RED HOT AT BHEL

Decades ago, a trip on Trichy-Thanjavur highway on which the BHEL (Bharat Heavy Electricals Limited) complex is located, the epicentre of Trichy's industrial ecosystem, was characterized by heavy vehicles lugging raw materials, fabrication units active till 2 am to produce thermal power equipment for BHEL, and the buzz of welding and machining. Over the years, policy changes and the shift from thermal power have rattled BHEL ancillary units. The fall in fresh orders for thermal plants made at least 300 out of 450 Trichy MSMEs, dependent on BHEL, to turn sick and close, while others struggled. The slowdown is ending, with BHEL securing unprecedented work orders for about 2 lakh crore in the thermal power sector. This offers MSMEs an opportunity to relive the past glory. The developments have already revived at least 50 small-scale units and helped Trichy retain the tag ‘Fabrication and Energy Capital of India.'
39 thermal power plants in pipeline

BHEL has secured orders worth 81,349 crore in FY 2024-25. So far, BHEL has bagged orders from state-level and private power companies pan India to supply power plant components for at least 39 new power plant projects including those in Maharashtra and Haryana. "We have enough power plant orders in hand to keep us running for the next 5-6 years. Continuous production, even with a minor profit margin is what ancillary units sought for the past five years. We see both sick units and new players producing components for us," an official in BHEL said. Orders for more power plants, for about 50,000 crore are further expected to come in FY 2025-26, adequate to keep ancillary units busy at least for a decade.
1 in every 3 thermal components
To meet the growing power demand, the Centre planned to add 80GW of power by 2030. Thermal power production with sizable coal reserves seems to be the preferred way for large scale power generation. BHEL said that Flue Gas Desulfurization (FGD), a component in thermal power plants to remove sulfur dioxide from the exhaust, has been made mandatory to reduce pollution threats. The 60-year-old BHEL Trichy complex is a specialist in thermal power plant equipment and component production. About one third of thermal power plant components, particularly boilers, are produced in Trichy. BHEL's Trichy complex will benefit from the strong order book.
Industrial estates witness uptick
Ariyamangalam, Thuvakudi, and Mathur Sidco industrial estates and other private industrialised pockets in Trichy's suburbs are gearing up to seize the moment. Between 2017 and 2022, lack of orders pushed a section of MSMEs to find greener pastures or made several units turn sick. The orders in the pipeline for BHEL Trichy, prompted MSMEs to revive their plants. "Around 50 sick units are up for revival, including units bought by major engineering firms. At least 150 MSME units will be revived by the year end. Trichy's industrial ecosystem will get back on its feet," N Kanagasabapathy, coordinator, BHEL small and medium industries association, Trichy said.
Mastery of trade
BHEL is looking beyond Trichy to outsource production. Manufacturers in Maharashtra and Chhattisgarh are keen to foray into fabrication and engineering. "We have been producing power equipment for a long time. Few operators located near the plant erection site may compete, but the quality of production of Trichy MSMEs can't be overlooked. More machinery and expansion plans are on cards," A R Syed Arif, ex-chairman, CII Trichy zone said.
Challenges ahead
Besides competition from new players in other states, MSMEs in Trichy bat for streamlining the bidding to ensure fair profit margin for producers and overcoming reverse bidding threats. Support in procuring raw materials and reducing logistics costs are also sought. "Considering huge volume of orders, BHEL must take a vendor friendly approach in the bidding process to complete on time, and get more responses from MSMEs including sick units," Karthikeyan M, director of Velmurugan heavy engineering industries said. For about 10 years now, MSMEs have not bothered about profits in producing components for BHEL. But, with a strong order book, MSMEs expect BHEL to be fairer in reviving the ancillaries. "We may have to buy CNC machines and other modern equipment to overcome manpower shortage," M Sivakumar, proprietor, Jyothi Engineering, said. ITIs in Thiruverumbur and Manikandam in Trichy district with a combined output of 1,072 technicians could play a major role in providing machinists, welders, and fitters to BHEL ancillaries.