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BHEL plans to become a global player

Eyeing overseas niche technology companies

Ashok K. Puri, Chairman and Managing Director, BHEL

BHARAT HEAVY Electricals Limited (BHEL) is set to become a global player by acquiring niche technology companies in western Europe and the U.S. in the same way that oil companies have been making forays abroad. Buoyed by rising orders, the company's profit is also soaring with a 400 per cent spurt in the first quarter of the current fiscal along with a doubling of turnover.

BHEL Chairman-cum-Managing Director Ashok K. Puri told The Hindu that rising investments in key sectors of the economy like power, petroleum and steel had opened up new horizons for the company. It was gearing up to meet the huge capital equipment needs of these industries.

Within the country, he said, BHEL had few rivals but in bidding for projects, it was already used to facing global competition from Japanese, Korean, Chinese and Russian suppliers.

Besides, India was one of the few countries with a large capital goods industry and as such was ideally suited to become a global supplier of equipment. Internationally, industries were now going in for large-scale expansions and companies like BHEL could step in to meet the demand for capital goods.

As for domestic demand, he said the company had already planned a production capacity expansion costing over Rs. 1,000 crore. In addition, it was moving ahead to produce the next generation 800 MW boilers needed in the country, given plans to expand power generating capacity by 15,000 MW every year for the next ten years. He did not agree with the criticism that supercritical technology was not needed and stressed this was essential in view of the huge expansion in power capacities now being envisaged.

The company, however, needed to move much more quickly to meet the demand for equipment in other sectors as well, he maintained. For instance, BHEL was a big supplier of equipment to the oil refinery sector where Reliance Industries alone was gearing up to double capacity to 66 million tonnes while Indian Oil Corporation (IOC) was planning a ten million tonne expansion. Similarly, investments in the steel sector, another major customer of BHEL, were pegged at Rs. 50,000 crore over the next 5-7 years.

The company, he stressed, had to grow much faster to keep up with this pace of growth in the rest of the economy. One way to expand, he said, was to acquire companies in niche sectors abroad.

The recent decision by the Government to allow Navaratna companies to take such decisions on their own had given a boost to the company's plans in this direction. He hinted that some companies had already been identified with niche technologies.

These could provide synergy in operations at much lower costs than greenfield investments. As for streamlining investments within the existing 14 plants of BHEL, Mr. Puri said the focus would remain on the main plants in Bhopal, Hardwar, Hyderabad and Tiruchirapalli where as much as Rs. 800 crore investment was expected to be made. At the same time, fresh investments were planned even for Bangalore and Ranipet plants. The company's plans for setting up a financing agency had now been discarded, as the investment climate was now buoyant. Financing projects was no longer a problem, he said.

SUSHMA RAMCHANDRAN

in New Delhi

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