State-owned Heavy Engineering Corporation (HEC), Ranchi, which startednet profits from the last fifth consecutive year, closed its financial year 2010-11 with net profit of Rs 38.69 crore, attaining a growth of29 per cent over its last year turnover of Rs 528.52 crore. The MoUtarget for the net profit of HEC set by the department of heavyindustry had been Rs 36.79 crore.
It may be mentioned that HEC was established in 1958 as one of thelargest integrated engineering organisation in the country, consistingof foundry forge plant (FFP), heavy machine building plant (HMBP) andheavy machine tools plant (HMTP).to manufacture equipment andmachinery for core industries like steel, mining, power, railways, drfence and so on.
The financial performance of HEC had not been satisfactory due to excessive manpower, lack of work culture, high overheads, high interest burden, poor marketing set-up, poor strategies, absence ofcontinuity in the top management and under-utilisation of capacity. HEC had been referred to the Board for Industrial & FinancialReconstruction (BIFR) in February 1992 as the company’s accumulated loss of Rs 1008 crore had eroded the paid-up capital of the company of Rs 437 crore and had also completely eroded the borrowed capital, leading to negative net worth of Rs 570 crore.
HEC had been faced a shutdown order in August 2004. However, with the intervention of Jharkhand High Court it received the revival package from the Centre and the Jharkhand government. Within a span of five years the company achieved three fold increases in turnover and had been able to come out of red and making net profit since then.
A senior Official of HEC told Business Standard that the year 2008-09 was the beginning of a golden era for the company when it achieved several milestones with its aim to attain Rs 1000 crore company.
He said in recognition of the ongoing metamorphosis in HEC, resulting in turnaround of the company, the Board for Reconstruction of Public Sector Enterprises (BRPSE), has bestowed HEC with “BRPSE Turnaround Award 2010”.
The award has been given to HEC for continuously earning net profits for the last three years up to 2009 and its net worth becoming positive.
Sources said for sustained revival, HEC has been trying to diversify its business area and successfully entered into business of coal vwasheries. It procured order worth Rs 211 crore from Bharat Coking
Coal Limited (BCCL). During the year, HEC had received total ordersworth Rs 1,021 core and as on date it has work orders worth Rs 2,337 crore,.The company signed MoU with the department of heavy industry forperformance in 2011-12 where sales target and net profit were incorporated at Rs 1,000 crore and Rs 52.10 crore respectively.
