BEML Ltd and Heavy Engineering Corporation (HEC) have signed a memorandum of understanding to manufacture and supply equipment to cater to the needs of the mining industry.
Under this agreement, BEML and HEC will combine their expertise in the field of manufacturing and marketing of heavy engineering and mining machinery such as Rope Shovels and Walking Draglines.
The companies will not only jointly manufacture but will also look after commissioning and providing after sales service support for the identified products.
The collaboration in manufacturing of mining equipment will help boost the turnover of both BEML and HEC by around Rs 150-200 crore (on an incremental basis) each year, said Deepak Kumar Hota, CMD, BEML.
According to Avijit Ghosh, CMD, HEC, the mining industry has been growing and the demand for equipment is also on the rise. Currently a majority of the demand is met through imports.
The tie-up will not help both the companies leverage their manufacturing capability but will also help bring down the delivery time, reduce working capital and create capability for high capacity equipment to meet the growing demand.
"There is a demand-supply gap and the dependence on imports is huge. The joint effort will not only help the country attain self reliance but will also help bring down the costs," Ghosh said at a press conference in the city on Monday.
Both the companies are also exploring the possibility of getting funding from the Department of Heavy Industry for projects such as development of 20 CuM rope shovel.
Anil Kumar Jha, CMD, Coal India, who was present at the MoU signing event, said 'indigenously manufactured good quality machines' was the need of the hour to enable the company ramp up coal production.
CIL, which expects its coal production to increase to one billion tonne, up from 567 million tonnes in FY18, in the next three to four years, is likely to procure Rs 12,000-13,000 crore of equipment in the next two to three years.
"We expect to be able to produce one billion tonne of coal in three to four years and this cannot be accomplished unless there is supply of indigenously supplied good quality machines," he pointed out.