Strategic Management - BHEL

Strategic Management II Project Report On

How is Indian Public sector (BHEL) in Heavy Engineering production fighting its way through with technologically superior multinational companies in India?
Submitted By: Group 5, Section C Date: 29 Mar 2012

Govind Raj Kaushik Manu Shivanand Pa Badrinaraynan Praveen Kumar Alluri Punit Moris Ekka Ragvendran K. Saikiran Pollamarasetty Shweta Kalla

PGP2011640 PGP2011716 PGP2011764 PGP2011792 PGP2011801 PGP2011804 PGP2011843 PGP2011881

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Strategic Management - BHEL

Table of Contents

Introduction ...................................................................................................................................................................... 3 Overview of the Power Sector in India ............................................................................................................................. 3 Industry Analysis: Porters 5 forces ................................................................................................................................... 4 BHEL (Bharat Heavy Electricals Limited)........................................................................................................................... 6 Product portfolio .............................................................................................................................................................. 6 BHEL SWOT Analysis ......................................................................................................................................................... 7 Competition Analysis ........................................................................................................................................................ 8 Boiler Turbine Generators (BTG Segment) ....................................................................................................................... 8 Transformer Segment....................................................................................................................................................... 9 Challenges being faced by BHEL ..................................................................................................................................... 11 Diamond Framework for India in power plant manufacturing and engineering sector (BHEL)..................................... 13 Value Chain for BHEL ...................................................................................................................................................... 15 How BHEL can improve the supplier opportunity cost and customer willingness to pay ............................................. 17 Opportunities for BHEL................................................................................................................................................... 18 Conclusion ...................................................................................................................................................................... 19 References ...................................................................................................................................................................... 19 Appendices ..................................................................................................................................................................... 20

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Introduction
Indian Power sector had been dominated by public sector (BHEL) for many decades till a few years back. But the monopoly of Bharat Heavy Electricals Limited was jeopardized with the liberalization of the Indian economy, and the power sector in particular. It led to the entry of foreign players into this sector and has shaken the grounds for BHEL. With their high technology equipments, low costs and timely supply, these multinational companies are giving a tough competition to BHEL. Through this report, we analyse the power sector in India and its dominant player, BHEL, followed by the competition it is facing and the actions that it is taking to tackle the same. Some recommendations have also been presented as the way ahead for BHEL

Overview of the Power Sector in India

The Power sector is the backbone of the Indian economy. It is present in the concurrent list of the Government. In the last decade, the electricity sector in the country has moved from being a mostly vertically integrated structure with the State Electricity Boards (SEB) owning the generation, transmission and distribution businesses to a more unbundled corporate structure. As compared to about 23 integrated utilities or SEBs that existed before the electricity reforms began, there are now more than 80 utilities/companies comprising state owned generation, transmission and distribution companies, private utilities engaged in all three functions in particular cities, industrial power generators (captive power units) that own small plants that cater to the electricity needs of their companies, central government owned power generation and transmission companies and Independent Power Producers (IPPs). From 170.4 TWh in FY1986, Indias electricity generation has increased to 811.1 TWh in FY2011. Generation increased at 5.4% CAGR for the five years to FY2011. From a peak growth rate of 7.5% in FY2007, the generation growth rate declined to about 5.9% in FY2011. The share of renewable energy sources has increased over the years and was 1.4% of the total electricity generated in FY2008 and FY2009.

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The power sector basically operates in 3 major segments which include the generation, transmission and Distribution. The generation machinery comprises of Boilers, turbines and generators. Transformers are major components in the transmission sector. Similarly switchgears and control gears account for most of the distribution machinery.

