Newspaper Kommersant article dated 05.06.2015 AMIRA will lean on Krasny Bor

Newspaper Kommersant article dated 05.06.2015 AMIRA will lean on Krasny Bor.
The Company opens a plant for manufacturing of street lighting poles.

At the end of June in Krasny Bor the company Megapolis (a member of Amira Group of Companies) will open a plant for manufacturing of steel poles for outdoor lighting with the production capacity of 60 thou units.  It is planned to pay back the investment in 5 years. Analysts note that the segment is stable and company’s payback plans are quite realistic, however they also notice a growing competition due to the use of new materials.

Full capacity of the new production facility will be 60 thou per year of faceted and round poles from 3 to 100 m high.  The plant will be opened at the end of June. Investment in the production facility located in the territory of about 2.5 ha amounted to 500 mln rubles. In 2016-2017 (depending on the economic environment) it is planned to commission the second stage of the project – a warehouse logistic complex located on the territory of 2.5 ha with the cost of 300 mln rubles. In order to implement the project the company acquired 5.7 ha plot of land in the industrial area Krasny Bor.  According to Andrei Saramud, Chairman of the Board of Directors of AMIRA Group of Companies, it is planned to pay back investment in five years.

AMIRA Group of Companies was founded in 1991 in St. Petersburg. It manufactures equipment for outdoor lighting and detached lightning diverters based on high masts for Russia and CIS countries. Six physical persons are in the ownership structure. In addition to the new plant the group includes a plant for manufacturing of steel faceted poles from 3 to 50 m high – Amira-Stalkonstruktsiya LLC, a plant for manufacturing of lighting fixtures and flood lights – Amira-Svetotekhnika LLC, a plant for manufacturing of tubular poles, metal foundations, brackets and miscellaneous metal structures – Amira-Energomontazh LLC, engineering and construction-erection company – Petrosvet LLC.  

According to Mr. Saramud the annual turnover of the Group of Companies exceeds 1 bln rubles.  Production program for 2015 includes 40 thou poles, including present production facilities (for comparison: nowadays 6 thou lighting units are in operation along the opened sections of WHSD). “Two independent lines are installed at the plant. It will allow us to significantly reduce time if we need to change product parameters.  Besides, in autumn of 2015 we plan to enter the market of towers for power transmission lines, and after additional retrofitting of the plant – the market of construction metal structures. Mr. Saramud hopes that in future the ratio of manufactured poles and towers for PTL at the plant should reach 50 to 50. Planned turnover for 2015 is estimated by him at 1.5 bln rubles, and after the beginning of manufacturing TPL towers in 2016 – at 3 bln rubles.

According to company’s own estimate its share on the RF market of lighting poles at 25%.  During two years it is planned to increase it up to 40% due to production growth and departure of foreign players from the market. Since the beginning of recession 70% of company’s order portfolio is from government contracts.  

Dmitri Baranov, Lead Expert of MC Finam Management, notes that the market of products stated by the investor is stable. However, during last years other materials have been more actively used for poles. “In Moscow they install street lighting fixtures made of aluminium. In other cities they consider an opportunity to install poles made of non-metallic composite materials,” he gives an example. Thus, competition on this market has been growing, and the same is fair   However, the analyst positively estimates the project outlook and stated payback period.

Based on the calculations of Vasily Kolosov, Head of Information Analysis Department of IC Energokapital, net profitability of Amira-Stalkonstruktsiya is 6.5-7%.   Due to this he believes that payback period of investment in the first stage of the project stated by the company is realistic with the targeted minimum revenue of the plant.

However, the issue of production of PTL towers is not that simple. “On the one hand investment in construction and innovation of trunk electrical networks for the nearest 5 years is still estimated at not less than 300 bln rubles.  On the other hand, the market of contractors and suppliers for federal and regional networks is historically rather specific. Due to the above a success of the investment project will largely depend on the competitiveness of the proposal, which is necessary to maximize purchase of products by network companies,” he notes.