Bhel formulates new strategy to counter competition coming from Chinese companies, vouches for its superior equipment

Bharat Heavy Electricals Ltd (Bhel) has formulated a new strategy to counter competition coming from Chinese companies who have picked up a large share of orders from power projects. The company is organising workshops in different parts of the country to convince its clients about the superiority of its equipment vis-a-vis competition.

The initiative is backed by a strong team of Bhel engineers and marketing personnel who have been given the mandate to educate clients about availability and performance of power equipment produced by various companies (including Chinese) globally. Few such workshops have already been held and the company intends to take it to other parts of the country with increased frequency.

“The whole idea is to shift customer preference towards Bhel equipment that have served Indian power plants for several decades,” said a Bhel official not willing to be named. Bhel chairman and managing director BP Rao said recent workshops have yielded positive results for the company and have helped customers to make informed buying decisions.

The proliferation of Chinese equipment is becoming a cause of concern for Bhel that till recently enjoyed monopoly status in the Indian power equipment market. Bhel has orders worth around R1,60,000 crore at present but off late Chinese companies have made a major impact in the Indian power market. Government data suggest that out of 80,610 mw new capacity under construction in the 11th Plan (2007-12 ), about 43,048 mw (55%) is ordered on Bhel and 15,725 mw (20%) on Chinese manufacturers. For the 12th Plan (2012-17 ) period, of the 32,010 mw capacity already under construction, a substantial 10,170 mw (31%) is ordered on Chinese manufacturers.

All major industrial groups like Reliance, Adani, JSW Energy , Jindal Power, KSK, GMR, Sterlite, Lanco, Indiabulls have placed orders from Chinese suppliers.

“In addition to Chinese equipment, new joint ventures will soon start manufacturing in India. Bhel exercise is needed to keep the company prepared for new changes in the market,” said a government official.

Bhel has been organising such workshops periodically in the past too for the mutual benefit of the customers and the company but has increased its frequency now in wake of growing competition in the power equipment market.

In fact, feedback from these workshops have also helped Bhel to come out with new generation power equipment that are not cost competitive but also deliver high levels of performance. The company has also bagged few orders from companies that have earlier placed orders with Chinese suppliers. Bhel, which has ramped up its capacity to 15,000 mw is further increasing it to 20,000 mw to cater to the growing demand for power equipment and address the issue of delay in supplies. Delays has been one of the reasons for Indian companies looking outside for equipment supplies.