Bhel’s Tiruchi vendors prepare to look beyond their only customer

A cluster of about 300 engineering units in Tiruchi, which for nearly four decades has almost entirely depended on Bharat Heavy Electricals LtdBSE 1.37 % for orders, is being forced by the problems facing its only customer to seek out new business opportunities for the first time. "All along, business was coming to our doorstep," said M Srinivasan, president of BhelBSE 1.37 % Small and Medium Industries Association, or Bhelsia, as this cluster of fabrication and machining shops is called. Not anymore. Bhel doesn't dominate the market for boilers and turbines as it once used to. The economic slowdown and the problems in the power sector haven't helped matters. Bhel's latest results, for Q2, in a pointer to its weak run. All its key metrics are down: order backlog by 16%, revenues 15% and profit after tax 64%. This has reflected in the fortunes of Tuvakudi, an area outside Tiruchi where Bhelsia is based out of. With the public sector company's order pipeline drying, Srinivasan said some of the smaller vendors have shut shop. Most others, he said, believe it may never get back to the good old days again. Three years ago, Bhel is said to have outsourced some 2.5 lakh tonnes of fabrication work to all its vendors, including those in Tiruchi. The projection given by Bhel then was that this would touch 7.5 lakh tonnes by 2015. Actually, the volumes have now fallen to 2 lakh tonnes. Bhel couldn't be reached for comments. more at: http://economictimes.indiatimes.com/news/news-by-industry/indl-goods/svs/engineering/bhels-tiruchi-vendors-prepare-to-look-beyond-their-only-customer/articleshow/25685191.cms