BTG market is experiencing steady growth in the country. The generation equipment segment garnered revenues of USD4.2 billion in FY10. The market expanded at a CAGR of 23.9 per cent over FY0810. Boiler is the major segment, accounting for 63 per cent of the total revenues. Turbines accounts for 27 per cent while generators account for the remaining 10 per cent. Production of transformers increased at a CAGR of 7.9 per cent during FY08-10. Domestic transformer industry has the capability to manufacture the whole range of power and distribution transformers including transformers used for HVDC transmission up-to 500 KV. The switch gear industry in India manufactures entire voltage range from 240 KV to 800 KV. Significant advances have been made in control gears due to major developments in the field of technology. However there is a huge deficit between the requirements and the supply. The per capita capacity is only 1/3rd of the world average. Exports of the electrical machinery sector increased at a CAGR of 14.9 per cent to USD1.9 billion from USD1.4 billion during FY07-09. Transformers and generators were the primary drivers of the increase in exports. Exports of electrical machinery stood at USD4 billion in FY10. Exports of electrical power equipment & parts, valued at USD3.2 billion, constituted the largest share.

Industry Analysis: Porters 5 forces The overall attractiveness of the power sector would be low to moderate based on the following analysis: Buyer Power Moderate Opening up of markets has led to rivalry between the companies. Sheer number of buyers means players have many potential customers Market players are able to differentiate their products to a certain extent Buyers are reliant on products offered within this market to maintain their own business

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Supplier Power Moderate The main suppliers to this market are the manufacturers of raw materials Raw materials are subject to price fluctuations Market players attempt to overcome this through hedging strategies Switching costs are relatively higher for private players.

New entrants Low Major players are PSEs and other big private players Large capital cost required for setting up Subsequent high exit barriers also discourage new entrants Increasing demand in the end user market is the only positive sign for new entrants.

Substitutes - Low No real substitutes for heavy electrical equipment Alternate sources for power generation are coming up However switching costs are high for adopting this. Difficult to assess whether these offer cost advantages per unit basis

Rivalry Moderate Increased competition from Chinese companies. PSEs have dominance in heavy engineering, machine tools, boiler manufacturing. Several multinational companies of the likes of ABB and Seimens have entered the industry High fixed costs and low switching costs for buyers intensify rivalry

The Indian heavy engineering industry had been synonymous to BHEL for a long time indeed. We look as to what, apart from governmental policies, helped BHEL sustain its position for so long and the strengths it is competing on till date.

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BHEL (Bharat Heavy Electricals Limited)

Bharat Heavy Electricals Limited was established by the Government of India in 1964 to manufacture the electrical equipments indigenously within the country. Ever since it was established, BHEL has been involved in the designing, developing and manufacturing, testing and commissioning a wide range of products and services that cater to the core sectors such as power, transmission, transportation, defence, renewable energy, oil and gas. BHEL has a lion share of 62% of Indias total installed power generating capacity. The company has invested heavily in R&D to develop new products and services. The company follows stringent quality norms and has been accredited with ISO certifications. The company has also been exporting its products and services to the countries like Malaysia, Iraq, Eqypt and New Zealand. It has recorded revenues of Rs.43337 Crores and net profit INR 6011 for the FY 2011. It employs over 46,500 highly skilled people.

Product portfolio BHEL manufactures a wide range of products in its portfolio under 30 major product groups. The picture below illustrates the wide chain of activities that VHEL is into. It plays a part in almost every stage of Power and Industrial applications.

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Let us understand the illustration here. First, for the oil fuels, we need the oil-rig equipment. It is processed in a refinery. In the power generation plant, the heat they produce heats the water in the boiler which flow through the steam pipes and rotates the turbine. This causes the generator to rotate. The power so produced is stepped up using a transformer, and through the switchgear equipments is transmitted. The entire operation is automated with the help of Instrument Transformers and Control and Relay Panels. It also produces Hydel Power equipment and Desalination Plant equipment, Apart from these it also produces locomotives which consume power. The detailed established capacity of the entire product line of BHEL is enclosed in Appendix 1. In a nutshell these are the various categories and the products of BHEL Power Boilers, gas turbines, valve, turbo generators, air preheaters, electrostatic precipitators, hydro power plant are some of the products which fall in the power category. Industry Capacitors, compressors, desalination plant, gas turbines, oil field equipments, turbo generator, photo voltaic cells, steam turbines, steam generators are some of the major products that cater to the industries. Transmission Bushings, Capacitors, Control Relay Panels, Dry-type Transformers, Energy Meters, HVDC Transmission System, Insulators, Switchgears, Power Semiconductor Devices, Power System Studies, and Control Shunt Reactor are the major products in this category Transportation Electric Rolling Stock, Electrics for Rolling Stock, Electrics for Urban Transportation System are the major products catering to the transportation Non-conventional Energy Source Mini/Micro Hydro Sets, Solar Lanterns, Solar Photovoltaic, Solar Water Heating Systems, Wind Electric Generators are the nonconventional energy source products.

