Crompton Greaves Bags Another Order

Crompton Greaves (CG) which was facing few problems in the last year has been buzzing on the bourses in 2014. And now the company has another reason to cheer for. CG has signed a contract with the State Utility of Paraguay - Administracion Nacional de Electricidad (ANDE) for  supply of 19 single and three phase transformers amounting to a total of 683.3 MVA, for expansion of the country’s 220 kV Electricity Network.  Paraguay is one of the world’s largest exporters of electricity.  It exports to neighboring Brazil and Argentina. The company however has not disclosed the price of the contract.

If investors could recollect we had recommended CG to our readers in Dalal Street Investment Journal in our cover story of turnaround candidates. The scrip has really turned around and is showering good amount of profit for the investors.

CG, which has a consolidated global manufacturing capacity of 95,000 MVA; 46,000 MVA in Asia, 31,000 MVA in Europe, and 18,000 MVA in North America, will manufacture these transformers in India and supply them in 3 lots. Spare parts, supervision of installation and commissioning, and on-site training, will also be provided. Noticeable factor is, this contract was won under a competitive international public bidding process.

The Paraguayan grid has 1.3 million customers and approx 32,000 kms of distribution lines. It has been growing at the rate of 4% per annum since 2009. This contract represents the strengthening of 10% of ANDE’s current transforming capacity. ANDE’s grid also faces difficulty due to distribution losses which are amongst the highest in the region. To assist in reducing those losses, and improving the grid’s energy efficiency, CG recently also won a contract for the manufacture, supply, and installation of 30,000 Smart Meters in that grid.

As part of its global manufacturing capacity, in the America’s, CG has a greenfield power transformer plant and a distribution and medium power transformer plant with a combined capacity of 10,000 MVA in Washington, Missouri, an 8,000 MVA power transformer facility in Winnipeg, Canada, and an extra high voltage (EHV) switchgear & mobile substation manufacturing facility in Sapucaia do Sul in the state of Rio Grande do Sul, Brazil.

This underlines the fact that CG is well positioned for serving the South American market and can provide its array of power transmission & distribution (T&D) products which includes transformers, extra high voltage (EHV) equipment, instrument transformers (IT) , medium voltage (MV) switchgear, gas insulated switchgear (GIS), mobile sub-stations, and smart grid devices, to power utilities and Industries in that region.

Commenting on the contract, Avantha Group Company CG’s CEO & Managing Director, Laurent Demortier said, “CG’s global expertise in power transmission and distribution is now making its presence felt in the South American region too. We are proud to be involved in this major project with ANDE, and become a key player in their grid expansion and modernization programme.  Our customers in the fast growing networks in that region can rest assured that we are fully equipped to meet all their demands with cutting edge quality and prompt deliveries”. We expect the news to make a positive impact on the counter.