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SPURRED BY the strong and consistent growth achieved in the last few years, engineering major Bharat Heavy Electricals Limited (BHEL) has now set its sights on becoming a US$10 Billion company by 2012.

The company has unveiled a ‘Strategic Plan 2012’ that will enable it grow at a 20% Compounded Annual Growth Rate (CAGR) and achieve a turnover of US$10 Billion by 2011-12, i.e. two and a half times its present turnover of US$4 Billion, said an official release.

Riding on the continued buoyancy in the Indian economy, especially in the infrastructure and capital goods sectors, the plan focuses on ensuring a sustainable profitable growth for the company over the next five years. In the power plant equipment industry, which constitutes a major chunk of BHEL’s business, reasonably good growth is anticipated.
 
The installed power capacity base in the country is expected to witness an addition of around 1,50,000 MW during the 11th and 12th plans.

The growth planks for the company in the next five years are expected to be driven by capacity and capability enhancement that will leverage the company’s efforts in its core area of power, supported by its industry, transportation, transmission, exports and spares & services businesses.

Also, in order to retain its competitive edge in the face of mounting competition, various capability-building initiatives like Design-to-cost, Purchase and Supply Management, Lean Manufacturing, etc. have been taken up at the Bhopal and Hyderabad plants and will shortly be put in place across the company.

In addition, the spares and services business is expected to be the next growth opportunity for the company where revenues are expected to increase four-fold.

The marketing activity for spares and services has already been consolidated and systems capability is being strengthened to address various market segments, the release said.

With the establishment of manufacturing capacity of 10,000 MW per annum by the end of 2007, BHEL has embarked upon a very ambitious plan of enhancing its manufacturing capacity to 15,000 MW per annum with a total investment of around Rs 32,000 Million, for the 11th Plan.

Having already tied up technology to produce higher rating super-critical thermal sets, this will further strengthen the position of the company in the domestic market, besides reaffirming its commitment to the country’s power development programme for meeting the country’s power forecast for the 11th Plan and beyond, the release claimed.