The Hindu Business Line : Bharat Forge, Alstom zero in on Mundra for power foray

One of the important aspects of this alliance is the high level of indigenisation in the products, which could see it exceed 85 per cent shortly after commissioning

A view of the Mundra Port in Gujarat.

Murali Gopalan

Mumbai, Dec. 16 Bharat Forge and European power equipment giant Alstom have zeroed in on the Mundra port of Adanis to set up a manufacturing facility with an annual capacity of 5000 MW.

This will be an important production base for a whole range of supercritical turbines and generators. The choice of Gujarat means that Andhra Pradesh, which was also a close contender, is no longer in the reckoning.

The partners have also decided to explore joint forays into gas-based equipment as well as turbines and generators for nuclear applications eventually.

There are two joint ventures for the India plan.

The first, in which Alstom will hold 51 per cent stake, will see manufacture of core turbines and generators. The other venture for production of an entire range of heat exchangers, condensers and deaeraters will see Bharat Forge holding 51 per cent.

Sources say that one of the important aspects of this alliance is the high level of indigenisation in the products, which could see it exceed 85 per cent shortly after commissioning.

Assessed needs

India’s assessed needs of capacity addition are approximately 30000 MW per annum. The present installed capacity is approximately 7000-8000 MW largely held by Bharat Heavy Electricals (Bhel). To that extent, Bharat Forge believes that the sky is the limit in its joint venture with Alstom.

The world automotive business has been the backbone of the Indian company’s business till now but this could soon take a backseat. For instance, for FY (financial year) 2003, auto took up 95 per cent of the $157 million (Rs 750 crore) generated. This was down to 83 per cent in FY 2007 when turnover had reached $1 billion (Rs 4,800 crore).

By FY 2012, Bharat Forge expects the non-automotive space to account for 40 per cent of its total business and further to 75 per cent by FY 2015.

Equally, this could also mean that India will be back on the company’s radar after years of consolidation in the global arena.

Today, Europe accounts for nearly 50 per cent of the total business with North America taking up 17 per cent. India’s share is 26 per cent with the Asia-Pacific region coming last with eight per cent.

“Clearly, the company has identified new areas of business to be its future growth drivers. And given the way the world auto business is floundering with the imminent collapse of the Big 3, the timing of the transition is just right though it was planned years in advance,” top sources said.

Key business

The key business areas in the non-automotive sphere are energy (where the manufacturing focus will be windmill shafts and gas engine components); aerospace (structural and rotating components); oil & gas (valve/choke bodies and composite blocks); construction and mining; marine and railways (which will revolve around engine components).

Sources say that with its steel making and forging capabilities, Bharat Forge is on track to becoming one of the largest open die forging manufacturers with a capacity of 200,000 tonnes per annum.

Related Stories:
Bharat Forge seeks Centre’s help in bulk bidding for supercritical equipment
GSPC rejects HPCL’s proposal for stake in Mundra terminal

More Stories on : Power | Alliances & Joint Ventures | Shipping/Ports

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page