Member units of BHEL Small Industries’ Association (BHELSIA) could manage to fabricate only 1.28 lakh tonnes of components in 2012-13, a little over 50 per cent of the target set by BHEL because of the power crunch combined with economic slowdown.
The output figure excludes the performance of a handful of units that switched over to ACF (Away Centre Fabrication) business model whereby the ancillary industry has to buy raw material by itself for fabricating components.
The output is way short of the performance in the previous year when the BHELSIA units could deliver output of 2.54 lakh tonnes.
However, the performance of units under ACF models has improved from 90,000 tonnes in the previous year, to nearly 1.03 lakh tonnes in 2012-13, according to BHELSIA sources.
With respect to sub-contracting machining and valves, the performance of BHELSIA units has been consistent at 60,000 tonnes in the last two years.
Among BHELSIA members, there is a perceptible rise in patronage for the ACF model advocated by BHEL. From only eight units a year ago, the number of industries that have switched over to ACF model of business has reached 36. Most industries adopted the new model recently, and 20 more were waiting to enlist themselves as ACF vendors, the sources said. In the previous year, the business was robust and the BHELSIA was found wanting on performance, but this time around, the extent of sub-contracting order declined significantly.
Although the delay in delivering the components had slowed down the implementation of projects, there was a substantial decline in sub-contracting volume, according to Rajappa Rajkumar, former president of BHEL Small Industries’ Association and Vice-President Tamil Nadu Small and Tiny Industries’ Association. BHELSIA members are hopeful that the public sector behemoth will fulfil its social responsibilities towards the local vendors. Patronisation of ACF model of business must not put the survival of local vendors at stake, they say.