MILAN, April 26 (Class Editori) -- Indian Oil Corporation Limited appointed Maire Tecnimont to create a paraxylene plant and its linked infrastructures in Paradip, in the state of Odisha, in Eastern India. The overall value of the Lump Sum EPCC (Engineering, Procurement, Construction and Commissioning) contract is of about 450 million dollars and it was awarded to the two subsidiaries Tecnimont and Tecnimont Private Limited. News revealed by the company before the start of the session has been appreciated as proved by the 3.01% growth of the stock on the Italian Stock Exchange, to 2.672 euros, and the marginal +0.22% reached in the FTSE MIB, to 24,446 points.
The project includes engineering, material supplying, building, start-up and performance test. The new plant will have a capacity of 800,000 tons per year and is expected to be ready within 33 months starting from the date of award. The paraxylene produced will feed the near terephthalic acid unit thus guaranteeing the availability of raw materials while giving an important boost to the manufacturing industry of the country.
Paraxylene is an intermediate component in the supply chain of the petrochemical industry needed to produce several polymers, especially PET (also known as polyester) which is used in serval fields as packaging and cosmetics and pharmaceutical industry.
Pierroberto Folgiero, CEO of Maire Tecnimont, said to be satisfied that "our relationship with an important player like Indian Oil Corporation Limited continues to grow with another strategic contract aimed at increasing the country's natural resource processing capacity. As India is preparing for a major investment plan in the downstream segment in order to meet the fast-growing domestic demand for plastic products, we are in a privileged position to seize the new opportunities that will arise, thanks to our technological approach and historical presence in the country with our engineering center Tecnimont Private Limited".
After news of the latest contract, Intesa Sanpaolo's analysts confirmed the hold rating with a target price of 2.6 euros, underlining that "in this first part of the year, the Group has carried out a successful new order acquisition campaign by collecting so far 2.2 billion, i.e., 75% of the total indicated by the company's guidance for 2021. In our preliminary analysis we have calculated that this new contract may contribute around 3-4% to the EBITDA over the next 3 years, although this is already included in our estimates. In any case, we believe them to be conservative given the order intake recorded since the beginning of the year." In 2020, the Group's order intake amounted to 2.7 billion and some analysts expect the company to exceed 3-billion worth contracts this year.
For its part, Banca Akros confirms its neutral rating with a target price of 2.4 euros, adding that "the contract is large and suggests that the Indian market is large as well. Maire Tecnimont can benefit from its Indian subsidiary and its historical presence in the country". (All rights reserved)
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