Praj Industries Ltd Board gives consent for Europen JV. The Board of Directors of the Company has given a green signal to the implementation of the proposed JV of the Company and Aker Kvaerner. The Company will hold 60% and AK Process will hold 40% of the shareholding in this JV.
The proposed JV will combine Aker Kvaerner's execution capabilities and extensive European market knowledge with the technological expertise of the Company.
The JV will offer European customers access to the complete scope of services required for license, plant design and construction, with seamless integration and application of the Company's technology. The Company, a global leader in bio-ethanol technology for over two decades, has been active in European markets for bio-ethanol technology solutions. In 2006, the Company and Aker Kvaerner entered into an alliance for strategic cooperation on bio-ethanol projects in Europe. Based on market interest in the alliance and the fact that Europe will follow a binding guideline of 10 per cent bio-fuels blending by 2020, thereby expanding the market opportunity for biofuel plants, the two Companies commenced discussions to extend their association by forming a JV.
Apart from the potential to expand new business prospects, the JV offers greater visibility for both the Company and Aker Kvaerner businesses in this marketplace.
Aker kvaerner Netherlands BV, part of the Aker Kvaerner Group, would be the legal entity entering into the proposed JV with the Company. The JV would be located in The Netherlands.
- Entry into Biodiesel Technology Domain
In line with its vision to expand in the biofuels technology arena, the Company has entered into Biodiesel Technology space. For Biodiesel projects, the Company will offer in-house developed turnkey solutions including technology, engineering, plant & equipment and project management services.
With nearly 60% of the incremental growth in world transport fuel being diesel based and with almost all countries round the world being major diesel consumers, on and off the road, the Company management felt its was the right time to address the biodiesel technology market. With its superior engineering expertise and its understanding of agri-based raw materials, the Company has on offer a robust plant which will have the capability to process a wide range if feeds stocks.
A separate division has been created within the Company to promote the biodiesel business line.
- Brasilian Acquisition on the Cards
The Company is currently examining certain acquisition proposals with a view to enter Brazilian biofuels technology, plant & equipment market and establish an operational base.
Ethanol production in Brazil is poised to double by 2010. Today, Brazil is at a major turning point in terms of technology and plant designs etc. and the Company sees an opportunity to serve these changing requirements.
Meanwhile, the Board has given in-principle approval for initial investments upto Rs 40 crores to establish the JV in Europe and to commence operations in Brazil.
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