BEML banks on granite mining, SEZs for growth

BEML Limited, the Bangalore-based defence PSU, is betting big on granite and marble mining, special economic zones and the boom in real estate to grow its mining and construction equipment business.

The company is in the process of expanding its product offerings in the 7-50 tonne excavator category aimed at the granite and marble mining sector.

Said B B Singh, general manager, BEML Limited, "Presently, our low-end excavators range includes 7-tonne, 20-tonne, 22 tonne and 30 tonnes. We are presently developing new machines in the 40 tonne category, which has got specific applications in the granite mining area. Our in-house R&D unit is in the process of developing this machine and we hope to bring it to the market within a year."

With this, BEML hopes to expand its product range within the low-end excavator category and strengthen its market presence in the country.

"With the setting up of special economic zones, new airports, irrigation canals and other infrastructure projects, we expect huge orders for our excavators in the next few years," Singh said.

BEML manufactures a wide range of equipment for mining and construction sectors like excavators, bull-dozers, dump trucks, backhoe loaders, motor graders, pipe layers, rope shovels and walking draglines. The market for low-end excavators in India is around 6,000 units annually. BEML is fighting competition from companies like Telcon, JCB and L&T Komatsu in this segment.

The company has a distinct product range for both low-end and high-end applications in the mining and construction sector. While the low-end excavators start from 7 tonnes and go up to 50 tonnes, the high-end applications are between 100 tonne to 160 tonne, which are targeted mainly at coal and iron ore mining.

Singh said, with the launch of new products, the company aims to double its sales during 2008-09. During the present financial year, BEML expects a sales growth of 50 per cent in its low-end excavators to over Rs 60 crore.

Next year, BEML is aiming at sales of over Rs 100 crore, he said. In 2006-07, BEML sold 200 machines and is aiming at doubling the number in the next two years.

Apart from new products, the company has also adopted a new marketing approach. For the first time, the public sector company has gone in for a private distribution network to increase its sales.

Over the last one year, BEML appointed 22 dealers across the country apart from its own 22 branches and 10 regional offices. Next year, it plans to add another five dealers.

"While the institutional and government sales is taken care of by our own offices, the dealer network will push sales among small contractors and mines. We hope to double our sales with the marketing network in place next year," Singh said.