New Delhi: State-run Bharat Heavy Electricals (Bhel) has said that it will invest Rs1,400 crore to build a manufacturing facility for castings and forgings, key components for power equipment.
“We are planning to invest Rs1,400 crore to build a castings and forgings factory,” Bhel CMD K Ravi Kumar told PTI.
The company has also formed a 50:50 joint venture company with Heavy Engineering Corporation (HEC) to cater to the needs of castings and forgings.
The new JV company would manufacture some of the castings and forgings required by the two units of HEC, Heavy Machine Building Plant (HMBP) and Heavy Machine Tools Plant (HMTP).
HEC’s contribution to the investment of the JV will be in the form of transfer of the plant and equipment and Bhel will invest same amount towards the equity capital of the company.
However, the amount has not been disclosed yet.
Bhel will also provide the necessary technological support and guidance required by the JV, a company statement said on Saturday.
“Business will be given on a preferential basis on a benchmark price to the JV both by Bhel and HEC,” it added.
Bhel is already investing a significant amount in manufacturing stainless steel tube plant, as a part of its casting and forging business.
“Meanwhile, the company has shortlisted a couple of firms for forming more joint ventures, one of them would be in place by next month and the second one by December this year,” Kumar said.
“It will invest $2.5 billion (over Rs10,000 crore) in the next four years to ramp up capacity to meeting the growing electricity needs,” he informed.
On the overseas expansion, the company is looking for acquisitions and is likely to appoint global consultants to advise them.
“Bhel recently bagged a Rs1,155 crore order from GVK Power for supplying and installing equipments at a power project in Punjab,” Kumar said.
The scope of work in the project includes design, engineering, manufacture, supply, erection and commissioning of steam turbines, generators, boilers and associated auxiliaries.
It has enhanced its manufacturing capacity to 10,000 MW per annum, which is being further increased to 15,000 MW per annum in the next two years at a total investment of Rs4,200 crore.