BEML plans Rs 115 cr capex in FY '09

BEML Limited, the defence sector PSU, has planned a capital expenditure of Rs 115 crore during 2008-09 to modernise all its manufacturing units in Bangalore, Mysore and Kolar Gold Fields. Last year, the company invested Rs 157 crore for modernisation of the plant and machinery in all major manufacturing divisions.

BEML Chairman and Managing Director V RS Natarajan told reporters, here today, besides bringing Rail Unit-2 on-stream at KGF in 2007-08, BEML completed setting up a new assembly facility for manufacture of transmissions at KGF and a new automated assembly line for engines at Mysore complex.

He said the company had drawn up a modernisation plan involving an outlay of Rs 415 crore spread over five years starting 2004-05. Of this, till now the company has spent Rs 215 crore and the remaining amount will be spent during the next couple of years.

Meanwhile, the company has increased the capex plan to Rs 550 crore by adding another Rs 100 crore from the funds raised through a follow-on public issue in July last year. It had raised Rs 526 crore to meet its modernisation expenses.

He said the BEML will soon commence assembling BEML products in Brazil where it has formed a joint venture company - BEML Brazil Paricipacoes Ltda for an initial investment of Rs 100 crore spread over 2-3 years. BEML had registered its Brazilian subsidiary in May 2007.

According to Natarajan, BEML will initially export 25 machines to Brazil and market them through its JV. The machinery include excavators, dozers and loaders.

"Once we sell these machines we will start assembling them locally for the Brazilian market." The assembly plant will be set up at Vitoria in Brazil and employ local workers, he said.

He said the company is also opening a new sourcing office in China during the last week of April. It plans to procure various parts and components from Chinese vendors for its mining and construction equipment division and metro coaches.

Natarajan said the company's new joint venture company, BEML Midwest Ltd, which was set up to explore contract mining opportunities in coal and iron ore mining, has bagged orders worth Rs 96.32 crore. This includes the first contract mining project at Manganese Ore India Ltd valued at Rs 3.35 crore. For 2007-08, BEML has declared an interim dividend of 55 per cent as against 120 per cent for 2006-07.

Natarajan said the trading division of BEML, which came into being last financial year, has made a head-start by achieving sales of non-BEML products to the tune of Rs 160.83 crore during 2007-08. Its technology division also contributed well by doing internal billing to the tune of Rs 11.69 crore and direct billing of Rs 76 lakh.