Uganda order worth more than Rs 100 cr: Praj Industries

Speaking about the new Uganda order to build an ethanol plant with a capacity of 60,000 litres per day, Gajanan Nabar, CEO & MD of Praj Industries says the order win is worth more than Rs 100 crore and the execution period of the order would be 16-18 months.

Moreover, the plant is environmental friendly and the effluents generated by the plant would be converted into bio-compost.. The plant would also produce captive power to the tune of  50-60 percent of the power required, says Nabar.

According to Nabar the order book is showing good traction and the company is hopeful of winning more international orders.

Below is the transcript of Gajanan Nabar's interview with Nigel D'Souza and Ekta Batra on CNBC-TV18.

Ekta: You have won the order for an ethanol plant in Africa, can you take us through details of this order win, what does it mean for you in terms of profit and loss (P&L) when do you start execution, how much is it worth?

A: We have won this very prestigious order from Uganda. This is for ethanol plant which is co-located with the sugar mill called Kakira Sugar. It is one of the very reputed and large business groups in Uganda. It is for 63,000 liters per day kind of capacity. The order is upwards of Rs 100 crore, so it is a large order. We are going to start executing it right away and execution period is about 16-18 months overall.

Key features of this project is that it is very environmental friendly; it is reducing the steam and power consumption almost by 10-15 percent on conventional offerings, and it also produces power to the extent of 50-60 percent of their power requirement. So it is a very sustainable technology for the customer.

Nigel: You said it is a Rs 100 crore project?

A: More than Rs 100 crore.

Nigel: Could you give us some guidelines with regards to the margins on this particular project because in the last quarter you had done something like around 6.8 percent and that was a big improvement from 4.6 percent. So is it in that range of around 6 percent upwards or is it on the lower end?

A: This is an international order. So it is in a direction of accretive margins.

Ekta: What does this take your entire order book to? How much are you executing in terms of your total order book right now?

A: As of last quarter, we were at Rs 720 crore and then we had announced another large order for our new business group of about more than Rs 250 crore and this is on top of that. So probably I would request you to hold on for about 10 days and we are going to announce the complete order book but order book is showing good traction right now.

Ekta: How big a market is Africa for you in terms of a continent?
A: It is like as big as India. In terms of population, in terms of total gross domestic product (GDP) as a continent but the good part of it is that there is lot of interest towards blending mandates as well as for beverage grade ethanol. So I think we are seeing some good amount of opportunities here.

Nigel: With regards to your total order book, I believe that the domestic orders constitute close to around 75 percent of your total order book and international orders are around 25 percent. This is international order, can we see more of the same, are you looking to expand your export orders?
A: Yes, I think traditionally we are about 50:50. Our international business is about 50 percent and we will get there. With the couple of new orders that we have won being international, the ratio will swing towards more of international orders.

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