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BHARAT HEAVY ELECTRICALS LIMITED Submitted by:- ANKUR KAUSHIK 10SP0647, Section B

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Page 1: Bhel Write Up

BHARAT HEAVY ELECTRICALS LIMITED

Submitted by:-

ANKUR KAUSHIK

10SP0647, Section B

Page 2: Bhel Write Up

ABOUT THE COMPANY:-

BHEL is the largest engineering and manufacturing enterprise in India in the energy-related/infrastructure sector, today. BHEL was established more than 40 years ago, ushering in the indigenous Heavy Electrical Equipment industry in India - a dream that has been more than realized with a well-recognized track record of performance. The company has been earning profits continuously since 1971-72 and paying dividends since 1976-77. 

BHEL manufactures over 180 products under 30 major product groups and caters to core sectors of the Indian Economy viz., Power Generation & Transmission, Industry, Transportation, Renewable Energy, etc. The wide network of BHEL's 14 manufacturing divisions, four Power Sector regional centres, over 100 project sites, eight service centers, 18 regional offices and one subsidiary enables the Company to promptly serve its customers and provide them with suitable products, systems and services -- efficiently and at competitive prices. The high level of quality & reliability of its products is due to the emphasis on design, engineering and manufacturing to international standards by acquiring and adapting some of the best technologies from leading companies in the world, together with technologies developed in its own R&D centres.

PRODUST VARITEY:-

Thermal power plants Gas based power plants Hydro power plants DG power plants Industrial sets Boilers Boiler auxiliaries Fan Air-pre heaters Gravimetric Feeders Pulverizers Pulse jet and Reverse air Type Fabric Filters Electronic participators Mechanical separators Soot blowers

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Valves Heat Exchangers and Pressure Vessels Pumps Power station and control equipment Switchgears Bus ducts Transformers Insulators Capacitors Energy meters etc…

CAPACITY AUGMENTATION & UTILIZATION: BHEL made a capital investment of Rs.1767 Crore during 2009-10 towards augmentation of manufacturing capacity and modernization of facilities in manufacturing units and at power project sites, as against Rs.1082 Crore invested during 2009-10, registering an increase in capital investment of about 63%. Focused attention was given on rebuilding and retrofitting of existing facilities to enhance their life, accuracy and productivity through an additional investment of Rs. 51 Crore. BHEL has set-up state-of-the-art facilities to manufacture supercritical equipment. A world class facility for manufacture of high rating transformers has also been set up at Bhopal. A new Centralized Stamping Unit (CSU) commenced production at Jagdishpur in Uttar Pradesh. BHEL has developed the capability to deliver 15,000 MW of power equipment per annum .Further augmentation to 20,000 MW per annum is underway and is expected to be completed by March 2012. Currently BHEL is supposed to utilize around 63% of its available capacity of 15000 MW of power equipment per annum.

LABOUR PRODUCTIVITY:-

one of the Navratna public sector undertakings of the country, has a reason to cheer. It has the proud distinction of winning nine of the Prime Minister's Shram Awards, the highest in the country, for the three consecutive years, for 2005, 2006 and 2007. The awards were recently conferred on the employees by the Prime Minister, Dr. Manmohan Singh, the union minister for labour and employment, Mallikarjun Kharge and the union minister of state for labour and employment, Harish Rawat, at a glittering function recently held at the Vigyan Bhawan in New Delhi. The BHEL bagged 14 awards, out of which Haridwar unit of the company alone won nine of these coveted sobriquets. Instituted in 1985 by the union ministry of labour and employment, these awards, which include Shram Bhushan, Shram Veer and Shram Shree, are the country's highest honour bestowed on individuals for outstanding achievements leading to

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higher productivity, improved quality, greater safety, import substitution and foreign exchange savings.

AWARDS AND CERTIFICATIONS:-

 BHEL has become the first Public Sector Company in the country, whose six units participated in the CII-EXIM Business Excellence award scheme and all got recognition certificates from CII. While its Bhopal, Trichy and Power Sector Eastern Region have won the Commendation for Significant Achievements in TQM, its Ranipet unit, Electronics Division and Power Sector Southern Region have received the Commendation for Strong Commitment to TQM.

BHEL has further acquired the following certifications:-

Quality Management Systems (ISO 9001)

Environmental management Systems (ISO 14001)

Occupational Health & Safety management Systems (OHSAS18001).

