Vendors fear further delay in Nano project

Tata Motors' planned vendor park at its 1,100-acre Nano project site in Gujarat may be delayed by at least six months, triggering speculation among suppliers of a delay in the Nano project. The delay is mainly on account of global recession, which has slowed down demand for vehicles, according to Rajkot-based suppliers.

Leading suppliers such as Bhavani Industries and Amul Industries of Rajkot, which were earlier supposed to shift base to Chharodi near Ahmedabad in December, are yet to receive communication from the Tatas, and many of them feel that the relocation is not likely to happen before June next year.

The park, once commissioned, is set to house about 60 vendors from across the country, which will set up their units near the Nano factory.

"Ideally, it takes an investment of Rs 10 crore (Rs billion) and about two to four months' time to set up our unit. We were to start functioning by December or January, however, things are yet to move," said a supplier.

Apparently, the park will help players cut logistics and inventory costs by moving their business closer to the project site.

"We wrote a letter to Tata Motors asking about the delay in vendor park but are still awaiting their reply. We supply wiring components to Nano. Since things are not clear, we are currently not moving to the new facility," said Nisheeth Mehta, chairman and managing director of Microsing Products.

Also, Tata Motors has cut on the parts supplies from Rajkot vendors by about 50 per cent.

Suresh Santoki, managing director of Amul Industries said, "Tata is not picking up parts for Nano as per commitment. Under such conditions, the Nano plant in Sanand may delay by about six month or till December next year." Rajkot-based Amul Industries supplies "connecting rods" for Nano and is a single-source for Nano.

A top official of Kadvani Forge, which supplies gear parts for Nano, said, "Tatas are not taking supplies from us as per their monthly commitment. All these are steps to cater to the present scenario. In this condition, production of Nano at Sanand factory may be late. Production from Pantnagar or Pune factory will be on time."