Navaratna defence PSU, Bharat Electronics Limited (BEL) is making a capital expenditure of Rs 570 crore in the next two years ending March 2010 to modernise its manufacturing plants in the country.
The modernisation is being done to prepare the company meet the requirements of the offset business.
According to V V R Sastry, chairman and managing director, BEL, the company would spend Rs 260 crore during the current financial year and Rs 360 crore during the next fiscal.
The company had spent Rs 120 crore in 2007-08. The company has just completed the modernisation of its mass manufacturing facility to produce electronic voting machines (EVMs) at an investment of Rs 8 crore.
"We have been modernising the manufacturing facilities already set up for various products, such as the one for making EVMs. In order to create most cost effective solutions and high quality products. We felt that there is a need to modernise the facilities not only to take care of today's miniaturised components and to give much better higher reliability of products that we have done," he said.
The company is also looking at contract manufacturing opportunities for multinational companies and to this effect this infrastructure will give the necessary confidence to all foreign vendors so that they can give more and more sophisticated electronic modules manufacturing outsourced to India, he said.
BEL has already signed MoUs with some foreign companies who are very active in avionics like Boeing, Northrop Grummen and Lockheed Martin and some Israeli companies.
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"These companies have already come and audited our quality, manufacturing, business process systems and certified us as their vendors for their requirements. With this type of upgradation of our infrastructure, we are confident that by this financial year end we will get quite good orders as part of the offset business," Sastry told Business Standard.
He said the company likely to end the current financial year with an order book position of Rs 10,000 crore. As of April 2008, it had an order book of Rs 9,000 crore and expects to get more orders during the course of the year. It is targetting a turnover of Rs 4,800 crore this year, a growth of around 18 per cent over the last fiscal.
Sastry said "The proposed capital expenditure of Rs 570 crore will be made over and above our new projects. Those projects will be going in a project mode and that expenditure will be extra, whether its a joint development project or a joint venture that we are looking at which may crystallise end of this year or next year. The investment for that will be extra, but over and above that the existing facilities modernisation will see a capital expenditure of Rs 570 crore in the next two years."
He said BEL has been awarded a Rs 100 crore order by the Election Commission to manufacture and supply 102,000 electronic voting machines for the forthcoming assembly elections in the states of Andhra Pradesh, Orissa, Sikkim and Parliament elections in 2009.