Now, BHEL is well on its journey towards total quality management (TQM)

SUPPLIER BASE:-

BHEL has a wide supplier base, both in India and outside India. BHEL has manufacturing units at several locations across India such as Bhopal, Andhra Pradesh, Uttrakhand , Punjab, Madhya Pradesh,etc. Thus, the strategy for selecting buyers is to select the vendor which is closest to the plant location so as to keep the cost of delivery to the possible minimum.

BHEL also has a supplier base in foreign countries such as Germany, UK, France etc. But foreign suppliers are preferred only in case of procurement of highly technical items which are not manufactured in India.

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INVENTORY MANAGEMENT:-

Inventory management in BHEL is characterised of following points:-

There is a separate stores department in each plant of BHEL which is well staffed by a full fledged and trained stores staff.

Each plant has a specific stores policy which advocates for setting up of various stock levels such as reorder level,minimum stock level ,buffer stock level,economic order quantity etc.

Then proper stores ledger,bin cards,stock ledgers and other stores ledger are maintained for full proof and reliable record keeping.

BHEL’s policy is to value its stock at first in first out (FIFO) basis. There are two types of inventories in BHEL plants,(a) fast moving consumable items and

(b) slow moving fixed items Fast moving items being petty or small articles are first received in stores department

and then routed to production sites. But slow moving fixed items being costly and heavy items are ordered and directly

moved to shop floors so as to save on storage costs.

Inventory Valuation:-(i) Inventory is valued at actual/estimated cost or net realisable value, whichever is lower.

(ii) Finished goods in Plant and work in progress involving Hydro and Thermal sets including gas-based powerplants, boilers, boiler auxiliaries, compressors and industrial turbo sets are valued at actual/estimated factorycost or at 97.5% of the realisable value, whichever is lower.

(iii) In respect of valuation of finished goods in plant and work-in-progress, cost means factory cost; actual/estimatedfactory cost includes excise duty payable on manufactured goods.

(iv) In respect of raw material, components, loose tools, stores and spares cost means weighted average cost.

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(v) Where current estimates of cost and selling price of an individually identified project forming part of a contract indicates loss, the anticipated loss in respect of such project on which the work had commenced, is recognised.In arriving at this loss, total income from the project including incentives on exports/deemed exports is taken intoconsideration.

(vi) The components and other materials purchased / manufactured against production orders but declared surplusare charged off to revenue retaining residual value based on technical estimates.

BETTER ASSET UTILIZATION:-

o Operation of CNC & Critical Facilities on three shift Basis

o Implementation of Overall Equipment Effectiveness (OEE) to enhance availability & process capability of critical facilities.

o Reconditioning, Retrofitting and Renovation of ageing facilities to enhance their life,

o improve efficiency and restore their process capability.

o Multi-Skilling of operators.

o Inter Unit /Intra Unit load sharing

o Quick Disposal of Condemned Plants & Machinery to de-congest shop floor

ENERRGY MANAGEMENT:-

BHEL is one of the few companies worldwide,involved in the development of Integrated Gasification Combined Cycle (IGCC) technologywhich would usher in clean coal technology.BHEL has set up Asia’s first 6.2 MW IGCC powerplant with an indigenously designed pressurisedfluidised bed gasifier. Efforts are underway inscaling this up to a 125MW IGCC power plant

In conformity with its concern for theenvironment, BHEL has been contributing to thenational effort for developing and promotingrenewable energy based products on asustained basis.

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During the year, a major order was received for the supply and installation of57 nos. of Solar PV powered systems (5.94 kWp each), for dispensing petrol at HPCL retail outlets, located all over India. This is the first ever large-scale orderof its kind released by any

PSU in the petroleum sector in the country and the system offered by BHEL willenable HPCL to illuminate and run the company owned and operated petrol pumps smoothly irrespective ofGrid power outage.

