The Hindu Business Line : BHEL Tiruchi posts 70% rise in profit before tax

Tiruchi, April 4 Modernisation, capacity expansion and productivity increase are the focus areas for the Bharat Heavy Electricals Ltd unit here, according to Mr R.N. Misra, Executive Director, Tiruchi Complex.

The Tiruchi unit has reported a record performance with a 70 per cent jump in profit before tax and 22 per cent jump in turnover in 2007-08. Its order book during the year was about Rs 10,200 crore.

Sees better year

Addressing the unit’s annual press conference, he said the unit is set to show a better performance in the current year, which it is starting with an order book of over Rs 17,000 crore. The year 2008-09 will also mark the entry of BHEL into the supply of super critical boilers of 600 MW and more. It now makes thermal sets of 200-500 MW capacity.

A joint venture with the Tamil Nadu Electricity Board will soon be formalised and this would mean the Tiruchi unit would get orders to make 800 MW boilers, he said.

The Tiruchi complex, the largest of BHEL’s many, includes the high pressure boiler plant and seamless steel tube plant here, the piping centre at Chennai and an industrial valves plant at Goindwal, Punjab.

Competition

Productivity increases, cost savings and assured deliveries achieved over the last two-three years have contributed to BHEL Tiruchi gaining the capacity to take on international competition including China. During this time, the unit has closed the 25-30 per cent cost advantage that China had over it. Tiruchi unit now competes and wins orders against Chinese competitors. It has also protected its profits despite the increase in steel prices, he said.

BHEL Tiruchi has opened the current year’s order book for the supply of boilers for a power plant in Chhattisgarh — an order that was originally to have been met by China. Over 77 per cent of its orders from the power sector were through international competitive bidding and over 60 per cent of its customers are repeat customers.

Expansion plans

The unit will have the expanded production capacity of 15,000 MW in place by March 2009 against the present 10,000 MW with a total investment of Rs 732 crore. These investments would enable BHEL to make higher capacity and supercritical boilers.

BHEL Tiruchi has received its first order for supply of supercritical boilers (2X660 MW) for the Barh super thermal project at Bihar.

Over the next two years the unit would recruit over 2,350 workers to add to the existing 10,000.The unit has a continuous training programme to upgrade skills and no man days were lost last year.

The value add for an employee has gone up to Rs 27.6 lakh against Rs 19.7 lakh in 2006-07.

ancillaries

In tandem with BHEL’s own expansion plans, BHEL Tiruchi is giving a “big push” to the development of ancillary units and sub-contractors, Mr Misra said.

Over 515 ancillary units, including 315 fabrication units, employing 14,500 workers now support BHEL’s operations. The company has plans to expand this base by supporting an additional 150 units this year. Every new unit means an additional investment of over Rs 50 lakh by an entrepreneur and generation of at least 35 jobs each. The new units will generate over 5,000 jobs totally. Existing units will be strengthened — capacities in 25-30 units are being expanded and eight units are investing Rs 6 crore in new equipment such as automated submerged arc welding machines.

More Stories on : Performance | Bharat Heavy Electricals Ltd | Tamil Nadu

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