Maoist insurgency hurting industrial development in India

Reuters reported that the growing Maoist insurgency in India over large swathes of the mineral rich countryside could soon hurt some industrial investment plans just as the country suffers an economic slowdown.

While the economic impact may be small compared with India's trillion dollar economy, the insurgency and the sense that it is worsening signals that India does not fully control its own territory and adds to risks for companies mulling investments.

The Lalgarh incident worried the country's third largest steel producer, JSW Steel, which is setting up a USD 7 billion, 10 million tonne steel plant near Lalgarh. Mr Biswadip Gupta CEO of the company's West Bengal operations "We are waiting and watching, so are the others. On top of the economic woes, you have the problem of Maoists now. It is very jittery."

Mr PK Mahapatra executive the alumina company's executive director of mines and refinery said "We are more vulnerable and we have to remain alert."

Senior railway official said a strike by Maoists in east and central India, against police action in Lalgarh, it has hit supplies of iron ore and coal. Mr Soumitra Majumdar spokesman for the South Eastern Railways said "Exports have also been hit and if supplies get cut off in this manner, at least three steel plants in the region will be greatly affected soon."

Mr Anjan Roy analyst at the Federation of Indian Chambers of Commerce and Industry, referring to growth of industry said "It is still a law and order problem, but it has not been taken seriously and can have serious consequences if not dealt with properly."

The rebels, estimated to have 22,000 fighters, operate in large parts of the eastern, central and southern countryside and officials said they are now spreading to cities and bigger towns. The Maoists, who are fighting for the rights of poor farmers and the disenfranchised, regularly attack railway lines and factories aiming to cripple economic activity.

(Sourced from http://www.steelguru.com/news/index/2009/07/10/MTAxNTY5/Maoist_insurgency_hurting_industrial_development_in_India.html

Sunil HiTech Engineers upbeat on boiler turbine generator segment

 According to Mr Chandrashekhar Chincholkar CFO of Sunil HiTech Engineers, the company has immense scope in the boiler turbine generator. He said that “That is where the opportunity lies for us and that is where we hope to get larger order book going ahead.”

Mr Chindholkar said “First I will run through the basic numbers. The installed capacity of power in India is around 1, 18,000 MW out of which thermal capacity is roughly 95,000 MW. If you look at the 11 plan period that is from 2007-12, the government has a target of about 78,000 MW of power capacity and in the first 2 years of this plan period, what they have achieved is roughly 13,200 MW. So there is large shortage of power capacity and by the end of this particular plan period, we hope the capacity build up will increase by 55,000 MW. So there will still be a shortage of around 23,000 MW of power capacity which will get spilled over to next plan.”

He said that “Out of the entire capacity buildup that is likely to happen around 70% would be thermal, so on the thermal side roughly 4 crore to 4.2 crore is the per MW cost of which boiler turbine and generator contributes 55% and balance 45% is the Balance of Plant equipment. So that is where the opportunity lies for us and that is where we hope to get larger order book going ahead.”

He added that “We are basically in a cooling period. Our annual results will be declared tomorrow, so I would not be able to comment on that but if one looks at the board sector and what can really happen in the sector going ahead, I think going ahead the order book should improve.”

He also said that "The opportunity for us is on the boiler turbine generator side where we do the erection and commissioning. Apart from that on Balance of Plant side we do lot of packages in Balance of Plant and we are quoting for lots of Balance of Plant projects. So the basic opportunity for is for erection commissioning for boiler turbine and generator plus the Balance of Plants.”

He further added that “Opportunity is pretty large. If you look at our last year’s numbers they were in the range of 6.9% net and in the first 9 months the margins are in the range around 6%. Going ahead once we declare our annual results for FY 2009, there will be more clarity on margins but overall if you look at construction companies the margins have been hit this financial year.”

(Sourced from http://www.steelguru.com/news/index/2009/07/10/MTAxNTcw/Sunil_HiTech_Engineers_upbeat_on_boiler_turbine_generator_segment.html)

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