BHEL units to up biz from Defence

The two major units of country’s largest power and transmission equipment manufacturer, state-owned Bharat Heavy Electricals (BHEL) are planning to re-enter defence business. The units — Tiruchirappalli (Tiruchy) and Ranipet — are planning to produce battle tanks, missile launchers and water desalination facilities for submarines. It may be noted that the Ranipet unit also supplies fuel tankers for space exploration projects.

Recently B P Rao, chairman and managing director of BHEL said, “Talks are on for supplying certain type of equipment for the armed forces.” BHEL is working on supplying heavy duty 127-mm guns to the Navy. BHEL supplies 76-mm guns to Navy.

Following this, A Chandrababu, general manager in-charge, BHEL Ranipet unit, which manufactures boiler auxiliaries, told Business Standard that the unit has initiated dialogues with the Navy and is also looking to re-enter the defence business in a “big way”.

“Ranipet unit’s progress in Defence was not very good in the past. We have now decided to scale it up and have started talking to the Navy to re-enter this business,” he added.

The unit, which used to manufacture missile launchers for the Navy, started discussions for the same and for desalination water facility for sub-marines for the Navy. “We have tested one such facility in Vishakapatnam and was successful. We are now planning to showcase this model to the Navy for submarines,” said Chandrababu.

He noted that the Ranipet unit has received Rs 3 crore in order from the Indian Space Research Organisation (ISRO) to build fuel tanks for the Chandrayaan II project. These tanks will be supplied by the end of the year. The unit has already supplied two tanks to ISRO.

Meanwhile A V Krishnan, executive director, BHEL — Tiruchy unit, which used to produce battle tanks said, it has initiated dialogues with the Army to re-enter this space. “We have the capability and capacity to manufacture these in our unit,” he added.

“Presently, the defence business contributes less than 1 per cent of the total revenue for the unit, we want to increase this substantially,” he said.

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

According to industry analysts, defence production is turning lucrative as the defence sector is augmenting its weapon infrastructure.

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

BHEL, along with Finnmechanica may supply as many as 30 heavy duty 127-mm naval guns. With each gun coasting around Rs 130-150 crore.

“We already supply 76-mm guns to the Navy and now the defence ministry wants us to make the 127-mm guns. So, we are the agency along with Navy to chose the right technology,” recently Rao said in a press conference. It is not just naval guns, but BHEL has big plans for other defence orders too.