Bharat Heavy Electricals (Bhel) and National Thermal Power Corporation (NTPC) are planning to enter into a 50:50 joint venture to make heavy equipment required for super-critical thermal power plants.
“The joint venture between Bhel and NTPC will be finalised soon,” said Jairam Ramesh, minister of state for power.
He said the venture was significant as PSUs would play an important role in meeting the power generation target of 78,000MW in the Eleventh Plan.
The joint venture company will manufacture equipment such as boilers and turbines.
The proposed joint venture is expected to settle the conflict between Bhel and NTPC sparked by NTPC’s initial proposal to venture into power equipment manufacturing. Both the heavy industries ministry and Bhel had opposed the move.
NTPC pushed for the equipment venture, saying Bhel often delayed in supplying equipment. Bhel, however, opposed the proposal, saying it would create a conflict of interest with a generator also producing equipment.
For the super-critical thermal power plants, sources said the proposed joint venture might enter into a technical tieup with a global company under a transfer of technology clause.
The government is considering making the transfer of technology mandatory for bidders getting supply contracts for power plant equipment.
Bhel, even with its planned expanded capacity, can meet only up to 60,000MW.
Power ministry officials said the proposed joint venture would ensure the timely supply of equipment for NTPC, especially for projects planned for commissioning during the Twelfth Plan.
Bhel has designed and manufactured equipment that accounts for about 70 per cent of NTPC’s installed capacity.
Ramesh said he had set a target of adding 11,000MW in 2008-09.
source:
http://www.telegraphindia.com/1080409/jsp/business/story_9112070.jsp
Ramesh
The Human Search Engine
alluwanted.com
Tuesday, April 8, 2008
India's BHEL assigned 'AAA(ind)' rating - Fitch
MUMBAI (Thomson Financial) - Fitch Ratings said it assigned a national long-term issuer rating of 'AAA(ind)' to Bharat Heavy Electricals Ltd. (BHEL) with a stable outlook.
The ratings reflect BHEL's strong business position as a market leader among the power generation equipment manufacturers in India, its technological capabilities in supplying power generation equipment across various fuels/capacities and a significantly large order book 4.5 times of its 2007 revenues.
The ratings are supported by the company's superior financial position consisting of large cash balances, a negligible debt, growing profitability and free cash flows also give support to the ratings.
tfn.newsdesk@thomson.com
Ref:
http://www.forbes.com/markets/feeds/afx/2008/04/08/afx4864551.html
Ramesh
The Human Search Engine
Alluwanted.com
The ratings reflect BHEL's strong business position as a market leader among the power generation equipment manufacturers in India, its technological capabilities in supplying power generation equipment across various fuels/capacities and a significantly large order book 4.5 times of its 2007 revenues.
The ratings are supported by the company's superior financial position consisting of large cash balances, a negligible debt, growing profitability and free cash flows also give support to the ratings.
tfn.newsdesk@thomson.com
Ref:
http://www.forbes.com/markets/feeds/afx/2008/04/08/afx4864551.html
Ramesh
The Human Search Engine
Alluwanted.com
Monday, April 7, 2008
BHEL mulling JV for overseas acquisitions
Bharat Heavy Electricals Ltd. (BHEL) is reportedly contemplating forming a joint venture for overseas acquisitions, and is in talks with ONGC, Reliance Industries, Reliance Energy and L&T for the same.
According to a financial daily, the new JV is aimed at gaining the right financial strength to bid for overseas companies against stiff global competition. The newspaper adds that BHEL unsuccessfully tried to acquire two solar power equipment makers - one in Europe and another in the US.
The new BHEL JV would focus on acquiring companies engaged in making power equipment, both in conventional and renewable energy space, says the business daily. It will also look at tapping companies engaged in production of equipment for oil and gas sectors, it adds.
