BEML plans Rs 680 cr expansion

BEML Ltd, the public sector mining & construction, rail & metro and defence equipment maker, today announced plans to invest Rs 680 crore in the next two to three years for expansion and diversification.

The investment plan includes second phase construction at Palakkad, where it has set up a new plant for defence equipment and setting up of a new manufacturing plant for aerospace components at Bangalore aerospace Special Economic Zone.

“With an order book of Rs 5,206 crore in hand we expect to grow our sales by 18-20 per cent during the current year to touch Rs 4,200 crore. We are anticipating good business in the rail & metro business and mining & construction segment with the revival of the economy,” V RS Natarajan, chairman and managing director, BEML Ltd told reporters, here.

Giving the break-up of investment programme, he said, the company will invest Rs 316 crore for aerospace components plant, Rs 100 crore for revival of Mining and Allied Machinery Corporation (MAMC), which was acquired by BEML jointly with Coal India Limited and Damodar Valley Corporation (DVC), a power generating company, Rs 100 crore for setting up an 18-Mw wind mill and the balance for modernisation of its factories.

BEML, which has just commissioned its new manufacturing plant at Palakkad in Kerala for producing defence equipment, plans to acquire another 600 acres land there from Kerala government for second phase expansion. It plans to shift its entire range of defence equipment there, Natarjan told reporters, here today.

In the first phase, BEML has invested Rs 260 crore to set up a 200,000 sq ft complex, its first manufacturing plant outside Karnataka.

He said the MAMC acquisition has helped the company to get a good opportunity to increase its sales of mining and construction equipment business. The company expects to generate business over Rs 500 crore from Coal India alone for supply of mining equipment in the next 10 years. Coal India is expected to extract 700 million tonnes of coal over the next few years.

The company has recently acquired 48 per cent stake in MAMC and intends to increase it to 51 per cent. Presently, Coal India and DVC hold 28 per cent each in the company.

BEML’s order book has marginally grown by 3.78 per cent to Rs 5,206 crore as on April 1, 2010 compared to the previous year. This comprises Rs 3,300 crore for rail & metro business, Rs 1,100 crore for mining & construction equipment and Rs 700 crore from defence equipment as of April 1, 2010.