BHEL looking at Africa for first factory abroad

Government-owned Bharat Heavy Electricals Ltd (BHEL) is looking at Africa for setting up its first manufacturing facility abroad. The company had earlier zeroed in on the UAE, but decided to locate the plant in Africa.
 
A senior company executive said the location has not been finalised but it would cater to the company’s business in Africa and the West Asia. Africa, West Asia and Central Asia are the primary foreign markets for BHEL, dominant player in the power and heavy equipment business in India. It plans to increase its export revenue to Rs 10,300 crore by 2012.

The aim behind the new facility is that it would open the entire African and the West Asian market for the company. At present, BHEL has Rs 1,000 crore worth of business in Africa alone. “If we focus, we can get better access,” said the executive. BHEL earns about 15 per cent of its revenue from abroad. It recorded a net profit of Rs 3,039 crore on a revenue of Rs 27,505 crore in 2008-09. It aims to become a $10 billion (around Rs 47,200 crore) company by 2012.

The proposed overseas plant would manufacture switchgear and transformers. “We have been holding preliminary talks with various countries in Africa,” said the executive, without divulging names. The plans are in a discussion stage and nothing has been finalised till now, said another.

At present, BHEL’s international business is supported from India, with its presence overseas being limited to regional offices in Dubai and Jakarta. Its product profile for the international market ranges from thermal, gas and hydro generation to the transmission business. Though its products and services have been exported to over 70 countries, it has not established any production base outside India.

BHEL had earlier made plans for acquisitions abroad, including that of Czech power company Skoda Power AS’ turbine manufacturing facility and units for manufacturing boilers and railway coaches, among others. But these plans could never take off and now it appears to be focusing on putting up its own facility.