BHEL to invest Rs 235 cr in Bharat Heavy Plates

Bharat Heavy Electricals Limited (BHEL) is planning to invest Rs 235 crore over the next two to three years in Bharat Heavy Plates and Vessels Limited (BHPV). It was acquired by BHEL last year. The investment will mainly go into modernising the plant and infusion of working capital.

B P Rao, chairman and managing director, BHEL who was here to flag off country’s first critical boiler said that BHPV, located in Visakhapatnam, Andhra Pradesh, is presently the engineering procurement and construction (EPC) unit for process industries. Going forward it would also manufacture ancillaries for BHEL.

The proposed investment includes procuring new machines and modernising and infusing working capital, he added.

Setting up a manufacturing unit would need massive greenfield investments and long gestation time, supporting an existing entity like BHPV makes better business sense where economies of scale can be achieved by enhancing the capacity with brownfield investments, according to BHEL’s earlier release.

The market for BHPV’s products, especially in process equipment and cryogenics, is expected to grow rapidly. BHPV has been handicapped due to the financial constraints in participating in some tenders, which would be mitigated once the financial restructuring is complete and BHEL takes over.

With BHEL, Tiruchy Unit is heavily booked with orders for boilers in the utility segment, BHPV can be developed as dedicated centre for industrial boilers.

It is expected that the turnover will cross Rs 1,000 crore in five years, according to a BHEL release

Ref:
http://www.business-standard.com/india/news/bhel-to-invest-rs-235-cr-in-bharat-heavy-plates/379179/