The acquisition will be helpful in getting new technologies and expertise, intellectual property rights, product extensions and market access, the newspaper says, adding that the proposed JV would focus on developed markets like the US and Europe.
ref:
http://www.indiainfoline.com/news/innernews.asp?storyId=63993&lmn=1
According to a financial daily, the new JV is aimed at gaining the right financial strength to bid for overseas companies against stiff global competition. The newspaper adds that BHEL unsuccessfully tried to acquire two solar power equipment makers - one in Europe and another in the US.
The new BHEL JV would focus on acquiring companies engaged in making power equipment, both in conventional and renewable energy space, says the business daily. It will also look at tapping companies engaged in production of equipment for oil and gas sectors, it adds.
The acquisition will be helpful in getting new technologies and expertise, intellectual property rights, product extensions and market access, the newspaper says, adding that the proposed JV would focus on developed markets like the US and Europe.
ref:
http://www.indiainfoline.com/news/innernews.asp?storyId=63993&lmn=1
Saturday, April 5, 2008
BHEL, NPCIL to float N-power equipment JV
NEW DELHI: Power equipment major BHEL and Nuclear Power Corporation of India (NPCIL) on Friday signed a memorandum of understanding (MoU) for floating of a joint venture (JV) company. The JV company will undertake manufacturing of nuclear power generation equipments. The new company will also tie-up with an international company for technical support in this area.
According to the terms of the JV, BHEL will provide financial support while NPCIL will provide technical expertise, a source said. Financial and technical terms of the JV would be formally decided at a later date, it added.
“The boards of the two companies have approved the formation of the JV, which would be operational by October this year,” BHEL chairman and managing director K Ravi Kumar said. The JVC also plans to cater to the needs of other companies which may venture into nuclear power after the Indo-US nuclear deal. It would also be free to participate in open tenders globally.
The JVC will explore and evaluate the various technological options available for steam turbine generator sets of 700 mega watt (mw) rating and above. It would start manufacturing 1,100 mw and 1,500 mw equipment at a later date. “The development of indigenous vendors has ensured long-term support to the power stations in case of any problems and availability of spares for the life cycle of the projects and can avoid Dabhol like situation,” heavy industries minister Sonotosh Mohan Dev said. The JV will not set up a new plant and instead a new unit will be added to the existing BHEL plant at Bhopal or Thiruchirapalli.
ref:
http://economictimes.indiatimes.com/News/News_By_Industry/BHEL_NPCIL_to_float_N-power_equipment_JV/articleshow/2927050.cms
According to the terms of the JV, BHEL will provide financial support while NPCIL will provide technical expertise, a source said. Financial and technical terms of the JV would be formally decided at a later date, it added.
“The boards of the two companies have approved the formation of the JV, which would be operational by October this year,” BHEL chairman and managing director K Ravi Kumar said. The JVC also plans to cater to the needs of other companies which may venture into nuclear power after the Indo-US nuclear deal. It would also be free to participate in open tenders globally.
The JVC will explore and evaluate the various technological options available for steam turbine generator sets of 700 mega watt (mw) rating and above. It would start manufacturing 1,100 mw and 1,500 mw equipment at a later date. “The development of indigenous vendors has ensured long-term support to the power stations in case of any problems and availability of spares for the life cycle of the projects and can avoid Dabhol like situation,” heavy industries minister Sonotosh Mohan Dev said. The JV will not set up a new plant and instead a new unit will be added to the existing BHEL plant at Bhopal or Thiruchirapalli.
ref:
http://economictimes.indiatimes.com/News/News_By_Industry/BHEL_NPCIL_to_float_N-power_equipment_JV/articleshow/2927050.cms
Thursday, April 3, 2008
Bhel net rises 17%, plans greater role in nuclear segment
Spurred by a jump in orders, India’s largest power equipment maker Bharat Heavy Electricals Ltd (Bhel) on Thursday reported a 17% growth in net profit for the fiscal year 2007-08 compared with the previous year.
