The Hindu Business Line : BEML enters new areas

With eyes set on Rs 5,000-crore business in seven years, Bharat Earth Movers Ltd (BEML) on Friday unveiled three new forays - into contract mining, engineering design software solutions, and trading in non-BEML products.

The Defence PSU said that it was entering the lucrative coal contract mining business through a three-way joint venture.

BEML would pick 45 per cent equity while an unnamed Hyderabad-based domestic mining company would take 46 per cent and an Indonesian player 9 per cent, Mr V.R.S. Natarajan, Chairman and Managing Director, told newspersons.

The joint entity would have an authorised capital of Rs 100 crore. Pending the Centre's approval, the consortium has over the last few months made half-a-dozen expressions of interest for de-blocked coal areas in several States, Mr Natarajan told Business Line.

The new entity would hire on contract basis and provide low-cost inputs for the domestic market.

Contract mining of coal would unfold huge business opportunities for the company. "We hope to make a big dent in this business," Mr Natarajan said, adding that such a forward integration was natural for mining equipment makers the world over.

BEML's newly launched equipment for underground mining would make it the only single supplier in the world of both surface and underground mining equipment.

Business revamped

The three core businesses have been restructured as autonomous groups each headed by a director: for Mining & Construction; Defence - which forms nearly a third of the work; and the emerging area of Railway & Metro.

The newly spun-off Technology Division will provide engineering design software solutions for mining and Defence equipment and metro coaches, in addition to work being done for auto ancillaries.

Net, sales up

BEML posted 18.6 per cent growth in sales turnover, posting a provisional Rs 2,201.65 crore (Rs 1,856 crore) for the year ended March 31. It expects to close the current fiscal with sales of Rs 2,500 crore, going by an order book worth Rs 2,550 crore. Net profit was Rs 184 crore (Rs 172.57 crore). Profit before tax was Rs 280 crore (Rs 272 crore). Exports closed at Rs 63 crore, lower than the anticipated Rs 100 crore. All divisions had broken even for the first time in 40 years.

More Stories on : Diversification | Restructuring | Diversified

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