The Executive Committee of the National Economic Council (Ecnec) has approved, in its meeting held on May 26, plan for the undertaking balancing, modernisation, rehabilitation and expansion (BMRE) of the Heavy Mechanical Complex (HMC) at Taxila. The scheme, estimated to cost Rs 21.54 billion, is focused at the production of power generation equipment based on state-of-the-art technology to meet growing national demands of energy.
In addition, the Design Centre of the HMC is to be upgraded at a total cost of Rs 665 million, for which administrative and financial approval has recently been accorded by the Central Development Working Party (CDWP). Implementation of the restructuring program, consisting of the BMRE of production facilities, strengthening of the Design Centre and procurement of technology, is envisaged to be completed in three years.
HMC has already firmed up its program to manufacture, in a big way, major and critical equipment for power generation plants based on various energy resources. The comprehensive product range will include equipment for hydroelectric, coal-based, thermal, wind power, urban and industrial waste power, in line with the projections of the National Security Power Plan 2005-2030.
The management aims at supplying small hydropower and wind energy plants on a turnkey basis in the near future. A well-conceived business plan, on short and long-term basis is in place, projecting annual sales after the initial five years of completion of the BMRE at about Rs 15 billion, including its conventional products like sugar mills, cement plants and equipment for the oil and gas sector etc.
HMC, a strategic industrial unit, is the largest engineering, designing and manufacturing organisation professionally managed, which is spread over an area of 2.31 sq km. Its two works namely Mechanical Division and Foundry and Forge Division were established under the Chinese technical and economic assistance. Production facilities were established during 1960s-1970s and have become outmoded since no major investment was made in subsequent years to modernise installed machinery. Though rehabilitation of major machines has been done on a regular basis with the help of the Chinese, plant capability is no more compatible.
It is planned to upgrade the plant and general purpose machinery, and material handling equipment will be refurbished. Steel melting facilities will be overhauled and upgraded by installing modern instrumentation, and by adding an induction furnace and vacuum de-gasification stations to produce refined grade steels required for manufacturing the turbines.
A heavy-duty forging press of 15,000 tons capacity and heat treatment facilities will be added to the Forge Shop. Heavy duty turning, boring, milling and drilling CNC machines will be installed in the existing Machine Shop. In addition, precision welding machines, material preparation equipment and quality assurance equipment will also be installed.
The HMC has a well-equipped product design and engineering office, with modern computer-based hardware and software facilities. Technology acquisition and assimilation has been successfully done, through technology transfer agreements and under joint ventures with foreign companies. This has not only enabled HMC to become a market leader in the supply of sugar mills and cement plants on a turnkey basis domestically, it also placed Pakistan on the export map. To enlarge its scope of supply of equipment and technical services for the energy and industrial sectors, the HMC will develop further its design and engineering capabilities.
It is now planned to upgrade the Design Centre, with focus on adoption and adaptation of latest technology in the new areas of business. The modern engineering and manufacturing technology related to various industrial sectors has to be acquired from foreign sources. The proposed strengthening and capacity-building of the product design office include additional state-of-the-art facilities for computer-aided design (CAD) and computer-aided engineering (CAE), which will be integrated with computer-aided manufacturing (CAM).
Currently, the Complex employs more than 1,000 professionals, technicians and workers. The company having certification of international standards and qualifications such as ISO, American Boiler Board, ASME and TUV etc, is profitable despite technological and financial constraints. For the fiscal year ending June 30, 2010, the company has achieved record sales of two billion rupees, having earned gross profit of Rs 187 million. Sales during the period July 2010-March 2011 amounted to Rs 1,507 million, while orders in hand value Rs 2,213 million, with additional orders in the pipeline.
The domestic market for sugar and cement having been saturated for quite sometime, the company needed diversification of its production programme. Concerted efforts were made in this direction in the past but plans did not materialise, primarily due to non-availability of requisite foreign technology, lack of government support and inconsistent policies. Thus, the HMC's competitive edge has eroded over a period of years. The complex now plans to expand and diversify its products range to cover equipment for energy, chemical, petrochemical, agro-based and other industries and the infrastructure sector, besides acquiring latest technology for its current product line.
The HMC has already contributed significantly in the development of various power plants in the country. The list of thermal power plants for which the company manufactured substantial equipment includes KESC's Bin Qasim 2x210 mw, Wapda/Pepco's Muzaffargarh 1x320 mw and IPPs such as Hubco and AES Lalpir power stations. Likewise, the HMC has supplied partial machinery and equipment for medium and mega-hydropower projects like Malakand III, Ghazi Barotha, Warsak and Tarbela, besides installing a number of small and mini hydropower projects in the Gilgit-Baltistan and the Azad Jammu and Kashmir (AJ&K).
In the past, China has helped Pakistan in establishing a strong base for heavy engineering industry, and is again willing to support the government's roadmap for strengthening the sector. During the visit of the Federal Minister for Industries and Production to China in the month of April, Managing Director HMC has signed a Memorandum of Understanding with the Chinese who are willing to help the HMC in implementing the BMRE plan along the financing. The Economic Affairs Division has initiated action for seeking project financing of $156.44 million, to cover its foreign exchange component, from China and other sources.
(The writer is Vice President of The Institution of Engineers, Pakistan)