TELK in talks with BHEL for tie-up

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Mr K.R. Viswambharan, Managing Director, TELK
Mr K.R. Viswambharan, Managing Director, TELK

G.K. Nair

Kochi, Aug. 24

THE State-owned Transformers and Electricals Kerala (TELK) is in the process of entering into a tie-up with Bharat Heavy Electricals Limited (BHEL) in a bid to strengthen co-operation between the State and central public sectors.

The first round of discussions with BHEL was positive and the second round will be held in October when a final decision is expected, Mr K.R. Viswambharan, Managing Director, TELK, told Business Line on Wednesday.

According to him, there will be a boom in the power sector till 2012. Hence, it could be a booming period for TELK too because "of its reputation as a quality transformer manufacturing unit in the country."

Considering the future prospects, Mr Viswambharam said, the company, which is in the red and under the BIFR net, has to go for modernisation to be competitive with multinationals in the domestic and international market. Modernisation will involve an investment of around Rs 50 crore. He said a study would be conducted soon for this purpose.

The unit, which had accumulated a loss of Rs 70.09 crore in 2000-01, had managed to reduce it to around Rs 55 crore, he said. It is still being reduced, said Mr Viswambharam.

The unit is in the process of recovery to improve its net-worth. Modernisation will result in higher productivity and reduction in production costs, which in turn would extricate it from the red, he said. "Once its net-worth becomes positive, the company would come out of the sick list also," he said.

The whole exercise is also aimed at retaining the company in the public sector, Mr Viswambharan said

Before embarking on the modernisation programme, TELK has to liquidate its loan liabilities. To meet the fund requirements, it has decided to sell 50 acres of land from the 116 acres under its possession at Angamally, he said. With the sale proceeds, the unit will be able to liquidate its liabilities and the balance could be used for modernisation.

In fact, there is no dearth for orders for TELK because of its products' quality. It has in hand orders worth Rs 130 crore. But the major constraints at present are outdated machineries and shortage of skilled manpower. These have affected meeting the delivery schedules, he said.

To meet the skilled manpower requirement, the company has decided to recruit people through the employment exchange on a temporary basis, he said. The current manpower strength is 1,100. There had not been any recruitment for several years, said Mr Viswambharan.

Last fiscal, the company achieved a turnover of Rs 90 crore from orders worth Rs 116 crore. "We are targeting a turnover of Rs 100 core in 2005-06," he said.

The orders in hand are from BHEL, Oman Electricity, State electricity boards, Power Grid Corporation of India, Seimens, L&T and Railways, he said.

(This article was published in the Business Line print edition dated August 25, 2005)
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