The six million tonne per annum greenfield steel project proposed by Tata Steel in Kalinganagar will require maintenance support services worth Rs 1,200 crore when fully commissioned.
These services will be outsourced by the company and are expected to create huge opportunities for the small and medium enterprises (SMEs) in Orissa. The services to be outsourced include warehousing, machine shop, electrical repairing shop, fabrication shops, electrodes and lubricant suppliers, waste management, mechanised material handling and hospitality among others. Since the maintenance cost is about 4 per cent of the total investment in steel industry, this is expected to create huge opportunities for the small and medium enterprises.
"We will invest about Rs 30,000 crore in the Kalinganagar project in phases and will require maintenance support services worth Rs 1,200 crore. The SMEs of the state can take advantage of that ", B K Singh, vice-president (Orissa project), Tata Steel, said here. Addressing the participants of a seminar on 'Ancilliarisation of SMEs and downstream industries", organised by the Utkal Chamber of Commerce and Industry (UCCI), Singh said, the company is in the process of developing a vendor development group in the state.
The group will work towards developing the local entrepreneurs and will provide assistance to anyone who wants to be a partner in Tata Steel's business.
He said, the service sector is contributing most to the gross domestic product (GDP) of the country and the small units need to concentrate on the service sector. Stating that the endeavour of the company is to benefit the local units, he said, Tata Steel will give the first right of refusal to local industries in the maintenance support services. On a suggestion to set up a tool room on the public-private-partnership (PPP) mode at Kalinganagar in partnership with UCCI, Singh assured to look into the proposal.
Niranjan Mohanty, president, UCCI said, Utkal Infrastructure Development Consortium (UIDC) has been formed to empower MSMEs to access large opportunities. The mega projects proposed to come up in Orissa can involve the SMEs through award of small packages of work. He said, currently, UIDC is executing projects worth Rs 23 crore with the major chunk of business coming from Tata Steel and Small Industries Corporation Limited (SICL).
Jindal Stainless has also assured to award small packages to the consortium. The consortium is looking at a turnover of Rs 100 crore and aims to diversify into product marketing and developing a common brand, he added. Hemant Sharma, director, industries, Orissa government said, the mega units need to create an enabling environment for the development of small and medium industries in the state. It will help to broad-base the industrialization process in the state, he added.