HEAVY MECHANICAL COMPLEX (PVT) LTD

S.KAMAL HAYDER KAZMI
Research Analyst
, PAGE
Nov 24 - 30, 2008

Heavy Mechanical Complex (HMC) (Pvt) Ltd is a leading engineering goods manufacturing enterprise in Pakistan with over 160,000 sq. meters covered facilities and 1,100 employees. HMC is a professionally managed progressive organization which provides manufacturing services both on our own or customers design. HMC has gained rich experience in designing and manufacturing of large projects through collaboration with internationally reputed engineering organizations. All its processing facilities are in-house including Designing, Fabrication, Machining, Iron and Steel Castings, Forgings, Heat Treatment, Assembly, Sand Blasting, Painting and Galvanizing etc.

HMC PLANTS

HMC manufactures equipment for hydro-electric power plants, thermal power plants, sulphuric acid plants, industrial alcohol plants, oil & gas processing plants and chemical & petro-chemical plants, etc. Boilers, cranes, construction machinery, material handling equipment, steel structure and railway equipment etc. are some of the other products which are produced on regular basis. The company's capabilities include engineering and manufacturing of Sugar Mills ranging between 1,500 - 12,000 TCD (tons of cane crushing capacity per day), Portland Cement Plants of 700- 5,500 TPD (tons per day) module and White Cement Plant of 50 - 1,000 TPD.

FINANCIAL HIGHLIGHTS
INDICATORS JULY-MAY 2006-07 JULY-MAY 2007-08
Production index 100% 90%
Cost of goods manufactured (Rs in mn) 1384 1293
Net sales (Rs in mn) 1572 1451
Pre tax profit - loss (Rs in mn) -19 -10
Gross profit margin (%) 11.82 10.69
Net profit margin (%) 1.21 0.70
Manpower cost to prod. Cost (%) 23.10 23.62
Value addition (%) 28.54 30.49
Source: HMC


PRODUCTION
PRODUCTION (MAJOR PRODUCTS)   JULY-MAY, 2006-07 JULY MAY, 2007-08  
  M.U ACTUAL PRODUCTION % CAP. UTIL. ACTUAL PRODUCTION % CAP. UTIL. % INC/ DEC
Steel Ingots MTN 2,202 6.32 2,600 7.46 18.07
Forgings (press hammers) MTN 1,739 41.24 1,713 40.62 -1.50
Cast Iron Casting MTN 2,091 45.62 2,514 54.85 20.23
Steel Castings MTN 1,157 19.42 1,582 26.55 36.73
Boilers MTN 2,434 276.59 2,291 260.34 -5.88
Power Plants MTN 2,304 - 16 - -99.31
Chemical Plants MTN 804 - 1,555 - 93.41
Cement Plant & Eqp MTN 1,952 72.83 68 2.54 -96.52
Sugar Plant & Eqp MTN 2,981 168.50 3,300 186.53 10.70
Source: HMC

IMPORTANCE OF HMC

Heavy Mechanical Complex has played a crucial role in the industrial and socio-economic development. Its main contribution has been in achieving self-reliance in the sector through import substitution, saving billions of dollars and earning millions of dollars through export promotion. For almost two decades, HMC remained flagship of national prime engineering industries, having earned recognition as leading manufacturers of capital goods of international standards. The company earned significant profits, provided employment to thousands, trained hundreds of engineers and technicians and developed new products for defense & strategic industries. Company has designed, manufactured and installed 23 sugar mills, five cement plants of various capacities and 35,000 tons of equipment for power plants. A host of other engineering goods manufactured by the HMC include road construction machinery, industrial boilers, various types of cranes, railway equipment, truck chassis & axles, equipment for fertilizer plants and oil refineries, besides a variety of steel structure, castings and forging.

HMC WITH OTHER COUNTRIES

Heavy Mechanical Complex has successfully executed a large number of contracts in many countries which were won against international competition. The turnkey projects which related to design, engineering, construction and commissioning of three sugar mills and a cement plant were completed in Indonesia and Bangladesh. In addition, it's various products such as construction machinery, electric overhead traveling cranes, steel structure, boilers, railway materials and equipment for sugar and cement industry have been exported to Bangladesh, Afghanistan, Sri Lanka, Ghana, Uganda, Kenya and the UAE. The company is registered with international donor agencies and governments of the respective countries. The flexibility and general purpose nature of plant machinery installed at HMC and its state-of-the-art design and engineering capabilities, allow diversification of activities of the company to cover industry, power, water, energy, agriculture and infrastructure sectors, meeting domestic and export requirements. Heavy mechanical complex has signed contracts for supply of cement plants, one each to Iran and Uzbekistan which have not yet been materialized and can be revived for implementation.

CONCLUSION

The Heavy Mechanical Complex is the biggest undertaking of its type in Pakistan with Chinese assistance. During financial year 2008, the HMC's financial position has slightly declined as compare to last year 2007. The management of the company should improve their company performance like increase in Net Sale, Pre Tax Profit, Gross Profit Margin and Net Profit Margin. The company has rebuilt its credentials for privatization, showing remarkable improvement in recent times and offers the potential for economical revival after privatization. No doubt, the complex enjoys the singular distinction of successfully placing Pakistan on export map of the world.