McNally eyes nuclear opportunity in US

McNally Bharat Engineering Co is looking at an opportunity in the nuclear power space through its UK arm Specialist Energy Group.
Hayward Tyler, Specialist Energy’s main operating subsidiary, has a presence in the after-market spares segment in pumps for nuclear plants in the US.

“It has a steady business out of a significant share in the nuclear pump spares market. And following the Japan nuclear disaster, most of the nuclear power plants in the US are going for refurbishment, which has thrown up an opportunity for us,” Amritanshu Khaitan, director of the company, said after the annual general meeting of McNally Bharat.

Hayward Tyler, a 200-year-old firm, which has a presence in pump and fluid-filled motor technology, is also a major supplier of pumps for power plants to companies including Bharat Heavy Electricals in India.

McNally Bharat is currently working on turning around the London Stock Exchange-listed Specialist through cost-cutting measures, exploiting synergy with its earlier German acquisition, apart from strengthening its presence in the US nuclear power market.

“The reason we took over Specialist Energy is we felt that there are a lot of opportunities in the technologies they have. We can combine their expertise with our costs management. If we can bring their costs down, we can turn it around, improve profitability and also market share, Khaitan told DNA.

Benefits will also accrue from the synergy between Specialist and our earlier acquisition in Cologne, which will help in improving operational efficiency, he said.

“In the long run we will examine what sort of stuff we can outsource for Specialist out of India. Being UK-based, their cost structure is really high,” he said.

McNally Bharat in April acquired majority 40% control of Specialist routed through its arm MBE Mineral Technologies Pte Ltd. The deal includes Specialist investing back in MBE Cologne Engineering GmbH, a wholly owned subsidiary of MBE, which manufactures specialist machinery and components for material handling and power generation sectors.

Following the acquisition, the Khaitans have started implementing cost-cutting measures including restructuring Hayward Tyler’s Luton operations and closing down the head office in London, which together are expected to deliver annualised cost savings of around £1 million.

In India, McNally is looking beyond its traditional engineering business and has forayed into civil construction to maintain revenue stream at a time of economic slowdown.

“We have set up a civil construction vertical and aggressively focusing on it. A large order for building a township being promoted by Unitech in West Bengal has already come to us.”
McNally expects to close the current financial year with an order-book position of Rs 6,000 crore. “Our current order book is about Rs 4,000 crore. We would be happy if we are able to book another Rs 1,500-2,000 crore worth or orders,” Khaitan said.