Mold-Tek unlocks value by de-merger of its KPO biz

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Mold-Tek is the only listed player in India in the structural engineering KPO sector.  Be it pre-engineered buildings, conventional steel & wood, RCC and multi-storied buildings, Mold-Tek has firmly established itself as an engineering service provider in the vast geographical area of the North-American continent.

 

MOLD-TEK Technologies started its KPO division in 2002 to cater to the highly specialized, knowledge based structural engineering domain with a team of 10 Engineers.  During the last five years Mold-Tek acquired necessary US structural engineering domain expertise and established a proven track record.  Today 270 engineers work out of its Hyderabad office for its 40 plus clients in USA and Canada. 

 

ACQUISITIONS:

In order to grow rapidly in the field of "High Rise Building Structural Detailing", Mold-Tek acquired M/s. Crossroads Detailing Inc., INDIANA - USA having seven years of US Engineering expertise.  This enabled Mold-Tek to quickly penetrate into these high value-added services.

To further strengthen its capacity, Mold-Tek acquired another company in OHIO having seven years of High Rise Building Detailing Expertise.

A)      In April, 2007 Mold Tek acquired as a 100% subsidiary - M/s Crossroads Detailing Inc., promoted by an American "Professional Engineer".  M/s. Crossroads has 12 American Engineers of which three are US certified "Professional Engineers ".  Our US engineers at "Crossroads" take care of the front-end marketing operations, client communications, quality checking and training of our Indian Engineers.  Our India office handles engineering deliverables with quick turn around time and quality.

B)      Recently in November, 07 the company has finalized its second acquisition of a US-based structural detailing KPO  specializing in high rise buildings  and also its associate company in India with a total manpower of 90 Engineers .  This addition enhances Mold-Tek's capacity in this segment by more than 125%.  This acquisition will enable Mold-Tek to achieve better than 100+% annual growth it has been achieving in its revenues over the last few years.  Due to this acquisition, the client strength will go up from 40 to 60 and the resources from 270 to 360 (more than 150% growth over last year).  This acquisition will add about Rs. 10 crore (USD 2.5 million) to the revenues from the year 2008-2009.

 

Mold-Te, KPO division has been growing by more than 100% CAGR with impressive profits at around 50%.  This kind of high profitability was possible due to the high-end engineering services provided by the company. So far the company has been providing services to Pre-Engineered Industrial and residential buildings on a fixed rate model with average monthly rate of $ 2200 per resource.

 

In the recently entered high rise building segment Mold-Tek can command much higher value-addition which will enable Mold-Tek to maintain the profitability inspite of rupee appreciation.  Mold-Tek is also planning to enter into "designing of high rise buildings "which commands still higher hourly rates i.e. more value addition.

 

Market Potential:

Market potential for its structural engineering services from US alone will be in billions of US dollars. In any country, building construction activity spreads all over the towns and cities.  Hence to gain higher market share Mold-Tek needs to have its presence in quite a few locations with in USA and other countries.

 

Hence acquisitions will continue to be a long-term strategy for the company to grow in different market segments.  At present, company's services occupy far less than 0.1% of the market share of American Structural Industry itself.  Building up expertise and training engineers in SDS/2 & TEKLA soft ware used in developed countries, is the only limitation for achieving further high levels of growth.  Mold-Tek is using the expertise of its American Partners to achieve this goal.

 

Future Projections:

For the current year, Mold-Tek is expected to reach consolidated earnings of around Rs. 27.00 crore in its KPO division up by around 150% over the previous year turn over of Rs. 11.4 crore.  This is expected to grow to about Rs. 50-55 crore during the year 08-09 and about Rs. 90-100 crore during 09-10.

 

The KPO Company hopes to maintain similar PBT around 50% on its Indian Sales or about 40% on Mold-Tek's plastic division is leaders in pail industry in India.  Mold-Tek Plastics Ltd., will also register considerable growth and is expected to reach Rs. 130 crore revenues for the year 08-09 up from around Rs. 100 Crore this year.

 

Sourced From: Adfactors Public Relations Pvt Ltd