New Delhi, June 11: As a first step towards the revival of Bharat Heavy Plate and Vessels (BHPV), Bharat Heavy Electricals Limited (BHEL) has placed the first commercial order on BHPV following the formal takeover of the company last month. The order envisages manufacture and supply of 680 Mt of boiler components, including drums, headers, riser tubes, panels, coils and piping products, a BHEL spokesman told the sources today.
In view of BHPV's working capital position, BHEL has decided to issue raw material for the orders free of cost. The first batch of raw material has already reached the BHPV works. As setting up another manufacturing plant needs massive greenfield investments and long gestation time, supporting an existing entity such as BHPV makes better business sense for BHEL where economies of scale can be achieved by enhancing capacity with brownfield investments.
BHEL plans to load BHPV every monthly, based on its performance and capacity. The market for BHPV's products, especially in process equipment and cryogenics, is expected to grow rapidly.
With a capital expenditure of Rs 236 crore, spread over three years, in addition to induction of experienced manpower and required technology from BHEL, BHPV's turnover is expected to cross Rs 1,000 crore in five years.