BHEL – Leverage
itself to diversity into
New economy sector
of IT
By K G Ramachandran,Chairman
& Managing Director,Bharat Heavy Electricals Ltd.
Bharat
Heavy Electricals Limited (BHEL) has completed yet another successful year
in 1999-2000, despite operating in a highly competitive environment and
subdued industrial climate in the country which witnessed declining trend
in the sale price of products. Major highlights of performance during the
year 1999-2000 are summarised below:
-Profit
after Tax Rs.5994 million, up by 10.06%
-Turnover
Rs.66340 million, decline marginally by 2.37%
-Net
Worth Rs.33578 million up by 8.93%.
-Nav
per Share Rs 137.2 up by 8.93%
Orders
inflow during 1999-2000 stood at Rs.72210 million taking the total outstanding
order book at the end of March, 2000 to over Rs.105,000 million available
for execution in 2000-2001 and beyond.
ORDERS INFLOW
Power
Sector
BHEL continued to demonstrate
its competitiveness by bagging most of the power plant orders placed
during the year under open International Competitive Bidding in the country.
Orders worth Rs 4008 Crore were booked as against Rs.3281 Crore booked
last year.
Notable orders booked, including
those against International Competitive Bidding (ICB), are :
Ø
Talcher STPS (4x500 MW) of NTPC - the single largest thermal power plant
equipment order
ever
on BHEL.
Ø
Suratgarh TPS Stage II (2x250 MW) of RSEB.
Ø
Tala HEP (6x170 MW) - highest rating (Pelton type turbines) hydro order
for the largest
hydroelectric
project of Bhutan.
Ø
Malana HEP (2x43 MW) of the Bhilwara Group.
Ø
Kopili HEP Stage II (1x25 MW) of NEEPCO.
Ø
Turnkey order for refurbishment of Korba TPS (2x120 MW) of MPEB.
Industry
Sector
Despite subdued market
conditions and severe competition, the Industry Sector booked orders worth
Rs.2503 Crore, as against Rs.2304 Crore booked last year. Sustained focus
on customer response and project management resulted in BHEL retaining
an overall success rate of over 60%.
Significant orders booked
against intense competitive bidding include :
Ø
Entry into new business area of Mounded Vessels for LPG storage - orders
already bagged from IOC for facilities at Vizag, Ajmer and Delhi.
Ø
7th consecutive order for 120 MW captive power plant from NALCO for Angul
expansion - a measure of customer's confidence in BHEL.
Ø
Retained market leadership of over 80% for Centrifugal Compressors with
major orders from IOC Haldia and GAIL Vijaipur and Gandhar.
Ø
Country's largest AFBC Boilers of 2x165 Tonnes/Hour capacity and 55 MW
STG, from Jindal Steel & Power Ltd., Raigarh (M P).
Ø
BHEL joined the national endeavour to promote non-conventional fuels and
secured orders for Steam Turbine Generators from 5 sugar and 4 bio-mass
projects.
Ø
Thrust on motor business with overseas pump and compressor manufacturers
- repeat orders from Ingersoll Dresser Pumps, UK and Austria. Over 70%
market share retained in the domestic market for AC and DC Electrical Machines.
Ø
Leadership in the field of Ceramic Technology established with an order
for 4 lakh Disc Insulators for + 500 kV HVDC application from PGCIL, following
successful type testing at CESI, Italy.
Ø
Japan Bank for International Cooperation (JBIC) funded order for supply,
erection and commissioning of three clear water pumping stations from Bangalore
Water Supply and Sewerage Board.
Ø
Maintained leadership in 400 kV substations with two turnkey orders for
KEB (Talaguppa)and PGCIL (Allahabad).
Ø
4 nos. highest rating (306 MVA) Generator Trans- formers order for hydro
power projects from 1000 MW Tehri HEP.
Ø
Market leadership of over 90% in Wellheads and X-mas Tree equipment with
orders from ONGC and OIL.