BHEL’s commitment towards environment conservation continued with the completion of several EnvironmentImprovement Projects (EIPs). These projects helped in creating a pollution-free environment, conservation ofprecious resources like energy, water, fuel oil, coolant, lubricant beside installation of proper system for storage/handling of chemical waste, using state-of-the-art technologies. Major EIPs included tree plantation in andaround units/sites, bringing the cumulative figure of tree plantation to over 31 lakh, rainwater harvesting plantsand energy and resources conservation projects. BHEL has also initiated Carbon Disclosure Projects (CDP)with a focused approach

CONSERVATION OF ENERGYFollowing the principle of Kaizen, continuous efforts are made in the company for conservation and optimum use of variousforms of energy. The major steps taken for conservation of energy in the company are listed below:

1. Optimal distribution of loads resulting in reduction in peakload demand.2. Power factor improvement measures.3. Demand Side Management and installation of MD Controller.4. Planned Running of Arc Furnaces.5. Better operation/control of Induction Furnace.6. Use of Producer Gas in place of LPG for pre-heating of Castings.7. Energy Saving in Walking Beam Furnace by installation of Magnetizer.8. Reduction in consumption of RFO/F.O. per metric ton of steam generation in T.P.S.9. Use of Metal Halogen Lamps instead of fluorescent tubelights for lighting purposes. As a result of energy saving measures the energy cost as a percentage of turnover for the year 2001-2002 was containedat 2.63% as compared to 3% for the previous year. This reduction was achieved inspite of overall increase in the price ofCoal, Oil, Electricity etc.

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NEW PRODUCT DEVELOPMENT:-

Having recorded the highest-ever turnover of Rs 34,050 crore, Bhel has spent 2.3% of the

company’s turnover on R&D, which amounts to Rs 788 crore. With this, the Corporate R&D unit in

Hyderabad has achieved Rs 6,334 crore during 2009-10 through products and systems developed

in-house, as against Rs 5,300 crore achieved last year. In fact, Bhel is one among the four Indian

companies figuring in ‘The Global Innovation 1000’ to be ranked for its record expenditure on R&D.

The R&D spend is expected to go up from the present level to 5% in the next four to five years.

The Corporate R&D unit has been involved in specific product development in the field of power

generation, transmission and utilisation. As part of an MOU with the government of India, BHEL has

developed new products and applications for power generation. Some of the specific initiatives

include development of super critical and ultra super critical power projects, according to HS Jain,

GM-in-charge. Plant specific training simulators were designed for Khaperkheda and Bhusawal

thermal power plants. Besides, performance analysis, diagnostics and optimisation packages were

also developed for hydro electric projects at Sewa and Parbati.

Further, the unit it is now developing a centre for Nano Technology and centers of excellence in

areas of machine dynamics and compressor & pumps. The Centre for Nano Technology is being

developed at a cost of Rs 8.27 crore, and it is expected to be functional by June 2011. It would make

Bhel future-ready in the super critical regime.

Some of the other centers of excellence include Centre of Excellence for Machine Dynamics, which

is being set up with an investment of Rs 7.21 crore and Centre of Excellence for Compressors and

Pumps for Rs 9.9 crore

Meanwhile, the unit has received a LOI from AP Genco for design, engineering, manufacture,

supply, erection, civil works, testing and commissioning of phase shifting transformer for its

Kothagudem thermal power station. The value of the contract is Rs 27.08 crore. Besides, it has got

orders from Naval Science and Technological Laboratory, Visakhapatnam and from Defence

Machinery Development Establishment, Bhopal . On the patent front, the Corporate R&D unit has

filed 263 intellectual property right (IPR) applications. The applications comprise 133 patents and

130 copyrights. With this addition, it has filed 1,100 IPRs till date. According to Jain, the unit is

planning to file over 400 IPRs by 2012.

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ENVIRONMENTAL MEASURES:-

BHEL shares the growing concern on issues related to Environment and Occupational Health & Safety (OHS), and is committed to protecting Environment in and around its own establishment, and to providing safe and healthy environment to all its employees. For fulfilling these obligations, a Health, Safety & Environmental Policy has been formulated and implemented through management systems.

In recognition of this, BHEL has been awarded the ISO 14001 Environmental Management Systems Certification and OHSAS 18001 Occupational Health & Safety Management Systems Certification from M/s Det Norske Veritas (DNV). Under UNDP programme for specialized services in the area of Environment, BHEL has set up a Pollution Control Research Institute (PCRI). BHEL also has a Model Centre for Occupational Health Services at Trichy, which is a pioneer in this field in India. Today it offers a wide range of occupational health care as well as expertise in work Environment monitoring, Toxicology, Ergonomics and in organization of OHS to multitude of industries for different sectors in India. Few ILO sponsored candidates from African countries have undergone training at this Model centre.

