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Case Study
HEEP Haridwar: New Business Areas

Company Profile

BHEL is an integrated power plant equipment manufacturer and one of the largest
engineering and manufacturing companies of its kind in India. The company is engaged in the
design, engineering, manufacture, construction, testing, commissioning and servicing of a
wide range of products and services.
BHEL has three main business sectors namely (i) Power, (ii) Industry and (iii) International
Operations, with primary marketing responsibility for major system/product sales.
BHEL has a mammoth 20,000 MW per annum capability for manufacturing of power
generation equipment. A widespread network of 17 manufacturing units, 2 repair units, 4
regional offices, 8 service centres, 1 subsidiary, 4 overseas offices, 6 joint ventures, 15
regional marketing centres and current project execution at more than 150 project sites across
India and abroad corroborates the humongous scale and size of its operations. BHEL s global
competitiveness has established its footprint in all the inhabited continents with references in
82 countries. BHEL has acquired and adapted some of the best technologies from leading
companies in the world including General Electric, Siemens AG, Mitsubishi Heavy Industries
Ltd. etc., together with technologies developed in its own R&D centers.
In line with its policy to grant more autonomy and delegation of power to selected public
sector enterprises, GoI conferred Maharatna status on BHEL in February 2013.

History of Heavy Electrical Equipment Plant (HEEP), Haridwar

HEEP is one of the most strategically important unit among the 17 manufacturing units of
BHEL. Situated in Haridwar, this unit contributes around 12 % (approx.) of the total turnover
of the company. Some major products of this unit include Steam Turbine and Turbo generator
modules up-to 1000 MW, Condenser and Heat exchangers, Super Rapid Gun Mount (Naval
Gun) and Industrial control panels.
Thermal Power sector continues to account for bulk of the order book of HEEP for the past
years and hence the unit witnessed a decline in both its turnover and profitability (annexure-1)
due to slowdown in the Indian Power Sector. This slowdown is attributable to various

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unexpected developments like cancellation of coal blocks, policy logjam, delay in

implementation of planned projects, decline of industrial growth with subsequent decline in
demand of power, thrust on renewables, stressed assets in power sector and increased
volatility in business environment.

The senior management at HEEP Haridwar is looking for various mechanisms to

diversify into new business areas.

Location: HEEP Haridwar Board Room

Mr. Kumar looked around as he settled in the board room to discuss about the topline to be
presented before the Chairman and Managing Director (CMD) of BHEL at Delhi
headquarters. As Executive Head of HEEP Haridwar, he was looking worried with the
turnover figures of the past few years.

Along with him were sectional heads of engineering, production and services. The team was
brainstorming about building strategy for future growth plan and to increase the turnover of
HEEP Haridwar unit from sectors other than Power Sector.

Naveen, head of engineering at HEEP Haridwar mentioned Currently power sector

equipment (products like Steam Turbine and Turbo generator, Condenser and Heat
exchangers) account for 95 % of HEEPs turnover and rest 5% comes from defense sector
(SRGM Naval Gun). But in order to achieve its target of generating 40% of its turnover
from non-power sector business in next 5-7 years, HEEP should focus on identifying new
business areas apart from power sector and diversify its product portfolio in light of strong
government push for smart cities, Make in India, Environmental protection etc.

Yeah, I completely agree with Naveen said Mr. Kumar. He further added that we are
utilizing only 50% of HEEPs capacity due to absence of orders from power sector and hence
radical steps must be taken to ensure that HEEP Haridwar gets enough business from other
sectors to ensure full capacity utilization.

Rajesh, the head of production interjected We can look at opportunities which are:

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a. Across various existing and upcoming sectors other than power sector.
b. Preferably focused on high value and high tonnage products since it suits our present
manufacturing facilities (Annexure-2).
c. India centric or even global.

If required, we can also seek approval from our corporate office on limited capital
expenditures for adding new manufacturing capabilities and also acquiring/adopting
technologies via JV/technology collaborations added Mr. Kumar

Naveen concurred and stated Some of the possible areas could be Defence/
petroleum/chemical/large Industrial equipment/Service sector/Heavy Engineering etc.

Location: BHEL HQ Board Room

CMD showed concern about the past declining trend in the turnover figures of HEEP
Haridwar. However, he appreciated the strategic proposal of HEEP Haridwar to empower its
growth wheel by diversifying its product portfolio.

He further added While diversifying, HEEP should keep in mind not to venture into
products already being manufactured or supplied by other units of BHEL (annexure-3)
to avoid internal competition, though there could be an overlap of sectors. Also, it would
be essential for the management to have a look at the forecasted business plan for the
opportunity finalized to understand the kind of capital investment required as well as returns
expected over the years.

