Achieve Greater Heights in the Years to Come
By Keshav Saran, Chairman & Managing Director, Engineers India Limited
 

THE INDIAN ECONOMIC OUTLOOK
The Indian economy has been passing through a bit difficult phase for some time. There are, however, some redeeming feature such as several economic reforms measures, substantial foreign exchange reserves, higher foreign direct investments and low balance of payment deficits that go towards boosting confidence levels in the economy. Amongst various reasons, a part of this slow down could be attributed to a global slow down as we are not insulted from what is going on in rest of the world and also the slow down in the productive investment in the economy. Efforts are being made for stepping up the public investment and also private investments to improve the situation. We do hope that with the emphasis on economic reforms, thrust being given to investment in the infrastructure sector and budgetary measures such as lowering of interest rates, the industrial investment would pick up soon leading to new projects.

It is heartening that some of EIL's major existing clients have plans for major investments. Development of new fields under the New Exploration Licensing Policy of the Government are underway. Major refinery companies have plans of adding to their existing refining capacity by way of expansion as well as grass roots projects. It is hoped that the refinery sector would throw up project work in view of the expected growth in the demand for petroleum products as envisaged in the Hydrocarbon vision-2025. Significant projects in the pipeline sector are also expected to materialize in the coming years.

GLOBAL BUSINESS SCENARIO
After a year of good growth in 2000, the world economy is experiencing an economic slow down with growth rates that are lowest since the oil shock of 1973. There are discouraging reports of global down turn with economics of the United States. Asia and Europe sliding further. The global slowdown may adversely affect Indian exports as well as foreign investment in Indian projects. However, Indian economy being much less dependent on exports than many other Asian and Latin American countries, it may be possible to improve the situation through internal measures as envisaged.

EIL'S STELLER PERFORMANCE
The year 2000-2001 was another very successful and satisfying year for the company with the turnover registering an impressive 28% growth over the previous year's turnover. Several major projects were completed during the year and new projects added. During the year under review, the company achieved a turnover of Rs.7876 million and profit before tax of Rs.1957 million. The net worth of the company has risen from Rs.6307 million to Rs.7131 million. The Board of Directors have recommended a dividend of 67% on the paid up capital of the company as on 31st March, 2001.

NEW BUSINESS
During the year, the company secured new business totaling Rs.6460 million. The major business came from the refinery, off-shore platforms and Pipeline sectors including several new assignments for expansion/modernisation of projects as well as work for new grass roots projects. The company won a number of assignment for, specialist services in the areas of environment engineering, risk analysis, advance control and optimisation, heat and mass transfer, information technology, maintenance. etc. Outside India, EIL has been successful in securing two contracts for Managing contractor's Service for petrochemical Projects being implemented by subsidiary companies of National petrochemicals Company, Tehran, Iran. The company is also providing services in Qatar, Kuwait and UAE and has made an entry into new markets of Indonesia, Nigeria and Madagascar by securing a few technical assistance assignments. Overseas offices have been opened in Abu Dhabi and Doha (Qatar). Offices are also planned to be opened in other countries in Middle East and South East Asia where business opportunities are good. EIL personnel are working presently in Qatar, UAE, Iran, Indonesia, Nigeria and Singapore on various projects.

NEW STRATEGIC INITIATIVES
In order to maintain its growth, the company has adopted a multi-pronged strategy for increasing its business. This includes 
· Working on LSTK basis 
· intensifying over seas operations 
· Diversification into other areas of infrastructure with high business potential 
· Taking up revamping/optimisation /quality upgradation of old operating plants such as refineries, petro-chemical plants etc. and 
· Targeting new green field projects in EIL'S core areas of specialisation.

The company had started venturing into turnkey contracting, earning roughly 45% of the revenue from LSTK contracts during the year. The company is now embarking upon diversification into several promising infrastructure and industry related areas including Highways & Bridges, Airports, Mass Rapid Transport systems, P9rts & Terminals, Power projects, Non-conventional/Renewable Energy Sources, Water projects, City Gas, Intelligent Buildings and other related works for which Strategic Business units (SBUs) have been established. Sustained efforts being put-in in this direction have started showing results. The company has exceeded the MOU targets set for the year and has a MOU score of 1.017 which is better than last year and the company is once again to be rated as an 'Excellent' Company. Its achievement were further recognized during the year through several awards including the Indian Institution of Industrial Engineering's Enterprise Excellence Award, the NPMP Award of Excellence for Finance Management and a Certificate of Recognition for Creativity and Innovation, the CSIR Shield for Process Technology Development and several safety awards.

The company has excellent credentials to follow a path of growth and success in the coming years and the company would achieve greater heights in the years to come.