BEML eyes Rs1,000 crore from dredging equipment unit

State-owned Bharat Earth Movers (BEML) looks to earn about Rs1,000 crore in three years from its new dredging equipment division, said chairman & managing director VRS Natarajan.

The company recently formed the new arm in consultation with the ministry of shipping.

“We are at the moment looking to tie-up with an overseas company for technology,” Natarajan said.

He added that the company will finalise the partner in a few months and start production of dredging equipment next fiscal.

“We don’t need to spend a lot because we will be using our existing plants in Mysore and Kolar Gold Fields (KGF, in Karnataka),” Natarajan stated.

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

BEML is also engaged in production of mining & construction equipment. It recently diversified into metro coaches and has plans for the aerospace segment.

The Bangalore-based company is yet to finalise the capacity for dredging equipment and hopes to book revenues of Rs100 crore in 2010-11.

Asked of the rationale behind venturing into dredging equipment, Natarajan said, “There is no company making these equipment in India and the market is worth Rs6,000 crore.”    

BEML plans to more than double its turnover in the next five years to Rs7,000 crore, Natarajan told DNA in an interview in October.

For the quarter ended September 30, BEML’s net profit rose just over 8% from a year ago to Rs14.7 crore on a 5.35% increase in net sales to Rs509.27 crore.

On Friday the stock closed 1.43% lower at Rs1,008.40 on the BSE.