Taxila Heavy Mechanical Complex: Symbol of Pak-China friendship

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By Engineer Zaheer Shah

 

Heavy Mechanical Complex (HMC) “which was in losses was vigorously revamped with new drive and strength” to stand on its feet and play a vital role for the country.

It is no doubt that HMC once a subsidiary of State Engineering Corporation and played remarkable role in engineering goods manufacturing industry in Pakistan.

The HMC built in 1971 and Heavy Foundry &Forge (HFF) in 1977 with the financial and technical assistance of China at strategically important location of Taxila about 30 kilometres north of capital Islamabad, are the symbols of Pak-China Friendship.

The HMC with “Mother of all Industries was built to provide stimulus to the indigenization of local industries and substituting imports.

Since inception HMC has made significant contributions to manufacture equipment for establishment and expansion of 57 Sugar and 22 Cement plants right from design to commissioning.

Apart from sugar and cement industries HMC has played key role in manufacturing equipment for chemical and petro-chemical plants, power plants, pressure vessels, heat exchangers, overhead cranes, road rollers, steel bridges, railways equipment and equipment for many other important industries.

The HMC also had export potential; it exported their products to some countries in the past mainly to the Middle East.

Lately, two hydropower projects one each at Gilgit Baltistan and Kashmir, further added to its financial woes. These power projects were bid by HMC with a view to recover its losses and establish a facility for indigenous turbine manufacturing without any prior homework or consideration at helm that HMC neither holds capacity nor expertise to undertake such projects.

The HMC won these projects through International Competitive Bidding at a very low value; resultantly the business had to suffer huge losses that instead of helping the organization rather proved detrimental to its precarious financial health.

To enable HMC revive its business, SPD as an immediate step paid off the bank liabilities, next was the undertaking of comprehensive study to find out fundamental problems and prepare a workable business plan to turn around.

A well-conceived business plan prepared by the consultants was presented to SPD in October 2018, the plan envisages two staged way forward; a short term three years plan to achieve sustainability and a long term eight years plan to Modernize, Rehabilitate, and Expand the entity to diversify its industrial manufacturing in the fields of agriculture, power plants and construction industry.

As a first step the plan suggests to change the organizational structure with a lean and forward looking top tier management thus successively filling up middle management that depleted due to voluntary separation schemes offered by government at different times to reduce the financial burden which rather proved damaging by creating voids.

To meet the short term plan by 2022 and settle employee’s outstanding liabilities, SPD is committed to provide required financial support and fiscal sustainability is envisioned to be achieved on completion of short term plan.

Revamping of Foundry and Forge Division by replacing the energy inefficient induction furnaces and refurbishing the out of action continuous billet caster plant is set to be completed by the year 2021 followed by setting up a bar rolling mill to realize financial sustainability for the ensuing businesses. The SPD shall assist in securing the funds required for re-establishment of Foundry & Forge Division.

Marketing has always been a weak area for any public sector business organization, so is the HMC marketing department; mainly the reliance is on orthodox marketing techniques.

The reform process for the marketing department to keep the business afloat on latest trends is in progress. Likewise, the design department which provides one of the largest facilities in Pakistan equipped with latest hardware and software is underutilized, to optimize its utilization and generate revenue the design center will be turned into a separate business unit.

The plant and machinery installed in the Complex is more than five decades old and due to excessive wear and tear it requires huge capital to maintain and keep it operative. To maintain a competitive edge in the market and achieve profitability it is imperative to replace old plant and machinery, which would of course involve large capital investment.

The long term plan has given a roadmap for a phased programme to procure latest computerized & numerically controlled machines and energy efficient plants by the year 2028.

In addition to above measures a diversification by capturing new business vistas, other than the HMC primary business sectors of sugar and cement industries that have come to a saturation point, is a main goal of HMC.

With the government main focus on small and medium hydel power projects the HMC foresees a great potential for turbine manufacturing and establishing its set up, vigorous efforts are underway to form a Joint Venture with a foreign company in the field. Recently, MOUs with a European and Chinese companies have been signed to launch future Joint Ventures.

The results of reform process have started showing, the commercial orders are under negotiations. With the focused aim and continuous efforts at hands the HMC by the year 2023 and 2028 is all set to achieve its short and long term objectives and regain its past image of being the Mother of all Industries that surely will play a vital role in the nation’s building.

The writer is Managing Director of Heavy Mechanical Complex. He can be contacted at md@hmc.com.pk