BHEL units plan to re-enter defence business

The Tiruchirappali (Tiruchy) and Ranipet units of power and transmission equipment manufacturer Bharat Heavy Electricals Limited (BHEL) is planning to re-enter the defence business.

“Talks are on for supplying certain types of equipment for the Armed forces,” said BP Rao, chairman and managing director, BHEL.

The two units would produce battle tanks, missile launchers and water desalination facilities for submarines.

A Chandrababu, general manager in-charge, BHEL Ranipet, which manufactures boiler auxiliaries, said the unit had initiated taks with the Navy to re-enter the defence business in a “big way”.

The unit, which used to manufacture missile launchers for the Navy, has started discussions for the same apart from a desalination water facility for submarines. “We have tested one such facility in Vishakapatnam and are now planning to showcase this model to the Indian Navy,” said Chandrababu.

The Ranipet unit has also received a Rs 3-crore order from the Indian Space Organisation (Isro) to build fuel tanks for its project Chandrayan II. These tanks will be supplied by the end of this year.

AV Krishnan, executive director, BHEL – Tiruchy, which used to produce battle tanks, said they had initiated dialogue with the Army to re-enter this space. “We have the capability and capacity to manufacture in our unit,” he added.

Currently the defence business accounts for less than one per cent of the total revenue for the unit, he said.

BHEL, in the defence space, will have to compete with private players such as Larsen & Toubro (L&T), Tata Power, Mahindra & Mahindra, Godrej Industries, Kirloskar Brothers, Ashok Leyland, Jindal, Max Aerospace & Aviation and Ramoss India.

According to Assocham, the Centre procures around Rs 55,000 crore of defence equipment every year.

BHEL along with Italian conglomerate Finmechanica may supply as many as 30 heavy duty 127-mm naval guns. With each gun costing Rs 130-150 crore, this means an order worth Rs 4,500 crore.

“We are already supplying 76-MM guns to Navy and now the defence ministry wants to us to make the 127-mm guns,” Rao said, adding they were also implementing an integrated platform system for naval ships.