The Tiruchirappalli (Trichy) unit of Bharat Heavy Electricals Ltd (BHEL) in central Tamil Nadu, which manufactures high-pressure boilers for thermal units, is doubling its capacity in two phases.
It invested Rs 192 crore for this last year and is currently investing Rs 732 crore, after which it will put in a further Rs 480 crore. It has also set aside Rs 362 crore for technology upgrade.
The unit currently employs around 10,000 people and is likely to add 1,000 more every year for the next three years.
V Ananthakrishnan, executive director, said turnover of the unit had increased to Rs 7,413 crore from Rs 5,554 crore in 2007-08. The unit had set a target of Rs 9,500 crore for 2009-10.
Outstanding orders had increased to Rs 27,150 crore in 2008-09 from Rs 18,165 crore last year, and orders booked during the year stood at Rs 15,500 crore, compared to last year’s Rs 18,165 crore.
Physical turnover of the unit has increased to 450,000 tonnes in 2008-09 and the target is 620,000 tonnes in 2009-10.
More From This Section
As for the BHEL unit at Ranipet in northern Tamil Nadu, 100 km from Chennai, it has reported a 30 per cent growth in turnover during 2008-09, despite industry recession and increase in input costs. The unit’s turnover rose to Rs 2,002 crore from Rs 1,427 crore, and it has set a target of Rs 2,500 crore for 2009-10. To support the target, Rs 117 crore is being invested in capacity expansion. It is planning to raise employee strength from the current 2,300 to 3,200 by 2011-12.
The unit, which makes auxiliaries for boilers, made a profit before tax of Rs 253 crore in 2008-09 compared to Rs 201 crore in 2007-08, an increase of 26 per cent.
The plant recorded profits for the 25th consecutive year.
A V Krishnan, executive director of the unit, said 2008-09 was a turbulent year. In the first half, the cost of steel and petroleum products rose by 60-70 per cent. This continued till September 2008, after which costs began falling again However, while input costs rose, the unit was not in a position to increase the price of the end product. The unit could have made another Rs 100 cr profit if prices hadn’t soared like this, he said, but the global recession began even as the former began recovering.
The other major challenge for the unit was power cuts, which not only affected production but also the quality. The unit spent Rs 1.8-1.9 lakh every month to consume diesel for its generators.
The current order book size is around Rs 6,500 cr, which will be implemented over the next two years, said Krishnan. To support the 2009-10 target, the unit is planning to increase its capacity to 3.2 lakh tonnes by the end of this year, from around 2 lakh tonnes now.
The unit is planning to focus on new segments in 2009-10, including water desalination plants. The unit, which had set a target of Rs 5,000 crore in 2011-12, is expecting 30 per cent of its business will be from water projects.
Demand for seawater desalination and brackish water de-mineralisation projects has increased following the Union environment ministry’s direction that new thermal power plants not use natural water but install their own self-generating water projects, as a condition for giving clearance for the projects, said Krishnan.
The unit got orders for setting up six brackish water de-mineralisation/seawater desalination plants, one each for thermal power plants in Gujarat and Delhi and two each at Bellary in karnataka and North Chennai.