Ø
Other major orders include: large size 500 TPD Chemical Recovery Boiler
from West Coast Paper Mills; 400/220/132 kV switchyards from WBSEB; largest
ever order from DoT for switching equipment totalling 2.53 lakh lines.
Ø
As a contribution towards national effort for effective metering of power,
BHEL has taken up production of tamper-proof electronic energy meters developed
in-house and has secured orders from customers like MSEB.
-
First 800 HP Diesel
Hydraulic shunting Loco was developed and supplied to IFFCO, Kandla, during
the year.
INTERNATIONAL
BUSINESS
Continuing the momentum
gained in overseas business, the company achieved a quantum jump in physical
exports, recording the highest ever export order inflow of Rs.703 Crore
as against Rs.250 Crore of last year - an increase of 181%. This
performance has been achieved while operating in a highly competitive
internatio- nal market witnessing structural changes and consolidation
of major power equipment manufacturing companies.
During the year, BHEL secured
orders for four prestigious gas-based and hydro projects, each one
of which signifies a major step forward.
Ø
First ever export order for a Frame-9 Gas Turbine based power plant of
124 MW ISO rating on turnkey basis from Ministry of Electricity &
Water, Government of Oman. The order is significant as it not only firmly
established BHEL in Oman but also marked the entry of BHEL in the setting
up of large size gas turbine based power plants abroad on turnkey basis,
so far the forte of a few companies from the developed world. This is the
fourth successive power plant order secured by BHEL since its entry into
Oman four years back.
Ø
The largest ever export order was secured for the supply of 2 nos. Gas
Turbine Generating Units (159 MW ISO rating each) and auxiliaries. The
order, received from General Company for Electrical Projects (GCEP), Iraq,
under the Oil for Food programme shall, however, be executed on receipt
of UN clearance.
Ø
BHEL achieved a major breakthrough in Bangla- desh, with an order for a
124 MW ISO rated Power Plant order at Baghabari. This was the second consecutive
order for a Frame-9 Gas Turbine based project during the year and is a
significant step forward for BHEL's plan to expand and consolidate its
base in the Bangladesh market.
Ø
BHEL made a foray in the Central Asian region by bagging the first ever
export order from Azerbaijan. The order for a 78.2 MVA Hydro Generator
package for the EBRD-funded Mingechaur HEP was won against stiff competition
not only from reputed international companies but also from well-entrenched
local companies.
Continued focus on
product and services export led to notable successes during the year, including
orders for Transformers from Azerbaijan and Greece; Shunt Reactors from
Greece; Spares and services from Oman, Malaysia, Malta, Libya and Cyprus;
Insulators from UK, Nepal, Malaysia, Saudi Arabia and France; Valves from
USA and Japan; Load gear boxes for Gas Turbines from France and Electrics,including
Motors, Controls and Power distribution system for a cold rolling mill
from Bangladesh.
As a result of thrust on
the after -market service business in overseas markets, BHEL completed
rehabilitation work for 50 MW Boiler at Siddhirganj Power Station in Bangladesh.
In addition, overhauling of 2 Boilers of 30 MW each was carried out
at Al Arish power project in Egypt, under BHEL's supervision.
In a record time of just
2 months, a 3 MW brushless alternator was manufactured and exported
to Vietnam.
Other export orders executed
during the year include: Valves to USA, Japan and Kuwait; Insulators to
UK, UAE, Saudi Arabia and Nepal; Transformers to Greece, Oman and Jordan
and Spares and Services to Libya, Oman, Malta, Cyprus and Malaysia.
PROJECT FINANCE
-
BHEL continued to
upgrade its capability for providing/syndicating finances to customers
on selective basis. BHEL has organised lines of credit from leading Financial
Institutions like ICICI, IDBI and IFCI and major banks such as SBI as a
sales-aid-financing measure. During the year, a large committed competitive
credit was offered for a project.
