Bhel’s Make in India pushes its dormant plants; invites global companies to use their manufacturing facilities

Bhel’s proposed partnership can save time for foreign partners while putting Bhel’s idle factories and employees to work. (Bloomberg image)

Following lower utilization of its manufacturing facilities, the state-owned company Bharat Heavy Electricals (Bhel) called for the expression of interest (EoI) from foreign companies, which want to use their currently inactive factories for manufacturing from India. Possible areas where Bhel is seeking the partnership include manufacturing electrical equipment, transportation equipment, solar modules, lithium-ion cells and LCD panels, sources aware of the development said.

The company also offers its 14,000-acre land bank available in major cities, industry groups, and demand centers for a variety of purposes, including installing manufacturing facilities, hospitals, and smart cities. Bhel has 16 manufacturing facilities across the country. Calling it a “win-win situation” for both the foreign company and Bhel, analysts noted that both sides can benefit from the state-owned manufacturer offering a factory-ready solution, its 34,000 employees (including 9,000 engineers) and its pre-established supplier base and supply chain.

“The partnership can shorten the time to establish a manufacturing facility for the incoming partner and at the same time help Bhel use its idle factories and employees,” Emkay Global Financial Services said of this development. Bhel’s initiative to accelerate its commercial diversification comes at a time when it receives smaller orders from the power sector, its main customer base, with the slow pace of adding capacity from thermal plants in the country.

With the slowdown in energy demand, Bhel wants to take advantage of the opportunity arising from the aftermath of the coronavirus, where global companies are seen to be adopting the strategy to decentralize manufacturing to mitigate the disruption risks associated with concentrated and localized operations, he said. a company official requesting anonymity.

At the end of Q3FY20, Bhel’s order book decreased 8% yoy to Rs 1.1 lakh crore. Due to the blockage to contain the spread of the coronavirus, some large orders, which Bhel hoped to have, were also postponed.