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BHEL open to collaborations with Chinese firms

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(BHEL), which is facing stiff competition from Chinese equipment makers, today said it is open for collaboration with companies from the neighbouring country.

In response to a query on whether the company would be open for collaboration with Chinese entities, Chairman and Managing Director B Prasada Rao said, "If it adds value to us, we are open to that".

Import of cheaper Chinese power equipment are impacting state-run BHEL which today posted a net profit of Rs 6,868 crore for the year ended March, 2012.

The government is looking at higher import duty on Chinese power gear to provide a level playing field for domestic manufacturers such as BHEL.

Announcing the annual results, Rao said the company is open for collaborations with the private sector.

"Definitely, we will be providing [help] if the private sector comes for help from us. Secondly, we are open for that [collaboration with private sector]," he noted.

Among others, the company would be ready to offer 26 per cent equity in power projects. "We don't mind deploying our resources... That will also help in [ensuring] better business," Rao added.

Unperturbed by the significant slowdown in orders from the power sector, he said that current problems in the power sector are temporary in nature.

The entity's order book declined to Rs 22,096 crore last fiscal, as against Rs 60,000 crore in 2010-11 mainly due to sluggishness in the power sector.

As part of efforts to boost its overall business in the coming years, BHEL would be focusing on growth areas such as transportation and defence.

Rao stressed that transportation is expected to be the next growth area for the company after power.

"We have formed a group within the company to focus on metro [business]... We are also [participating] in the latest tender of Delhi Metro Rail Corp," Rao said.

According to him, the company is now refocusing on wind mills, which it left long back. "We are now looking for partner again... Defence is another big area," he added.

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