The Hindu Business Line : Defence majors eyeing SSIs to outsource components

Of the more than 100 stalls set up at the national exposition on outsourcing and vendor development, Kanara Industrial Fair-2003, at Baikampady in Mangalore, nearly 30 are from public sector undertakings and Defence organisations.

Organisations such as Hindustan Aeronautics Ltd, Heavy Vehicles Factory at Avadi in Chennai, and the Railways are in search for quality vendors to outsource components.

Sources in the SSI sector told Business Line that other organisations in the Defence sector such as Navy could not participate in the exposition owing to some constraints.

Meanwhile, speakers at the seminar on "vendor development" on Friday urged entrepreneurs to come forward to supply components to them. However, the SSIs will have to adhere to the norms and specifications of these organisations on various aspects. Vendors should accord importance to quality control while supplying products to these organisations, they said.

Urging entrepreneurs to take benefit of opportunities in Defence sector, Dr C.K.B. Nair, Joint General Manager, Heavy Vehicles Factory, Avadi, Chennai, said they could supply components to the battle-tank manufacturing unit at Avadi.

Established sources in the market are taking advantage of the lack of suppliers in the market and are increasing the prices of the components , he said. According to Dr Nair, total capacity of established sources is also inadequate.

He said that contracts for outsourcing components are given through open tenders. Even the General Manager of the unit has powers to sanction contracts up to Rs 5 lakh, provided the entrepreneur suited the requirements of the company.

Once a vendor executes two successive orders of HVF, that vendor would be considered as established supplier and would be given regular tender enquiries in future orders, he said.

Those who have completed their technical education should look out for tender advertisements so that they could make efforts to supply components to such units, he added.

Mr R. Inbasekharan, Chief Manager (Outsourcing), Engine Division, Hindustan Aeronautics Ltd, who spoke on `Outsourcing at HAL,' said that HAL has a range of products for sub-contracting.

He said that HAL, which is outsourcing nearly 30 per cent of the manufacturing work, is planning to take it to 50 per cent. There is no compromise on the quality of the work, he added.

Mr K. Jayaraj Pai, President of the Kanara Small Industries Association, said that the participation of Defence organisations would give an impetus for the development of SSIs in the region.

Entrepreneurs may reap the benefits of their interaction with Defence organisations here in four to five years, he added.

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