BHEL SWOT Analysis The biggest strength of BHEL that is helping it survive even now is its superior technology. BHEL is renowned for its high quality equipments not just in the country, but in the whole world. But the long delays in supplying orders are forcing customers to look at other options. And now that various MNCs are offering their customers high technology equipments at a lower cost, BHEL is getting replaced by many. We take a look at the

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competitors for BHEL in the BTG and Transformer segments, the two most value adding segments for BHEL. Strengths Wide product portfolio Strong international operations Robust research and technological capabilities Weaknesses Delay in delivery times Controlling stakes of the Government Threats Intense competition from multinational companies such as Siemens, ABB Risk of losing ground to Chinese companies Opportunities Growing global demand for energy Accelerating power sector in India Poised to benefit from the Indian industry sector

Competition Analysis
Boiler Turbine Generators (BTG Segment) The generation equipment segment garnered revenues of USD4.2 billion in FY10 with the market expanding at a CAGR of 23.9% over FY08-10. Among the BTG equipment Boilers is the major segment accounting for 63% of total revenue followed by Turbines and Generators accounting for 27% and 10% respectively.

Market size of generation machinery

6 4 2 0 FY 08 FY 09 FY 10

Generation machinery market breakup (FY10)

Generator Turbine Boiler

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BTG parts are going to witness increase in their sales due to the increase in power generation capacity in India to 250 GW by 2022. Though the demand seems favourable the BTG industry is facing strong competition due to the entry of global manufacturing facilities through Joint Ventures and imports from China. The competitors are entering into market by adopting low price strategy or by keeping the niche approach to get hold on market share. According to exhibit-1, in the operational BTG segment BHEL is the leading player with capacity of 15GW followed by L&T-MHI with a capacity of 4GW in FY11. By FY14, in the BTG segment, BHEL is expected to increase its capacity to 20GW followed by L&T-MHI and BGR Energy-Hitachi with estimated capacity of 4GW. BHEL being the market leader in BTG segment through its brand image and being technologically ahead of the competitors they are aggressively defending their market share by charging more than the Chinese based OEMs. China based OEMs are charging 2crore/MW BTG set where as the domestic OEMs are charging 2.8~3.2crore/MW. BHEL is continuously enhancing their manufacturing capacity which is accounting for their competitive advantage. Its been observed that there is a shift in the recent trend from subcritical to supercritical technologies and BHEL, market leader in the domestic BTG market and L&T-MHI JVs have been able to win their first orders in the supercritical segment in FY2009. The yearwise estimated capacity for BTG Manufacturing is given in Appendix 2

Transformer Segment BHEL commissioned 7150 MW of power plant equipment and comprising 6772 MW Utility & Captive/Industrial sets in the country and 378 MW in overseas markets. Utility sets totalling to 5,014 MW were put under Commercial Operation. The capacity of BHEL supplied utility sets to 85,786 MW and BHEL maintained its share of 64% in the countrys total installed capacity of 1,34,697 MW.

