New Delhi: Public sector heavy electricals company Bharat Heavy Electricals Limited (BHEL) has said that it will put in Rs1,400 crore to develop a manufacturing facility for castings and forgings.
Casting and forgings are key components for power equipment. For the purpose, BHEL has entered into a 50:50 joint venture with Heavy Engineering Corporation (HEC) to better service the demand for castings and forgings. The new joint venture company will make a few of the castings and forgings needed by the two units of HEC, Heavy Machine Building Plant (HMBP) and Heavy Machine Tools Plant (HMTP).
The investment was announced by K Ravi Kumar, chairman and managing director of BHEL. He said that the company will invest around Rs1,400 crore "to build a castings and forgings factory." A company statement revealed that HEC's contribution to the investment in the joint venture would take the shape of transfer of the plant and equipment, while BHEL will invest towards the equity capital of the company. Additionally, BHEL will also provide technological support and guidance needed by the joint venture company.
Business would be given to the joint venture company on a preferential basis at a benchmark price by both by BHEL and HEC.