TEMPORARY power supply company Aggreko has earned itself a vital foothold in the increasingly important Indian market.
The Glasgow-based company has paid £3.9 million for the power rental business of Cummins India, a division of US-based industrial power giant Cummins.
And yesterday Rupert Soames, the chief executive of Aggreko, described the purchase "the final
brick in the wall" of the company's expansion plans in the so-called Bric countries – the fast-expanding economies of Brazil, Russia, India and China.
Soames said: "We have been trying to find a way to get into India for two or three years and this opportunity presented itself.
"Although we have customers in over 100 countries worldwide, we have been particularly focused in the last two or three years making sure we have coverage in the four largest developing economies in the world. India is the last brick in the wall."
Commenting on the plans for the Indian company, Soames added: "We plan to expand the business organically investing in new fleet and personnel. We will try to grow the business as fast as we can. We will just take it a brick at a time."
Cummins is the largest supplier of power generators to Aggreko world wide and the deal further consolidates the two companies' partnership.
Aggreko, which rents generators, heating and air conditioning systems worldwide, has been targetting expansion in the so called Bric countries.
The company has long been in the Brazilian market and last year entered China and Russia. The company supplied temporary power to the recent Beijing Olympics.
The acquisition of Cummins India is subject to the approval of CIL's shareholders. The business is forecast to have revenues in 2008 of about INR179m (£2.4m).
Aggreko yesterday also announced the sale of one of its European divisions.
It sold off part of its industrial air compressor division to Atlas Copco, a specialist air compression service business based in Stockholm.
The deal was worth 14.6 million (£12.3m). The sale only affects Aggreko's European oil-free air compressor (OFA) business, as Aggreko retains its US business which provides temporary clean air compressors to industry.
Soames said the European business was one tenth the size of its US OFA business.
Soames commented: "Oil-free air is the smallest of our product groups, and while we have a large and successful OFA rental business in North America in which we will continue to invest, we do not believe that our European OFA business has the scale to warrant further investment."
The European OFA business, which is 50 per cent based in the UK, the rest in continental Europe, is expected to have revenues in 2008 of about 8.7m.
Aggreko has 121 service offices in 31 countries.
The company's share price closed 3 per cent down at 371.25p last night.
The full article contains 482 words and appears in The Scotsman newspaper.