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Strategic Management - BHEL

BHEL has contracted 26 large sizes Gas Turbine Generating sets of 100 MW and above ratings to a number of countries including Oman, China, Bangladesh, Vietnam, Italy, Iraq, Libya and Sri Lanka the forte of only a few manufacturers in the world in this size of gas turbines. BHEL-built power generating sets generated an all-time high 454.59 Billion Units of electricity: 73% of the total power generation in the country. Consistently exceeding the national average efficiency parameters, BHEL built thermal sets achieved the highest-ever Plant Load Factor (PLF) of 79.9%; Operating Availability (OA) was also the highest-ever at 86.4%. BHEL make 200-500 MW thermal sets, which form the backbone of the countrys thermal generating capacity, operated at the highest ever PLF and OA of 85% and 90.4%, respectively. Notably, 70 sets achieved PLF of over 90%. In addition, 7 BHEL make thermal sets of various ratings operated at a record PLF of 100%. Of the 13 power stations awarded with the Ministry of Powers Meritorious Productivity Awards for 2006-07, as many as 12 are equipped with generating equipment manufactured and supplied by BHEL, reaffirming the quality and reliability of BHELs equipment. Since sustained growth has been witnessed in the Indian economy in the last few years and as per latest estimates, the economy is expected to grow at 8.7 per cent in 200708 and average at 9 per cent during its 9th plan. The 9th plan envisages a capacity addition of 78,577 MW to the installed power generating base of the country. Riding on this growth, BHEL has plans to be a Rs.45000 Cr turnover company by 201112. BHEL has tied up technology for higher-rating thermal sets based on supercritical technology. Though the focus is presently on coal-based projects in view of the volatility in gas prices, BHEL is introducing advanced-class gas turbines for which orders have already been bagged against international competitive bidding. BHEL is facing still competition from AlstomGrid, ABB, Siemens, CGL in the T&D segment. Hence we see that the multinational companies are giving BHEL a tough competition in its most revenue generating segments. The challenges for BHEL are not limited to MNCs. We further explore the other challenges BHEL is facing at present.

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Challenges being faced by BHEL

Problems Galore

Traditionally, BHEL has had an advantage in the BTG segment. With competitors being overseas, the transportation costs of these extremely heavy equipments were high. Further, the government supported BHEL by charging import duties that were more than normal across the globe. This made BHEL, a monopolistic player and being a PSU, it led to complacency. Though their products were of good quality, the deliveries were always late. BHEL worked lazily throughout the year except for the three months Jan, Feb and Mar where it works overtime to meet its targets. Let us look at the challenges that BHEL faces today and how it plans to tackle it.

JVs for BTG

The foreign competitors, who delivered on time watched with vigilance. Players like L&T lobbied hard with the government. The result is the JVs between foreign and local players, L&T Mitsubishi, Alstom Bharat Forge, to name a few. Trying to handle the same, BHEL signed a JV with NTPC called NBPPL (NTPC BHEL Power Projects Pvt Ltd). It focuses not just on products but also on Project execution, there by taking a part of liability for delivery delays on itself. Overall, BHEL now follows the strategy JVs for Capability enhancement and M&A for Capacity enhancement. A list of these JVs are presented in Appendix 3

765kV and more

The highest transmission voltage in India today is 765kV. As the voltage gets higher, the power loss gets reduced. The need for superior equipment also goes up. Players like Areva, ABB and Siemens took the lead. While some of them established plants in India, some of them distributed from off-shore locations. BHEL missed the bus, and lagged behind. Though it has them in its portfolio today, it is unable to compete with the existing players. However, it has taken a lead in the 1200kV segment. It has developed 1200kV transformer indigenously. With it being one of its kinds in the world, this can be considered a bright spot in BHELs multiplying problems today. The first test bay is expected to be commissioned in Apr 2012 at Bina, M.P with all players taking part in it with equipment from

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each. With BHEL taking the Power Transformer supply, it has taken the crucial role in this emerging market.

The Great Wall

Chinese products come at a very low cost. As per the current budget, the import duties for power projects have been given tax-holidays for the next 3 years. Apart from that they also give the option for credit payments. And the delivery style of BHEL has already been discussed. As a result, they have emerged to be the strongest competitor in T&D segment. To tackle the same, it has utilised its Rs.10,000 Crore surplus to set up a new subsidiary for providing NBFA, BHEL also organizes workshops for customers emphasising on superior quality of BHEL products. Though it has orders booked for the next 5-6 yrs, it will have to go a great deal to tackle this Chinese competition.

