Tie-ups through the EOIs would be for products that complement BEML’s existing products
BEML Ltd is firming up tie-ups with two foreign companies for setting up joint manufacturing facilities in India. Besides, the state-owned company has also called for global expressions of interest (EOIs) for more tie-ups as part of its efforts to indigenise technology.
These planned units would be set up in its Make in India Park. In an interview with Business Standard, Deepak Kumar Hota, BEML’s chairman and managing director, said the nature of tie-ups through the EOIs would be open-ended.
Though Hota did not share the names of the two companies, he said the tie-up with a Czech firm was for spare parts and the other with a Japanese firm was for propulsion. Tie-ups through the EOIs would be for products that complement BEML’s existing products. “We would not only focus on the Indian market, but the joint ventures will export to markets defined in the contract,” he said. Over the years, BEML has exported to 68 countries.
State-run Bharat Heavy Electricals (BHEL), too, is seeking tie-ups with foreign original equipment manufacturers (OEMs) for jointly setting up manufacturing facilities. The advantage for foreign companies will be that no new land would be required to set up factories which could come on the land owned by BEML and BHEL. Whether such EOIs would be possible considering the global economic scenario, Hota said even though there was a slowdown in the short run, it would stabilise in the medium term and would “take off explosively” in the long term.
“We are seeing a kind of shift among manufacturing companies as they want to de-risk themselves and not depend on one single manufacturing country. So, India is a major investment destination because it provides the market. But we need to further improve the ease of doing business,” he said.
Hota said BEML was born in the womb of self-reliance, and that was the key growth driver for the company from its inception in 1964. “Our capability to absorb technology resulted in achievement of indigenisation level of over 80 per cent in defence products, over 90 per cent in mining and construction products and over 65 per cent in rail and metro products,” he said.
Nearly 68 per cent of BEML’s products are developed through its own research and development. “In the last two years, we have filed around 65-70 patents a year,” he said.
On being asked whether the government’s push on Atmanirbhar Bharat would help the company, he said around 90 per cent of everything that BEML sells was through open competition with global OEMs across all its three verticals. The government on May 13 said it would not procure goods or services worth up to Rs 200 crore from any foreign supplier. For this purpose, the general financial rules (GFR) would be amended to disallow global tender enquiries. Under the earlier guidelines, the government agencies were required to procure goods and services worth up to Rs 50 lakh only from local suppliers.
As part of its indigenisation programme, BEML also does vendor development. “It is an elaborate process and we do hand-holding of the MSME and allow them to use our testing facilities. These facilities are also used by the major private players for a charge,” he said.
BEML has about 1,700 vendors. Hota said the company would spawn vendors for 15-16 items for which they have only one Indian supplier or if they import some items.
Source: Business Standard
