BHEL glides on growth trajectory amidst competition

The turnover of Bharat Heavy Electricals Limited (BHEL) increased to Rs. 43,451 crore in 2010-11 from Rs. 34,154 crore in the previous year. Accounting for 28 per cent of the Corporation's turnover, the Tiruchi Complex of the Navratna company consisting of Heavy Pressure Boiler Plant and Seamless Steel Tube Plant in Tiruchi, Piping Centre in Chennai, and Industrial Valves Plant at Goindwal in Punjab, is on course to enhancing its turnover to Rs. 16,000 crore in the current fiscal from Rs. 12,275 crore in 2010-11.

Maintaining the leadership position in power equipment manufacture is not a cakewalk what with the competition getting intense with increase in the number of domestic companies and entry of foreign players.

A.V. Krishnan, Executive Director, BHEL, Tiruchi Complex, provides perspectives into the competition, opportunities and responsibilities.

On BHEL's challenges and competitive advantage:

The competitors have changed. So far, BHEL could have an edge in manufacture of sub-critical boiler sets with proven experience and standardised design.

Today, the competition is at a multi-national level and there are new technologies. Customers expect funding either through loans or equity. BHEL has joint ventures with utilities like State electricity boards and other public sector undertakings, but cannot fund new private sector companies whose professional commitment is not proven.

Quality is BHEL's competitive advantage; most boilers run with Plant Load Factor of 90 per cent. Some of the customers of Chinese companies are coming back to BHEL.

Steps taken to reduce cycle time of delivery: BHEL, Tiruchi, has fully leveraged capacity modernisation undertaken in three phases. The second phase was completed last March and when the third phase is completed in 2012, the level of 20,000 MW will be attained.

Every process has been made highly productive and more automated.

BHEL is able to fulfil its delivery commitment in 34 months for sub-critical boilers and 42 months for super critical sets. In case of repeat orders in a multiple project, subsequent sets are delivered in gaps of two months.

Challenges on logistics front:

It still remains a concern for BHEL, Tiruchi. But, we have come out with two to three modes. Firstly, transport carriers have been informed of total plan for the year, so that they could mobilise axles and get ready.

Secondly, multi-mode transport of components has been explored and initiated. Components are transported from Tiruchi to Karaikal Port by road and from there to the eastern ports of Paradip and Haldia, and again from there by road to the site.

BHEL could achieve a breakthrough in transporting components to the Tripura project site by utilising the nearest Bangladesh Port at a distance of only 120 km. The components were taken through the road in Bangladesh in a convoy of trailers.

Thirdly, BHEL will utilise Railway yards. Components will be taken to the yards in cranes and moved from there by road.

On diversification: BHEL is already into manufacture of equipment to tap solar, hydel and nuclear energy. The Tiruchi and Bangalore units are together producing a new product called solar thermal, through a MoU with Spain's Abengoa. Heat transferred by solar panels is transferred to heat exchanger, which produces steam to drive turbine. Heat generators are manufactured in Tiruchi and solar panels in Bangalore. Most plants in range of 15 to 17 MW will be put up by 2017.

Manpower addition: BHEL, Tiruchi, will induct 1,000 to 1,200 artisans every year, to replenish retirement vacancies. This is apart from Supervisors and Engineers appointed by the Corporation on an annual basis.

This addition will suffice to take care of growth. By 2017, we expect the manpower to reduce by 42 per cent owing to automation of processes.

Ultra super critical boiler:

The technology for this boiler operating in very high temperature for improved thermal efficiency is a learning experience world over. The technology is being developed indigenously by five entities including BHEL, IGCAR and NTPC under a national mission. The BHEL was working on putting up a demonstration plant.

Thirumayam unit: The independent unit in Pudukkottai district as part of Tiruchi Complex will be commissioned in the next six months. By August, 500 artisans will be recruited, and trained for a few months before posting them at Thirumayam. We have identified five to six locations for creating a township. Once an area of 40 to 50 acres is finalised, work on construction of school, shopping complex and hospital will be initiated and completed in a year.

Corporate Social Responsibility: In 2010-11, a sum of one crore rupees was spent on construction of school buildings, providing drinking water supply and providing furniture and computers to needy schools in villages. Our model is to spread out the benefits. Close to Rs.1.5 crore would be spent on CSR activities in 2011-12