BHEL to become $10 bn company by 2012

New Delhi, May 10: Spurred by strong and consistent growth over the Past few years, engineering major Bharat Heavy Electricals Limited (BHEL) today unveiled a strategic plan to become a 10 billion dollar company by 2011-12.

The 'Strategic Plan 2012' will enable the company to grow at a 20 per cent compounded annual growth rate (CAGR) and achieve a turnover of 10 billion dollars over the next five years, a 250 per cent increase over its present turnover of four billion dollars, a BHEL spokesperson said.

The growth plans for the company are expected to be driven by capacity and capability enhancement that will leverage the company's efforts in its core area of power, supported by its industry, transportation, transmission, exports, and spares and services businesses.

Also, in order to retain its competitive edge in the face of mounting competition, various capability-building initiatives such as design-to-cost, purchase and supply management and lean manufacturing have been taken up at the Bhopal and Hyderabad plants and will shortly be put in place across the company, the spokesman said.

On the back of the successful completion of its earlier five-year long-term document -- 'Strategic Plan 2007'-- BHEL is confident of achieving the goals it has set for itself in the new strategic plan.

With the establishment of manufacturing capacity of 10,000 MW per annum by the end of 2007, BHEL has embarked upon a very ambitious plan of enhancing its manufacturing capacity to 15,000 MW per annum with a total investment of about Rs 3,200 crore for the XI Plan.

The company had exceeded the turnover target set out in the Strategic Plan 2007, where it had originally targeted a turnover of Rs 12,500 crore at the end of 2006-07 but closed the year with an impressive top line of Rs 18,702 crore.

Giving a cutting edge to its globalisation efforts, BHEL will position itself as a regular EPC contractor in international markets besides pursuing the mergers and acquisitions route to avail inorganic growth opportunities to enlarge the company's operations and reach in export markets.

With an outstanding physical export order book of over one billion dollars, the company has gained high growth momentum in international business and is now targeting a seven-fold increase in physical exports from current levels.

In addition, the spares and services business is expected to be the next growth opportunity for the company where revenues are expected to increase four-fold.

UNI