BHEL eyeing big business in Indonesia

Bharat Heavy Electricals Ltd (BHEL) is exploring the possibility of setting up an assembly unit in Indonesia to grab a sizeable market share of the growing demand for power equipment in the South-East Asian country, according to sources. A decision in this regard is expected in the first half of 2011.

The Indian equipment major, which has a sales office in Jakarta, is currently studying the growth potential of the Indonesian market.As part of its long-term plan to boost its export operations, the company is also bullish on the prospects in the South African market. Initiatives are on to grab orders for export of key equipment to Belarus, Zambia, Libya and Bangladesh. BHEL supplied equipment to most of these markets in the past and is now negotiating for fresh supplies.

Big interest in Indonesia

When asked, Mr A.V. Krishnan, Executive Director of the Tiruchi complex, admitted that the company was taking keen interest in the Indonesian market. He, however, denied any proposal to set up an overseas facility to cater to the growing Indonesian economy.

“It's (Indonesia) a good market. There is good growth in power infrastructure there,” he said, adding that the company was “studying the market potential” in the South-East Asian economy.

BHEL is currently supplying two 120-tonne (per hour) circulating fluidised bed combustion boilers (CFBC) to PT IBR in Indonesia. CFBC boilers can use any type of low calorific value fuels ranging from rice husk to lignite or low-grade coal. According to Mr Krishnan, negotiations are on for more export orders to the country.Indonesia has the third largest coal reserves in the world. Most of the reserves are of thermal variety and are exploited for exports to China and India.

The export economy of Indonesian coal is now faced with the country's rising aspiration to ensure growth of domestic industrial activity by inviting foreign investment. Accordingly, the Indian corporate sector is invited to invest in the power and infrastructure sectors in Indonesia in return for its access to coal.

Growing potential

With increasing Indian exposure in Indonesia, theoretically, BHEL has growing market opportunities in the country. As the quality of Indonesian thermal coal is close to the Indian varieties except for low ash and high moisture contents, BHEL boilers and turbines are also considered suitable for use in Indonesian conditions.Meanwhile, the company is set to start supply of 200 MW oil fired boilers to the Trishreen Power project in Syria beginning January 2011. According to company officials, supplies for 4 X 125 MW crude oil fired boilers in Sudan are in the advanced stages of completion.