Its net profit was Rs2,815 crore compared with Rs2,415 crore a year ago. The company’s order book rose 41% to Rs50,265 crore and turnover was up 15% at Rs21,608 crore, its highest till date.
“There is a shortage of raw materials, problems in supply chain management and availability of skilled manpower. However, our projects in the 11th Plan period (2007-12) will be on time as we have taken advanced manufacturing action and ordered raw materials,” said K. Ravi Kumar, chairman and managing director.
However, power sector analysts say Bhel will not be able to sustain a growth trajectory in the long term because of increasing competition.
“Bhel will increasingly witness competition from overseas firms, particularly Chinese suppliers. When China’s domestic demands are met, these firms will start dumping in the Indian market as they will have an immense cost advantage,” said a New Delhi-based analyst, who did not want to be identified.
Bhel remains unfazed and proposes to introduce thermal power generator units with new capacities of 270MW, 525MW and 600MW to counter the Chinese threat.
“We are ready to take on international competition,” said Kumar.
He, however, admitted that since the yuan is undervalued, there will be pressure from Chinese companies such as Dongfang Electric Corp. Ltd, Shanghai Electric Power Co. Ltd and Harbin Power Equipment Co. Ltd.
“Currency fluctuation will hurt our margins to a certain extent. However, 40% of our contracts are covered for price fluctuations,” Kumar added.
To meet the increasing demand, Bhel plans to hire around 20,000 employees over the next five years that could even include lateral recruitment.
In another development, Bhel is in talks with Reliance Power Ltd (RPL) of the Reliance-Anil Dhirubhai Ambani Group for supplying equipment to the two 4,000MW projects of RPL at Sasan in Madhya Pradesh and Krishnapatnam in Andhra Pradesh.
The company will also start making, in a venture with Nuclear Power Corp. of India Ltd (NPCIL), nuclear-powered turbines and generators with capacities of 1,000MW and 1,600MW. It may also take up engineering, procurement and construction activities in the nuclear power sector.
“We, along with NPCIL, may also partner with an overseas technology provider for the nuclear power business. We are open to even giving them equity.”
Bhel has an annual manufacturing capacity of making power equipment that have a total capacity of 10,000MW, which the company plans to raise to 15,000MW a year by December 2009.
source:
http://www.livemint.com/2008/04/04004721/Bhel-net-rises-17-plans-grea.html
Ramesh
Human Search Engine
http://www.alluwanted.com
Its net profit was Rs2,815 crore compared with Rs2,415 crore a year ago. The company’s order book rose 41% to Rs50,265 crore and turnover was up 15% at Rs21,608 crore, its highest till date.
“There is a shortage of raw materials, problems in supply chain management and availability of skilled manpower. However, our projects in the 11th Plan period (2007-12) will be on time as we have taken advanced manufacturing action and ordered raw materials,” said K. Ravi Kumar, chairman and managing director.
However, power sector analysts say Bhel will not be able to sustain a growth trajectory in the long term because of increasing competition.
“Bhel will increasingly witness competition from overseas firms, particularly Chinese suppliers. When China’s domestic demands are met, these firms will start dumping in the Indian market as they will have an immense cost advantage,” said a New Delhi-based analyst, who did not want to be identified.
Bhel remains unfazed and proposes to introduce thermal power generator units with new capacities of 270MW, 525MW and 600MW to counter the Chinese threat.
“We are ready to take on international competition,” said Kumar.
He, however, admitted that since the yuan is undervalued, there will be pressure from Chinese companies such as Dongfang Electric Corp. Ltd, Shanghai Electric Power Co. Ltd and Harbin Power Equipment Co. Ltd.
“Currency fluctuation will hurt our margins to a certain extent. However, 40% of our contracts are covered for price fluctuations,” Kumar added.
To meet the increasing demand, Bhel plans to hire around 20,000 employees over the next five years that could even include lateral recruitment.
