Lloyd Electric buys Czech company

New Delhi: Air-conditioner coil-maker Lloyd Electric and Engineering Ltd (LEEL) has acquired the Czech company Luvata Czech s.r.o. in Prague, through a special purpose vehicle for an undisclosed amount.

The acquisition of the world’s second largest manufacturer of heat exchangers for the heat ventilation air conditioning and refrigeration (HVACR) industry by LEEL will add teeth to its plans to gain a significant market share in the European and Russian market.

“The acquisition has been made through our special purpose vehicle Lloyd Coils Czech s.r.o. It will add synergy to our existing business as it represents an opportunity for us to strengthen our product offering in the over $60 billion global HVACR equipment market,” Mr Brij Raj Punj, Chairman and Managing Director, LEEL, told Business Line.

Luvata Czech, a fully-owned entity of Luvata Holding OY, manufacturers customised finned pack heat exchangers (coils) serving the HVACR industry all over Europe.

The five largest players in coil manufacturing hold a combined market share of approximately 56 per cent and Luvata is one of them.

Last year, LEEL had raised invest $ 25 million through a GDR issue. “The acquisition and expansion plans of the company have been funded through the GDR mop up,” he added.

The Czech manufacturing base will help Lloyd Electric especially in the areas of cost control, technology absorption as well as direct access to the European markets, in addition to access to the strong customer base of Luvata Czech comprising several leading HVACR and OEMs including Lennox, Janka, Swegan, Cooling Solution, ETT, Chiller, Vesttherm, Hitecsa, Mr Punj added.

With the addition of 6,200 sq.m Czech manufacturing facility, LEEL‘s total manufacturing capacity will further go up by a million coils.

LEEL currently has three manufacturing facilities in Bhiwadi, Dehradun and Kala Amb (Himachal Pradesh), with a combined manufacturing capacity of 1.4 million coils and 0.452 million ACs.

Mr Punj said that LEEL could consider outsourcing some of the components to its manufacturing base in India and thereby further enhancing profitability and competitiveness.

LEEL had reported turnover of Rs 630 crore for the year ended March 31, 2008. “We hope to clock a turnover of Rs 900 crore for 2008-09,” he said. Presently, LEEL derives roughly 60 per cent revenue from coils, 30 per cent revenue from contract manufacturing of ACs and balance 10 per cent from railway air conditioning.