INTRODUCTION

1. Bharat Heavy Electricals Limited has one its largest units, manufacturing boiler pressure parts in Trichy. Hence Trichy has emerged as one of the largest fabrication clusters in Tamilnadu supporting the power sector of the country. With more than 1000 Small and Medium Enterprises (SMEs) engaged in engineering and fabrication industry, largely catering to the requirements of Bharat Heavy Electricals Limited (BHEL), the cluster has become a major hub for fabrication sector with a turnover crossing over Rs. 5000 crores and employing more than a lakh people.

2. Over a period of time, these SME units have become vendors to BHEL for their outsourced production With BHEL’s boiler facilities at Trichy being expanded to 10,000 MW per annum by FY2012, large products which hitherto are manufactured by BHEL are likely to be fully or partly outsourced thus creating a large potential for growth.

3. Given the growth in the power / ancillary engineering sector, and also considering BHEL’s requirements and power sector requirements in future, SME units feel the need for a common industrial infrastructure to cater to the specific demand. Most of the industries though have the capacities to grow bigger and have attractive growth prospects; lack of industrial infrastructure due to high capital expenditure is becoming a major impediment on their growth.

4. A study carried out by UNIDO also identifies lack of common infrastructure facilities, testing & calibration, design facilities & tool room as a major lacuna.

Project Objective

5. In order to enhance the competitiveness of Trichy and to attain higher growth, an SPV by name “Tiruchirapalli Engineering & Technology Cluster (TREAT)” has been formed by the leading entrepreneurs of Trichy, to catalyse the requirements of the industry. TREAT is a Section 25 Company registered under the Companies Act, 1956 and comprises of members from the existing industrial associations of Trichy, viz., BHELSSIA, Trichy Small Industry Association, etc.

6. The objective of the Project “Tiruchirapalli Engineering & Technology Cluster (TREAT)”, as a Section 25 Company, is to assist and enable the Trichy fabrication cluster to sustain long-term competitive advantage in the global market. Specific interventions have been identified to achieve collective efficiencies and gain access to organized domestic and international markets in fabrication sector. The underlying objective will be an initiative to position SMEs on a level playing field with large players while retaining their character as individual businesses.

7. TREAT, as an SPV (Special Purpose Vehicle) has been created with the aim of sustaining long term development in Trichy fabrication hub. It will be responsible for development and implementation of the project and will oversee the operation and maintenance of the same.

8. The TREAT Cluster will be a Heavy Engineering, Fabrication Centric Facility, to assist the fabrication industries in and around TRICHY as a Common Facility Center, with partial grant from the Ministry of Commerce and Industry.

9. We have planned many heavy as well as State of the Art machines for this project. These machines are not being procured for the manufacture of a specific product range of a company. These are required as a COMMON FACILITY CENTER (CFC) to cater to the Tiny, Small and Medium industries in the fabrication cluster of Trichy which has more than 500 industries engaged in small to large fabricated components.

10. It is our endeavour to get as far as possible versatile machines so that maximum number of industries who can ill afford very expensive machines or are constrained due to space problems or having requirement of occasional need for such machines, can avail this common facility and derive the benefit.

IIUS Project Proposals for Fabrication Cluster at Trichy, Tamil Nadu:

11. The Department of Industrial Policy and Promotion (DIPP), under Ministry of Commerce & Industries, Government of India (GOI) has introduced the Industrial Infrastructure Up-gradation Scheme (IIUS) with an objective to enhance international competitiveness of domestic industry by providing quality infrastructure through Public Private Partnership (PPP) in the clusters which have greater potential to become globally competitive.

12. Hence under this scheme the development of the fabrication cluster in TRICHY, which has the potential to grow up as the national hub for engineering fabrication was initiated and a Detailed Project Report (DPR) was submitted to DIPP. It had also identified a series of facilities to be provided, particularly in the area of training and capacity building to catapult Trichy as a global fabrication hub. The TREAT sought and got the approval for funding under the scheme

Proposed Project:

13. The Project envisages setting up of the CFC (Common Facility Center) for technology up-gradation in the cluster. It will provide technical assistance and job work related services in the critical areas of Heat Treatment, Testing, De-coiling, Shearing and other allied activities as well as provide key infrastructure for material handling and uninterrupted oxygen supply. The proposed facility will introduce state-of-the-art technology to the cluster enterprises to enable it to develop fabrication capabilities to serve all types of clients and activities

14. TREAT will operate and manage other value added services. It will function as a service provider to assist cluster firms in producing value added products, enhance productivity and meet international norms in fabrication activity

15. The Scheme provides for financial assistance in the form of a grant up to 75% of the project cost, with a ceiling of Rs. 60 crores. The GOI contribution under this scheme is restricted to creation of durable assets. No central fund shall be provided for land, land development, preliminary and pre-operative expenses and working capital

16. The Scheme requires a minimum of 15% contribution from promoter industries in form of SPV contribution and the remaining funding is to be financed by financials means such as debt. The SPV formed by the industrial association shall be responsible for proposal preparation, project development and implementation of projects selected under the scheme

17. The TREAT has appointed IL&FS Cluster Development Initiative (IL&FS CDI) for the preparation of Detailed Project Report for seeking funding under the proposed scheme and oversee the Construction activities.

   

Project Location:

18. The proposed project would be developed on a land parcel admeasuring 14 acres situated at Siruganur Village & Thalampatti Village, near Lalgudi in Tamil Nadu, about 25 km from Trichy.

Conclusion:

19. The proposed interventions are aimed at achieving collective efficiencies and gaining access to organized domestic and international markets in fabrication sector. The underlying objective will be an initiative to position SMEs on a level playing field with large players while retaining their character as individual businesses.

20. The proposed infrastructure Upgradation will enhance the capacity of the Trichy fabrication cluster and will enable the fabrication units to undertake larger volume orders. The provision of high end machinery at the Common Facility Center will enable such units to execute larger higher volumes in shorter time frames as compared to their present conditions.

21. It will benefit not just the cluster units but the entire cluster ecosystem including larger players like BHEL. The overall productivity, speed and quality of production for the entire manufacturing hub of Trichy stand to enhance with this intervention.