In another development, Bhel is in talks with Reliance Power Ltd (RPL) of the Reliance-Anil Dhirubhai Ambani Group for supplying equipment to the two 4,000MW projects of RPL at Sasan in Madhya Pradesh and Krishnapatnam in Andhra Pradesh.
The company will also start making, in a venture with Nuclear Power Corp. of India Ltd (NPCIL), nuclear-powered turbines and generators with capacities of 1,000MW and 1,600MW. It may also take up engineering, procurement and construction activities in the nuclear power sector.
“We, along with NPCIL, may also partner with an overseas technology provider for the nuclear power business. We are open to even giving them equity.”
Bhel has an annual manufacturing capacity of making power equipment that have a total capacity of 10,000MW, which the company plans to raise to 15,000MW a year by December 2009.
source:
http://www.livemint.com/2008/04/04004721/Bhel-net-rises-17-plans-grea.html
Ramesh
Human Search Engine
http://www.alluwanted.com
Wednesday, April 2, 2008
FACE TO FACE ? 1: SETTING UP ANOTHER BHEL WILL NOT BE AN EASY TASK: CMD
Apr 01, 2008 (Asia Pulse Data Source via COMTEX) -- -- State-run Bharat Heavy Electricals Ltd, which enjoys a near monopoly in the domestic power equipment market, does not see any threat to its position from entry of overseas as well as local players. BHEL CMD K Ravi Kumar feels it would be a real challenging task to create another such company, which specialises in providing total solutions to the customers under one roof. Also, the firm, which was been held responsible for missing the 10th plan five year target, is taking i Free Report!The Only 3 Options Strategies You'll Ever Need
Initiatives to ensure timely delivery during five years to 2012.
Following are the excerpts from an interview with Kumar:
PTI: The government is pushing for a new BHEL with NTPC. Do you agree to the move?
Kumar: We are the only integrated manufacturers in the country, perhaps one of the few in the world. We manufacture every thing S under one umbrella. We give total solutions to the customers. Siemens manufactures only turbo generators, GE manufactures Turbines. You can be a product leader or a cost leader like Chinese. GE, Siemens are product leaders. They spend lot of time on R&D and they make the best product. They don?t give total solutions. We are not product leaders or we are not cost leaders also. But we provide total solutions under one roof. So if somebody has to establish a company of our size it will be very very difficult. I am not saying it is impossible. The way the demand is going up, definitely there is a scope for others to come in. But to be a competitor to BHEL, I am not skeptical, to establish a company of our size is not going to be easy.
PTI: How much investment would be required to set up a company of your size?
Kumar: We have already achieved 10,000 MW of capacity. We are planning 15,000 MW by 2009-end. We are planning 20,000 MW by 2012. If you really want to manufactures products under one roof, it will be very difficult.
PTI: Would not there be a competition from L&T-MHI?
Kumar: They are planning to manufacture super-critical boilers and turbines. They are entering, we are already in.
PTI: BHEL has been held responsible for slippages in 10th five year plan targets.
Kumar: I should not be complacent. Out of 42,000 MW we got (orders for) approximately 20,000 MW. We got only 50 per cent of what they had planned. We have already 80 per cent of what was ordered in 10th plan. BHEL has done well. Out of 40,000, they could place orders for only 30,000 MW. There were lot of delays in placing orders. Manufacturing is not a problem today. Today there is a problem of supply chain management.
PTI: Have you set for yourself any targets for the 11th five year plan?
Kumar: We suppose to supply about 60 per cent of the targeted capacity addition. The government plans to add 78,000 power generation capacity in the 11th five year plan. Another 10,000 MW would come from captive power plants. I feel the plan is for a lakh megawatt. Ultra mega power projects would also be there.
PTI: What is the update on acquisition of Bharat Heavy Plate and Vessels with BHEL?
Kumar: We will be taking it over in the first half of the next fiscal. The plan is to take BHPV a long way. We have worked out the details. We are negotiating with the government and the financial details can not be disclosed. BHEL is taking a 100 per cent share in BHPV. It will become a subsidiary of the company. It will not be merged with BHEL, it will be a subsidiary. But if we take over, we would like to invest about Rs 500 crore.