Over the head

BHELs machines are quite old and have already depreciated completely. Its only cost is maintenance and labor. It also has location advantage. Inspite of the same, BHEL lost an order for supply of supercritical turbine generator set to the Andhra Pradesh Power Generation Company to L&T by a margin of 500 Crores. Another new player BGR Energy beat BHEL for equipment supply to the Rajasthan government in consortium with China's Dongfang. The reason if analyzed will turn out to be its very high overhead costs accounting from high salaries of employees. Apart from that, it also maintains a township with schooling and medical facilities at all its plants. To tackle the same, BHEL plans to sell the houses of the township to the employees. They are also developing an alternate mechanism for medical funding. It also attempted to reduce the cost by using temporary workforce. Though it resulted in significant reduction in costs, quality was compromised. Skilled labour has always been one of the strengths of BHEL, but with senior people either retiring or taking a VRS, it risked losing its competitive advantage. It has now back tracked and has started recruiting heavily, especially through campus interviews

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With competition and challenges from all sides, BHEL is also taking measures to safeguard its position in the industry. Besides being a public sector enterprise is also working to its advantage in ensuring the same:

Diamond Framework for BHEL

Porters diamond model is mainly used to investigate the national competitive advantage in a specific industry. It is also used to explain why certain companies based in certain nations capable of consistent innovation. The model has four main and two additional

attributes. The four main attributes are Factor conditions, demand conditions, related & supporting industries, firm strategy, structure and rivalry. Two additional attributes are government and chance. All these attributes interact with each other and they form a dynamic system. 1. Factor Conditions: Human resources: The expertise required for power industry comprises of electrical and electronics, mechanical, computer science, civil and other closely related engineering areas. India has produced a lot of engineers in these streams, and research programs are also in place. So skilled man power is available and wages in India are low, which implies that skilled labour is available at low cost. Physical resources: Raw materials such as steel, copper are available. Both are commodity products and processing industry is available in India. Infrastructure: Necessary infrastructure is available, and it is continuously upgraded. Capital: Capital investments for the power sector are continuously increasing as the demand for the power in India is increasing.

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2. Demand Conditions: There is a huge power deficit in India. As of Dec 2011, over 300 million citizens had no access to electricity in India. India's power demand is seen rising 55.6 per cent to 1,400 billion kilowatt hours (bkwh) by the end of next five year plan period i.e., by March 2017.

3. Related and Supporting Industries: Presence of supporting industries like ancillary industries and SMES Lot of power generation companies were formed and supported by government which in turn generated business for power plant equipment manufacturing industry Railway industry played a major role in supporting power sector, as it is the primary coal transporter. This in turn supported companies like BHEL who supplied equipment to power generation companies

4. Firm Strategy, Structure and Rivalry: There is no immediate competitor for BHEL from private players of the industry. All the firms in this industry believed in permanent innovation process to meet the global standards and needs of the power industry.

5. Government: Government developed goals for power sector which lead to a sustained investment in the power plant manufacturing and engineering industry. Currently competition is regulated and de-regulation process is on-going. Funds are made available under various schemes to the companies at a lower cost of capital Government owns nearly 69% of share in BHEL

6. Chance: Earlier the pressure for innovation is less, but currently due to the entry of foreign players a lot of innovation is taking place.

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Companies are globalizing and are starting new branches in abroad The aim of nation and the companies is to satisfy electricity needs of every Indian citizen and this is a great motivator for everyone in the value chain of this industry

Value Chain for BHEL

BHEL is putting in efforts across its value chain to ensure its position as a competitive player in the Indian power sector. Considering the component wise efforts: Infrastructure: BHEL is making large investment on increasing the capacity. It is adopting both organic as well as inorganic means to achieve the same. It Acquired BHPV Vizagas as 100% subsidiary in 2008 which is slated to enhance their capabilities in design, fabrication, supply and erection of custom built process plant equipments. BHEL Electrical Machines Ltd. is a joint venture between BHEL & KEL (Kasargod)/GoK for manufacturing of products for Railways and Industries. It is a strategic move to enhance their presence in Transportation, Industrial and Renewable Energy Sectors.

Human Resource Management: It has started skill enhancement at ITIs in JV/PPP mode: Kabiguru(WB), Latur(Mah). It is also leveraging WRI Trichy to train high pressure welders and providing extensive training to Act Apprentices & Customers. By hiring retired specialists as Consultants, it is getting more expertise in the area. Through campus Recruitments, it is trying to find the best talent available for itself.