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Deliverables:
As part of this case study for identification of products/opportunities/avenues for
diversification and increasing turnover of HEEP Haridwar from Non-Power sector, you are
required to submit inputs covering but not limited to the following:

1. Details of product(s)/opportunities/avenues identified for diversification and their

market assessment.
2. Key competitors (Private & State run) analysis for opportunities identified in point
No.1
3. Synergy analysis with HEEPs existing capabilities, if any.
4. Forecasted business plan (for next 5 years) for the identified product(s)/opportunities/
avenues.
5. Various steps in the strategy that would define this diversification plan.
6. Any other information as may be considered essential.

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Annexure-1

TURNOVER (Lakhs)
800000
700000
600000
500000
400000
TURNOVER (Lakhs)
300000
200000
100000
0
2012-13 2013-14 2014-15 2015-16 2016-17

Fig-1. HEEP Haridwar Turnover figures of last 5 years

P.B.T (Lakhs)
120000

100000

80000

60000
P.B.T (Lakhs)
40000

20000

0
2012-13 2013-14 2014-15 2015-16 2016-17

Fig-2. HEEP Haridwar profitability figures of last 5 years

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ANNEXURE-2

FACILITIES AVAILABLE AT HEEP

HEEP Haridwar has completely in-house facilities like Engineering/Technology, Testing etc. to cater to
heavy manufacturing.

1) Manufacturing Facilities
CNC Borers and drilling m/c.
All types of lathe & Milling Machines.
Special purpose machines, notching press.
Heavy Forging and Casting facilities.
2) Material Handling Facilities
EOT Cranes, Jib Cranes, Suspension Crane, Monorails, Fork lifters etc. Mobile crane
Railway Wagons with loco shunters to handle ODC (Over dimension carrying)/ Heavy tonnage.
3) Metal Cutting/Forming/Welding Facilities
Hydraulic Press
Plate straightening m/c
Sheet Bending m/c
forming m/c
TIG/MIG welding facilities
CNC Flame/plasma cutting m/c
Furnaces for processing of the components
Press up-to 10000 T
4) Measuring / Testing Facilities
State-of-the-art Laboratories
Non-Destructive Testing (NDT) lab
5) Specialized Facilities
Pickling & Silver plating plant
World class Software for Solid modeling, FE Analysis etc.
Adequate IT infrastructure
6) Manpower
Approx. 6000 well qualified & trained manpower encompassing all fields of Engineering &
Technology.

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Annexure-3

BHEL EXISTING PRODUCT PROFILE INDUSTRY SECTOR

Transportation
Rolling Stock

Electric locomotives.
Diesel-Electric shunting locomotives for industry and power plants.

Traction Machines

Traction motors & Traction alternators for Locomotives & Electrical Multiple Units.
Traction Drive System & Controls & Traction Transformer.

Capacity Planning- BHEL is gearing itself for manufacture and supply of IGBT based WAG- 9 locomotives from Jhansi
works in view of requirement from Indian Railways.

Transmission
Offerings:-

BHEL undertakes turnkey transmission projects from concept to commissioning on EPC basis which includes
Substations/ Switchyard.
Products manufactured by BHEL include transformers, Shunt reactors, switchgear, insulators, etc.

Renewable Energy

Offerings:-

EPC solutions from Concept to Commissioning of Solar PV Power Plants:

Grid Interactive systems with & without BESS (Battery Energy Storage System)
Standalone/Roof Top/systems
Floating Solar power plants
Solar based Irrigation Pump

Water Business

Offerings:-

Complete Water Management Solutions for Power Plants, Industrial applications and Municipal Applications with
different treatment technologies include: -
Pre Treatment Plants (PT)
Sea Water Reverse Osmosis (SWRO) Plants
Demineralization (DM) Plants
Membrane Based treatment for industrial applications.
Effluent Treatment Plants (ETP)
Sewage Treatment Plants (STP) for Municipal applications.
Zero Liquid Discharge (ZLD) System

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Defence & Aerospace

Offerings:-

Major products being manufactured by BHEL includes Super Rapid Gun Mount, Strategic equipment for Naval
platform, Integrated Platform Management System for Naval ships, Thermo-pressed components, Turret castings
for T72 tanks, Simulators and Castings for ships.
For Space applications, BHEL has been a reliable supplier to ISRO of Solar Panels and Batteries for their
Satellites.
BHEL is one of select few firms worldwide with capability to Design and manufacture Heat exchangers for
military aircraft.

Preparing for Growth

In order to expand product portfolio: BHEL is taking initiatives in all three areas of Float, Move and Fight categories of
Naval Business:

BHEL is expanding its naval gun portfolio, in addition to existing 76/62 SRGM.
BHEL is taking up indigenous manufacturing of Marine Gas turbines for Propulsion and power for Indian Naval
Ships.

Captive Power Plants

Offerings:-

Steam Turbine based Captive Power Plants

STG/Boilers/BTG/EPC: Unit rating upto 200 mw
Gas Turbine based Captive Power Plants

Industrial Products

Offerings:-

Oil Rigs
Well heads and X-mas Trees
Compressors
Electrical Machines: Motors, industrial alternators.

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