State-owned engineering consultancy firm Mecon, which forayed into operation and maintenance (O&M) of steel plants this month with the commissioning of NMDC Steel’s factory in Chhattisgarh, sees more than 20% hike in its FY24 revenue.
“We did the DEC (design, engineering and consultancy) and PMC (project management consultancy) for the 3 million tonne steel plant in Nagarnar. Now we are doing its O&M,” Mecon chief general manager (marketing) Sundeep Sinha said.
Mecon, which has been primarily consulting public steel plants, is now also a steel maker. It has drawn a strategy to engage the equipment suppliers to operate and look after the equipment they supplied under the supervision of its officers.
“This has opened up a huge opportunity in O&M business. As many steel plants are offloading various activities to different agencies to reduce manpower, they may wish to have an established agency like us to look after these,” he said.
The Ranchi-based consultancy, under the ministry of steel, with 70 project and site offices across the country posted a revenue of `850 crore in FY23.
The Nagarnar business alone will add close to `12 crore each month. Mecon will be operating the plant for two years as of now. The agreement can be extended by up to five years. The steel factory has India’s second largest blast furnace.
Mecon also expects its profit margins to improve as the impact of Covid on project estimates begins to fade from this fiscal with several projects bagged before and during the pandemic are nearing completion. It is running around seven EPC projects of Coal India, Nalco and SAIL.
While Mecon’s profit margin was also impacted by increasing competition from private consultants in the steel sector, which accounts for about 70% of its revenue, it has now been approached by SAIL for decarbonisation of its steel plants.
“We are already in talks with many of the agencies who can help us in moving ahead in this direction,” said Sinha, adding that the company has also formed a committee and is in discussion with various parties to make available green hydrogen.
Mecon plans to open international offices mainly in Middle East, African and developing countries where they see potential to get orders. Talks are on with steel makers in Nigeria, Dubai and central Asian countries, the official said.
The company, which had a role either in DEC, PMC or EPC in more than 55% of the 160 MT steel capacity of the country, believes the capacity will increase substantially as the Indian per capita consumption of steel is one-third of the global average.