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Technology Development: The R&D investment at BHEL is one of the highest in India. It is also the winner of CII-Thompson Reuters Innovation Award 2010 in the 'Hi-tech Corporate' category for innovation.

Procurement, Inbound and outbound logistics: For Increasing efficiency of supply chain BHEL is going for Vendor Base Expansion (BHEL has added 1148 new vendors in 2009-10). Global Sourcing (for low cost of RM) is also being looked into and for the same it has also opened a procurement office in Shanghai, China. For long lead time operations, it has designed an AMA (Advanced Manufacturing Action). It has entered into Technology Collaboration Agreement with Sheffield Forge masters UK for large size forgings. To speed up the procurement process, it has started Reverse Auction and e-Procurement methods. Long term rate Contracts for steel, copper, CRGO, Transformer, Oil will help it in getting the right price for its raw materials and finished products. manufacturing is laid emphasis on in BHEL. Operations: BHEL is working on improved operations through efforts for Lean, DTC, PSM and on implementation of ERP/SAP. Its labour productivity is increasing over the years. Between 2007 and 2012(expected), the manpower productivity has increased by 17%, the capacity by 100% and the turnover by 167%. Services: The operations and maintenance services and the allied services offered by BHEL are deemed to be one of the best in the industry. Outsourcing for low tech/non-core

So, we find that BHEL is definitely trying to keep its lion share in the power sector intact, we further look as to how BHEL can generate more value for its customers:

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How BHEL can improve the supplier opportunity cost and customer willingness to pay

A suppliers opportunity cost is the minimum price they would accept and still choose to supply the resource. CURRENT SCENARIO: BHEL follows an online reverse auction through their portal https://bhel.abcprocure.com/domain/index.jsp for getting competitive bids. This is an effective way of maintaining competition between the suppliers for supply of medium to high customized component assemblies. BHEL should continue the current practice. Disadvantage: This does not build any long term relationship with the supplier and also, the opportunity cost lost for a supplier might not be substantial enough to bid for a low cost. PROPOSED: For the non-customized component assemblies, BHEL should go for the long term contract with its suppliers for supply of parts. This will ensure that the opportunity cost of losing a contract is very high and will thus entice the supplier for a low cost bid.

A customers willingness-to-pay is the maximum price they would pay and still choose to purchase a product. Current scenario: BHEL has its orders booked for the coming years but has been very inefficient in meeting the schedules of delivery. Due to a very high requirement of electrical machinery in the power sector, delivery is an important criterion for increasing the customer willingness to pay. PROPOSED: BHEL has to increase its capacity of production of boilers and more importantly, streamline is value chain for decreasing the lead time for delivering to the customers. Also, its competitors are like Siemens are focusing on increasing the efficiency of

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the equipment. It is recommended that BHEL works on these aspects to increase the customer willingness to pay.

The online portal used by BHEL for reverse auction. This increases the competitiveness of the bids.

There are other opportunities also available with BHEL, some of which are listed as follows:

Opportunities for BHEL

1. Nuclear Power Generation State-owned NPCIL is ramping up its operations. BHEL should re-orient and focus its efforts to develop technology for this too 2. Solar and Wind Power generation BHEL can play a big role in helping National Solar Mission achieve its proposed target of 20,000 MW of grid connected solar power. Foray into wind power generation can also be done by BHEL

3. Power capacity addition The market demand and budget reforms Tax-free bonds, ECB, additional depreciation of 20% for new power projects in first year, and exemption for 1 more year 4. High-voltage technology Power transmission in India, currently at around 765 KV Expected to move further up with advent of 1200kV test bay at Bina Opportunity to be the first entrant in T&D equipments

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Conclusion
BHEL has so far enjoyed a monopolistic atmosphere protected by the government. However, the winds have changed. International players now compete in the big market that India is. It does have orders booked for the next 5 years but the period after that would be in a spot of bother. BHEL can compete technically, but the other aspects pose the questions. Even recently, the 1200kV T&D equipments totally developed indigenously prove its technical competency, but achieving cost competency seems to be a problem. Lost orders to new players and Indian-International JVs have forced BHEL to retrospect. It remains to be seen whether BHEL can sustain its market share, utilising its skilled man power and machinery. As of now, with players like L&T lining up, the future looks troubled.

