Thermax, Babcock & Wilcox ink deal for boiler venture
Energy and environment solution provider Thermax and US-based Babcock & Wilcox (B&W) have inked a joint venture agreement to manufacture super-critical boilers for the power sector, with an investment of Rs 700 crore. The joint venture looks to set up a manufacturing facility with an annual capacity of 3,000 MW.
Thermax will hold 51 per cent of the equity, which will come from its cash reserves, while Babcock and Wilcox Power Generation Group will hold 49 per cent. The debt-to-equity ratio will be 1:1.
Ms Meher Pudumjee, Chairperson, Thermax, outlining the importance of super-critical boiler technology, said a one per cent rise in the efficiency level of a 300 MW plant would save 15 tonnes of coal per hour. Super-critical units on an average consume 20-30 per cent less coal than sub-critical ones, which in turn results in less carbon emission and lower operating cost.
The super-critical units come in a bigger configuration of over 600 MW, and their larger size offers economy of scale in terms of utilities and raw material.
Mr M.S. Unnikrishnan, Managing Director and CEO, Thermax, said the company had a 22-year-old business relationship with B&W. In February 2008, Thermax had signed a technology transfer deal with B&W for manufacturing sub-critical power boilers, from 100 MW to 800 MW.
Mr Unnikrishnan said that up to 300 MW (sub-critical) units would be taken care of by Thermax's existing facilities and the rest would be transferred to the joint venture company. The joint venture will also manufacture sub-critical boilers over 300 MW. The company is close to finalising the location. The facility is expected to be operational in 24 months.
Mr Richard L Killion, President and Chief Operating Officer, B&W PGG, said: “This joint venture presents substantial opportunities for both. It also augments B&W PGG's presence and profile in the global marketplace and presents a substantial opportunity to continue the growth of our business in India and globally.”
B&W, 140 years old, is a $2.8-billion major that pioneered the development of super-critical boilers. The boilers supplied by the company generate over 3 lakh MW globally.
Thermax's Rs 2 shares closed 2.3 per cent up on the NSE on Wednesday at Rs 671.60.