The Hindu Business Line : BHEL Tiruchi may get Rs 475 cr for expansion

To achieve the targeted turnover, the Executive Director says, it is necessary to focus on three issues — capacity increase, market building and capability creation.

Chennai , Sept. 13

THE Tiruchi unit of Bharat Heavy Electricals Ltd, which manufactures boilers for power plants, is likely to get Rs 475 crore from its headquarters for an expansion programme that would take its turnover to Rs 10,000 crore by 2011-12. At present, BHEL Tiruchi's turnover is over Rs 2,000 crore.

Mr A.K. Mathur, Director, BHEL, told Business Line that while the company's board was yet to formally sanction the Rs 475-crore demand, "they should get what they want, because money is not an issue right now."

Dr V. Gopalakrishnan, Executive Director, BHEL, Tiruchi, has a three-pronged strategy to arrive at the goal. The first is to triple sales from utility boilers (for large power plants) to Rs 6,000 crore. Dr Gopalakrishnan sees no big problem here, the market being good.

The second is to get into `small boilers' segment, where BHEL has negligible presence. These are boilers for small sized captive and co-generation power plants, waste heat recovery boilers for steel and paper industry and stoker boilers for sugar industry. According to Dr Gopalakrishnan, BHEL continues to be a preferred vendor but customers have stopped giving enquiries to BHEL because the company is not into these products.

He targets revenues of Rs 3,000 crore from this business by 2011-12.

Finally, BHEL wants to get into other non-conventional areas, such as equipment for sea water desalination.

The idea is to produce power, perhaps using biomass, and use the power to split sea water into drinkable water and salt. The equipment could then be exported to West Asian markets. Preliminary marketing efforts are under way.

Between this and other services, such as renovation and modernisation and consultancy, Dr Gopalakrishnan believes it is possible to garner revenues of another Rs 1,000 crore. To achieve the targeted turnover, the Executive Director says, it is necessary to focus on three issues — capacity increase, market building and capability creation.

BHEL Tiruchi's operations involve fabrication of steel into boilers and components. It intends to raise its capacity from 3.5 lakh tonnes of steel now to 7.5 lakh tonnes by 2011-12. At present, only one lakh tonnes is processed at Tiruchi.

The ancillaries process another two lakh tonnes and rest is supplied to the customers directly from vendors.

"Shop capacity will go up only slightly," says Dr Gopalakrishnan, adding that "massive outsourcing" would be more the order of the day. On-site fabrication is also being keenly pursued.

For development of the small boilers market, BHEL proposes to standardise boilers of some capacities so that they could be offered "off-the-shelf", cutting down production time.

Products of other capacities could be got wholly made by vendors and supplied to customers under BHEL's label.

For capability building, Dr Gopalakrishnan plans a renewed R&D thrust into areas such as coal and combustion research. He further proposes to develop and make optimal use of BHEL's Welding Research Institute so that it grows out of mere welding research and gets into metal forming.

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