Problem faced by the client
We were approached by a Legacy Steel Industry Business to help them diversify. They had a healthy cashflow from the existing business and were worried about its future. They wanted to diversify into new tech to mitigate risk as their current business was highly cyclical, had very high regulatory and geopolitical risks.
Strategy Proposed
In the extensive report we handed over to the client, we detailed all possible ventures which could ensure a well diversified and complementary portfolio for the owners. After careful evaluation of all the options, the client finalised on venturing into Data Centre business running 100 percent on renewable sources. We helped them with all the planning, setting up and sourcing all the required equipment. We identified the locations and started construction. The client set up data centres at 3 locations. One powered by a combination of wind and solar. The other 2 completely powered by solar. The client invested close to 3 years’ worth cash flows of the existing business into the new ventures.
Outcome
The projects are currently yielding close to 27% ROCE. The client is now looking to invest in another location with hydro power capacity. We are assisting them in finding a suitable location. The Client’s objective of diversification was successful. The Client is now looking to venture into other new areas after the completion of their 4th data centre and is eager to work with us for the same.