PROJECT COMPLETION
AND COMMISSIONING
During the year, the
company added 59 sets of 3522 MW in the country, including 10 nos. of 199
MW captive/industrial sets and 8 nos. of 128 MW diesel sets for India's
largest diesel power plant at Kozhikode.
With this, the installed
capacity of BHEL sets went up to 62,460 MW and BHEL maintained its
share of nearly 65% in the country's total installed capacity of 97,059
MW.
Major power projects commissioned
during the year include:
-500
MW thermal set for Vindhyachal Unit 8.
-250
MW thermal sets for Bakreswar Unit 1, Raichur Unit 6, Birsinghpur Unit
4 and Unchahar
Unit 4.
-220
MW nuclear sets for Kaiga 2 and RAPP 3.
-143
MW Gas Turbine sets for Faridabad Units 1 and 2.
-120
MW Steam Turbine for Kayamkulam CCPP.
In addition, the first
2 sets at the 90 MW (3x30 MW) Gas Turbine based turnkey power plant of
Petroleum Development Oman (PDO) were commissioned during the year. Significantly
for the first time in PDO's history, an EPC contractor - BHEL - has
been awarded the 'Best Contractor's Camp Award' for measuring upto the
exacting standards of Health, Safety and Environment, stipulated
by 'Shell' worldwide.
In the Transmission sector,
the 1500 MW + 500 kV Chandrapur-Padghe HVDC project was commissioned
and handed over to MSEB. Also, power flow was achieved at the + 200 kV
National HVDC Stage II project between Barsoor and Lower Sileru, successfully
demonstrating the national capacity for HVDC technology.
EQUIPMENT
PERFORMANCE
BHEL-built thermal
sets achieved the highest ever Plant Load Factor (PLF) of 68%, which was
higher than the national average. The Operating Availability (OA) of these
sets was 80.2%. BHEL-make 200/210/250/500 MW thermal sets, which form the
backbone of the country's thermal generating capacity, operated at an all
time high PLF of 74.3%. BHEL supplied sets generated 305.70 Billion
Units of electricity, constituting 72% of the total electricity generated
in the country during 1999-2000.
Notably, 107 BHEL-built
thermal sets achieved PLF of over 70%, of these 23 sets achieved PLF of
over 90% and 47 achieved PLF of between 80 to 90%.
BHEL built nuclear sets
achieved the highest ever PLF and OA of 78.2% and 85.9%, respectively.
BHEL hydro sets achieved
the highest ever unit availability of 98.15%.
BHEL built hydro sets at
the 336 MW Chukha HEP in Bhutan broke all previous records
by generating 1944
Million Units (MUs) during 1999, due to 100% availability of BHEL sets.
BHEL built 500 MW (Unit
6) at Trombay TPS has been running continuously for over a year.
CUSTOMER
FOCUS
To facilitate uninterrupted
power supply and to keep power plants in good running condition, BHEL overhauled
the highest ever 100 utility and industrial thermal sets equivalent to
19,773 MW, including 10 non-BHEL sets equivalent to 2257 MW.
A 201 MVA, 400/21kV single
phase Generator Transformer of Peebles UK make at NTPC Rihand was repaired
in a record time of 9 months.
BHEL reinforced its commitment
to providing prompt and efficient customer service by successfully
renovating a turbogenerator at Essar Steel Limited's Captive Power Plant
at Hazira, in Gujarat, in a record time of just 45 days. The turbogenerator,
of 11 MW capacity was badly damaged causing a major hurdle in production.
QUALITY
As a commitment towards
Total Quality Management (TQM), in line with CII/EFQM guidelines,annual
improvement action plans are being implemented involving techniques like;Benchmarking,Business
Process Re-engineering, Six Sigma and Gemba Kaizen. These are resulting
in cycle time reduction for further improvement in delivery and technological
process upgradation, leading to improvement in quality of products and
enhanced customer focus,on continuous basis.
To fulfil its role of a
corporate citizen towards protection and conservation of the environment
and ensuring that its products and systems also meet such requirements,
BHEL has finalised a Corporate Environment Management Policy for ISO14001
certification.
