India's BHEL to Receive ASME Certification for Nuclear Equipment Supplies

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Bharat Heavy Electricals Limited (BSE:500103) (BHEL) (New Delhi), India's premier state-controlled power equipment manufacturer, is expected to receive the N & NPT stamps from the American Society of Mechanical Engineers (ASME) (New York, New York) shortly. The certification from ASME is mandatory for organizations to supply nuclear power equipment and components for projects constructed or executed by American companies. Confirming reports, A.V. Krishnan, the executive director of BHEL's Trichy facility, indicated that officials from ASME have completed statutory audits of BHEL's production units.

The N stamp is required for the supply of piping systems, valves, pumps, nuclear vessels, support structures and transportation packages. The NPT stamp will allow BHEL to supply turbines, tubular products, boiler components and other piping systems. Krishnan added that the certifications would be helpful, as BHEL is focusing on the supply of critical nuclear power equipment and components, including heat exchangers, vessels and steam generators.

In a related development, BHEL has signed a preliminary agreement with GE-Hitachi Energy Incorporated (Wilmington, North Carolina), under which the companies plan to design and construct 1,350-megawatt (MW) Advanced Boiling Water Reactors (ABWR) in India. Recently, the Prime Minister's office has approved the proposal for a joint venture between the Nuclear Power Corporation of India Limited (NPCIL) (Mumbai), Alstom S.A. (EPA:ALO) (Levallois-Perret, France) and BHEL. The joint venture proposes to construct eight nuclear reactors in the country with technical assistance from Alstom. BHEL's facilities at Bhopal (Madhya Pradesh), Thiruvanathapuram (Kerala), Bangalore (Karnataka) and Hyderabad (Andhra Pradesh) will undertake manufacture of critical nuclear power equipment. Sources have indicated that production has commenced in two of the four facilities.

To date, BHEL has supplied equipment for power plants with a combined capacity of 90,000 MW. The company, which is expected to expand its power equipment manufacturing capacity to 20,000 MW in the future, is investing more than $111 million to establish two new manufacturing facilities. Presently, BHEL produces 180 products across 30 categories in 14 manufacturing facilities. The company is also planning new production units at Jagdispur in Uttar Pradesh and Pudukkottai in Tamil Nadu.

As of December 31, 2010, BHEL's total order book value was about $8.6 billion. Of this, contracts from independent power producers accounted for nearly 25%. The order book value includes contracts for the supply of eight units of supercritical power plant equipment.

In the next 10 years, India's nuclear power sector is estimated to require an investment of $29.41 billion. By 2020 and 2032, the country is targeting 20,000 MW and 63,000 MW of new nuclear power generating capacity, respectively. Currently, nuclear power meets 3% of India's primary energy demand (PED). According to S.K. Jain, the chairman and managing director of NPCIL, by 2032 and 2050, nuclear power is likely to meet 7% and 25% of the PED, respectively.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.