The Hindu Business Line : BHEL Tiruchi going in for Rs 190-cr expansion

Capex plans Outsources making of relatively low-tech to free up capacities. New orders booked last year, at Rs 4,300 crore, swelled the outstanding orders figure to Rs 8,200 crore. The company had asked for a Rs 300-crore budget from headquarters, but decided Rs 190 crore was enough.

Tiruchi , April 5

Last year, the Tiruchi Complex of Bharat Heavy Electricals Ltd (BHEL) achieved a 60 per cent growth with no addition to capacity, despite having little surplus capacity to start with.

This, according to its Executive Director, Dr V. Gopalakrishnan, was possible by freeing up capacities by outsourcing relatively low-tech products. Recruitment of 120 youngsters also helped raise productivity.

But BHEL, Tiruchi, which produces boilers and pressure parts for thermal power plants, feels that it has reached the limit of squeezing more out of the existing assets. Record fresh order intake and orders on hand have necessitated investment in capacity expansion. New orders booked last year, at Rs 4,300 crore, swelled the outstanding orders figure to a record Rs 8,200 crore.

Against this backdrop, BHEL, Tiruchi, is going in for an expansion at an investment of Rs 190 crore — the first major capex in over 20 years. Alongside, there are plans to recruit 500 people, for which permission from the headquarters in New Delhi is awaited.

Last year, the Tiruchi complex turned over Rs 3,608 crore — another record. With orders on hand being so robust, it expects to achieve a turnover of Rs 5,000 crore in the current year.

BHEL - Tiruchi had asked for a Rs 300-crore budget from its headquarters. But although "they (headquarters) would have given us whatever we wanted, we decided this (Rs 190 crore) is enough," Dr Gopalakrishnan said at a press conference here on Wednesday.

Increased reliance on outsourcing has been its hallmark. Last year, the company's throughput increased to 3.20 lakh tonnes of steel last year, which is at least 1 lakh tonnes more than the previous year. But in-house production increased by only 20,000 tonnes to 56,000 tonnes. Also, the entire in-house production last year was of (high-value) pressure parts. Another measure that helped raise output was evening out production across the four quarters.

Meanwhile, BHEL, Tiruchi, is readying itself for the expected nuclear power boom by designing 700 MW boilers for nuclear plants.

Also, BHEL has made an entry into the `renovation and modernisation' of old power plants by securing two orders for Rs 137 crore.