TECHNOLOGY
DEVELOPMENT
-
During the year,
a turnover of over Rs.530 Crore was achieved by commercialising products
and systems through in-house R&D/technology developments.
Ø To reduce
pollutant emissions from automobile exhaust systems, a Ceramic Honeycomb
Substrate,conforming to Euro II norms was developed and a Catalytic Converter
based on it has successfully completed a cumulative on-road trial run of
80,000 kms after being fitted in a mid-size car.
Ø
BHEL's
Photovoltaic modules have been successfully tested and certified at the
European Solar Test Installation, Joint Research Centre, ISPRA, Italy.
Ø
India's largest vertical motor of 3175 kW capacity, has been developed
for the first time in the country, for Simhadri TPS.
Ø
For the first time in the country, a breakthrough has been achieved in
power plant automation technology, with the successful indigenous development
of a new automation system called Automatic Plant Start-up/Shut down (APS)
and Automatic Plant Regulator (APR) system. The systems have since
been commissioned at the 291 MW NEEPCO, Kathalguri and the 350 MW NTPC,
Kayamkulam, power plants.
Ø
To prevent erosion of hydro components in hilly regions due to excess silt
in water, a High Velocity OXY Fuel (HVOF) coating process has been developed
which is simple in application and can be easily adopted on large components.
RENEWABLE ENERGY SOURCES
100 kW Grid Interactive
solar power plant has been commissioned at Kiltan Island, Lakshadweep and
supplies for another 100 kW Grid Interactive solar power plant at Minicoy
Island,Lakshadweep have been completed.
BHEL-supplied Wind Electric
Generators (8x250 kW) were successfully commissioned at the first windfarm
of Rajasthan at Amarsagar (Jaisalmer). So far, 296 WEGs equivalent to 66
MW have been supplied to various customers.
As BHEL's own contribution
to green power, a 4 MW windfarm has been commissioned and synchronised
with the Grid at Kadavakallu in AP. Besides, three Grid Interactive solar
power plants, totalling 100 kW, have been commissioned at BHEL offices
in Delhi and Noida.
Highest ever orders for
11,500 nos. portable Solar PV Lanterns were received during the year
for use in rural areas.
CAPITAL INVESTMENT
During
the year, a capital investment of Rs.112 Crore was made on plan capital
programmes with focus on holistic modernisation and replacement of ageing
facilities for enhancing competitiveness of key products/areas. Programme
for refurbishment and uprating of all medium and heavy machine tools and
equipment, was given renewed thrust.
TECHNICAL
COLLABORATION AGREEMENTS
BHEL has become the
forerunner in taking up manufacture of sub and super critical Once-Through
Boilers by entering into a Technical Collaboration Agreement (TCA) with
Babcock Borsig ower GmbH, Germany - one of the technology leaders
in Once Through Boilers. For the upcoming mega power projects in
the country, the installation of Once-Through Boilers with super-critical
parameters will not only improve efficiencies but also be environment friendly
with lower emission of gases like SOx and NOx.
BHEL has also entered into
a TCA with Apparatebau Rothemuehle Brandt + Kritzler Gmbh, Germany-a company
providing technical solutions in the field of energy and environment, for
the manufacture of state-of-the-art pollution control equipment called
'Fabric Filters'. With the introduction of stringent pollution control
regulations in the country, manufacture of Fabric Filters assumes
significance as customers are now looking for high efficiency and cost
effective pollution control equipment.
HUMAN RESOURCE
MANAGEMENT
With
the aim of streamlining and optimising its human resources, a Voluntary
Retirement Scheme was introduced in the company. The scheme was a major
success since as many as 8274 employees availed of it. Apart from this,
the company has undertaken several new initiatives including revamping
its training/retraining programmes for its employees.
NATIONAL/INTERNATIONAL
RECOGNITION
-
As a result of individual
and collective efforts, a number of national and international awards have
been bagged by various units and employees of BHEL.
