BHEL Trichy to Source 1.2 Lakh Tonnes of Components Annually from MSMEs

ENA MSME 2024-07-17 15:12:35 Tamil Nadu, Jul 17 (KNN) In a significant development for the Micro, Small, and Medium Enterprises (MSME) sector in Trichy, Tamil Nadu, Bharat Heavy Electricals Limited (Bhel) Trichy has announced plans to expand its vendor base for outsourcing components used in thermal power plants. This move comes as a beacon of hope for the region's struggling MSME sector, which has faced severe challenges in recent years. Bhel Trichy, a major player in India's power sector, has secured orders to establish at least seven thermal power plants across the country, including projects in Odisha, Uttar Pradesh, and Chhattisgarh. The company estimates an unprecedented annual requirement of 1.2 lakh tonnes of outsourced components, marking a multi-decade high in demand. The announcement is particularly timely, given the sharp decline in MSME units supporting Bhel Trichy. From a robust network of 350 ancillary units in 2019, the number has dwindled to approximately 80 today. To meet the surge in demand, Bhel is now actively seeking new MSME partners under two business models. The first model involves providing raw materials to vendors within a 350km radius for component production. In the second model, MSMEs are allowed to procure raw materials independently and deliver finished components directly to project sites. While this development has injected optimism into the local industrial ecosystem, MSME representatives have voiced concerns about challenges in fully capitalising on this opportunity. V Kannan, president of the Valavanthankottai Industrial Manufacturers' Association, highlighted the issue of varying steel prices, which potentially disadvantages Tamil Nadu-based MSMEs compared to their northern counterparts, reported TOI. We're paying around Rs 5,000 per tonne more for steel than MSMEs in northern states with iron smelting factories, Kannan explained. This price disparity needs to be addressed to ensure a level playing field. Another critical concern is access to finance. S Gopalakrishnan, secretary of the Trichy District Tiny and Small Scale Industries Association (Tiditssia), emphasised the need for support from nationalised banks. Each unit may require loans of up to Rs 5 crore to modernise production facilities and hire skilled workers, he stated. However, banks are hesitant due to the recent downturn in MSME turnover. Responding to these concerns, a Bhel official assured, We will provide necessary support to our business partners to meet the high volume of orders. Production for the new projects has already commenced. This development represents a potential turning point for Trichy's industrial landscape. If the challenges of price disparities and financial access can be addressed, it could mark the beginning of a significant revival for the region's MSME sector, with positive implications for local employment and economic growth. (KNN Bureau) 38629 https://knnindia.co.in/news/newsdetails/msme/bhel-trichy-to-source-12-lakh-tonnes-of-components-annually-from-msmes 2024-07-17 15:12:35 knnindia.co.in BHEL Trichy to Source 1.2 Lakh Tonnes of Components Annually from MSMEs