New Delhi: At a time when companies are shelving expansion plans and cutting costs, state-owned Bharat Heavy Electricals Ltd (Bhel) is planning to open a marketing office in Kazakhstan and use it to access markets in the Commonwealth of Independent States (CIS).
“We were debating whether to open an office in Moscow or in Almaty (capital of Kazakhstan). The board approved Almaty as Moscow is very expensive (to run operations from) and there is no local power generation equipment manufacturer in Kazakhstan unlike Russia,” said a Bhel executive who didn’t want to be identified. “We also chose Kazakhstan as it has a politically stable system.”
“While we have got orders in Azerbaijan, we are scouting for orders in countries such as Belarus and Ukraine,” he added.
The company will also look at orders from countries such as Armenia, Georgia, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan and Ukraine, he said.
Bhel already operates in the region.
While NTPC Ltd, the country’s largest power generation company, plans to set up power projects in Kazakhstan so that it gets to import coal from that country, Bhel has also been operating in Tajikistan along with public sector NHPC Ltd to build and rehabilitate several commercially unviable hydroelectric projects.
India is trying to politically and economically engage countries in Central Asia to secure fuel supplies, especially gas, because countries in the region have significant reserves of oil and natural gas and could help meet India’s growing demand.
However, some analysts are not convinced of the efficacy of Bhel’s move.
“In the immediate term, I do not see this substantially increasing Bhel’s overseas orders,” said Madanagopal R., an equity research analyst at Mumbai-based Centrum Broking Pvt. Ltd.
Of Bhel’s order book position of Rs1.25 trillion, international orders account for around Rs7,500 crore.
West Asia, Africa and Central Asia are the primary international markets for Bhel, which plans to raise exports to Rs10,300 crore by 2012.
Bhel has the capacity to manufacture power equipment capable of generating 10,000MW a year, which it plans to raise to 15,000MW by December.
Bhel posted a net profit of Rs2,859 crore on revenue of Rs21,401 crore in the year 2007-08.
The heavy equipment manufacturer has generated orders worth Rs24,000 crore in the current fiscal and aims to become a $10 billion-plus firm by 2012.