PTI: Where will the manufacturing joint venture with NTPC be located?
Kumar: If its focus is on exports, it will be located near ports. If not, it will be located somewhere else.
PTI: What is your present order book position?
Kumar: We are not short of orders. Our order book is Rs 82,000 crore now. What we should do is to improve the supply chain management and on-time delivery. That can be improved by Advance Manufacturing Action, which means we will start manufacturing equipment even before receipt of orders. We have taken up with the government that they should standardise the equipment.
PTI: What would be the capacity of the joint venture with NTPC?
Kumar: It should be at least 3,000 MW, the investment for which depends on how NTPC responds. We have chosen the name and formed a shell company. It will be a separate company, which will be managed by NTPC and BHEL. Both the companies will appoint two directors each on the joint venture?s board.
PTI: Is the competition from international companies a blessing in disguise in a sense that your burden was reduced to some extent?
Kumar: We thought the 40 per cent market share, which is not with us, should go to an Indian manufacturer. This is why we are going for another company in joint venture with NTPC. We are not afraid of competition. The joint venture will complement BHEL in certain areas.
PTI: Are you still looking for acquisitions or tie-ups?
Kumar: We would be looking for equity participation in power projects. We held talks with four producers, two have been successful. We have already signed up with state utility of Tamil Nadu and expect to close a deal soon with Gujarat. We are also in talks with the Uttar Pradesh utility.
Ref:
http://www.tradingmarkets.com/.site/news/Stock%20News/1292478/
Initiatives to ensure timely delivery during five years to 2012.
Following are the excerpts from an interview with Kumar:
PTI: The government is pushing for a new BHEL with NTPC. Do you agree to the move?
Kumar: We are the only integrated manufacturers in the country, perhaps one of the few in the world. We manufacture every thing S under one umbrella. We give total solutions to the customers. Siemens manufactures only turbo generators, GE manufactures Turbines. You can be a product leader or a cost leader like Chinese. GE, Siemens are product leaders. They spend lot of time on R&D and they make the best product. They don?t give total solutions. We are not product leaders or we are not cost leaders also. But we provide total solutions under one roof. So if somebody has to establish a company of our size it will be very very difficult. I am not saying it is impossible. The way the demand is going up, definitely there is a scope for others to come in. But to be a competitor to BHEL, I am not skeptical, to establish a company of our size is not going to be easy.
PTI: How much investment would be required to set up a company of your size?
Kumar: We have already achieved 10,000 MW of capacity. We are planning 15,000 MW by 2009-end. We are planning 20,000 MW by 2012. If you really want to manufactures products under one roof, it will be very difficult.
PTI: Would not there be a competition from L&T-MHI?
Kumar: They are planning to manufacture super-critical boilers and turbines. They are entering, we are already in.
PTI: BHEL has been held responsible for slippages in 10th five year plan targets.
Kumar: I should not be complacent. Out of 42,000 MW we got (orders for) approximately 20,000 MW. We got only 50 per cent of what they had planned. We have already 80 per cent of what was ordered in 10th plan. BHEL has done well. Out of 40,000, they could place orders for only 30,000 MW. There were lot of delays in placing orders. Manufacturing is not a problem today. Today there is a problem of supply chain management.
PTI: Have you set for yourself any targets for the 11th five year plan?
Kumar: We suppose to supply about 60 per cent of the targeted capacity addition. The government plans to add 78,000 power generation capacity in the 11th five year plan. Another 10,000 MW would come from captive power plants. I feel the plan is for a lakh megawatt. Ultra mega power projects would also be there.
PTI: What is the update on acquisition of Bharat Heavy Plate and Vessels with BHEL?