BHEL is a member of CORE (Corporate Roundtable on Development of Strategies for Environment) launched by The Energy Research Institute (TERI). CORE is envisaged as a means to facilitate a proactive and catalytic role for industry in addressing the environmental problems plaguing India and helping the industry towards sustainability paradigm. CORE is now a partner organization to the WBCSD (World Business Council for Sustainable Development). It has signed a memorandum of understanding with WBCSD, now called as CORE-BCSD, India. Interfaces between companies such as BHEL, TERI and the WBCSD would provide an important link to address issues of sustainable development at a global level and to learn and exchange experience of the participating companies.

BHELs commitment to environmental issues can be seen as an integral part of its core business. In the field of Non-conventional and Renewable Energy, BHEL has successfully launched products like wind electric generators, solar heating systems, solar photovoltaic systems, solar lanterns and battery powered road vehicles. Technology upgradation has been done to minimise environmental impact of fossil energy products,by way of low-NOx oil/ gas burners, circulating fluidised bed combustion boilers etc.

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RESEARCH AND DEVELOPMENT AND TECHNICAL UPGRADATION:-

Various research and development activities have taken place at different sites of BHEL.These research activities have led to huge technical upgradation over the years. A brief account of such activities at various sites is as under:-

Pollution Control Research Institute, Hardwar

Pollution Control Research Institute (PCRI) has been set up by Department of Heavy Industry with Bharat Heavy Electricals Ltd. (BHEL) as the lead agency under United Nations Development Programme (UNDP).

The development objective of PCRI project is to evolve industrial pollution control technologies with respect to air, water, noise and solid wastes to avoid unintended side effects of economic growth.

The Institute provides services to various industries and Thermal Power Stations on a regular basis. A comprehensive study on Environmental Impact Assessment covering all the three seasons for Amarkantak TPS for MPEB-Madhya Pradesh was completed by PCRI

Welding Research Institute (WRI), Tiruchirapalli

Welding Research Institute (WRI), the only one of its kind in the country, was set up at Tiruchy under the aegis of BHEL with funding and technical assistance from UNDP/UNIDO and Government of India. WRI is equipped with state of art welding research facilities like electron and laser beam, flatboat, friction and plasma welding in addition to facilities for conventional arc welding. Further, it has advanced testing facilities for fatigue testing metallorgraphic studies, Residual stress measurement, Residual life estimation etc. WRI has entered into an agreement with GTZ Germany for undertaking cooperative research projects in welding, in the 2nd phase of the Project which is under implementation.

Some of the programes of technology upgradation and R&D effort of the Public Sector undertaking are detailed below:

BHEL

In BHEL, during 1997-98, Rs.61 cr. were spent on in-house R&D programs, focusing on development of new products/systems, business enhancement, quality/reliability improvement and indigenisation. The turnover due to R&D efforts resulting in new or modified products was around Rs.760 cr. during the year.

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New products designed and developed include; Hydrogen Recycle Compressors for Diesel Hydro Desulphurisation System (DHDS) units being set up by refineries; Spark Gaps for series compensation schemes for 400 KV transmission lines which have been successfully tested to International Standards at KEMA, Netherlands making BHEL one of the few companies in the world having this technology; Bull ring segments with super Ni-hard composition to increase life and reliability of Bowl type Coal mills; a modified 2 cylinder HP-IP steam turbine of 150 MW utility sets which has been supplied to Jindal Tractobel, GIPCL and will be supplied to Tata Jojobera; an Energy Management System has been supplied to Narmada Control Authority; a microprocessor based control system for HVDC is being supplied to NHVDC stage II: 210 KN Disc Insulators have passed all type tests and have been demonstrated at a few commercial sites; the largest synchronous motor of 3950 KW which so far were being imported has been manufactured and supplied to ONGC Santhal Project; a single shaft combined cycle system with gas turbine and steam turbine on a single shaft have been developed and is being offered commercially.

BHEL has also developed a highly efficient Terminal Automation System to accurately load pre-set quantity of Petrol into wagons/trucks. IOCL has placed an order worth Rs.1.5 cr. for this system marking BHEL's entry into a new line of business.

