Move may draw firms exiting China
State-owned Bharat Heavy Electricals Limited (BHEL) has called for Expression of Interest (EOI) from foreign companies who wish to use its factories currently lying idle, for manufacturing from India.
The economic disruption across the world due to COVID-19 has highlighted the dangers of manufacturing activities being concentrated in a single location and the need for diversification of supply chains and manufacturing. BHEL’s move, which comes at a time when many global companies are looking to exit China, may help them to invest in India – one of the fastest growing economies, said analysts.
“In order to further promote ‘Make in India’ and support international companies for setting up manufacturing in India, BHEL has floated an Expression of Interest (EOI) inviting global companies to partner with it and leverage its facilities and capabilities for setting up a manufacturing base in the country,” BHEL said in a statement.
“The partnership can shorten the time to set up manufacturing facility for the incoming partner, while also helping BHEL utilise its idle factories and employees. With power sector demand still struggling, this is a significant diversification move. India has so far lagged in grabbing a share of the global supply chain shift from China to other emerging markets. One of the key reasons for this underperformance is a lack of readymade land bank, delay in approvals and fear of dealing with Indian bureaucracy,” Amar Kedia of Emkay Global said.
BHEL, a Maharatna CPSE under the Department of Heavy Industries, has 16 state-of-the-art manufacturing facilities spread across the country with substantial land bank as well as extensive built up industrial, commercial and residential spaces. BHEL’s manpower strength of about 34,000 includes 9,000 engineers with qualifications and experience in cutting edge technologies.
Besides, it has 16 Centres of Excellence (CoEs) in varied areas such as Computational Fluid Dynamics, Intelligent Machines & Robotics, Machine Dynamics, Nano Technology, Power Electronics, Ultra High Voltage, Advanced Transmission, Control & Instrumentation, Surface Engineering, Coal Research, Advance Fabrication Technology, etc. and 5 Specialised Research Centres – Welding Research, Ceramic Research, Electric Traction, and Pollution Control.
“With BHEL offering a readymade solution in the form of factories, staff as well as pre-set vendor base and supply chain, this can open up several possibilities for BHEL in the longer term if handled well, in our view,” said Mr. Kedia.
BHEL also has ongoing technology partnerships with some of the major global manufacturing and engineering companies as well as relationships with leading national laboratories and institutions.
According to BHEL, its facilities and capabilities along with its tie-ups put it in a strong position to support any international company, in setting up a base in India.
BHEL shares declined 2.77% to close at ₹22.85 in a weak Mumbai market on Tuesday.
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