Bharat Earth lines up Rs 500 crore spread

Bharat Earth Movers (BEML), the public sector undertaking under the Union Ministry of Defence, has drawn up Rs 500 crore expansion-cum-modernisation plan for the financial year 2007-08.

The company will utilise a part of the funds, which it plans to raise through a public issue in April this year for expansion of its plant capacity in all its production units, said BEML CMD V R S Natarajan.

BEML's Rs 400 crore public issue was cleared by the Cabinet Committee on Economic Affairs on Thursday. "We are basically looking to become a market leader in all our segments over the next few years. At present, we are the leader in the mining and earth moving equipment business and looking to become the only supply source for the Metro coaches and ground support equipment in the country," he said.

Of Rs 500 crore capital expenditure planned in the next financial year, BEML aims to spend Rs 250 crore on its core business like earthmoving equipment and another Rs 240 crore to set up a brand new manufacturing unit to produce the metro coaches at Bangalore.

In addition to this, it also plans to upgrade the existing facility to make the coaches to match the global standards and to make an exclusive hub for rolling out high-tech metro trains to meet the growing demand from the metro cities. It plans to manufacture 200-300 metro coaches per annum. Presently, it is capable of producing only 12-15 per month.

The company aims to secure orders for the supply of metro rail coaches for the second phase of the Delhi Metro and also bags order for the Bangalore Metro as and when it happens, Nataran said.

BEML will make fresh investments in its new joint venture set up in Brazil last year with its partner, Compagnie Comercio E Construcoes, to manufacture 500 rail wagons and 200 earth-moving equipment and spares annually.

It will also invest in its joint venture with Hyderabad-based Midwest Granite and Indonesia's Slumber Mitra Jaya for entering into contract mining, he said. This JV firm will commence operations in 2007-08. BEML is also in the process of setting up a new unit to manufacture the rail coaches, military wagons at Kolar.

It recently acquired 1,109 acres on lease and two workshops from Bharat Gold Mines at Kolar gold fields (KGF) and built a new test track for defence equipment at KGF.

These workshops have been upgraded and a new fabrication unit is set up for heavy structures, mainly for mining and construction equipment. While one workshop is utilised for heavy fabrication works and the other is being used for making the rail coaches.