BEML all set to bag Rs 968 cr defence order

PSU defence and earth moving equipment maker Bharat Earth Movers (BEML) is close to bagging a Rs 968 crore defence order. The company says, it has completed price negotiations for the manufacture of 100 Bhim T6 self-propelled guns and it expects to clinch firm orders in the next three months.

BEML chairman V R S Natarajan said, the Arjun Main Battle Tank variant 155mm, 52 calibre artillery gun system will be manufactured in collaboration with LIW Denel South Africa. While BEML will make the undercarriage and the hull, the turret and the gun will be sourced from Denel. According to the agreement, Denel will offer the technology free to BEML, he added.

BEML expects further orders after the delivery of the first batch. This, officials said, will expand the portfolio to tanks and guns. Incidentally, the order follows a Rs 1,000 crore three-year supply deal in March this year for 228 armoured recovery vehicles.

The company said, these diversifications along with the foray into high speed rail wagons and underground mining equipment "" thanks to the acquisition of underground equipment manufacturing workshop of Bharat Gold Mines in Kolar "" will assist it reach the Rs 5,000 crore turnover by 2013, marking a 12 per cent average year-on-year growth till then. For high speed rail wagons, BEML has signed up with Rotem, Korea. According to the agreement, BEML will pay upfront $4 million to Rotem and 3 per cent royalty for the 15-year collaboration.

Officials said, for now the company has a comfortable order position amounting to Rs 2,015 crore. Besides the T6 order, the company is on course to supply more Tatra army trucks and rail wagons. While the Tatra order is expected to contribute Rs 300-400 crore, rail wagons are expected to rake in another Rs 100 crore.

Ups stake

Rakesh Jhunjhunwala and Associates have acquired a further 0.48 per cent stake through the open market in BEML. With this, their holding increases to 5.13 per cent.