With an aim to develop Indian MSME sector, government introduced Public Procurement Policy (PPP) in 2012 which deliberated 25 per cent supplies to PSUs through Micro and small enterprises (MSE). Many leading PSUs have followed this norm but there is lot to do yet. Based on the Aatmanirbhar Bharat initiative and to benefit the MSMEs for coping with the COVID-infused pressure, the government has further asked PSUs to procure domestically and cut down on imports. This is aimed at scaling up indigenous products and improve manufacturing capacities.

In line with this government agenda, Industrial Products Finder (IPF) hosted its 2nd Buyer-Seller Summit on October 21 that discussed various MSME supply avenues and opportunities for indigenisation. The speakers from the large government organisations also educated MSMEs on developing their approach as a supplier exploring domains where the company is interested to indigenise.

The webinar - moderated by Rakesh Rao, Executive Editor, Industrial Products Finder (IPF) - included panelists such as Shoba Pattabhiraman, GM- Corporate Materials, NTPC LTD; Srinivas Sirupa, Head-SCM, L&T Power; V Kishore, Dy GM, Rashtriya Ispat Nigam Ltd (Vizag Steel) and Neelam Pathak, Director - Sourcing & Analytics, AGSO, Nordex.

Sanjeev Chawla, Director, Office of Development Committee (DC) MSME, Ministry of MSME was the Guest Speaker of the webinar. Chawla highlighted what do MSMEs want? What pressing issues are keeping them behind. Chawla pointed out, “Government PSUs have started procuring from MSME or MSEs. MSEs have become regular suppliers the larger organisations. What remains missing is the connecting link between these government organisations and MSMEs.”

“The procuring government departments should make a provision of a Nodal Officer who can understand the issues and guide the MSMEs to obtain clearances and also make them understand the regulations. The Ministry of MSME has offices for facilitation of the MSMEs across all states,” informs Chawla.

MSMEs are serious when it comes to work but are in need of reliable and trustworthy guidance, believes Chawla.

Sowing Aatmanirbhar seeds

Shoba Pattabhiraman from NTPC Limited - India's largest energy conglomerate with roots planted way back in 1975 to accelerate power development in India - educated NTPC’s intent to accommodate suppliers and how can suppliers can approach them. She observes, “In line with the ‘Aatmanirbhar Bharat’ initiative, NTPC has put restrictions on imports. Its technical and commercial guidelines also favour Indian bidders. All border sharing countries cannot participate in the bids unless have sought approval from the Cabinet secretariat.”

NTPC’s Phased Manufacturing Program (PMP) was introduced during bulk tendering of 660MW / 800MW units. Many manufacturing facilities of high value items like turbine, generators, boiler components were developed in India.

Apart from turbine, generator and boiler components, manufacturing facilities for some other components like BFP, CEP, heaters, deaerators, fans etc. were also developed looking at future demand. Same concept shall be continued by NTPC and effort shall be made to include more equipment into the ambit of PMP.

To promote MSME vendors, MSEs are given various benefits in procurement of Goods and services in line with PPP, 2012 and to improve their competitiveness vis-à-vis other bidders. Vendor development programs/special VDPs are being organised across the NTPC.

NTPC also has significant provisions for SC/ST and women entrepreneurs.

In the current financial year till Aug’20, NTPC’s MSE procurements accounts to 49.44 per cent, which is highest so far. Shoba Pattabhiraman from NTPC concluded her presentation explaining vendor registeration process, seeking help and which areas is NTPC looking at to source vendors – Spares supply, indigenous development etc.

Building capacity

L&T Power, provides integrated concept-to-commissioning solutions for Thermal power plants and turnkey solutions for Gas-based power plants. The company currently sources its supplies majorly within India, about 85 per cent and from China at 5 per cent and 10 per cent accounts to other countries. Srinivas Sirupa of L&T Power states, “We are procuring mostly form India, while only some crucial supplies which are not available in India are sourced from other countries and China. L&T Power has 12801 total vendors of which 12076 are domestic and 725 belong to foreign. Out of the 18 per cent domestic vendors which is 1909 of them are MSMED vendors who receive payments within 45 days.”

