Bhel to raise capacity to 20,000 mw by Mar ’12

Public sector power equipment supplier Bhel said that the company expects to commission its ongoing project to raise capacity to 20,000 mw by March 2012 as per schedule. Bhel’s decision to stick to the schedule comes in the wake of at least five private players drawing up plans to set up supercritical equipment manufacturing facilities in the capacity range of 4,000-5,000 mw. The government’s policy is to encourage utilities to procure equipment from indigenous sources. Bhel has 15,000 mw manufacturing capacity in place. While the private players are setting up greenfield projects, the public sector equipment supplier is expanding its manufacturing capacity through brownfield projects where capital expenditure requirement is relatively much lower.

“We welcome competition from private players. But we will strive to maintain our leadership position,” Bhel chairman BP Rao said. Bhel feels it would be able to maintain its leadership position in the domestic power equipment market on the back of its strength in power equipment manufacturing business. Larsen and Toubro (L&T) and JSW are among private companies keen on supercritical power equipment segment.

Bhel enhanced its manufacturing capacity from 10,000 mw to 15,000 mw at a capital expenditure of Rs 3,000 crore. But it expects to further expand capacity to 20,000 mw with an additional investment of Rs 1,600 crore only. Bhel is in the bidding race with private players for bulk supply of eleven units of 660 mw supercritical units to power projects envisaged by central utilities NTPC and Damodar Valley Corporation (DVC) for implementation under the 12th Plan. Bhel will also have to compete for bulk supply of 800 mw supercritical units to NTPC’s power projects, for which tender is due to be floated by the central utility soon.

Earlier, Bhel had requested the government for award of initial supercritical units on a nomination basis so that it could indigenize the new technology. The government asked NTPC and DVC to go for tendering.

Bhel has bagged power equipment supply orders worth Rs 59,031 crore in the financial year 2009-10, nearly the same level as in the previous fiscal. Bhel has orders worth Rs 1,43,800 crore as on March 31.

“The company expects a similar performance in the current fiscal,” The company’s turnover grew by 21% to Rs 34,050 crore in the fiscal 2009-10 compared to the preceding fiscal. During the same period, itsnet profit jumped by 37% to Rs 4,287 crore. The company’s profit before tax increased 31% to Rs 6,353 crore.