Tata Projects forms venture with Engineers India

Chennai: Tata Projects and the public sector Engineers India have formed a joint venture to undertake projects in the hydrocarbon sector.

The memorandum of understanding for forming the proposed company was signed in July 2007, but the venture, Tata Engineers India Ltd (TEIL), was incorporated last week. The joint venture will have a start-up equity capital of Rs 10 crore, equally shared by the two partners. The headquarters will be in Noida, near New Delhi.

Sources said that Engineers India Ltd will bring to the table its expertise in refinery engineering and procurement, while Tata Projects will chip in with its capabilities in project management.

The proposed venture will initially pursue opportunities in the refinery sector. Opportunities also exist in putting up mini refineries and units within refineries such as hydrocrackers and crude distillation units.

Sources said that the joint venture will vigorously pursue opportunities in the hydrocarbon sector in West Asia. “Right now it is a small company but it has a potential to grow very big,” an official of the company said.

Asked if the paid-up equity was not small, he observed that in projects business, much of the requirements for funds were for working capital. Again, much of the working capital comes in the form of advances.

With two strong parents, the joint venture would have no difficulty in raising debt funds, should there be a need, he said.