Kumar: We will be taking it over in the first half of the next fiscal. The plan is to take BHPV a long way. We have worked out the details. We are negotiating with the government and the financial details can not be disclosed. BHEL is taking a 100 per cent share in BHPV. It will become a subsidiary of the company. It will not be merged with BHEL, it will be a subsidiary. But if we take over, we would like to invest about Rs 500 crore.
PTI: Where will the manufacturing joint venture with NTPC be located?
Kumar: If its focus is on exports, it will be located near ports. If not, it will be located somewhere else.
PTI: What is your present order book position?
Kumar: We are not short of orders. Our order book is Rs 82,000 crore now. What we should do is to improve the supply chain management and on-time delivery. That can be improved by Advance Manufacturing Action, which means we will start manufacturing equipment even before receipt of orders. We have taken up with the government that they should standardise the equipment.
PTI: What would be the capacity of the joint venture with NTPC?
Kumar: It should be at least 3,000 MW, the investment for which depends on how NTPC responds. We have chosen the name and formed a shell company. It will be a separate company, which will be managed by NTPC and BHEL. Both the companies will appoint two directors each on the joint venture?s board.
PTI: Is the competition from international companies a blessing in disguise in a sense that your burden was reduced to some extent?
Kumar: We thought the 40 per cent market share, which is not with us, should go to an Indian manufacturer. This is why we are going for another company in joint venture with NTPC. We are not afraid of competition. The joint venture will complement BHEL in certain areas.
PTI: Are you still looking for acquisitions or tie-ups?
Kumar: We would be looking for equity participation in power projects. We held talks with four producers, two have been successful. We have already signed up with state utility of Tamil Nadu and expect to close a deal soon with Gujarat. We are also in talks with the Uttar Pradesh utility.
Ref:
http://www.tradingmarkets.com/.site/news/Stock%20News/1292478/
Tuesday, April 1, 2008
Manpower at BHEL
I worked 18 years (1981-1999) with Electronics Div,BHEL, Baangalore and have come across many brilliant Engineers. As many Engineering graduates look for IT jobs these days, it becomes difficult for manufacturing sector to attract engineers interested in core engineering. However, BHEL manages to get excellent Engineer trainees and are able to hold them too. Hats off to the BHEL.
While we work at BHEL, we may complain about many things, including salary. But if you take out the salary part of it, BHEL is a great place to work at. If you have ideas, there is no limitation to implement your ideas.
I was lucky to have many bosses, who were open to ideas. And I had great company of excellent colleagues. While some cream left BHEL -Udayan Banerjee ( now a VP at NIIT, India), Sastry ( surprisingly took early retirement from Infosys), Raghavan ( now CEO of Honeywell, India ?? ), Shagrithaya, P. Chandrasekhar, ( now in Honeywell) many others like Nandakumar Kamath, Ravindran, Thamendran, Baliga, Rawat etc continue to be loyal to BHEL.
I love BHEL and I learned a lot from BHEL. I look forward to see how I can get involved again with BHEL as a vendor! Or probably help the wards of BHEL employees !!!!
Ramesh
I still remember my staff number after 9 years - 3775739 !!
While we work at BHEL, we may complain about many things, including salary. But if you take out the salary part of it, BHEL is a great place to work at. If you have ideas, there is no limitation to implement your ideas.
I was lucky to have many bosses, who were open to ideas. And I had great company of excellent colleagues. While some cream left BHEL -Udayan Banerjee ( now a VP at NIIT, India), Sastry ( surprisingly took early retirement from Infosys), Raghavan ( now CEO of Honeywell, India ?? ), Shagrithaya, P. Chandrasekhar, ( now in Honeywell) many others like Nandakumar Kamath, Ravindran, Thamendran, Baliga, Rawat etc continue to be loyal to BHEL.
I love BHEL and I learned a lot from BHEL. I look forward to see how I can get involved again with BHEL as a vendor! Or probably help the wards of BHEL employees !!!!
Ramesh
I still remember my staff number after 9 years - 3775739 !!
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