‘Supply-chain management is a big constraint in this country’

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: B Prasada Rao was recently named chairman & managing director of Bharat Heavy Electricals Limited (BHEL). He has more than three decades of experience in the country’s biggest capital goods company. He is targeting to make BHEL a $10-billion company by 2012. Rao, in an exclusive interview to FE’s Simran Arora, talks about the growth opportunities for the company, challenges from Chinese equipment manufacturers and upcoming joint ventures. Excerpts:

You have just taken over. How does it feel and what are your immediate plans?

It is great, but challenging. I am looking at going beyond $10 billion, which means a growth of 25%. So, leading the company on a year-on-year basis to scale up the operations is a big challenge. Besides, with the market growing, there is a lot of competition with new players coming in. We have to strengthen ourselves. Being an integrated power plant equipment manufacturer, we have some inherent advantages, which we need to consolidate and build on.

What is your short-term vision?

Well, I have been a part of this company for the last 31 years and I have also been a part of the strategy planning for the company. We are charting out the plan for this company for the next five years in accordance with our goal to reach a figure of $10 billion by 2012. We are not only on the right path to reach that level, but also to exceed that level.

How do you plan to tackle the Chinese threat?

We have taken several steps to tackle the Chinese threat. We compete with better equipment and we are also targeting to offer prices that the Chinese are offering. In addition, we are also doing what is called design to cost-purchase and supply management. In fact, supply chain management is a big constraint in this country. We don’t have many suppliers who can supply all the needs of power plant equipment. So, we are looking at developing some of them. We have also opened up an office in China, for example.

Are any fresh orders in the pipeline?

Well, we have received orders worth about Rs 20,000 crore in the first half of this fiscal. The significant part is that we have received almost 70% orders from the private sector. Most of these private customers, who were earlier patronising Chinese equipment, have been coming back to us.