BEML to tie up with foreign firm for dredging

State-owned BEML Ltd will soon sign an agreement with a European firm for its foray into dredging equipment, said chairman & managing director V R S Natarajan.

He, however, did not reveal the name of the company.

“We have already completed the formalities, we will announce the venture in a month or so,” Natarajan said.

The company, to begin with, will bid for two dredgers in Bangladesh along with its foreign partner.

Natarajan had told DNA in December BEML’s targeting a turnover of Rs1,000 crore in three years from the dredging division. The division was formed a few months earlier in consultation with the shipping ministry.

“We don’t need to spend a lot because we will be using our existing plants in Mysore and Kolar Gold Fields (in Karnataka) to manufacture the equipment,” he had then said, adding that the market for dredging equipment, almost all of which is serviced through imports, is worth about Rs6,000 crore. BEML hopes to book revenues of Rs100 crore in the division in 2011-12.

The company also plans to begin in the first quarter of the next fiscal construction of its new facility in Bangalore to produce a range of aerospace equipment.

The plant, located at a Karnataka government-run aerospace special economic zone near the international airport at Devanahalli, is spread over 25 acres.

“We have acquired the land and commissioning will take 12-18 months from the date of beginning of construction but we hope to do it in 12 months,” Natarajan said.

BEML is spending Rs360 crore on the unit, which will predominantly make ground support equipment. “It will also be possible for us at a later stage to assemble jets and choppers,” Natarajan said.

The company had last month started producing some aero parts at its Mysore plant.

Natarajan said the company might look to partner some overseas company to make defence equipment in Devanahalli.

The company is zeroing in on a European firm for the technology needed for its foray into dredging equipment.

The public sector company is expanding capacity at both its facilities, which make heavy vehicles for the army, at a cost of Rs180 crore. It is also incurring a capex of Rs140 crore for Phase-II of its plans in Palakkad, Kerala, where it makes components for railway coaches.

BEML also makes equipment for the construction and mining industries. It’s also assembling metro coaches for the Delhi Metro Rail Corporation and Bangalore Metro Rail Corporation.

For the three months ended December 31, BEML’s net profit rose 8% to Rs50.37 crore on a 5% drop in net sales to Rs658.18 crore.