References
1. BHELs current procurement system: https://bhel.abcprocure.com/domain/index.jsp 2. Indian Power Sector , March 2012 ICRA 3. Electrical machinery , November 2011 , IBEF 4. Global power generation, February 2012, Marketline (Datamonitor 360) 5. http://ibnlive.in.com/generalnewsfeed/news/transformer-industry-fears-crisis-due-toraw-material-shortage/916605.html 6. http://www.crnindia.com/commodity/copper.html 7. http://www.sciencedirect.com/science/article/pii/S096014810900278X 8. http://en.wikipedia.org/wiki/Electricity_sector_in_India 9. http://www.hindustantimes.com/business-news/Markets/BHEL-share-sale-likely-nextfiscal-year-govt/Article1-811711.aspx 10. http://www.dnaindia.com/money/report_govt-fails-to-decide-on-ongc-bhel-stake-saleto-meet-again_1650457 11. http://www.bhel.com/about.php 12. http://gop.academia.edu/ADemir/Papers/1450959/COMPETITIVE_ADVANTAGE_OF_WIN D_POWER_INDUSTRY_FOR_TURKEY_ANALYSIS_OF_FACTOR_CONDITIONS_IN_PORTERS_ DIAMOND_MODEL 13. http://en.wikipedia.org/wiki/Diamond_model 14. http://www.cedro-uva.org/lib/jansen.economics.html

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Appendix 1: Installed Capacity of various Product categories of BHEL

S. NO. PRODUCT UNIT INSTALLED CAPACITY 2010-11 2009-10 For Sale ACTUAL PRODUCTION 2010-11 For Captive Consumption 2009-10 For For Sale Captive Consumption

HEP- BHOPAL 1 Turbo Sets Set MW 1/1 210 or 250/236 1/1 210 or 250/236 0 0 0 0 0 0 0 0

- Steam Turbine/Nuclear Turbine

Hydro

Sets Nos MW Nos MW 25 2500 25 2500 450 3200 25 2500 25 2500 340 3200 15 1149 15 1256 387 2351 0 0 1 30 3 0 24 785 25 1399 336 2379 0 0 0 0 4 0

Hydro Turbine Hydro Generator

3 4 5 6 7 8 9 10 11 12 13 14 15

Large Electrical Machine Traction Machines

(Incl.TG/AG,Blower Motors,BPRV etc.)

Nos Nos Nos MVA Nos Nos Nos MVAR Nos Set Nos Nos MT Nos Tonne

Power Transformers Instrument Transformer Electrical Machines Switchgear Capacitor Industrial Controlgear Traction Controlgear Control Equipment Heat Exchangers Control Panels Cathodic Protection System

30000 200 1800 3000 3200 250 220 600 52 1100 600 2700

30000 200 1000 3000 3200 250 220 600 52 1100 600 2700

18292 414 1327 2952 2610 0 191 1580 42 0 395 0

513 0 4 0 0 0 0 0 0 0 0 0

13351 354 1159 2892 2112 0 164 1301 39 0 392 0

880 1 7 28 136 0 0 0 0 0 2 0

TP, JHANSI 1 2 Power Transformers 33kv/ 132kv Other Transformer Special Purpose Transformer (Dry Type Trfr. etc.) Traction Transformer. (Frt. Loco & ACEMU) Instrument Transformer ESP Transformer 3 4 Diesel Shunters AC Locomotives (Upto 6500 HP) Nos Nos Nos Nos Nos 140 1000 500 10 30 140 1000 500 10 30 154 464 1228 7 31 0 0 0 0 0 130 363 1106 8 22 0 0 0 0 0 Nos 140 140 181 3 159 12 Nos./MVA 200/15000 105/5500 151/7337 1/60 142/4483 2/88

