BEML opens sourcing base in China

Bangalore: BEML Ltd has launched its Chinese base to source low-cost components as well as to market its own equipment in the region.

The Shanghai sourcing and marketing office will be a launch pad to market BEML’s high-end mining and construction equipment and spare parts to companies in China and the neighbouring countries such as Uzbekistan, Kazakhstan and Ukraine, a BEML release here said.

It also signed sourcing and contract manufacturing memorandum of understandings (MoUs) with two Chinese companies.

BEML, which has set a 2008-09 sales target of Rs 3,600 crore, said it anticipates the Chinese base to generate business of over Rs 300 crore in the next 2-3 years, besides improving its regional presence.

The invest Rs 3,000-crore defence public enterprise manufactures heavy earthmoving equipment for the mining and construction industry, rail coaches and metro rail cars; and heavy duty trucks for the defence services. The Shanghai office would source from Chinese companies critical components and machinery parts required to manufacture all these equipment back home, making use of their low-cost, high quality advantage.

The company said the Chinese business climate would be conducive for its growth and its existing ties with Chinese company Xiamen yielded business worth Rs 10 crore in 2006-07 and Rs 48 crore in 2007-08.

An MoU for sourcing and contract manufacturing was signed with Hunan Sunward Intelligent Machinery Co Ltd for mid-size excavators of up to 15 tonnes. Another was signed with Sino Truck Ltd, Shantong province, for the supply of 30- and 50-tonne tippers and skid loaders. The Consul-General in China, Mr Vishnu Prakash, and BEML’s CMD, Mr V.R.S. Natarajan, were present at both the events.