Ø
For the fifteenth year in succession, an employee of BHEL has been selected
for the coveted Prime Minister's Shram Award, for outstanding performance.
Ø
For the tenth year in succession, BHEL has won EEPC's export award for
outstanding export performance during 1997-98.
Ø
Best Contractor's Camp Award' to BHEL at PDO, Hubara (Oman) site, for measuring
upto the exacting standards of Health, Safety and Environment, stipu- lated
by 'Shell worldwide'.
Ø
Golden Peacock National Quality Award 1999', for encouraging Total Quality
Management practice in manufacturing and service organisations has been
awarded to BHEL's Bhopal Plant.
Ø
QCFI's
'Neyveli Lignite Corporation (NLC) Rolling Trophy', for the Best Public
Sector Organisation promo- ting the Quality Circle movement in India has
been awarded to BHEL's Haridwar Plant.
Ø
SSTP,
Trichy won the National Safety Council, USA's 'Significant Improvement
Award' for 1998.
Ø
British Safety Council Award for Electronics Division, Bangalore.
Ø
Excellence in Suggestion Scheme' awards of Indian National Suggestion Scheme
Association (INSSAN) for Hyderabad and Trichy units.
SOCIAL RESPONSIBILITIES
BHEL and its employees
also contributed to the Prime Minister's National Relief Fund for rendering
relief to the victims hit by the Super Cyclone in Orissa. Besides, BHEL
employees extended medical and other assistance to the cyclone victims.
Various welfare activities,
including medical camps and infrastructure support to schools in adopted
villages, were undertaken, during the year.
FUTURE OUTLOOK
-
BHEL has taken several
initiatives to address the requirements of the changing business
environment and
market needs.
ØBHEL
has decided to taken up Infotech as a business initiative. With its existing
expertise in IT and rich experience in Power Station engineering, Servicing
and allied areas, BHEL can leverage itself to diversify into the new economy
sector of Information Technology and IT enabled services. The company would
provide IT enabled business solutions globally in the following areas :
*
Dot.Com Company - B2B vertical portal for electrical, engineering and Power
Industry segments.
*
Software integrator and solution provider.
*
Expert systems for erection, commissioning, operation and mainte- nance
of power plant equipment, training package on Power maintenance.
*
Computer Aided modelling analysis jobs.
*
Application Service Provider (ASP).
Ø
It is focussing on the growing area of Services business i.e. after market
Services, life extension, renovation, modernisation and uprating of power
plants and industrial equipment, alongwith increased customer orientation.
It is taking up such services for non-BHEL equipment also, in the Indian
as well as overseas markets. In this area, the two Joint Ventures with
leading global companies - Siemens and General Electric - in thermal power
plants and gas turbines for after market services are already functional.
Ø
As part of strategic alliances, a joint working agreement has been finalised
with GE-India Technology Centre Pvt. Ltd. (a wholly owned subsidiary of
GE USA) to source engineering services from BHEL for development and manufa-
cture of various electronic control systems for diesel electric locomotives.
Joint venture is also being planned with GE Transportation Systems to manufacture
the diesel-electric propulsion systems.
Ø
To address emerging business prospects in the urban transportation area,
BHEL has entered into consortia with leading international majors and is
participating in various metro rail Projects.
Ø
As a growth strategy, the business of renovation, modernisation and uprating
of hydro Power Stations, which has a vast potential, is being targeted.
BHEL has recently signed a Memorandum of Understanding with Bhakra Beas
Management Board (BBMB), a premier organisation operating hydro electric
Power Stations. Both BHEL and BBMB will synergise each other's expertise
for renovation, modernisation and uprating jobs of hydro electric Projects.
Ø
Continuing from the momentum gained for exports this year, a multi pronged
action plan is being pursued to further enhance exports. The actions include,
evolving as a sourcing centre for global power and industrial needs, thrust
on large size Project exports with suitable Government support for credit,
entry into new markets for services business etc.