Appendix 1: Installed Capacity of various Product categories of BHEL

S. NO. PRODUCT UNIT INSTALLED CAPACITY 2010-11 2009-10 ACTUAL PRODUCTION 2010-11 For Sale For Captive Consumption 2009-10 For For Sale Captive Consumption

HEEP - HARDWAR 1 2 3 4 5 Turbo Sets* Hydro Sets Electrical Machines Gas Turbine Super Rapid Gun Mounts MW MW MW MW Nos 3 3 2 0 2 0 10020 0 0 5750 0 0 2900 0 0 0 0 0 2355 0 0 0 0 0

* Capacity of Turbo Sets includes manufacturing capacity of spares equivalent to 500 MW CFFP HARDWAR 1 2 Steel Castings Steel Forging (a) Steel Forgings (Heavy) (b) Medium Forgings (Medium) 3 4 Billets and Blooms N F Casting MT MT MT MT 2410 3000 4000 250 2410 3000 4000 250 1057 1777 143 89 811 1590 17 39 MT 6000 6000 3574 0 3736 6

HPEP- HYDERABAD 1 2 3 4 5 6 7 8 9 10 Steam Turbines Generators Gas Turbine Compressors Pulverisers Pumps Breakers Heat Exchangers Oil Rigs Drive Turbines MW MW MW Nos Nos Nos Nos Nos Nos Nos 1630 2720 1090 9 172 280 1035 152 14 27 1140 1947 992 9 101 187 1035 152 5 10 1913.18 2626.55 1721.6 20 172 341 5 257 41 32 797.4 1626.95 1287.7 12 145 227 186 191 23 29

EDN - BANGLORE 1 2 3 4 Control Equipments Power Devices Photovoltaics CUBICLE Nos KWS 4500 20000 8000 0 4300 20000 8000 0 6251 21077 4715 0 18 398 5421 19420 1155 0 476

Simulators (Defence Electronics) SETS

140 140

Appendix 1: Installed Capacity of various Product categories of BHEL

S. NO.

PRODUCT

UNIT

INSTALLED CAPACITY 2010-11 2009-10

ACTUAL PRODUCTION 2010-11 For Sale For Captive Consumption 2009-10 For For Sale Captive Consumption

TIRUCHY 1 2 Boilers Valves MT MT Nos 481162 13800 481162 13800 174415 382/500 40000 25 382/500 40000 25 35221 0 32787 0 168869 595939 545045

3 4 5

Nuclear Steam Generating Equipments MW

Seamless Steel Tubes Armoured Recovery Vehicles

MT Nos

BAP - RANIPET 1 Boiler Auxiliaries MT 245553 207305 293210 0 244933 0

I V P GOINDWAL 1 Industrial Valves & Valves Spares MT Nos 788 788 2479 13860 1911 11091

EPD - BANGLORE 1 2 3 4 Insulators & Bushings Assembled Production Ceralin Ceralin (Assembled) CMT MT CMT MT 745 745 6250 6250 6459 9253 1599 4130 6633 8840 1400 3355

IP - JAGDISHPUR 1 2 3 Insulators Ceralin Ceralin(Assembled) CMT MT MT 6000 1574 6000 1574 7376.56 1912.81 4397.27 0 0 0 7169.78 1593.21 3662.55 0 0 0

CFP - RUDRAPUR 1 2 3 CSU 1 Stampings Nos 13000000 13000000 3600000 0 1436000 0 SW H S Solar Lanterns Bus Duct Nos MT 150 150 1318 0 1188 0

Source: BHELs Annual Report

141 141

Appendix 2: Year wise Estimated Capacity for BTG manufacturing

Appendix 3 List of JVs with State Utilities

Names of Joint Ventures Power Plant Performance Improvement Ltd. BHEL-GE Gas Turbine Services Pvt. Ltd. NTPC-BHEL Power Projects Pvt. Ltd. Udangudi Power Corporation Ltd. Barak Power Pvt. Ltd. Raichur Power Corporation Ltd. Dada Dhuniwale Khandwa Power Ltd. Country of Incorporation India} India} India India India India India Proportion of Ownership One share

less than 50%

50% 50% 50% 50% 50%