Public sector energy major Bharat Heavy Electricals Limited (Bhel) is overwhelmed by its swelling order book and an increased response from private power producers in India and it is now time for the vendor community to celebrate their association with the power behemoth by sprucing up their operations to meet Bhel?s requirements in a big way.
Despite the recent entry of Larsen & Toubro, Thermax Power and Toshibha, among other private players into power equipment manufacturing, a huge number of vendors and away centre fabricators (ACFs) have not only shown their solidarity with the PSU power major but also decided to continue their age-old association with Bhel in spite of better margins offered by private players.
Reinforcing their strong support with the public sector power major, over 500 vendors in and around Trichy, and another 60-odd ACFs across different states, have not only decided to ramp up their capacities but are also keen to upgrade their factories with the latest machines and technologies to help Bhel Trichy meet its ambitious 15,000-mw capacity target in the current fiscal, compared with 10,000 mw in the previous year, according to Rajappa Rajkumar, president, Bhel Small and Medium Industries Association (BHELSIA). ?We have invested over Rs 250 crore over the last 15 to 18 months and will invest another Rs 250 crore to ramp up and upgrade the factories to meet Bhel Trichy?s target,? he said. ?Though we have been approached by a number of private players with better offerings, member companies have decided to work with Bhel. Our association with Bhel is long standing and we could grow to such a level because of our association with Bhel.? Though the vendors are small and medium in nature, they will still ramp up operations in the future. Apart from increasing its orders to us year after year, Bhel also provides them technical capabilities, training and make the payments on time. Thus, there is no logic in looking at others despite the better margins from private players, he said.
Interestingly, the vendor community has decided to create clusters across a few places in and around Trichy to enable smooth supply of components. ?We have created a cluster near Tanjore spread over 150 acre. A total of 25 companies set up their base to support Bhel. Similarly a cluster is being developed at Karaikkal near Puducherry to house a greater number of companies,? Rajkumar said. Moreover, to ensure continued power supply, the vendor community is planning to put up a captive power unit with a capacity of 5,000 kv. Apart from SBI, a few other banks have come forward to fund the expansion plans and new clusters.
Explaining in detail, G Ramakrishna, general manager, outsourcing, Bhel Trichy, said: ?Component outsourcing from our vendors and ACFs has grown manifold over the years. From 814 tonne in 1969, the outsourcing has gone up to 400,000 tonne in 2010 and we plan to increase it to 4,75,000 tonne in 2010-11 in order to further scale it up to 7,00,000 tonne by 2011-12.?