The recent changes in the MSMED Act in July 2020 will benefit Indian MSMEs as more vendors will fall in the MSMED category due to these changes, benefitting larger business base, Sirupa noted.

Enlisting challenges faced by L&T Power in India for sourcing, he states that these products struggle to meet delivery and capacity. These products are such as drive turbine for boiler feed pumps, liquid ring vacuum pumps, agitators, gas cooling pump, gypsum dewatering system, insulators for ESP and smart actuator. Besides, some products that are not manufactured in India are such as C-276 coils, plates & pipes; explosion bonding of C-276 services; titanium (Gr-2) coils, plates & clad plates, rapper coils, borosilicate blocks and Power Cycle Pipe. He informs that L&T Power also has plans to manufacture some products in India to indigenise them ensuring regular supply in future.

Exploring renewable supply

Nordex, a European company that designs, sells and manufactures wind turbines, has presence globally and is present in India as well. The company is looking for suppliers as the business vertical is fragmented globally and India can be a global supplier looking at the success of renewable energy adoption globally, while wind energy is making inroads in India too. Globally the wind energy Market is projected to be $160 billion by 2024.

Speaking about the Nordex plans in India, Neelam Pathak of Nordex explains, “Nordex is looking ahead for suppliers from India for global installations and these services run for contracts of upto 20 -30 years. Thus, the scope for the suppliers is huge and it will help you to be a renowned global supplier which will help suppliers from India earn goodwill for their domestic products.”

India too has ambitious plan when it to Solar energy but the realm of renewable energy also requires other sources too. Looking at the wind energy, last years there has been boom in adoption of the same. “In India, Castings and Towers is the segment where Nordex will be interested. Manufacturing companies can have access to global technology backed long term associations for supply and maintenance. China has developed its ecosystem and current conditions enable India to develop their own,” adds Pathak.

Sharing a significant insight, Pathak states, “The whole Wind Turbine component chain is highly concentrated among companies themselves. Thus, there is a big room for services and maintenance in the domain.”

Engineering indigenisation

Rashtriya Ispat Nigam Ltd, also known as Vizag Steel, is a public steel producer based in Visakhapatnam, India. Rashtriya Ispat Nigam Limited is the corporate entity of Visakhapatnam Steel Plant, India's first shore-based integrated steel plant built with state-of-the-art technology. “We have also identified 78 items for import substitution and 6 regular items procured by RINL/VSP. As of now, drawings of about 52 items are available with Vendor Development Cell, which are now uploaded on VSP’s website. MSEs may come forward for development of these items through trial route as the items are critical ones,” mentions V Kishore, explaining about the indigenisation and Make In India initiatives taken by the Vizag Steel.

“A separate structure of Vendor development Cell exists at the company which reviews various tenders and also the performance of he vendors. Based on the successful performance, un-enlisted vendors will also be awarded supplies,” says V Kishore. Some key material segments where the company is currently looking for vendors are such as automobiles tyres and spares, bearings, chemicals (purifying mass compound, soda lime), conveyor belts(conveyor belt repair material, COB-SC <= 2MW GRHR), electrical equipment (HV insulating mats), lamps & light fittings, photo voltaic modules, crimping tools, temperature and sample probe-HM, semiconductor fuses etc, ceramic coated lance and others.

Alike NTPC, RNIL also helps local vendors with concession inn turnover while also help startups to be part of vendors. While the company is looking out for SC/ST and women vendors to meet prescribed government requirements. This is an area which is not utilised well by the concerned MSMEs.

The information-loaded webinar observed that the large organisations shall have a ‘connect-to’ point or Nodal Officer for supplier facilitation to help MSMEs understand the process. Further, the large companies have opened up avenues for indigenisation, which MSMEs should take a note of and leverage the opportunity. This will help build global-level products in India.