Move aimed at tapping Rs 1 tn worth of rail rolling stock business

The Government-owned BEML Ltd is to hive off its rail business into a separate company to tap the business in rail rolling stock of nearly Rs 1 trillion over the next ten years, according to its chairman and managing director Mr V. R. S. Natarajan.

The Bangalore-based BEML, which got into the rail business only in 2002, is the only Indian company to manufacture metro rail cars. It will supply the rolling stocks to Delhi Metro and Bangalore Metro, he said after a function at the Combat Vehicle and Research Development Centre in Avadi, a Chennai suburb, on Sunday.

For the Bangalore Metro, BEML will deliver the first order of 150 cars by December 2012. The cost per 136 cars is Rs 918 crore. It has also bagged a Rs 1,000-crore deal from Delhi Metro to manufacture additional intermediate coaches for them. “We are expecting a huge order from the Jaipur Metro as well,” he said.

BEML Limited supplies the Indian Railways equipment such as integral rail coaches, overhead electric inspection cars, postal vans, electric multiple units, utility track vehicles and track laying equipment.

In the fiscal ended March 31, 2010, BEML posted revenue of around Rs 5,000 crore.

Of this, the rail business alone contributed Rs 1,300 crore and is projected to touch Rs 1,500 crore during the current fiscal, he said. “We expect that in the next five to six years, this business could touch nearly Rs 4,000 crore. It is better to have a separate company with a separate managing director,” he said.

Mr Natarajan said there is also enormous business opportunity in manufacturing aluminium rail wagons. The company had built a 70-tonne aluminium wagon for Nalco as part of a trial effort. It is now planning a 100-tonne side discharge aluminium wagon, which could be put in use when the high speed rail corridor takes off.

Indonesia expansion

Mr Natarajan said that with Indonesia turning out to be an attractive destination for selling mining equipment, BEML plans to have an assembly unit there. However, this would be subject to the order touching 100 units from the present 25.

“We plan to have the unit by next financial year. We may also consider buying an existing unit and refurbish it to save time as the demand for mining equipment from that country's coal mining (sector) is set to increase significantly,” he said.

The company had supplied mining equipment worth Rs 150 crore, with pending orders worth Rs 125 crore. The products include dumpers, dozers and excavators, he said.

(This article was published on December 12, 2011)
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