BHEL has also developed a higher power 207 KW traction motor for 25 KV single phase broad gauge AC-EMU operating in Indian Railways at Chennai; Delhi and Calcutta. Other developments include 282 KW rating traction motor for 3100 HP broad gauge diesel electric locos operating at maximum speed of 160 KMPH.

A new design of 700 HP meter gauge Diesel Electric Shunting loco has been developed for an export order to Malaysia and M/s Mitusibishi Japan who are the customers' consultants.

A 20 KWP grid interactive Solar Photovoltaic power plant has been designed, installed and commissioned at Electric Systems

SOME OTHER NOTABLE ACHIEVEMENTS OF BHEL ARE : -

Developement of an improved high capacity Dynamic Breaking resistor (DBR) unit for 25 KV A.C. electric loco for Indian Railways. This prototype has been satisfactorily tested in the laboratory and orders for 78 DBRs worth Rs.6.5 cr. are being executed.

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- Development of a PC based Man Machine Interface (MHI) for variable frequency drives.

Development of an on-line vibration monitoring and analysis system for Boiler Feed Pumps for 210 MW Thermal Power Station (TPS). The system has been successfully field tested at Vijayawada TPS.

Development of Duplex low pressure Heaters. The first LP Heater of this design has been supplied to Jindal Tractobel 2x130 MW units.

Developed and supplied for the first time in India, a variable Frequency Drive (VFD) for Boiler Feed Pumps for 250 MW Kothagudam TPS (AP).

- Developed a water cooled Thyristor module for high current applications.

- Developed a single enclosure 3-phase bus bar module for 145 KV GIS.

- Developed a lattice type butterfly valve, with several new features, for the Bhivpuri Hydro Electric Power Plant.

Developed a 'Hardware-in-loop' Simulator for shop floor testing of control systems for thermal power plants.

Designed and manufactured the largest hydro-generator air coolers for 6x250 MW Nathpa Jhakri Hydro Electric Power Station.

Some R&D projects which are likely to be completed by March 1999 are: development of High Pressure Boiler for Circulating Fluidised Bed Combustion (CFBC) boiler; demonstration and testing of state of the art 200 KW Phosphoric Acid Fuel Cell (PAFC) power plant under Indian conditions; Installation and commissioning of Corex Gas Firing system for 130 MW boiler; Development of 3-phase induction motor type 6 FRA 6068 for AC Locos; Development of high speed BAPLON for control of Electrostatic precipitators; Development of 11 KV.2 MVAR controlled shunt reactor with technical Consultancy from St.Petersburg University, Russia and Development of efficient Francis runner profile for the head range 60-80 meters.

EDUCATION AND TRAINING:-

BHEL nominates its employees for training prgrammesconducted in house by HRDI & HRDC’s and by otherexternal agencies. During the year 2001-2002, a total of 40172 participants nominated by BHEL attended various training programs. Besides, 3333 Trade apprentices were provided training facilities under the Apprentices Act.

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PROFITABILITY:-

The profitability of BHEL for past three years can be analysed on the basis of following financial ratios:-

2009-10 2008-09 2007-08 Profitability ratios: (in Percentage)a) Profit before tax to i) Capital employed 24.63 6.46 14.69 ii) Net Worth 25.80 8.17 15.72 iii) Sales 13.00 4.61 9.08b) Profit after tax to Equity 244.91 127.72 191.19c) Earnings per share (in Rupees) 24.49 12.77 19.12

FUTURE GROWTH OUTLOOK:-

BHEL’s future outlook is promising. Drivers like power projects, other infrastructure development activities, industrial growth and favorable policy regulations will drive growth in manufacturing. The Indian engineering industry has been witnessing significant level of capability enhancement over the years. As export markets open up, this will help India develop a strong presence in global engineering exports.

Power sector contributes the largest to the engineering companies’ revenues. Major players in this sector like ABB and BHEL derive 60 per cent and 69 per cent of their revenues from supplying equipments to the power sector. Going forward, with the Government clearing the blueprint for adding 100,000 MW in the tenth (2002-07) and eleventh 2007-12) five-year plans, the potential are high for the engineering majors.

Emerging trends such as outsourcing of engineering services can provide new opportunities for quantum growth. Engineering and design services such as new product designing, product improvement, maintenance and designing manufacturing systems are increasingly getting outsourced to countries like India and China. India’s engineering sector has significant potential forfuture growth, in manufacturing as well as services.

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