Bhel eyes foreign orders worth Rs4,000cr in 4 yrs

Bharat Heavy Electricals Limited (Bhel) plans to devise a strategy to bag more more orders from abroad. This is part of its initiative to increase its turnover from overseas to about Rs 4,000 crore in four years, which would be about 20 per cent of the total turnover.

Last year, the overseas orders contributed Rs 1,000 crore (about 10 per cent) to the company's total turnover of Rs 10,336 crore. The public sector company is also increasing its capacity from 6,000 mw to 10,000 mw by 2007-08 by investing Rs 1,000 crore.

In the first half of this financial year, Bhel bagged overseas orders worth Rs 1,175 crore and hopes to comfortably exceed its this year's target of Rs 1,500 crore.

The impact of the first half's orders will start showing in the company's balance sheet from the last quarter of this year or the first of next year.

"The time is ripe to secure projects in Africa, South East Asia and West Asia," said Bhel chairman and managing director A K Puri.

He said, Bhel could do much better in bagging orders overseas if the government could support the company .

"The government and industry should work in tandem. We should follow a combination of diplomatic and business initiatives," said Puri. As a case in point, it can be recalled that former Prime Minister A B Vajpayee's visit to Oman had been soon followed by Bhel bagging a contract in Oman.

Puri also pointed that Chinese companies, which have emerged as rivals to Bhel in recent times, can avail of financial support from state-owned financial institutions at 3-4 per cent rates of interest.

"Given the same facilities, we can take Chinese companies head on," he said.

To ramp up it's existing capacity, Bhel is adding machine tools to its plants.

"We can raise our capacity from 6,000 mw to 10,000 mw for just Rs 1,000 crore because the infrastructure is already in place and we don't need to acquire land. The fixed costs are already taken care of and we need only incremental investments," said Puri. Its short-term plans include running the machine tools on three shifts.

The major export orders landed by the company for the present fiscal include the turnkey contract for two power projects in Oman.

BHEL also opened its kitty in Ethiopia and Surinam this year. The company competes with General Electric, Siemens, Mitsubishi, Toshiba and Hitachi internationally for power equipment contracts.

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Shopping abroad

The plan is part of its initiative to increase its turnover from overseas to about Rs 4,000 cr in four years

Last year, the overseas orders contributed Rs 1,000 crore

The PSU is also planning to increase its capacity from 6,000 mw to 10,000 mw by 2007-08