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S&L joint bidding strategy boosts orders

Kohinoor Mandal

KOLKATA, July 20

STEWARTS & Lloyds of India Ltd (S&L), a subsidiary of Tata Steel, has tied up with Tata Growth Shop (TGS), an independent profit centre within Tata Steel, for jointly bidding for major turnkey engineering projects.

The arrangement has helped S&L bid for big projects, according to Mr Utpal Dhar, Managing Director of S&L. ``With TGS by our side as a joint bidder, the bid gets a different dimension. Ever since the agreement came into force six months ago, we have rece ived a number of contracts'', Mr Dhar told Business Line.

The Jamshedpur-based TGS is a multi-disciplinary engineering complex, exclusively meant for the design and manufacture of metallurgical plants and equipment and special purpose electric overhead travelling cranes.

Both the Tata Steel outfits were established long back _ S&L in 1937 and TGS in 1967. Tata Steel holds 55 per cent stake of S&L, another 25 per cent is held by banks and FIs and the rest is with the public.

As Mr Dhar explained, the nature of contracting major turnkey projects had changed over the year. ``Earlier a big project used to be divided into smaller ones and then contracted out. At present, the companies are appointed for the overall project. In su ch a scenario,the financial strength of the bidder is important. Ours being not too big a company could not participate successfully in big projects. However, with TGS beside us, the problem is no longer there'', he said.

For the year ended March 31, S&L registered a turnover of Rs 35.72 crore, down by 28 per cent from Rs 49.73 crore in the previous financial year. However, the profit after tax increased by 31 per cent to Rs 1.44 crore from Rs 1.10 crore.

Declining to divulge the details of his company's tie-up with TGS, Mr Dhar clarified that this was exclusively an in-house arrangement. ``We have entered into a working arrangement and a core team has been formed with representatives from both the organi sations,'' he said.

Recently, S&L received an order worth Rs 26 crore to revamp the Namrup unit of Hindustan Fertiliser Corporation Ltd. The order was awarded by Project & Development India Ltd on behalf of the fertiliser major. The work involves complete civil, structural, piping, equipment, erection, electrical and instrumentation work.

Mr Dhar estimated that the company would end up the current financial year a turnover of Rs 50 crore. ``This is an initial estimate. The profit margin is likely to be higher. In fact, during the last six years we have continuously increased our profits'' , he said.

S&L has drastically reduced it manpower in the last few years, bringing it down to 325. The major reduction had been effected in the non-technical category. ``So, the overall efficiency of the staff has increased with the rationalisation of the workforce '', he added.