of the total installed power generating capacity in Tamil Nadu, BHEL sets account for 5808 MW.

TNEB is already undertaken works for establishing additional power capacity in its thermal power stations. It is adding 600 MW of capacity at Mettur Thermal station and 1200 MW capacity in North Chennai power station. In 2009-2010, the power generation capacity of Tamil Nadu is expected to increase to 11,533 MW on commissioning the Koodankulam Atomic Power Plant and expansion project of Neyveli Lignite Corporation, Tamil Nadu finance minister K Anbazhagan said, presenting the 2009-10 budget.

Ashok Leyland eyes more non-truck business

Hinduja Flagship Ashok Leyland (AL) looks to increase contribution of non-cyclical (non-truck) business and garner almost of half of its revenues from the non-truck business in the immediate term.

Ashok Leyland, hit hard by slow down, reported 60-70 per cent drop in sales in the last three months. It has undertaken several cost-cutting measures to combat the slow down pressures.

AL will be cutting its capital expenditure to Rs 2000 crore from the earlier plan of Rs 3200 crore - Rs 3300 crore over the next three years. While it is freezing the capacity addition plan at Ennore, it will cut capacity at Uttarakhand plant to 50,000 per annum from the envisaged 70,000 units.

The company has also announced voluntary cuts in salary levels from managing director to lowest executive levels that would result in about 20 per cent reduction in total salaries and wages bill for the current year.

As the commodity prices have softened, ALL looks for some price reduction from the vendors to lower company's material cost by three per cent. Besides the company has announced cuts in overseas travel, executive class journey and ad and publicity programmes, among others.

Meanwhile to maintain the topline, the company seeks to grow its revenues from its non-cyclical businesses, which include non-auto engines, buses, exports and defence and spare parts. The total share of the non-cyclical business, which is 38-39 per cent of the total revenues, is likely to increase to 45-46 per cent in the current year and would exceed 50 per cent going forward, according to Mr K Sridharan, chief financial officer, Ashok Leyland.

AL expects to end the current fiscal with total revenues of about Rs 6000 crore of which around Rs 2800 crore is expected to come from non-cyclical business.

Amara Raja and Maruti ink pact for co-branded replacement battery

Hyderabad-headquartered automotive and industrial battery manufacturer Amara Raja Batteries has entered into an agreement with India's leading car manufacturer Maruti Udyog to launch a co-branded battery for the replacement market.
The new co-branded battery called 'Amaron MGB' will be available for all customers of Maruti's models such as Maruti 800 A/C, Alto, Wagon R, Zen Estilo, Gypsy, Omni, Swift and Esteem as part of Maruti's Genuine Spares offerings. This battery will be available in all 3000 plus authorized dealerships and outlets of Maruti.

Maruti Suzuki has already endorsed 'Amaron' brand of Amara Raja Batteries as replacement batteries besides OEM fitment for most of its car models.

Amara Raja expects to boost the market share through this tie-up. The company posted 37 per cent fall in net profit at Rs 18.72 crore for the quarter ended 31 December, 2008 compared with Rs 29.65 crore in the same period a year ago.

However, robust growth in industrial and automotive after-market segment helped the company post eight per cent growth in net sales to Rs 333.02 crore from Rs 307.88 crore in the corresponding period of the previous fiscal.

Jaydev Galla, managing director, Amara Raja Batteries, said that the company had improved market share in industrial battery division and retained share in automotive battery division, in spite of reduced offtake in the OE sector. The company is also going ahead with capex plans to expand medium (VRLA) valve regulated lead acid capacity in the face of growing market opportunity. Establishment of adequate capacity for motor- cycle and small VRLA is also underway.

Germany's Sew-Eurodrive sets up unit in Sriperumbudur

Germany-based leading drive engineering major Sew-Eurodrive has ramped up its gearmotor assembly capacity in India by establishing its second assembly plant at Sriperumbudur near Chennai as well as doubling the capacity at its Vadodara unit.
The company has invested about Rs 55 crore over the past three years in its expansion that include a new unit at Sriperumbudur, expansion of capacity at Vadodara assembly plant and SAP implementation in its factory. Post-expansion, Sew-Eurodrive India, a wholly-owned subsidiary of 1.8 billion euro Sew-Eurodrive GmbH, will have total capacity of 56,000 units per annum in India.

M J Abraham, chief executive officer, Sew-Eurodrive India, said that the expansion was in response to meet the growing demand for gearmotors and to meet the requirements of its customers in India. Construction and textiles are the fastest growing segments, followed by automobiles, steel and food and beverages in India.

Sew-Eurodrive India clocked total revenues of Rs 107 crore for 2007-08. It has been growing at a CAGR of 55 per cent over the last few years. However, the present slow down is expected to impact the revenues this year. The company employs about 185 people with sales and service network across 16 cities in India.

Globally, Sew-Eurodrive has 65 assembly plans and 12 manufacturing units, employing over 13,000 people.

Chennai Metro Rail – work to commence soon

Finally, the work for the much-awaited Rs 14,600 crore Chennai Metro Rail Project is set to take off soon. Hyderabad-based construction firm, Soma Enterprise, is to execute the first work of the project- elevated viaduct from Koyembedu to Ashok Nagar.

The 45 km underground-cum-elevated metro rail project secured cabinet approval on 28 January. The project will be implemented through a special purpose company, Chennai Metro Rail Ltd (CMRL). The foundation stone for proposed the metro project will soon be laid by the Tamil Nadu chief minister M Karunanidhi.

The Chennai metro project has achieved fastest financial closure among the metro rail projects in India by securing Japanese government funding in 12 months and Government of India funding in 14 months, said a statement of CMRL.

Of the total outlay of Rs 14,600 crore for the project, Rs 11,680 crore will be the share of state government and Rs 2920 crore will be the share of the Union government. Out of the state government's share, Rs 8646 crore will be mobilized through a loan from Japan International Co-operation Agency (JICA) and Rs 3034 crore will be met from Tamil Nadu government's funds, said Tamil Nadu finance minister K Anbazhagan.

The state government has made a provision of Rs 600 crore as state government's share in its budget for 2009-2010.
The Metro Rail project consists of two corridors, covering a length of 24 km, which will be underground and 21 km elevated. The project is scheduled for completion by fiscal 2014-15.

According to government document, the ever-growing vehicular and passenger demands coupled with constraints on capacity augmentation of the existing network have resulted in chaotic condition during peak hours of the day. The traffic in Chennai metro would see a growth of over 90 per cent by 2028 and public transport is seen as one of the key solutions to ease traffic in the city. It was felt that public transport should increase from the present 35 per cent to 60 per cent to keep pace with the growing traffic.

Hence, it was decided to build a metro rail system to provide a better public transport system in Chennai metropolis. The Metro system requires only 20 per cent of the energy used by a road-based system, causes no air pollution and creates less noise. It will occupy no road space where underground and only 2 metres where elevated. A single six coach metro train will remove 16 buses or 300 cars or 600 two wheelers from the roads at peak hours. It is expected that the trains will run every five minutes. The Metro is expected to shift 13 lakh passengers per day from the roads by 2026, save over 100 lives a year by reducing fatal accidents, and avoid 500 non-fatal accidents per annum and reduce journey times by 50-75 per cent, according to an official statement.